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Home My Public Portal AboutTBP 2016-07-0601 i EHLERS LEADERS IN PUBLIC FINANCE Town of Fraser Board of Trustees Matt Dempsey - Ehlers 7/6/2016 T Community Goals for Fraser Water and Wastewater • Equitable Fee and Rate Structure • Promote growth • Promote housing affordability • Undertake capital projects EHLERS LEADERS IN PUBLIC FINANCE 3 Topics Today • Agreement on Committee Problem Statement • Progress on Water &Wastewater fee discussion • Water &Wastewater Fee Alternatives — Discussion of the benefits and drawbacks of each alternative — Polling of the committee on which alternatives merit further consideration and analysis • Next steps I - 4) EHLERS LEADERS IN PUBLIC FINANCE Fraser Water and Wastewater Committee Problem Statement • Water & Wastewater fees contribute to housing costs and the goal of the Committee is to find ways to reduce those fees, while maintaining the health of the enterprise fund and the ability to fund future capital projects 0 EHLERS LEADERS IN PUBLIC FINANCE 19* �.:-�ys�j;=➢ �Y�' :' TW,"� Rp, Mi+F ^'i .".: - . y,.8 Progress on Water & Wastewater fees • Work to Date — Compared Rate & Fee structure with peers — Recommended water rate structure — Researched revenue options for funding the CIP — Reviewed benefits and drawbacks of alternatives for the PIF fees — The Committee began exploring options in November 2015 • The next step for the Committee is to make a decision as to which alternative PIF fee structures should receive further consideration and analysis — This analysis will enable the Committee to select its PIF approach at a future meeting based on the economics of each alternative and the priorities of the Town and Enterprise fund 5 EHLERS LEADERS IN PUBLIC: FINANCE Plant Investment Fees Alternatives • PIF based on size of unit (sf.) • Collect PIF at the Certification of Occupancy — Consider service fees as well • PIF based on number of units per net acre (Density) • Multi -family and mixed use PIF rate tied to meter size • Lower PIF amount per unit • Tie PIF to fixture count • Create an Incentive Zone EHLERS LEADERS IN PUBLIC FINANCE Charge PIF based on Size of Unit (sf.) • Method — Create graduated schedule of PIFs based on size of housing units — Fee would decrease as unit size decreases • Benefits — Maintains current fees for most residential housing — Incentivizes the construction of smaller housing units • Drawbacks — Reduces PIF revenues paid on some new development; usage fees may need to increase to replace lost revenue — Fees for small homes built on large plots would be reduced — Administration would be on-going as properties are added • Recommendation: — This alternative would incentivize the construction of small units, but would encourage all small units, not just small, attainable units that the Town desires. This alternative would accomplish the Town's objectives; however, other alternatives may prove superior in attaining the Town's goals. EHLERS L LAUERS IN PUBLIC FINANCE '�,^ r:� . .. � •b':e�±y .. yi.K- aur+:r.+ _•AG .,^=—�wr-wg`�r;'�a�aT�T:,; -.74, ; . , ..�"�,!*d:r+�' , ,, A f .�'9F�4i�P"';: Charge PIF at the Certification of Occupancy • Method — Maintain existing PIFs — Collect PIF from developer when the Certificate of Occupancy is issued • Benefits — Easy to implement — Reduces development cost because the Developer does not need to provide financing for PIFs until the project is complete • Drawbacks — Town is at risk of being unable to collect in event of economic downturn (foreclosure, defaults, failure to complete). — Town is at risk if homeowner moves into housing unit prior to receiving the Certificate of Occupancy and continues construction • Recommendation: — Recommend the Committee support this alternative to the town trustees. This would lower financing costs and risks for Anx.,Qi^pers and could encourage development in the Town 8 EHLERS LEADERS IN PUBLIC FINANCE Charge PIF based on Number of Units per Net Acre (Density) • Method — Create graduated schedule of PIFs based on density of housing developments — Fee would decrease as density increases • Benefits — Maintains current fees for most residential housing — Incentivizes the construction of higher density housing projects • Drawbacks — Reduces PIF revenues paid on some new development; usage fees may need to increase to replace lost revenue — Requires the calculation of units per net acre Recommendation: — This alternative would be difficult to administer and the concept could be achieved as effectively through the creation of a multi- family and mixed-use fee structure. 0 9 _- -- -- - --- _ _ E H L E R LEADERS IN PUBLIC FINANCF ....,.. .-er....._ �.M1,. :..:..; rr•—;•.rASR�er_-j;;7�.<Gta..:ww.u�+awe'�rv»:�`-��N"'t'°�S�!`.''y�w+��r.�pPpn-w:�e Multifamily/Mixed-Use Tied to Meter Size • Method — Create discounted schedule of PIF charges for multifamily/mixed-use developments based on meter size • Benefits — Maintains current fees for single family residential housing — Lowers cost of multifamily housing and mixed-use projects (with single meter) from current PIF based on charging by unit — Incentivizes only the construction of higher density housing and mixed-use projects — Simple to administer and easy to distinguish from residential and commercial fee structures, which will remain unchanged • Drawbacks — Reduces PIF revenues paid on some multifamily and mixed-use development; usage fees may need to increase to replace lost revenue • Recommendation: — Recommend the Committee support this alternative to the town trustees. This will encourage the development of apartments and mixed-use projects that the Town wants to incentivize. L'3 EHLERS t [ADE Rs IN PUBLIC FINANCE Lower PIF Amount • Method — Lower the current fees charged for Water & Wastewater connections • Benefits — Easy to implement — Reduces development costs • Drawbacks — Reduces PIF revenues paid on all new development; usage fees would need to increase to replace lost revenue — Incentivizes the development of all residential projects, rather than just attainable housing projects — Developer must finance PIFs during the entire period of construction • Recommendation: — Do not recommend this alternative as it lowers revenues without assuring achievement of specific goals. 0 -- EHLERS LEADERS IN PUBLIC FINANCE Fixture Count • Method — Create schedule of PIFs based on number of fixtures • Benefits — Reduces fees for units with few fixtures — Reduces development costs for low volume users • Drawbacks — Reduces PIF revenues paid on some new development; usage fees may need to increase to replace lost revenue — Requires the calculation of fixtures per unit, and the creation of a schedule of standard fixture units for each type of fixture — Creates additional work for developers — Problematic administration. Enormous increase in bureaucracy. • Recommendation: — Do not recommend this alternative as it would be difficult to administer. AW - --- _ _ __ - -------- - _ - E H L E R S 12 LEADERS IN PUBI IC FINANC[ Incentive Zone • Method — Lower the water tap fees within the zone — Consider land use regulations that may decrease costs of development (Height restrictions, Parking requirements ... etc.) • Benefits — Reduces development costs in an area where the Town desires development • Drawbacks — Reduces PIF revenues paid on some new development; usage fees may need to increase to replace lost revenue — Requires legislative efforts to create the zone and establish incentives — Does not benefit all areas of the Town equally — Goals not established yet • Recommendation: — Recommend considering this alternative further at a later date if future growth begins to occur. ,3 EHLERS LEADERS IN PUBLIC FINANCE Vote Water & Wastewater Committee PIF .. . .. . ecYes No Maybe Future 1 3 1 - PIF based on size of unit (sf.) viable Collect PIF at the Certification of Occupancy 0 5 - - PIF based on number of units per net acre (Density) 0 2 1 2 Multi -family and mixed use PIF rate 0 4 - 1 - Lower PIF amount per unit 0 - 5 - - Tie PIF to fixture count - 5 1 - Create an Incentive Zone Merits further _ 1 1 3 consideration 14 EHLERS IFADSHSIN PURIW IINANCF Next Steps • Perform an analysis of the alternatives that the Committee selects for further consideration • Select an alternative to recommend to the Town trustees 15 EHLERS _- LEADERS IN PUBLIC FINANCE 44* FREERS LEADERS IN PUBLIC FINANCE Paul Wisor Municipal Advisor (303) 802-2303 mdempsey @ ehlers-inc.com In