2.   Land Development Consent Agenda (any land development consent agenda item pulled for discussion will be discussed at the beginning of the land development discussion portion of the agenda, which is item F on this agenda)

a.   Ordinance Amendment
Consideration of approval of transportation development fee ordinance changes to be effective July 1, 2005 . Council may take final action. (Mr. Tim Bailey)

A public hearing for the proposed changes was held on October 14, 2004 at the regular Town Council meeting.  No one spoke at the public hearing.  No changes have been made to the ordinance since the public hearing.  Schedule for the ordinance amendment is proposed as follows:

Revisions to the ordinance will make three primary changes.  Method used to determine the maximum fee is proposed to change from an improvements driven system to a demand driven system.  Fee credits are proposed to change from full cost to cost for improvements that exceed collector street standards.  Fees will be adjusted to correlate with changes in the fee credit system.

Goals of the changes are to have a system that is simpler to use and understand.  Effort in determining fee levels and administering revenue collections will be reduced creating a more efficient system.  Both system type and fee levels will be similar to adjacent communities allowing an easy comparison to those communities. 

There has been some email comments that the changes are developer friendly and reduce the cost to the developer.  Staff does not feel this is the case.  Developers will now be required to build the collector portion of the road as a mandate without fee credits.  The Developer’s unreimbursed cost to build a collector road will offset any fee adjustment.  Therefore, road improvement requirements and cost will remain the same for a typical development.

A strikethrough/underlined version of the ordinance is attached.  A modified fee schedule is attached to coincide with the ordinance revisions.

Ordinance 05-006

An ordinance amendment to the Town of Cary, NC Land Development Ordinance amending Chapter 7 as follows:

7.11      Transportation Development Fees

7.1.1     Purpose

The purpose of this section is to establish a procedure to assist in the funding of road improvements required by new growth in the Town's jurisdiction. It is not the intent of this section to require the developer to pay for all new road construction except controlled access freeways. The Town provides a fee schedule in this section so that a procedure is in place for new development to pay a prorated share of road costs required to provide adequate road improvements to serve new construction before the new development is completed.

7.11.5   Condition of Approval

No certificate of compliance under the North Carolina State Building Code shall be issued for new construction within the jurisdiction of this Ordinance unless and until the transportation development fee herein established has been paid in full.  No building permit shall be issued for residential construction within the Town Town ’s jurisdiction unless and until such fee has been paid in full.  No certificate of compliance under the North Carolina State Building Code shall be issued for new construction within the jurisdiction of this Ordinance unless and until the transportation development fee herein established has been paid in full. 

7.11.6   Transportation Zones

There shall be five three transportation zones, which together encompass the entire planning jurisdiction of the Town.  The zones are the southeast zone, central zone, and base zone (any other area of the planning jurisdiction).  The purposes of the transportation zones are to help ensure that adequate funding is available in different areas of the Town's planning jurisdiction to pay for road improvements needed to maintain adequate levels of service appropriate to each area. The transportation fees paid by new development in each zone are partially based on the unit cost of improvements within that zone and are partially based on the cost of Town-wide improvements. The total transportation impact fee paid represents two fees--a fee for the zone the property is located and a Town wide fee. The boundaries of the transportation zones are defined in Section 3.23.3(C), Transportation Zones. to replace the capacity based on the new travel demand.  Fees collected must be used for road improvements within Cary ’s planning jurisdiction.  Boundaries of the zones are shown on the following exhibit.

NOTE FROM TOWN CLERK: The exhibit is on file in the town clerk's office with the official minutes.

7.11.7   Fees

(C)        If the proposed new construction contains a mix of building uses, the development fee shall be calculated separately for each use according to the fee schedule.  If the building has a single primary use, the development fee shall be calculated for a single use, according to the fee schedule.

7.11.8   Individual Assessments

(B)        The professional engineer to perform each individual assessment shall be selected by the Town Manager or his or her designee from a list of qualified engineers maintained by the Town. The list shall contain the names of at least three engineers or engineering firms, and shall be updated annually regularly and approved by a committee appointed by the Mayor and Town Council and including representatives of the Town and the development community. The Town Council reserves the right to dispute the assumptions, methodology, or conclusions of individual assessments. An individual assessment may take into consideration such factors as internal capture of trips in mixed use projects and higher rates of pass by trips than indicated by ITE if supported by reliable local data.

(C)        Fees computed under this section shall be computed in dollars per dwelling unit (for residential uses) or typically dollars per 1,000 square feet of non-residential floor area (for non-residential uses), using the following demand driven system `formula(e):

DEVELOPMENT FEE PER UNIT = UNIT COST – CREDIT: where  

UNIT COST = (Average Trip Rate X Average Trip Length X Percent New Trips) divided by ( Lane-mile Capacity X Lane -mile Cost); and  

CREDIT = (Vehicle User Taxes and Fees X Capital Allocation X Annual Travel Miles, divided by Fuel Consumption X Present Value Factor) + (Bond Debt Retirement X Present Value Factor) X reduction Factor.  

(D)        For purposes of making an individual assessment of road impacts, the following definitions apply:

(1)  Annual travel miles:  The average number of vehicle miles traveled per year for a given land use based upon the average daily trip rate (ADT) of the use times its trip length.

(2)  Average trip rate:  The peak hour vehicle trip generation rate.

(3)  Bond debt requirement:  The percentage of property tax revenues used to retire currently outstanding general obligation bonds for roads.

(4)  Capital allocation:  The percentage of all collected vehicle user taxes and fees spent by the State of North Carolina for road capital improvements.

(5)  Fuel consumption:  The average number of miles driven by each vehicle for each gallon of gasoline consumed.

(6)  Lane-mile capacity:  The number of vehicles which can be accommodated on one lane mile of roadway in a single peak hour at the lowest level of service.

(7)  Lane-mile cost:  The cost to acquire right-of-way and construct improvements for one lane of thoroughfare for a distance of one mile in the Town, as determined from the records of the Town of the actual cost of similar projects.

(8)  Present value factor:  The value of future payments after they have been adjusted to a base period by applying a discount rate, which is an interest rate expressed in terms of percentage per annum, over an extended period of time relating to the life of the road facility.  Said interest rate shall be the Town of Cary current bond buyers’ index at the time of computation.

(9)  Reduction factor:  A factor set forth in the fee schedule which may reduce the amount of the transportation development fee.

(10)  Vehicle use fees and taxes:  The amount of taxes and fees paid by motorist for fuel purchases to the State of North Carolina .

7.11.9   Collection of Fees

(C)        The transportation development fee for proposed new commercial or industrial construction that is speculative construction shall be computed in conjunction with the application for a building permit for the expected use and any increase in use shall be collected prior to or simultaneously with the issuance of the building permit for the first fit-up to be constructed within the shell.

7.11.10 Fund Accounting

(A)        The Town shall establish an account for each transportation zone into which the zonal portion of the development fees collected within the zone shall be credited. The Town-wide portion of the fee shall be credited to a separate, Town-wide account. Interest at the actual rate of return on invested funds of the Town shall be credited periodically, but not less often than quarterly, in accordance with the accounting policies of the Town.

7.11.11 Use of Funds

(A)        The revenues from the zonal portion of development fees collected within a transportation zone, and accrued interest on such revenues, shall be spent on qualifying road improvements. located within the same zone.

(B)        The revenues from the Town-wide portion development fees, and accrued interest on such revenues, may be used to finance all or portions of qualifying road improvements located anywhere within the Town's planning jurisdiction.

(CB)      Qualifying road improvements include improvements to thoroughfares shown on the Thoroughfare Plan within the Cary Comprehensive Transportation Plan anywhere within the Town’s planning jurisdiction.

(DC)      Transportation development fees may be used to finance direct project costs of qualifying road improvements, including:

(1)        Direct project-engineering costs;

(21)       The acquisition cost of rights-of-way;

(32)       The construction cost of improvements, including related pedestrian and drainage improvements (excluding pedestrian facilities);

(43)       Signalization and intersection improvements; and

(54)       The principal sum and interest and other financing costs on bonds, notes, or other obligations issued by or on behalf of the Town to finance qualified road improvements.

(ED)      Development fees collected pursuant to this section shall not be used to pay for any of the following:

(1)        Construction, acquisition, or expansion of public facilities other than road improvements;

(2)        Repair, operation, or maintenance of existing or new road improvements.

(FE)      Up to 25 percent of all fees collected shall be reserved for cash reimbursement to developers for qualifying road improvements. The amount of such reimbursements shall not exceed the value of such improvements in excess of the amount of transportation development fees that would otherwise be payable for the proposed development, unless the substitution of cash reimbursements for development fee offsets is specifically approved by the Town Council. At the end of each fiscal year, the amount of collected fees eligible for cash reimbursements shall be calculated, and if the total amount of reimbursements owed exceeds the amount of eligible fees available, the fees shall be remitted to developers in proportion to the amount of cash reimbursements owed.

7.11.14 Offsets

The Town shall grant offsets to transportation development fees for road cost that exceed the requirements for a collector road in accordance with this section or Section 7.11.16, Developer Agreements. There shall be no other offsets to transportation development fees.

(A)        Proposed Thoroughfare Improvements

(1)        The Town shall grant an offset for development:

(a)        Which was approved prior to the adoption of this Ordinance; and

(b)        For which the approval and permits have not expired;

(c)        Which has not been fully completed, subject to the additional terms of this section.

(2)        Offsets will be discounted by the value of the amount that would have been added to any building permits within the development that were issued prior to the effective date of this Ordinance.  

(A)     Offset value calculations shall depend on the following factors:

(3)        Offset value calculations shall depend on the following factors:

(a1)      The value of the road right-of-way dedicated by the developer to the Town for a qualifying road improvement. The value of the road right-of-way to be used in this calculation shall be the actual sale value of the land, if the land has been sold within the last three years before dedication; if the land has not sold within the last three years before the dedication, the applicable value shall be determined by professional appraisal. The appraisal shall be performed in accordance with the Town's Standard Procedures.

(b2)      The construction costs paid at the time of construction by the developer for qualifying road improvements. Offsets will not be paid for any road construction that exceeds the standards of the Town's Standard Specifications and Details Manual.

(4)        If a developer of a development approved prior to the effective date of this Ordinance, and under construction on such effective date, was required to provide thoroughfare improvements but has not initiated construction of such improvements before the date of adoption, the developer may request that the Town approve a developer agreement, in accordance with Section 7.11.16, Developer Agreements, allowing payment of transportation development fees in lieu of construction of the required road improvements. If such a developer agreement is executed by the Town and the developer, then the developer shall pay to the Town, within six months after the effective date of this Ordinance, transportation development fees equal to the amount of fees that would have been due under this Ordinance if its effective date had coincided with the issuance of the first building permit for the developer's project.

(5)        If a developer was required to provide thoroughfare improvements within a project which was approved prior to the adoption of this Ordinance, and offsets are issued, the developer shall only be required to make a fee payment in the amount by which the total fee assessed due to construction within the development exceeds the value of the offset. In no case shall the total sum of the offsets and the amount of the fees paid exceed the total of the fees that would otherwise be assessed under this chapter as a result of the development.

(6)        These offsets shall only be available if the Town Council has approved the construction of the improvements in advance, by approval of a preliminary subdivision plat, developer agreement, or site plan, specifically including such improvements.

(7)        In order to obtain these offsets, the developer shall submit an estimate of costs to the Engineering Department within six months of the effective date of this Ordinance. The estimates shall be revised when final road construction costs are tabulated. Offsets provided for road construction projects meeting the requirements of subsection (A)(1) above shall be valid as set forth in Section 7.11.14(b) below.

(B)        Prior Improvements in the Same Land Development

If a developer has, as a result of the approval of a planned unit development, subdivision, or other land development, constructed prior to May 1, 1989, road improvements shown on the Thoroughfare Plan and meeting the other tests of this section, the developer shall be given an offset for the previous improvements which may be applied against the development fee within such land development. The value of the offset shall be computed as follows:

(1)        The total amount eligible for consideration shall be the costs determined by using the values described in subsections (A)(2) and (A)(3) above;

(2)        The potential offset amount of subsection (B)(1) above shall be reduced by that proportion of the approved development which has actually been completed prior to the adoption of this Ordinance;

(3)        This offset shall be allowed only if the person making the improvements or his or her direct successor in interest applies to the Town for such offset on or before November 1, 1989 .

7.11.15 Certificate of Offset

(A)        Upon computation by the Town Manager, or his or her designee, of the offset allowed to a developer, the Town shall issue to the developer a numbered Certificate of identify the amount of Ooffset within the Developer Agreement expressed in dollar value of the offset and designating and the land development project for which such Certificate was approved.

(B)        Upon request, a Certificate of Offset may be changed in denomination by the Town as long as the total offset for a designated parcel remains the same. Such Certificate of Offset shall be freely transferable between any subsequent owners of the designated land. Any attempt to transfer such a Certificate to any person who is not an owner, purchaser, or mortgagee of land within the designated land development project shall make such Certificate voidable at the option of the Town. Each Certificate shall be registered in the name of the owner of the land in the office of the Engineering Department or the Finance Department.

(CB)      Any Certificate of Ooffset may be used by the registered owner of such Certificate as an offset against a transportation development fee imposed on construction of a building in the designated land development project. Certificates may not be used for payment of any other fees, taxes, or amounts due the Town, and shall not have any intrinsic value. The Town shall have no obligation to the holder of any Certificate offset who, for any reason, owes no development fees during the life of the Certificate offset and thus has no use for the Certificate offset.

(DC)      Each Certificate of Ooffset shall be valid from the date of issuance until ten years after its issuance or the last date of construction within the project, whichever occurs first, unless an extension not to exceed ten years is granted by the Town Council prior to the termination of the earlier of these periods.

(ED)      An Certificate of Ooffset shall be credited in dollars against the applicable development fees in effect on the date when such fees become due under this chapter.

(FE)      Holders of active Certificates of Ooffsets that are eligible for recalculation shall apply to the Town Manager or his or her designee for recalculation within one year from July 1, 2001 the effective date of fee changes. The recalculated value of unused Certificates of Ooffsets shall be the face value of the certificate times the ratio of the total value of the improvement or dedication made by the developer to the amount of offset originally provided ratio of the revised fee to the fee in place when the offset was given or most recently revised. The amount eligible for offset will be determined under the revised offset provisions in effect after July 1, 2001 when the fees are modified. The applicant requesting recalculation shall be responsible for providing the information needed to recalculate the offset.

7.11.16 Developer Agreements

Where a development includes a qualifying road improvement, the Town and the developer, by mutual consent, may enter into an agreement regarding the terms of the participation of the developer in the construction or financing of such road. Such agreement may provide for cash reimbursements, offsets, or other appropriate compensation to the developer for his or her participation in the financing and/or construction of the road. The agreement shall be on a form approved by the Town Council, after review and recommendation by the Town Engineer Town Manager or designee, and shall identify:

(A)        The estimated cost of the road improvement in excess of a collector road, based on the approved bidding process and using the lowest bid approved by the Town Engineer Director of Engineering;

(B)        A schedule for initiation and completion of the improvementAn offset amount and cash reimbursement amount;

(C)        A requirement that the improvement be designed and completed to Town standards;

(D)        Such other terms and conditions as deemed necessary by the Town Council.

Adopted: 5/12/2005

Effective: 7/1/2005

In addition to the above ordinance, the fee schedule follows:

TOWN OF CARY PROPOSED TRANSPORTATION DEVELOPMENT FEES