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RTC Board Meeting Regional Road Impact Fee Program September 21, 2012.

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Presentation on theme: "RTC Board Meeting Regional Road Impact Fee Program September 21, 2012."— Presentation transcript:

1 RTC Board Meeting Regional Road Impact Fee Program September 21, 2012

2 Scope of Work Land use assumptions Methodology Geographic service area and benefit districts Development potential Economic analysis Credit program Options for transit oriented development 2

3 Executive Summary Overall General Comments Program has generated substantial revenue $81 Million – RTC Impact Fee projects with collected fees $185 Million – Developer CCFEA projects $266 Million - Total Capacity Improvements through RRIF Changes in collections Collections: $9 million (2005) / $750,000 (2010) Credits issues: $24.5 million (2006) / $626,000 (2010) Economic downturn has had significant impact on the program Reduced development = Reduces collections Produced changed expectations Impact of adopting less than 100% of maximum supportable fee Credit program Shift away from regional priorities 3

4 RRIF Program Accomplishments Regional Road Impact Fee Capacity Improvements $ 81 Million RTC Impact Fee projects with collected fees $185 Million Developer CCFEA projects $266 Million Total 4

5 Methodological Recommendations Refine factors used to derive vehicle miles of travel Trip rates Adjustment factors % of new trips Trip lengths Trip length weighting Re-evaluate factors included in cost/fee development Historical versus projected costs Consider adoption of automatic inflation adjustments in the RRIF schedules 5

6 CIP Recommendations Consider prioritizing 10-year CIP 125 planned improvements (4 th Edition) Current CIP is not prioritized by year or importance As a result road improvements are market (developer) driven Collectors could be eliminated from the Regional Road Network for impact fee purposes and be designated as project-level improvements Potential impact to RRIF Program would be explored in the next update New development could be required to build first two lanes as project-specific improvements 6

7 Summary of Policy Recommendations Land use projections used in the 4 th Edition of the RRIF program were prepared prior to the recession and 2010 Census TischlerBise recommends more conservative land use and travel demand assumptions for the next update of regional road impact fees Simplify land uses in fee structure (32 existing land uses) Consolidate nonresidential land uses Consider movement to progressive residential fee structure Reevaluate geographic areas for RRIF program A possible alternative would be the delineation of two service areas (tiered impact fee program) Centers and corridors concept could be the starting point for delineating an urban area more suitable for multi-modal improvements Should way credits are calculated be revised? 7

8 Existing RRIF Credit Program Used to pay impact fees in lieu of cash Represent dollar value of developer built projects Actual cost/impact fee rate = credits Measured in Vehicle Miles Traveled (VMT) Life span of 20 Years Can be traded on the open market Must be used in the Benefit District they were earned May be limited to 50% use on projects outside the Original Development of Record 8

9 Future Credit Program Modify Future Credit Program Eliminate the use of credits outside the development of record Value credits in dollars in lieu of VMTs Issue credits based on a prioritized CIP, ie, less credits for improvements projected in the outer years Issue credits based on the impact fees due or on the value of improvements listed in the CIP 9

10 Buy-Back Program: The Policy Issues September 21,

11 Statutory Requirements NRS 278B.240: If an owner is required … as a condition of the approval of the development, to construct or dedicate … off-site facilities for which impact fees … are imposed, the off-site facilities must be credited… 11

12 Turning Developer Improvements into Credits…? $5,000,000 CIP road built by a developer To determine # of credits: $5 M divided by Current cost/ VMT ($216.22/VMT) = 2, VMTs 12

13 Then What? Creditholders: Build road Capacity, per CIP and CCFEA Redeem credits instead of paying Impact Fees Transfer or sell credits to others to redeem at Market Price within 20 years 13

14 Then What? Washoe County RTC: Accepts Impact Fee payments or Credits from New Growth Relieved of obligation to build the CIP roads the creditholders have built 14

15 Discussion Point #1 The price of a Bought-Back Credit is Driven by Available Funds & Demand Not: $ cost / VMT at credit issuance; or $ cost / VMT per impact fee calculations 15

16 Discussion Point #2 Cost of No Buy-Back = Foregone Impact Fee Revenue < 16 Cost of a Buy-Back Increased impact fees from a Buy-Back

17 Discussion Point #3 Relationship of the CIP to the Credit Issue Roads built for Credit were on the CIP, creating capacity RTC doesnt need to fund With Buy-Back, CIP needs remain 17

18 Discussion Point #4 What are the unknowns? Will Assumptions Hold? How many creditholders will participate? Impact on Credits that are not Bought Back Is there Legal Exposure? What are Staff and other Administrative Costs? 18

19 Implementation Buy-Back Program: Whos Eligible? Original Creditholder? Third-Party Creditholders? Those Expiring Sooner? Later? 19

20 Implementation 20 Buy-Back: Next Steps Revise Current Program to avoid moreexcess credits Determine: Buy-Back Participation Funding Source Confirm ROI Projections Execute Buy-Back

21 Implementation If No Buy-Back: Next Steps Revise Current Program to avoid moreexcess credits Implement remaining Recommendations 21

22 Buy-Back Program: Financial Analysis September 21, 2012

23 Financial Analysis Assumptions Analysis based on Vehicle Miles Traveled (VMTs) Growth Rate for new development – Washoe County Consensus Forecast (WCCF) at 1.4% annually Percent of Growth paying Impact Fees 15% cash vs 85% credits (based on 2011 collections) No issuance of future credits Willingness of current credit holders to sell Discount Rate to assess present dollar value 23

24 Preliminary Results 24 ScenarioCost to RTC Credits Purchase Buy Back Price Per Credit Recaptured Impact Fee Revenue Present Value ROI Last Year of Credits No Buy Back$0 N/A$0N/A Buy Back 200,000 Credits$5,000,000200,000$25.00$13,957,920$5,787,552$ ,000 Credits and 2% Growth Rate$5,000,000200,000$25.00$21,017,059$8,714,573$ ,000 Credits and 0.75% Growth Rate$5,000,000200,000$25.00$6,958,308$2,885,213($0.42)2024 4Buy Back of 400,000 Credits$10,000,000400,000$25.00$20,792,680$8,621,536($0.14)2023 5Buy Back Program of $15 Million$15,000,000272,727$55.00$13,957,920$5,787,552($0.61)2024 6Multi-Year Buy Back Program$12,000,000218,182$55.00$20,792,680$8,621,536($0.28)2023

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