Development Impact Fees are assessed by the City of Peoria to help pay for the one-time capital infrastructure costs resulting from new developments in the City. In areas of the city where little or no development exists, infrastructure requirements are great, as are the costs to provide that infrastructure. Substantial capital investments for roads, parks, water and wastewater facilities, and public safety facilities are necessary to serve new growth and maintain existing levels of service. 

For the past eighteen months, the City has been working with TischlerBise, to update the General Government and Utility impact fee study.  The study update is required per the provisions of the Impact Fee state statute A.R.S. §9-463.05.  TischlerBise is a highly credentialed consultant who has many years of experience helping Arizona communities develop sound and defensible development impact fee programs.

In preparing the update to the development impact fees, three components are taken into consideration:  the land use assumptions (LUA), the infrastructure improvements plan (IIP), and the development fee report.  The land use assumptions describe the projected growth in the city based on changes in land uses, densities, intensities, and population. The infrastructure improvements plan describes, in detail, based upon requirements in the statue, each of the necessary public service facilities to be included in the development fee report.  The development fee report details the fee calculation methodology and establishes the fee by each development type (residential, commercial, etc.). 

As required by A.R.S. §9-463.05, the City must meet certain public noticing and meeting requirements for each of these components before implementing any new or amended fees.  The City must release the IIP and post it on the City’s website at least 60 days before the City Council holds a public hearing on the plan.  Both the IIP and the fee study report were posted on the city’s website on March 7, 2024 starting the 60 day stakeholder review period. 

Staff will present a summary of the report as well as the recommended changes for council consideration and discussion prior to holding the public hearing on May 7, 2024.  

February 20, 2024 - Developer Stakeholder Meeting #1 was held to review planned methodologies, discuss projects included within the proposed Infrastructure Improvements Plan (IIP) and review land use assumptions.  Multiple stakeholders attended and provided feedback.

March 7, 2024 - The draft Land Use Assumptions, Infrastructure Improvements Plan and Development Fee Report was made available on the City’s Impact Fee webpage. This report includes all the required components to provide a full understanding of the assumptions, projects and fees associated with the update.

March 7, 2024 - Published Notice of Intent and Public Hearing in the Peoria Times.  

April 8, 2024 - Developer Stakeholder Meeting #2 was held for further discussion on planned methodologies, projects included within the proposed Infrastructure Improvements Plan (IIP) and land use assumptions (LUA).

The intent of this item is to provide an update on the 2024 Development Impact Fee Study and obtain Council’s direction to staff regarding policy items related to service area boundaries, capital projects and draft fees. The draft report is attached.

Impact fees are an important source for funding one-time capital infrastructure related to growth.  Adjustments in fees are necessary and required to address changes in land use assumptions, development patterns and project costs.  Funding options for growth related infrastructure is affected by the type and amount of fee revenue generated.