§ 9-8-10 Credits.
(A) Credits. Subject to the provisions of this section, credits shall be provided to the Developer towards the payment of Development Fees for an eligible Capital Facility required by the City and provided by the Developer.
(1) Credits shall only be issued pursuant to a Credit Agreement that meets the requirements of subsection (E) of this section.
(a) No credits shall be provided unless an application for a Credit Agreement is submitted to the City by the Developer within one year of the date the Capital Facility for which credits are otherwise eligible is accepted by the City Engineer or authorized designee.
(b) It is the responsibility of the Developer to request allocation of development fee credits through an application for a Credit Agreement. If development fee is paid before a Credit Agreement has been executed, no credits may be applied retroactively for that development fee and no reimbursements shall be made for the amount of the credit that would have been provided had a Credit Agreement been in effect when the development fee was paid.
(c) It is the responsibility of the entity to whom credits are allocated pursuant to a Credit Agreement or any amendment thereto, to notify City staff at the time an application for a building permit is submitted that a credit should be applied towards the payment of a development fee pursuant to an executed Credit Agreement or an executed amendment thereto. If the notification required hereunder is not made prior to the payment of the development fee, no credits may be applied retroactively for that development fee and no reimbursements shall be made for the amount of the credit that would have been provided had the notification been made prior to the payment of the development fee.
(d) Upon execution of a Credit Agreement by the Developer and the City Manager credits shall be deemed allocated to the Developer Property identified in the Credit Agreement.
(2) No credits shall be issued until the eligible Capital Facility for which the credits are being issued has been accepted by the City Engineer or authorized designee or until adequate financial security to insure the completion of the eligible Capital Facility has been provided in accordance with all of the terms of an executed Credit Agreement.
(B) Credit Ineligibility. Credits shall not be provided for a Capital Facility provided by a Developer under the following circumstances:
(1) No credits shall be provided for a Capital Facility that was provided by a Developer unless the Capital Facility is included in an adopted Infrastructure Improvements Plan and Fee Report as a Necessary Public Service or Facility Expansion for which a Development Fee is assessed.
(2) Credits shall not be provided for any Capital Facility provided by a Developer if the cost of such Capital Facility will be repaid to the Developer by the City through another agreement or mechanism, other than a Credit Agreement discussed in subsection (E) of this section. To the extent that the Developer will be paid or reimbursed by the City for any Capital Facility from any funding source including an agreement to reimburse the developer from future development fees, the amount of credits claimed by the Developer shall be reduced by the amounts to be paid or reimbursed by the City.
(C) Amount of Credits. The amount of the credits provided pursuant to this section shall be limited to the actual costs the Developer incurred in providing the eligible Capital Facility or to the costs of the Capital Facility included in the adopted Infrastructure Improvements Plan ("IIP") and for which the development fee is assessed, whichever is less. In no event shall the amount of any credit exceed the actual costs the Developer incurred in providing the eligible Capital Facility. By way of example, if a Developer incurs a cost of $1,000,000 for the construction of a Capital Facility that is included in an adopted IIP that reflects the cost of the Capital Facility as being $800,000 the amount of the credit will be limited to the $800,000, the cost of the Capital Facility reflected in the IIP. Conversely, if a Developer incurs a cost of $1,000,000 for the construction of a Capital Facility that is included in an adopted IIP that reflects the cost of the Capital Facility as being $1,000,040, the amount of the credit will be limited to $1,000,000, the actual costs Developer incurred in constructing the Capital Facility.
(1) Notwithstanding the foregoing, if development fees that are adopted are less than the fees reflected in the IIP and/or Fee Report as needed to pay for all of the Necessary Public Services and/or Facility Expansions included in the IIP (full fees), the amount of the credits provided pursuant to this section shall be reduced by the City proportionately.
(D) Application of Credits. The application of credits towards development fees is subject to the following:
(1) Credits may only be applied towards the development fee for the applicable Category of Necessary Public Services that included the Capital Facility for which the credit is being provided. By way of example, if a Developer expands a wastewater facility to provide wastewater services to new development in the portion of South Goodyear identified as a Service Area for Wastewater Development Fees, credits for the cost of the Facility Expansion may only be applied against Wastewater Development Fees in the South Goodyear wastewater Service Area.
(2) Credits may only be applied to development located within the same Service Area for which the Development Fee being credited is collected. By way of example, if a Developer is entitled to a credit for the costs of constructing a Capital Facility that is identified in an Infrastructure Improvements Plan as being necessary to provide water services to North Goodyear and it is included in the Water Development Fee for the Service Area North Goodyear, the credits provided may only be applied toward Water Development Fees for the Service Area North Goodyear.
(3) Credits shall be applied only to that portion of the applicable development fee attributable to the Capital Facility for which the credits are provided. By way of example, if a Developer constructs a Capital Facility that is included in an adopted IIP for which a wastewater development fee is assessed, and the costs of the Capital Facility in the IIP represents 10% of the total costs of all Capital Facilities included in the IIP the amount of the credit that can be applied towards a wastewater development fee will be 10% of the applicable wastewater development fee. Thus if the wastewater development fee for a building in the North Goodyear Service Area was $15,019 (calculated based on one two-inch meter) the amount of the credit that could be applied towards the wastewater development fee is $1,502.
|
Dev Fee |
Category of Development |
Development Unit |
Development Fee Per Development Unit for Applicable Service Area |
Credit Portion (Percent of Cost in IIP) |
Wastewater Credit |
|---|---|---|---|---|---|
|
Wastewater |
Commercial |
Meter Size – 2" |
$15,109 |
10% |
$1,502 |
(E) Credit Agreement. No credits shall be applied toward development fees unless the Developer and the City have entered into a Credit Agreement in a form provided by the City and which shall, at a minimum, include the following:
(1) The total amount of credits resulting from the provision of an eligible Capital Facility.
(2) A list of all of the Capital Facilities and costs of each Capital Facility included in the adopted Infrastructure Improvements Plan ("IIP") for which a development fee is assessed.
(3) The credit amount to be applied towards development fees for each Development Unit within the new property for which credits shall be applied, which credit shall be calculated pursuant to subsection (D)(3) of this section.
(4) If applicable, terms providing for the recalculation of the credit amount in the event that the Credit Agreement was executed before the Capital Facility was completed.
(5) Provisions for recalculating the credit amount in the event the Infrastructure Improvements Plan and/or development fees are modified following the execution of the Credit Agreement.
(6) A legal description and map property depicting the property for which credits shall be applied. This property shall be the property, the development of which resulted in the developer providing the Capital Facility for which the credits are being provided (the "Credit Eligible Property"). It may also include additional property if the additional property is part of a unified plan of development that includes the Credit Eligible Property. This property shall collectively be referred to as the "Developer Property."
(7) The term of a Credit Agreement shall not exceed 10 years. Credits not applied prior to the expiration of the Credit Agreement shall expire.
(F) Multiple Entities. If multiple entities jointly provide an eligible Capital Facility, all entities must enter into a Single Credit agreement and any request for the allocation or reallocation of credits shall be made in writing and executed by all of the entities that provided the eligible Capital Facility.
(G) Reallocation of Credits. Credits provided under an executed Credit Agreement may be reallocated only by an amendment to the Credit Agreement executed by the City and Developer. An amendment to the Credit Agreement for the reallocation of credits is subject to the following:
(1) The Developer that executed the Credit Agreement being amended and the entity that controls the property to which credits are to be allocated shall both be signatories to a written request seeking the reallocation.
(2) The amount of the credits reallocated shall not exceed the total amount of credits resulting from the provision of an eligible Capital Facility, as reflected in the Credit Agreement less the amount of credits that have already been applied towards development fees owed for development within the property identified in the Credit Agreement, as of the date of the amendment and less the amount of credits reallocated to other property prior to the date of the amendment.
(a) By way of example, the amount of credits that would be available for reallocation assuming the following facts ((i) the Developer constructed an eligible Capital Facility and entered into a Credit Agreement that provided $1,000,000 in total available credits; (ii) the Developer previously reallocated $500,000 of the available credits to another property; and (iii) as of the effective date of the proposed amendment, $200,000 of credits had been applied towards development fees for development within the property identified in the Credit Agreement (the "Developer Property")) would be $300,000 calculated as follows ($1,000,000 - $500,000 - $200,000 = $300,000).
(3) A reallocation of credits shall not be made to any property that is subject to a Development Agreement or any other agreement or reimbursement mechanism that involves the category of development fees to which the reallocated credits would apply.
(4) The amendment for a reallocation of credits shall be on a form provided by the City, but shall include, at a minimum, the following:
(a) A legal description and map property depicting the new property for which credits shall be applied.
(b) The total amount of credits to be allocated to the new property and a provision pursuant to which Developer assigns to the entity who with the Developer requested the reallocation all legal rights and obligations related to the reallocated credits, subject to the terms of the Credit Agreement to the entity.
(c) The credit amount to be applied towards development fees for each Development Unit within the new property for which credits shall be applied, which shall be calculated pursuant to subsection (D)(3) of this section and provisions for recalculating the credit amount in the event the IIP and development fees are modified following the execution of the Credit Agreement.
(d) Modifications as needed to reflect the impact the reallocation shall have on credits available to serve the Developer Property.
(H) In lieu of a Credit Agreement provided herein and provided the improvements were publicly bid, Developer and the City may enter into a Reimbursement Agreement in a form provided by the City and which shall, at a minimum, include the following:
(1) The total amount of reimbursement resulting from the provision of an eligible Capital Facility.
(2) A list of all of the Capital Facilities and costs of each Capital Facility included in the adopted Infrastructure Improvements Plan ("IIP") for which a development fee is assessed.
(3) The reimbursement amount to be paid from development fees collected for each Development Unit, which reimbursement amount shall be calculated in the same manner as the calculation of credit amounts pursuant to subsection (D)(3) of this section.
(4) Provisions for recalculating the reimbursement amount in the event the Infrastructure Improvements Plan and/or development fees are modified following the execution of the Reimbursement Agreement.
(5) The term of a Reimbursement Agreement shall not exceed 10 years.
(I) City Manager’s Authority. The City Manager or authorized designee is authorized to establish procedures and submittal requirements for the issuance of Credit Agreements, amendments to Credit Agreements, requirements for the application of credits towards development fees, Reimbursement Agreements and amendments to Reimbursement Agreements. The procedures and submittal requirements shall, at a minimum, comply with the requirements set forth in this article. The City Manager, or in the absence of the City Manager, the person who has been authorized by the City Manager to act on his behalf during his absence shall be authorized to enter into Credit Agreements and amendments to Credit Agreements. (Ord. 19-1416, passed 1-14-2019)