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Impact Fee Materials
Commission Memorandum REPORT TO: Honorable Mayor and City Commission FROM: Anna Rosenberry, Finance Director Chris Saunders, Assistant Planning Director Chris Kukulski, City Manager SUBJECT: Impact Fee Discussion MEETING DATE: October 18, 2010 AGENDA ITEM TYPE: Policy Discussion BACKGROUND: The purpose of this meeting is to review and discuss the policies that have brought about the City's Impact Fee programs, and the work that will be done in the coming months/year related to impact fees. We have attached relevant reading material, and plan to have an open discussion format for the evening. The Engineering Department, Finance Department, Building Inspection Department, and the Planning Department will be leading their relevant portions. Below is an outline of the discussion points and links to the related materials: 1. Policy Decisions on Growth of the City Community Plan (foremost, in Chapters 1-3) http://www.bozeman.net/Smarty/files/e6/e6a049b8-fad5-4886-b7f5-3ebfbd2f4556.pdf 2. Facility Plans and Infrastructure Expansion Needs to accommodate growth while maintaining defined Level Of Service standards Find the following Facility Plans at: http://www.bozeman.net/Departments-(1)/Public-Service/Engineering/Plans Transportation Facility Plan Wastewater Facility Plan Water Facility Plan http://www.bozeman.net/Smarty/files/e6/e63eff8a-50ae-435a-95e8-bd60e6d3a037.pdf Fire Protection (Master) Plan 3. Options to Fund Infrastructure Development a. Different from Funding Maintenance of Existing Infrastructure; b. General Taxes. c. Voted Levies/Bonds. d. Increased Utility Rates to Residents. e. Creation of Assessment Districts (Special Improvement Districts, Special Improvement Lighting Districts.) f. Increased Assessments to existing Districts (for instance, Street Maintenance District.) g. Tax Increment Finance Districts. h. Federal Funds. i. State Funds. j. Developer Exactions. k. Impact Fees. 4. Why Impact Fees were added. a. Advantages of Impact Fees. d. Disadvantages of Impact Fees. 5. Our Impact Fee Programs: Codified in Bozeman Municipal Code - Chapter 3.24 http://www.bozeman.net/Smarty/files/55/5561f2ec-9214-4ed3-820e-b6d23c74b43f.pdf a. Lawsuit & Settlement – The City’s impact fees were legally challenged in the spring of 1999. The case remained in district court and had not reached the trial phase in the spring of 2005. In 2005, the Legislature passed a bill specifically authorizing local governments to establish impact fees. A settlement of the suit was reached in the spring of 2005. After the settlement of the suit the City contracted for and completed the scheduled update of the fee studies. b. Water Impact Fees – Study found at http://www.bozeman.net/Smarty/files/86/86505cf9- de28-467f-9538-b54edd003c1c.pdf The water impact fee covers impoundment, storage, treatment, and transmission of water. Acquisition of additional water rights are not included in the impact fee but are handled separately through Commission Resolution 4095. Fees are typically set by the size of the water meter, although there are defined exceptions. The City can allow connection to its water system by unannexed properties who would then be subject to the water impact fee. A new treatment plant south of town is in design and construction is expected to begin work in 2011. c. Sewer Impact Fees – Study found at http://www.bozeman.net/Smarty/files/bf/bfc27851- d4cd-4ee3-a344-8ad696368d56.pdf The sewer impact fee covers collection and treatment sewage. Fees are typically set by the size of the water meter serving the property. The City can allow connection to its sewer system by unannexed properties who would then be subject to the sewer impact fee. A new sewer plant which is funded in part by impact fees is now under construction. d. Street (Transportation) Impact Fees – Study found at http://www.bozeman.net/Smarty/files/b4/b44785fa-43e7-4753-9060-b02c3a4256b5.pdf The transportation impact fee is the most complex of the impact fees adopted by the City. During the most recent update, the City asked the consultant to examine whether there was adequate data to distinguish between the development norms and Low Income/Affordable Housing impacts and Downtown. The consultant did locate and incorporate the needed information and the Commission did adopt a differentiated transportation impact fee. The service area and cost for service per unit of demand remained the same. The difference was based upon a demonstrated distinction in the demand for service. The difference in demand then changes the equation so that the cost paid per unit is less. The Downtown area is called the Trip Exchange District in the impact fee ordinance. Other areas that could demonstrate a similar difference could be considered for creation of a Trip Exchange District. e. Fire Impact Fees – Study found at http://www.bozeman.net/Smarty/files/e6/e68ae60b- c0bd-45fa-b49e-11d0d098f5be.pdf The Fire/EMS impact fee methodology changed with the most recent update. The original study in 1995 relied upon the fire flow methodology which measures demand by the amount of water required to suppress a fire. With the passage of time new record keeping mechanisms were put in place and duties changed. The current study relies upon a call response methodology. This reflects that many of the service calls for Fire/EMS are to events like car accidents or injuries which do not require fire flow. The capacity must still be available to respond to all types of calls. The change in methodology significantly changed the cost allocations between residential and commercial/industrial development. f. Police Impact Fees – A contract for a study was awarded. Due to the projected length of time to obtain the necessary information on future development of law enforcement facilities the contract was terminated. g. Recreation Impact Fees – The Parks, Recreation, Open Space and Trails plan is the City’s facility plan for parks. It examines the current status of park and recreation facilities, looks at future needs, and identifies options for making improvements. Chapter 10 includes a recommendation to consider the possibility of impact fees as a one of several possible funding sources for specific facilities. Chapter 11 includes discussion of impact fees among other possible local funding sources for park improvements. Although some other Montana communities do collect impact fees for parks, Bozeman has not seriously looked at impact fees for parks to date. h. Impact Fee Credits. 6. Upcoming Issues: a. Updates to Current Studies (Water/Sewer/Street/Fire) - Draft Request for Proposals. b. September 2009 Commission Memo (attached.) c. Advisory Board vacancies. d. Recent Gallatin Association of Realtors (GAR) letter regarding reduction of Street Impact Fees. Documents Attached: September 2009 Commission Memo Chapter 3.24, Impact Fees, BMC Water Impact Fee Study Sewer Impact Fee Study Street Impact Fee Study Fire Impact Fee Study 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Most Recently Amended By Ord. 1746 Effective 9/6/2008 p. 1 Chapter 3.24 IMPACT FEES Sections: 3.24.010 Legislative Findings 3.24.020 Authority and Applicability 3.24.030 Intent 3.24.040 Definitions 3.24.050 Transportation Impact Fees 3.24.060 Fire Protection Impact Fees 3.24.070 Water Impact Fees 3.24.080 Wastewater Impact Fees 3.24.090 Refunds of Development Impact Fees Paid 3.24.100 Credits Against Development Impact Fees 3.24.110 Miscellaneous Provisions 3.24.010 Legislative Findings The City Commission of the City of Bozeman, Montana finds that: A. The protection of the health, safety, and general welfare of the citizens of the city requires that the street, fire protection, water, and wastewater systems of the city be expanded and improved to accommodate continuing growth within the city and within those areas directly served by its Fire Department and within those areas connected to its water and wastewater systems. B. New residential and nonresidential development imposes increased and excessive demands upon existing city facilities. C. New development often overburdens existing public facilities, and the tax revenues generated from new development often do not generate sufficient funds to provide public facilities to serve the new development. D. New development is expected to continue and will place ever-increasing demands on the city to provide public facilities to serve new development. E. The creation of an equitable development impact fee system would enable the City to impose a proportionate share of the costs of required improvements to the city's transportation, fire protection, water, and wastewater systems on those developments that create the need for them. F. All types of development that are not explicitly exempted from the provisions of this chapter will generate demand for city's transportation, fire protection, water, and wastewater services or facilities that will require improvements to city facilities and equipment. G. The city's transportation impact fee study, dated October 31, 2007, prepared by Tindale-Oliver & Associates and as updated, and the fire/EMS impact fee study dated July 2008 and as updated, prepared by HDR Engineering, and water and wastewater impact fee studies dated July 2007, prepared by HDR Engineering, set forth reasonable methodologies and analyses for determining the impacts of various types of Most Recently Amended By Ord. 1746 Effective 9/6/2008 p. 2 development on the city's street, fire protection, water and wastewater systems and for determining the cost of acquiring land and the cost of acquiring or constructing facilities and equipment necessary to meet the demands for such services created by new development. H. The City establishes as city standards the assumptions and service standards referenced in the impact fee studies and other duly adopted documents as part of its current plans for the transportation system and for the city's fire protection, water, and wastewater systems. I. The documentation required by 7-6-1602, MCA is collectively contained in the City’s facility plans, impact fee studies, development regulations, financial records, capital improvements program, design and specification manual, and other city documents J. The development impact fees described in this chapter are reasonably related to the service demands and needs of new development and are based on the above-cited impact fee studies and documentation and do not exceed the costs of acquiring additional land and the costs of acquiring or constructing additional facilities or equipment required to serve the new developments that will pay the fees. K. All transportation improvements upon which the transportation impact fees are based and upon which transportation impact fee revenues will be spent, based on the limitations set forth in this chapter will benefit all new development in the city; and it is, therefore, appropriate to treat the entire city as a single service area for purposes of calculating, collecting, and spending the transportation impact fees, while recognizing differences in the demand for service based upon the identified factors set forth in the transportation impact fee study. L. All of the fire protection improvements listed in the fire impact fee study will benefit all new development that receives fire protection service directly from the City Fire Department; and it is, therefore, appropriate to treat the entire city and all properties served directly by the City Fire Department as a single service area for purposes of calculating, collecting, and spending the fire protection impact fees. M. All of the water system improvements listed in the water impact fee study will benefit all new development that connects to the city water system; and it is, therefore, appropriate to treat the entire city and all properties connected to the city water system as a single service area for purposes of calculating, collecting, and spending the water impact fees. N. All of the wastewater system improvements listed in the wastewater impact fee study will benefit all new development that connects to the city wastewater system; and it is, therefore, appropriate to treat the entire city and all properties connected to the city wastewater system as a single service area for purposes of calculating, collecting, and spending the wastewater impact fees. O. There is both a rational nexus and a rough proportionality between the development impacts created by each type of development covered by this chapter and the development impact fees that such development will be required to pay. P. The City’s facility planning, capital improvement program, development review, and bidding processes create a public process by which, on a specific and detailed basis, the capacity expanding components of construction can be identified and funded Most Recently Amended By Ord. 1746 Effective 9/6/2008 p. 3 distinctly from those components which are not capacity expanding by providing for evaluation by the City and the Impact Fee Advisory Committee of future needs related to growth, identification of applicable funding sources, and monitoring of construction and payments. Q. This chapter creates a system by which development impact fees paid by new developments will be used to expand or improve the city transportation, fire protection, water, and wastewater systems in ways that benefit the development that paid each fee within a reasonable period of time after the fee is paid. R. This chapter creates a system under which development impact fees shall not be used to cure existing deficiencies in public facilities or to pay maintenance or operations costs associated with providing public facilities. 3.24.020 Authority and Applicability A. This chapter is enacted pursuant to the city's self-government powers, the authority granted to the City by the Montana State Constitution, Sections 7-6-1601 through 7-6- 1604, and Sections 7-1- 4123, 7-1-4124, 7-3-4313, 7-7-4404, 7-7-4424, 7-13-4304, and 69-7-101 of the Montana Code Annotated. B. The provisions of this chapter shall apply to all of the territory within the limits of the city. C. The provisions of this chapter related to the fire protection impact fees shall also apply to all properties located outside the city that are served directly by the City Fire Department. D. The provisions of this chapter related to water impact fees shall also apply to all properties located outside the city that are connected to the city water system. E. The provisions of this chapter related to wastewater impact fees shall also apply to all properties located outside the city that are connected to the city wastewater system. 3.24.030 Intent A. This chapter is adopted to help implement the comprehensive plan of the city, the city's 2001 transportation plan update prepared by Robert Peccia & Associates, and as updated, the September 2006 draft of the water facility plan prepared for the City by Allied Engineering and Robert Peccia and Associates, and as updated, and the May 2006 draft of the wastewater facility plan prepared for the City by HDR Engineering and Morrison-Maierlie, Inc., and as updated, the August 2006 draft of the Fire Protection Master Plan prepared for the City by Emergency Services Consulting, Inc, and as updated. B. The intent of this chapter is to ensure that new development bears a proportionate share of the cost of improvements to the city transportation, fire protection, water, and wastewater systems; to ensure that such proportionate share does not exceed the cost of the transportation, fire protection, water, and wastewater facilities and equipment required to serve such new developments; and to ensure that funds collected from new developments are actually used to construct improvements to the city transportation, fire protection, water, and wastewater systems that reasonably relate to the benefits accruing to such new developments. Most Recently Amended By Ord. 1746 Effective 9/6/2008 p. 4 C. It is the further intent of this chapter that new development pay for its proportionate share of public facilities through the imposition of development impact fees that will be used to finance, defray, or reimburse all or a portion of the costs incurred by the City to construct improvements to the city transportation, fire protection, water, and wastewater systems that serve or benefit such new development. D. It is not the intent of this chapter to collect any money from any new development in excess of the actual amount necessary to offset new demands for transportation, fire protection, water, or wastewater improvements generated by that new development. E. It is not the intent of this chapter that any monies collected from any development impact fee and deposited in an impact fee fund ever be co-mingled with monies from a different impact fee fund or ever be used for a type of facility or equipment different from that for which the fee was paid. 3.24.040 Definitions A. “Central Business District” (CBD) means land uses established within the B-3, “Central Business District,” zoning district. B. "Development" means any construction or expansion of a building, structure, or use, any change in use of a building or structure, or any change in the use of land, which creates additional demand for public services. C. "Development impact fees" means the transportation impact fee, fire protection impact fee, water impact fee, and wastewater impact fee established by this chapter. D. "Development Impact Fees Review Committee" means the committee composed of the Impact Fee Coordinator, the Building Official, the Director of Public Service, the Fire Chief, and the Director of Planning and Community Development, or their designees appointed to serve in the member's place at a meeting. E. "Encumber" means to legally obligate by contract, or otherwise commit to use by appropriation or other official act of the City. F. "Impact Fee Capital Improvement Program" means the capital improvements program for the transportation system, the city fire protection system, and the city water and wastewater systems, which shall assign monies from each impact fee fund to specific projects and related expenses for improvements to the type of facilities or services for which the fees in that fund were paid, and shall not include improvements needed to correct existing deficiencies or operations or maintenance costs. G. “Impact Fee Coordinator” means the Director of the City’s Department of Planning and Community Development or the Director’s designee. H. "Impact fee funds" means the transportation impact fee fund, fire protection impact fee fund, water impact fee fund, and wastewater impact fee fund established by this chapter. I. "Impact fee studies" means the transportation impact fee study, dated October 31, 2007, prepared by Tindale-Oliver & Associates and as updated, and the fire impact fee study, dated October 1995 and as updated, prepared by James Duncan and Associates, and the water and wastewater impact fee studies dated May 2007, prepared by HDR Engineering. Most Recently Amended By Ord. 1746 Effective 9/6/2008 p. 5 J. "Improvement" means planning, land acquisition, engineering design, construction inspection, on-site construction, off-site construction, equipment purchases, and financing costs associated with new or expanded facilities, buildings, and equipment that expand the capacity of a facility or service system and that have an average useful life of at least ten years. “Improvement” does not include maintenance, operations, or improvements that do not expand capacity. K. "Independent fee calculation study" means a study prepared by an applicant for a building permit or water or wastewater connection permit calculating the cost of expansions or improvements to the city's transportation, fire protection, water, or wastewater systems required to serve the applicant's proposed development; that is performed on an average cost (not marginal cost) methodology; uses the service units and unit construction costs stated in the impact fee studies; and is performed in compliance with any criteria for such studies established by this chapter or by the City. L. "Initiation of construction" means the date of the preconstruction meeting with the City Engineer or his/her designee, or the date of the first visible change in the physical condition of the improved site caused by the first person furnishing services or materials to effect construction of the improvement, whichever occurs first. M. "Project-related improvements" means site-related improvements including, without limitation, all access streets adjacent to the proposed development or leading only to the proposed development and not included on the transportation system; all streets and driveways within the development; all acceleration, deceleration, right, or left turn lanes leading to any streets and driveways within the development; all traffic control devices for streets and driveways within the development; all water lines or facilities adjacent to, leading to, or located within the development and serving only the development; all wastewater lines or facilities adjacent to, leading to, or located within and serving only the development; and all off-site improvements necessary for the safety and code compliance of a development. Credit for incidental improvements shall not be allowed. The presumption shall be made that the minimum improvement needed to serve a project shall be deemed to be a project improvement even if additional capacity is thereby created that may be potentially used by other developments presently or in the future. N. “Transportation system” means capacity-adding improvements to collectors or arterial roads of three lanes or more, which are included on the 2001 Greater Bozeman Transportation Plan Update or the City’s impact fee capital improvement program, and which will benefit new development as required by law and this chapter. The transportation system includes only those bicycle and pedestrian facilities built in conjunction with and included in a capacity-adding transportation facility improvement otherwise eligible for impact fee funding pursuant to the terms of this chapter. The “transportation system” does not include project-related improvements. O. “Trip Exchange District” means a defined geographic area that meets the following criteria, pursuant to the transportation fee study and an independent fee calculation study as provided in section 3.24.050(B)(3), BMC: 1. The use of shared and consolidated parking; 2. A high degree of pedestrian and bicycle access to and throughout the proposed development; Most Recently Amended By Ord. 1746 Effective 9/6/2008 p. 6 3. The availability of public transit; 4. Extensive trip capture within the proposed development where trips to the proposed development result in visits to multiple businesses in the area via a mode other than automobile; The following additional physical development characteristics are associated with trip exchange district land uses: 1. The majority of buildings associated with the proposed development are multi-story buildings, often more than two stories; 2. Diverse business proprietorships within the development; 3. Primary use at the ground floor is commercial; 4. The majority of individual businesses within the development are less than 20,000 square feet; 5. Structures within the development are in near to each other and the public street (with small or no setbacks); 6. Having a high percentage building coverage on the lot and typically in excess of 0.5; and 7. The physical characteristics are shared among the entire business area, not just one or a few of the businesses. 8. The area should be at least 50% developed as measured by lot area utilized. 9. The area is the subject of a city enforceable common plan of development, such as an urban renewal plan. 3.24.050 Transportation Impact Fees A. Imposition of Transportation Impact Fees 1. On or after March 23, 1996, any person who seeks to obtain any of the following forms of development approval is required to pay a transportation impact fee in the amount specified in Table 3.24.050: a. A building permit; b. Any other permit that will result in the construction of improvements that will generate additional traffic; or c. Any extension of any such permit that was issued before the effective date of this chapter;; or d. Any delayed payment of impact fees as specified and approved by the City Commission in accordance with the BMC Title 17, Chapter 2 for Workforce Housing Lots. 2. Notwithstanding the above subsection, no impact fee shall be imposed earlier than the issuance of a building permit for developments requiring a building permit. Most Recently Amended By Ord. 1746 Effective 9/6/2008 p. 7 3. No permits of the types described in Subsection A(1) of this section shall be issued until the transportation impact fee described in this chapter has been paid, unless the development for which the permit is sought is exempted by Subsection F of this section. B. Computation of Amount of Transportation Impact Fee 1. An applicant required by this chapter to pay a transportation impact fee may choose to have the amount of such fee determined pursuant to either Subsection (B)(2) or (B)(3) of this section. The amount of the fee calculated pursuant to either Subsection (B)(2) or (B)(3) shall be subject to the following adjustment: a. For the first expansion of an existing nonresidential building, the amount calculated shall not include the amount calculated for the expansion of up to thirty percent as compared with its size on February 22, 1996, or two thousand square feet, whichever is less. b. The transportation impact fees adopted are those shown in Table 3.24.050, BMC and as updated as provided for in this Chapter. 1. Beginning on February 16, 2008 the amount of the fee collected shall be sixty percent (60%) of the amount calculated. 2. Unless an applicant requests that the City determine the amount of such fee pursuant to Subsection (B)(3) of this section, the City shall determine the amount of the required transportation impact fee by reference to Table 3.24.050. The fee amounts set forth in such table include credits for expected future receipts of state and federal highway funds and expected future receipts of gas tax revenues, and all other non-impact fee sources of funding anticipated to be made by or as a result of new development to be applied to the transportation improvements required to serve new development. a. If the applicant's development is of a type not listed in Table 3.24.050, then the City shall use the fee applicable to the most nearly comparable type or land use in the table. In making a decision about which use is most nearly comparable, the City shall be guided by the most recent edition of "Trip Generation: An Information Report" prepared by the Institute of Transportation Engineers; or if such publication is no longer available, then by a similar publication. If the City determines that there is no comparable type of land use listed in the table, then a new fee shall be determined by: 1. Finding the most nearly comparable trip generation rate from the above publication; and 2. Applying the formula set forth in Subsection (B)(3)(d) of this section. b. If the applicant's development includes a mix of those uses listed in Table 3.24.050, then the fee shall be determined by adding up the Most Recently Amended By Ord. 1746 Effective 9/6/2008 p. 8 fees that would be payable for each use if it were a freestanding use pursuant to Table 3.24.050. c. If the applicant is applying for an extension of a permit issued previously, then the fee shall be the net increase between the fee applicable at the time of the current permit application and any transportation impact fee previously paid pursuant to this chapter for the same structure. In the event that the fee applicable at the time of the current permit application is lower than the transportation impact fee previously paid pursuant to this chapter for the same structure, there shall be no refund of transportation impact fees previously paid. d. If the applicant is applying for a permit to allow a change of use or the expansion, redevelopment, or modification of an existing development, the fee shall be based on the net positive increase in the fee for the new use as compared to the previous use. However, no new fee shall be imposed unless an additional unit of service demand is created, in accordance with Table 3.24.50. If necessary to determine such net increase, the City shall be guided by the most recent edition of "Trip Generation: An Information Report" prepared by the Institute of Transportation Engineers; or if such publication is no longer available, then by a similar publication. In the event that the proposed change of use, expansion, redevelopment, or modification results in a net decrease in the fee for the new use or development as compared to the previous use or development, there shall be no refund of transportation impact fees previously paid. 3. An applicant may request that the City determine the amount of the required transportation impact fee by reference to an independent fee calculation study for the applicant's development prepared by qualified professional traffic engineers and/or economists at the applicant's cost and submitted to the City Engineer. Any such study must show the traffic engineering and economic methodologies and assumptions used, including, but not limited to, those forms of documentation listed in Subsections (B)(3)(a) and (B)(3)(b) of this section and must be acceptable to the City pursuant to Subsection (B)(3)(c) of this section. a. Traffic engineering studies must include documentation of trip generation rates, trip lengths, any percentage of trips from the site that represent net additions to current trips from the site, the percentage of trips that are new trips as opposed to pass-by or divert-link trips, and any other trip data for the proposed land use. b. Economic studies must include documentation of any special factors that the applicant believes will reduce the traffic volumes otherwise attributable to the proposed land use. c. The City shall consider all such documentation and any independent fee calculation study submitted by the applicant, but shall not be Most Recently Amended By Ord. 1746 Effective 9/6/2008 p. 9 required to accept any such study or documentation that the City deems to be inaccurate or unreliable and may request that the applicant submit additional or different documentation for consideration. Any independent fee calculation study submitted by an applicant may be accepted, rejected, or accepted with modifications by the City as the basis for calculating transportation impact fees. d. Upon acceptance, or acceptance with modifications, of an independent fee calculation study and documentation, the City shall use the following formulas to determine the transportation impact fee: Net Impact Fee = Total Impact Cost – Gas Tax Credit – Ad Valorem Credit Where: Total Impact Cost = ((Trip Rate × Assessable Trip Length × % New Trips) / 2) × (1 -Interstate Adj. Factor) × (Cost per Lane Mile / Avg. Capacity Added per Lane Mile) Total Gas Tax Credit = Present Value (Annual Gas Tax Credit), given 4.6% interest rate & 25-year facility life Annual Gas Tax Credit = (((Trip Rate × Total Trip Length × % New Trips) / 2) × Effective Days per Year × $/Gallon to Capital) / Fuel Efficiency And where: Trip Rate = the average daily trip generation rate, in vehicle-trips/day Assessable Trip Length = the actual average trip length for the category, in vehicle miles Total Trip Length = the assessable trip length plus an adjustment factor of half a mile is added to the trip length to account for the fact that gas taxes are collected for travel on all roads including local roads % New Trips = adjustment factor to account for trips that are already on the roadway Divide by 2 = The total daily miles of travel generated by a particular category (i.e., rate X length X % new trips) is divided by two to prevent the double-counting of travel generated among land use codes since every trip has an origin and a destination. Interstate Adjustment Factor = adjustment factor to account for the travel demand occurring on interstate highways (15.0%) Cost per Lane Mile = unit cost to construct one lane mile of roadway, in $/lane mile($3,678,522 per study and will be subject to inflationary adjustments) Average Capacity Added per Lane Mile = represents the average daily traffic on one travel lane at capacity for one lane mile of roadway, in vehicles/lane-mile/day (8,658 per study) Cost per Vehicle Mile of Capacity = unit cost to construct to provide a vehicle mile of capacity ($472.92 per study) Most Recently Amended By Ord. 1746 Effective 9/6/2008 p. 10 Present Value = calculation of the present value of a uniform series of cash flows, gas tax payments in this case, given an interest rate, “i,” and a number of periods, “n;” for 4.6% interest and a 25-year facility life, the uniform series present worth factor is 14.6768 Effective Days per Year = 365 days $/Gallon to Capital = the amount of gas tax revenue per gallon of fuel that is used for capital improvements, in $/gallon ($0.102) Fuel Efficiency = average fuel efficiency of vehicles, in vehicle- miles/gallon (17.70) C. Payment of Transportation Impact Fee 1. An applicant for any of the permits or extensions listed in Subsection (A)(1) of this section shall pay the transportation impact fee required by this chapter to the City prior to the issuance of any such permit. 2. All funds paid by an applicant pursuant to this chapter shall be identified as transportation impact fees and shall be promptly deposited in the transportation impact fee fund described in Subsection D of this section. D. Transportation Impact Fee Funds 1. A single transportation impact fee fund is created and such fund shall be maintained in an interest bearing account. 2. Such fund shall contain only those transportation impact fees collected pursuant to this chapter and any interest which may accrue from time to time on such amounts. E. Use of Transportation Impact Fee Funds. The monies in the transportation impact fee fund shall be used only as follows: 1 To acquire land for and/or acquire or construct capacity-adding capital improvements to the transportation system reasonably related to the benefits accruing to new development subject to the terms of this chapter, in accordance with the requirements of Montana law; or 2 To pay debt service on such capital improvements to the transportation system; or 3 For purposes of refunds or credits, as described in Sections 3.24.090 or 3.24.100(G)); and 4. May not be used for a. operations or maintenance purposes; b to correct existing deficiencies; or c. for bicycle or pedestrian facilities not built in conjunction with and included in a capacity-adding transportation system facility, otherwise eligible for impact fee funding. F. Exemptions from Transportation Impact Fee Most Recently Amended By Ord. 1746 Effective 9/6/2008 p. 11 1. The following types of development shall be exempted from payment of the transportation impact fee: a. Alterations, remodeling, rehabilitations, expansions of existing buildings, or other improvements to an existing structure where no additional vehicle trips will be produced over and above those produced by the existing use; b. Construction of accessory buildings or structures that will not produce additional vehicle trips over and above those produced by the primary building or land use; c. The replacement of a destroyed or partially destroyed building or structure with a new building or structure of the same size and use where no additional vehicle trips will be produced over and above those produced by the original building or structure; d. The installation or replacement of a mobile home on a lot or a mobile home site when a transportation impact fee for such lot or site has previously been paid pursuant to this chapter or where a mobile home legally existed on such site on or prior to the effective date of this chapter;e. Any other type of development for which the applicant can demonstrate that the proposed land use and development will produce no more vehicle trips from such site over and above the trips from such site prior to the proposed development, or for which the applicant can show that a transportation impact fee for such site has previously been paid in an amount that equals or exceeds the transportation impact fee that would be required by this chapter for such development. 2. Any such claim for exemption must be made no later than the time when the applicant applies for the first permit or a type listed in Subsection (A)(1) of this section for the proposed development, and any claim for exemption not made at or before that time shall have been waived. 3. The City Manager or his designee shall determine the validity of any claim for exemption pursuant to the criteria set forth in Subsection (F)(1) of this section. TABLE 3.24.050 The following transportation impact fees apply to developments not located in the Central Business District or a designated Trip Exchange District. ITE LUC Land Use Unit Fee* RESIDENTIAL: 210 Single Family (Detached) Less than 1,500 sf and very low income(2) du $2,171 Less than 1,500 sf and low income (3) du $3,147 Less than 1,500 sf du $3,968 Most Recently Amended By Ord. 1746 Effective 9/6/2008 p. 12 ITE LUC Land Use Unit Fee* 1,500 to 2,499 sf du $5,396 2,500 sf or larger du $6,082 220 Apartments du $3,339 230 Residential Condominium/ Townhouse du $2,946 240 Mobile Home Park du $1,593 LODGING: 310 Hotel room $3,063 320 Motel room $1,678 RECREATION: 430 Golf Course hole $12,295 411 City Park acre $546 444 Movie Theaters 1,000 sf $6,463 INSTITUTIONS: 610 Hospital 1,000 sf $6,023 620 Nursing Home bed $381 520 Elementary School student $315 530 High School student $477 540 University (7,500 or fewer students) (4) student $609 550 University (more than 7,500 students) (4) student $529 560 Church/ Synagogue 1,000 sf $2,428 565 Day Care 1,000 sf $7,433 OFFICE: 710 50,000 sf or less 1,000 sf $3,977 710 50,001-100,000 sf 1,000 sf $3,623 710 100,001-200,000 sf 1,000 sf $3,084 710 greater than 200,000 1,000 sf $2,460 720 Medical Office 1,000 sf $9,584 RETAIL: 820 under 50,000 sf 1,000 sf $9,378 820 50,000-99,000 sf 1,000 sf $9,587 820 100,000-199,000 sf 1,000 sf $9,331 820 200,000-299,000 sf 1,000 sf $8,567 820 greater than 300,000 sf 1,000 sf $8,144 812 Building Material/ Lumber 1,000 sf $21,209 813 Discount Super-Store 1,000 sf $26,996 817 Nursery/Garden Center 1,000 sf $18,903 851 Convenience Store 1,000 sf $44,607 931 Quality Restaurant 1,000 sf $22,036 934 Fast Food Rest w/ Drive-Thru 1,000 sf $61,225 841 New/Used Auto Sales 1,000 sf $12,033 890 Furniture Store 1,000 sf $1,684 912 Bank/ Savings Drive-in 1,000 sf $31,706 INDUSTRY: 110 General Light Industrial 1,000 sf $2,290 140 Manufacturing 1,000 sf $1,250 Most Recently Amended By Ord. 1746 Effective 9/6/2008 p. 13 ITE LUC Land Use Unit Fee* 150 Warehouse 1,000 sf $1,627 151 Mini-Warehouse 1,000 sf $810 (1) Source: Transportation Impact Fee Study, Appendix F, Table F-1 (2) Defined as 50% of city median income based on 2007 Gallatin County Average Median Income (AMI) (3) Defined as 80% of city median income based on 2007 Gallatin County Average Median Income (AMI) (4) Impact fee to be assessed on structures with classroom facilities. All auxiliary structures such as administrative buildings and research centers are to be charged at the office land use rate. The following transportation impact fees apply to developments located in the Central Business District or within a designated Trip Exchange District. ITE LUC Land Use Unit Fee* RESIDENTIAL: 210 Single Family (Detached) Less than 1,500 sf and very low income(2) du $2,171 Less than 1,500 sf and low income(3) du $3,147 Less than 1,500 sf du $3,968 1,500 to 2,499 sf du $5,396 2,500 sf or larger du $6,082 220 Apartments du $3,339 230 Residential Condominium/ Townhouse du $2,946 240 Mobile Home Park du $1,593 LODGING: 310 Hotel room $2,835 320 Motel room $1,333 RECREATION: 430 Golf Course hole $4,333 411 City Park acre $182 444 Movie Theaters 1,000 sf $2,333 INSTITUTIONS: 610 Hospital 1,000 sf $6,023 620 Nursing Home bed $381 520 Elementary School student $315 530 High School student $477 540 University (7,500 or fewer students) (4) student $609 550 University (more than 7,500 students) (4) student $529 560 Church/Synagogue 1,000 sf $2,428 565 Day Care 1,000 sf $7,433 OFFICE: 710 50,000 sf or less 1,000 sf $3,187 710 50,001-100,000 sf 1,000 sf $2,911 710 100,001-200,000 sf 1,000 sf $2,475 Most Recently Amended By Ord. 1746 Effective 9/6/2008 p. 14 ITE LUC Land Use Unit Fee* 710 greater than 200,000 sf 1,000 sf $1,974 720 Medical Office 1,000 sf $9,584 RETAIL: 820 under 50,000 sf 1,000 sf $5,284 820 50,000-99,000 sf 1,000 sf $5,452 820 100,000-199,000 sf 1,000 sf $5,182 820 200,000-299,000 sf 1,000 sf $5,115 820 greater than 300,000 sf 1,000 sf $4,999 812 Building Material/Lumber 1,000 sf $21,209 813 Discount Super-Store 1,000 sf $26,996 817 Nursery/Garden Center 1,000 sf $18,903 851 Convenience Store 1,000 sf $44,607 931 Quality Restaurant 1,000 sf $6,009 934 Fast Food Rest w/ Drive-Thru 1,000 sf $22,164 841 New/ Used Auto Sales 1,000 sf $12,033 890 Furniture Store 1,000 sf $1,684 912 Bank/ Savings Drive-in 1,000 sf $24,133 INDUSTRY: 110 General Light Industrial 1,000 sf $2,290 140 Manufacturing 1,000 sf $1,250 150 Warehouse 1,000 sf $1,627 151 Mini-Warehouse 1,000 sf $810 (1) Source: Transportation Impact Fee Study, Appendix F, Table F-2 (2) Defined as 50% of city median income based on 2007 Gallatin County Average Median Income (AMI) (3) Defined as 80% of city median income based on 2007 Gallatin County Average Median Income (AMI) (4) Impact fee to be assessed on structures with classroom facilities. All auxiliary structures such as administrative buildings and research centers are to be charged at the office land use rate. *Compiler's Note: The Transportation Impact Fees listed in this formula shall be adjusted annually as per 3.24.110.K. 3.24.060 Fire Protection Impact Fees A. Imposition of Fire Protection Impact Fees 1. On or after March 23, 1996, any person who seeks to obtain: a. A building permit; or b. Any other permit that will result in construction that will generate demand for fire protection services; or c. Any extension of any such permit that was issued before the effective date of this chapter, is required to pay a fire protection impact fee in the amount specified in this chapter; or Most Recently Amended By Ord. 1746 Effective 9/6/2008 p. 15 d. Any delayed payment of impact fees as specified and approved by the City Commission in accordance with the BMC Title 17, Chapter 2 for Workforce Housing Lots. 2. No permits of the types described in Subsection (A)(1) of this section shall be issued until the fire protection impact fee described in this chapter has been paid, unless the development for which the permit is sought is exempted by Subsection F of this section. B. Computation of Amount of Fire Protection Impact Fee 1. An applicant required by this chapter to pay a fire protection impact fee may choose to have the amount of such fee determined pursuant to either Subsection (B)(2) or (B)(3) of this section. The amount of the fee calculated pursuant to either Subsection (B)(2) or (B)(3) of this section shall be subject to the following adjustment: a. For the first expansion of an existing nonresidential building, the amount calculated shall not include the amount calculated for the expansion of up to thirty percent as compared with its size on February 22, 1996, or two thousand square feet, whichever is less. 2. Unless an applicant requests that the City determine the amount of such fee pursuant to Subsection (B)(3) of this section, the City shall determine the amount of the required fire protection impact fee by reference to Table 3.24.060. a. If the type of development that a permit is applied for is not listed in Table 3.24.060, then the City shall use the fee applicable to the most nearly comparable type or land use in the table. b. If the type of development that a permit is applied for includes a mix of those uses listed in Table 3.24.060, then the fee shall be determined by adding up the fees that would be payable for each use if it were a freestanding use pursuant to Table 3.24.060. c. If the applicant is applying for an extension of a permit issued previously, then the fee shall be the net increase between the fee applicable at the time of the current permit application and any fire protection impact fee previously paid pursuant to this chapter for the same structure. In the event that the fee applicable at the time of the current permit application is lower than the fire protection impact fee previously paid pursuant to this chapter for the same structure, there shall be no refund of fire protection impact fees previously paid. d. If the applicant is applying for a permit to allow a change of use or for the expansion, redevelopment, or modification of an existing development, the fee shall be based on the net increase in the fee for the new use as compared to the previous use. In the event that the proposed change of use, expansion, redevelopment, or modification results in a net decrease in the fee for the new use or development Most Recently Amended By Ord. 1746 Effective 9/6/2008 p. 16 as compared to the previous use or development, there shall be no refund of fire protection impact fees previously paid. 3. An applicant may request that the City determine the amount of the required fire protection impact fee by reference to an independent fee calculation study for the applicant's development prepared at the applicant's cost by qualified professional fire protection experts and/or economists and submitted to the City Fire Chief. Any such study shall be based on the same service standards and unit costs for fire protection used in the fire impact fee study prepared by HDR Engineering dated July 2008 and as updated, and must document the economic methodologies and assumptions used. Any independent fee calculation study submitted by an applicant may be accepted, rejected, or accepted with modifications by the City as the basis for calculating fire protection impact fees. If such study is accepted or accepted with modifications as a more accurate measure of the demand for new fire protection facilities and equipment created by the applicant's proposed development than the applicable fee shown in Table 3.24.060, then the fire protection impact fee due under this chapter may be calculated according to such study. C. Payment of Fire Protection Impact Fees 1. An applicant required by this chapter to pay a fire protection impact fee shall pay such fee to the City prior to the issuance of any of the permits listed in Subsection (A)(1) of this section. 2. All funds paid by an applicant pursuant to this chapter shall be identified as fire protection impact fees and shall be promptly deposited in the fire protection impact fee fund described in Subsection D of this section. D. Fire Protection Impact Fee Funds 1. A single fire protection impact fee fund is created and such fund shall be maintained in an interest bearing account. 2. Such fund shall contain only those fire protection impact fees collected pursuant to this chapter and any interest which may accrue from time to time on such amounts. E. Use of Fire Protection Impact Fee Funds. The monies in the fire protection impact fee fund shall be used only: 1 To acquire or construct fire protection improvements within the city; or 2 To pay debt service on any portion of any future general obligation bond issue or revenue bond issue used to finance the acquisition or construction of fire protection improvements within the city; or 3 As described in Sections 3.24.090 or 3.24.100(G). F. Exemptions from Fire Protection Impact Fee 1. The following types of development shall be exempted from payment of the fire protection impact fee: Most Recently Amended By Ord. 1746 Effective 9/6/2008 p. 17 a. Reconstruction, expansion, or replacement of a previously existing residential unit that does not create any additional residential units. b. Construction of unoccupied accessory units related to a residential unit. c. Projects that the applicant can demonstrate will produce no greater demand for fire protection from such land than existed prior to issuance of such permit. d. Projects for which a fire protection impact fee has previously been paid in an amount that equals or exceeds the fire protection impact fee that would be required by this chapter. 2. Any such claim for exemption must be made no later than the time when the applicant applies for the first permit of a type listed in Subsection (A)(1) of this section for the proposed development, and any claim for exemption not made at or before that time shall have been waived. 3. The City Manager or his designee shall determine the validity of any claim for exemption pursuant to the criteria set forth in Subsection (F)(1) of this section. Table 3.24.060 Type of Development Impact Fee* Detached residential per dwelling unit $780.20 Attached residential, per dwelling unit $655.92 Commercial/Industrial/Institutional per 1,000 gross sq. ft. of building space $178.84 *Compiler's Note: The Fire Protection Impact Fees listed in this formula shall be adjusted annually as per 3.24.110.K. 3.24.070 Water Impact Fees A. Imposition of Water Impact Fees 1. On or after March 23, 1996, any person who seeks to obtain a permit for connection to the city water system, or who is subject to subsection (B)(2)(b) and applies for a city permit to expand or add to the structure served by a previously approved water connection, or any extension of such a permit issued before the effective date of this chapter, is required to pay a water impact fee in the amount specified in this chapter; or 2. Any delayed payment of impact fees as specified and approved by the City Commission in accordance with the BMC Title 17, Chapter 2 for Workforce Housing Lots. 3. No permits for connection to the city water system shall be issued until the water impact fee described in this chapter has been paid, unless the Most Recently Amended By Ord. 1746 Effective 9/6/2008 p. 18 development for which the permit is sought is exempted by Subsection F of this section. B. Computation of Amount of Water Impact Fee 1. The City shall determine the amount of the required water impact fee by reference to Table 3.24.070 unless the applicant chooses to submit an individualized calculation pursuant to subsection (B)(2)(a) or the City determines the application to be subject to subsection (B)(2)(b). If the applicant is applying for a replacement for a water connection permit issued previously, then the fee shall be the net positive difference between the fee applicable at the time of the current permit application and any water impact fee previously paid pursuant to this chapter for the same structure. In the event that the fee applicable at the time of the replacement permit application is lower than the water impact fee previously paid pursuant to this chapter for the same structure, there shall be no refund of water impact fees previously paid. 2. Individualized Calculations. a. An applicant may request that the City determine the amount of the required water impact fee by reference to an independent fee calculation study for the applicant's development prepared at the applicant's cost by a professional engineer and/or economist and submitted to the City Public Service Director. Any such study shall be based on the same service standards and unit costs used in the water impact fee study prepared by HDR Engineering dated May 2007, and as updated, and must document the economic methodologies and assumptions used. Any independent fee calculation study submitted by an applicant may be accepted, rejected, or accepted with modifications by the City as the basis for calculating water impact fees. If such study is accepted, or accepted with modifications, as a more accurate measure of the demand for new water facilities created by the applicant's proposed development than the applicable fee shown in Table 3.24.070, then the water impact fee due under this chapter may be calculated according to such study. b. The City may identify a user as having extraordinary demands for water service which are not accurately represented by the average usage which was relied upon by the methodology which generated Table 3.24.070. In this circumstance the City shall prepare a customized calculation based upon the Large Meter calculation methodology in Exhibit 6 of the Water Impact Fee study. The impact fee paid for water meters larger than 3 inches as of the effective date of this ordinance may be adjusted based on actual usage. If usage is greater than 110% of anticipated volume during the 12 month period of time beginning 6 months after building occupancy is granted by the City, an additional impact fee may be charged, using the same techniques for calculating peak day and storage EDUs and multiplying by the peak day impact fee cost per EDU and the storage impact fee cost per EDU then in effect. The additional impact fee is the positive net between a previously calculated impact fee and the Most Recently Amended By Ord. 1746 Effective 9/6/2008 p. 19 impact fee based upon the metered demand. C. Payment of Water Impact Fee 1. An applicant required by this chapter to pay a water impact fee shall pay such fee to the City prior to the issuance of a water connection permit. 2. All funds paid by an applicant pursuant to this chapter shall be identified as water impact fees and shall be promptly deposited in the water impact fee fund described in Subsection D of this section. D. Water Impact Fee Funds 1. A single water impact fee fund is created and such fund shall be maintained in an interest bearing account. 2. Such fund shall contain only those water impact fees collected pursuant to this chapter and any interest which may accrue from time to time on such amounts. E. Use of Water Impact Fee Funds. The monies in the water impact fee fund shall be used only: 1. To acquire or construct improvements to the city water system; or 2. To pay debt service on any portion of any future general obligation bond issue or revenue bond issue used to finance improvements to the city water system; or 3. As described in Sections 3.24.090 or 3.24.100(G). F. Exemptions from Water Impact Fees 1. The following types of development shall be exempted from payment of the water impact fee: a. Alteration or expansion of an existing building that does not require an additional or larger water meter; b. Replacement of a building or structure of the same size that does not require an additional or larger water meter; c. The location of mobile home on a site for which a water impact fee was previously paid, and that does not require an additional or larger water meter. 2. The installation of fire lines for fire protection shall be exempted from payment of the water impact fee. 3. Any such claim for exemption must be made no later than the time when the applicant applies for the first permit of a type listed in Subsection (A)(1) of this section for the proposed development, and any claim for exemption not made at or before that time shall have been waived. 4. The City Manager or his designee shall determine the validity of any claims for exemption pursuant to the criteria set forth in Subsections (F)(1) and (F)(2) of this section. Most Recently Amended By Ord. 1746 Effective 9/6/2008 p. 20 Table 3.24.070 WATER IMPACT FEE SCHEDULE* SIZE OF WATER METER COST PER METER 3/4 inch $ 3,310 1 inch $ 8,275 1 ½ inch $ 16,550 2 inch $ 26,480 3 inch $ 52,960 Larger than 3 inch calculated *Compiler's Note: The Cost Per Meter Fees listed in this formula shall be adjusted annually as per 3.24.110.K. 3.24.080 Wastewater Impact Fees A. Imposition of Wastewater Impact Fees 1. On or after March 23, 1996, any person who seeks to obtain a permit for connection to the city wastewater system, or who is subject to subsection (B)(2)(b) and applies for a city permit to expand or add to the structure served by a previously approved water connection, or any extension of such a permit issued before the effective date of this chapter is required to pay a wastewater impact fee in the amount specified in this chapter; or 2. Any delayed payment of impact fees as specified and approved by the City Commission in accordance with the BMC Title 17, Chapter 2 for Workforce Housing Lots. 3. No permits for connection to the city water system shall be issued until the water impact fee described in this chapter has been paid, unless the development for which the permit is sought is exempted by Subsection F of this section. B. Computation of Amount of Wastewater Impact Fee 1. The City shall determine the amount of the required wastewater impact fee by reference to Table 3.24.080 070 unless the applicant chooses to submit an individualized calculation pursuant to subsection (B)(2)(a) or the City determines the application to be subject to subsection (B)(2)(b). If the applicant is applying for a replacement for a wastewater connection permit issued previously, then the fee shall be the net positive difference between the fee applicable at the time of the current permit application and any wastewater impact fee previously paid pursuant to this chapter for the same structure. In the event that the fee applicable at the time of the replacement permit application is lower than the wastewater impact fee previously paid pursuant to this chapter for the same structure, there shall be no refund of wastewater impact fees previously paid. 2. Individualized Calculations. Most Recently Amended By Ord. 1746 Effective 9/6/2008 p. 21 a. An applicant may request that the City determine the amount of the required wastewater impact fee by reference to an independent fee calculation study for the applicant's development prepared at the applicant's cost by a professional engineer and/or economist and submitted to the City Public Service Director. Any such study shall be based on the same service standards and unit costs used in the wastewater impact fee study prepared by HDR Engineering dated May 2007, and as updated, and must document the economic methodologies and assumptions used. Any independent fee calculation study submitted by an applicant may be accepted, rejected, or modified by the City as the basis for calculating wastewater impact fees. If such study is accepted or accepted with modifications as a more accurate measure of the demand for new wastewater facilities created by the applicant's proposed development than the applicable fee shown in Table 3.24.080, then the wastewater impact fees due under this chapter shall be calculated according to such study. b. The City may identify a user as having extraordinary demands for wastewater service which are not accurately represented by the average usage which was relied upon by the methodology which generated Table 3.24.080. In this circumstance the City shall prepare a customized calculation based upon the methodology in the Water Impact Fee study. When applicable an adjustment for high strength discharge will be applied. The impact fee paid for water meters larger than 3 inches as of the effective date of this ordinance may be adjusted based on actual usage. If usage is greater than 110% of anticipated volume during the 12 month period of time beginning 6 months after building occupancy is granted by the City, an additional impact fee may be charged, using the same techniques for calculating treatment and collection in EDUs and multiplying by the impact fee cost per EDU. The additional impact fee is the positive net between a previously calculated impact fee and the impact fee based upon the metered demand. C. Payment of Wastewater Impact Fee 1. An applicant required by this chapter to pay a wastewater impact fee shall pay such fee to the City prior to the issuance of a wastewater connection permit. 2. All funds paid by an applicant paid pursuant to this chapter shall be identified as wastewater impact fees and shall be promptly deposited in the wastewater impact fee fund described in Subsection D of this section. D. Wastewater Impact Fee Funds 1. A single wastewater impact fee fund is created and such fund shall be maintained in an interest bearing account. 2. Such fund shall contain only those wastewater impact fees collected pursuant to this chapter and any interest which may accrue from time to time on such amounts. Most Recently Amended By Ord. 1746 Effective 9/6/2008 p. 22 E. Use of Wastewater Impact Fee Funds. The monies in the wastewater impact fee fund shall be used only: 1. To acquire or construct improvements to the city wastewater system; or 2. To pay debt service on any portion of any future general obligation bond issue or revenue bond issue used to finance improvements to the city wastewater system; or 3. As described in Section 3.24.090 or Section 3.24.100(G). F. Exemptions from Wastewater Impact Fees 1. The following types of development shall be exempted from payment of the wastewater impact fee: a. Alteration or expansion of an existing building that does not require an additional or larger water meter; b. Replacement of a building or structure of the same size that does not require an additional or larger water meter; c. The location of mobile home on a site for which a wastewater impact fee was previously paid and that does not require an additional or larger water meter; 2. Any such claim for exemption must be made no later than the time when the applicant applies for the first permit of a type listed in Subsection (A)(1) of this section for the proposed development, and any claim for exemption not made at or before that time shall have been waived. 3. The City Manager or his designee shall determine the validity of any claim for exemption pursuant to the criteria set forth in Subsection (F)(1) of this section. Table 3.24.080 WASTEWATER IMPACT FEE SCHEDULE SIZE OF WATER METER COST PER METER* 3/4 inch $ 2,955 1 inch $ 7,388 1 ½ inch $ 14,775 2 inch $ 23,640 3 inch $ 47,280 Larger than 3 inch calculated *Compiler's Note: The Cost Per Meter Fees listed in this formula shall be adjusted annually as per 3.24.110.K. 3.24.090 Refunds of Development Impact Fees Paid Refunds of development impact fees shall be made only in the following instances and in the following manner: Most Recently Amended By Ord. 1746 Effective 9/6/2008 p. 23 A. Upon application to the Impact Fee Coordinator by the applicant, the City shall refund the development impact fee paid if capacity is available and service is denied. B. 1. Upon application to the Impact Fee Coordinator, the City shall refund the development impact fee paid and not expended or encumbered within ten years from the date the development impact fee was paid or spent in a manner not in accordance with this chapter or section 17-6-1602 of the Montana Code Annotated. Refunds shall be paid to the owner of the property at the time the refund is due. In determining whether development impact fees have been expended or encumbered, fees shall be considered encumbered on a first-in, first-out (FIFO) basis. 2. When the right to a refund exists due to a failure to expend or encumber development impact fees, the City shall publish written notice within thirty days after the expiration of the ten year period from the date development impact fee was paid. The published notice shall contain the heading "Notice of Entitlement to Development Impact Fee Refund." C. If an applicant has paid a development impact fee required by this chapter and has obtained any of the types of permits or extensions listed in Sections 3.24.050 (A)(1), 3.24.060 (A)(1), 3.24.070 (A)(1), or 3.24.080(A)(1), and the permit or extension for which the fee was paid later expires without the possibility of further extension, then the applicant who paid such fee shall be entitled to a refund of the fee paid, without interest. In order to be eligible to receive such refund, the applicant who paid such fee shall be required to submit an application for such refund within thirty days after the expiration of the permit or extension for which the fee was paid. D. A refund application shall be made to the Impact Fee Coordinator within one year from the date such refund becomes payable under Subsections A and B of this section, or within one year from the date of publication of the notice of entitlement of a refund under Subsection B of this section, whichever is later. Any refund not applied for within said time period shall be deemed waived. E. A refund application shall include information and documentation sufficient to permit the Impact Fee Coordinator to determine whether the refund claimed is proper and, if so, the amount of such refund. F. A refund shall include a pro rata share of interest actually earned on the unused or excess development impact fee paid. G. All refunds shall be paid within sixty days after the Impact Fee Coordinator determines that such refund is due. (Ord. 1418 § 7, 1996; Ord. 1414 § 1 (part), 1996) H. Any refund payable pursuant to Subsections A and B of this section, shall be made to the record owner of property as of the date the refund was due. 3.24.100 Credits Against Development Impact Fees A. After the effective date of this chapter, mandatory or voluntary land or easement dedications for transportation, fire protection, water, or wastewater improvements, and mandatory or voluntary acquisition or construction of capital improvements to the Most Recently Amended By Ord. 1746 Effective 9/6/2008 p. 24 transportation system or the city fire protection, water, or wastewater systems by an applicant in connection with a proposed development may result in a pro rata credit against the development impact fee for the same type of service or facility otherwise due for such development, except that no such credit shall be awarded for: 1. Projects or land dedications not listed on the impact fee capital improvements program; or 2. Land dedications for, or acquisition or construction of, project-related improvements as defined in Section 3.24.040(G) or Section 3.24.040; or 3. Any voluntary land or easement dedications not accepted by the City; or 4. Any voluntary acquisition or construction of improvements not approved in writing by the City prior to commencement of the acquisition or construction. B. In order to obtain a credit against development impact fees otherwise due, an applicant must submit a written offer to dedicate to the City specific parcels of qualifying land or easements, or to acquire or construct specific improvements to the transportation system or the City fire protection, water, or wastewater systems in accordance with all applicable State or City design and construction standards, and must specifically request a credit against such development impact fees. Such written request must be made on a form provided by the City, must contain a statement under oath of the facts that qualify the applicant to receive a credit, must be accompanied by documents evidencing those facts, and must be approved not later than the initiation of construction of improvements or the acceptance by the City of land dedications, or the applicant's claim for the credit shall be waived. The granting of credit shall be approved by the City Commission. The City shall approve a credit only after showing that the need for the dedication or construction is clearly documented pursuant to section 7-6-1602 of the Montana Code Annotated, and that any land dedication proposed for credit is determined to be appropriate for the proposed use. 1. Upon receipt of a complete application for impact fee credit the Impact Fee Coordinator shall coordinate review of the application for compliance with the requirements of this chapter and other relevant requirements. Upon completion of the review the Impact Fee Coordinator shall either: forward the application to the City Manager, or when required to the City Commission, for approval or; if the application is insufficient or otherwise does not conform to the City’s requirements shall communicate in writing to the applicant the reason the credit request failed. If the application satisfies the requirements and is approved the credit may be provided in any of the allowed forms as described in Subsection G. a. Factors for Consideration (1) When credit is sought for an improvement listed in the second through fifth years of the CIP after the current fiscal year there shall be a rebuttable presumption that any credit shall be awarded as a credit balance and not as cash. (2) The final decision to approve a credit request in excess of $1,000,000 from a single impact fee fund shall be made by the City Commission. Most Recently Amended By Ord. 1746 Effective 9/6/2008 p. 25 (3) In the event that the City Manager believes that a credit request may result in a significant effect on policy decisions the credit request may be referred to the City Commission for final action regardless of the dollar amount. (4) In the event that the City considers that award of a credit may negatively impact its ability to construct improvements listed sooner in time on the CIP they may decline to award a credit at that time without removing the item from the CIP. 2. Appeals relating to staff decisions on credit requests may be appealed to the City Commission per Subsection 3.24.110.I C. The credit due to an applicant shall be calculated and documented as follows: 1. Credit for qualifying land or easement dedications shall, at the applicant's option, be valued at: a. One hundred percent of the most recent assessed value for such land as shown in the records of the City Assessor; or b. That fair market value established by a private appraiser acceptable to the City in an appraisal paid for by the applicant. 2. In order to receive credit for qualifying acquisition or construction of transportation, fire protection, water, or wastewater improvements, the applicant shall submit complete engineering drawings, specifications, and construction cost estimates to the City. The City shall determine the amount of credit due based on the information submitted, or, if it determines that such information is inaccurate or unreliable, then on alternative engineering or construction costs acceptable to the City. D. Approved credits shall become effective at the following times: 1. Approved credit for land or easement dedications shall become effective when the land has been conveyed to the City in a form acceptable to the City, and at no cost to the City, and has been accepted by the City Commission. When such conditions have been met, the City shall note that fact in the credit record maintained by the City Finance Department. Upon request of the credit holder, the City shall send the credit holder a letter stating the credit balance available to him (or her). 2. Approved credits for the acquisition or construction of transportation, fire protection, water, or wastewater improvements shall generally become effective when: a. All required construction has been completed and has been accepted by the City; and b. A suitable maintenance and warranty bond has been received and approved by the City; and c. All design, construction, inspection, testing, bonding, and acceptance procedures have been completed in compliance with all applicable City and State procedures. Most Recently Amended By Ord. 1746 Effective 9/6/2008 p. 26 However, approved credits for the construction of improvements may become effective at an earlier date if the applicant posts security in the form of a performance bond, irrevocable letter of credit, or escrow agreement, and the amount and terms of such security are accepted by the City. At a minimum, such security must be in the amount of the approved credit or an amount determined to be adequate to allow the City to construct the improvements for which the credit was given, whichever is higher. When such conditions have been met, the City shall note that fact in the credit record maintained by the City Finance Department. Upon request of the credit holder, the City shall also send the credit holder a letter stating the credit balance available to him (or her). E. Approved credits may be used to reduce the amount of development impact fees due from any proposed development for the same type of service or facility for which the applicant dedicated land or acquired or constructed improvements until the amount of the credit is exhausted. Each time a request to use credit from a mandatory or voluntary dedication, acquisition, or construction is presented to the City, the City shall reduce the amount of the development impact fee of the same type otherwise due from the applicant and shall note in the city records the amount of credit remaining, if any. In the case of a mandatory dedication, acquisition, or construction, any credit in excess of the amount of the development impact fee otherwise due under this chapter shall be deemed excess credit that is remaining and available for use by the applicant. In the case of a voluntary dedication, acquisition, or construction, any credit in excess of the amount of the development impact fee of the same type and applicable to the project, as shown in Tables 3.24.050, 3.24.060, 3.24.070, or 3.24.080, shall be deemed excess credit that is remaining and available for use by the applicant. Upon request of the credit holder, the City shall also send the credit holder a letter stating the amount of credit remaining to him (or her). F. Approved credit shall only be used to reduce the amount of development impact fees of the same type otherwise due under this chapter and shall not be paid to the applicant in cash or in credit against any development impact fees for a different type of facility or service or against any other monies due from the applicant to the City, except as described in Subsection G of this section. G. If the amount of approved credit for a mandatory dedication, acquisition, or construction exceeds the amount of the development impact fees of the same type otherwise due under this chapter, the applicant may request in writing that the City provide for reimbursement of any excess credit to the applicant in cash. Such written request must be approved not later than the initiation of construction of improvements, or the acceptance by the City of land dedications, or the applicant's claim shall be waived. Upon receipt of such a written request, the City may, at its discretion: 1. Arrange for the reimbursement of such excess credit from the impact fee fund for the same type of service or facility from development impact fees paid by others; 2 . Arrange for the reimbursement of such excess credit through the issuance of a promissory note payable in not more than ten years and bearing interest equal to the interest rate paid by the City for its long-term debt; or Most Recently Amended By Ord. 1746 Effective 9/6/2008 p. 27 3. Reject the request for cash and provide credit. Such excess credit shall be valued at one hundred percent of actual developer costs for the excess improvements, or at the actual appraised value of such excess improvements, at the City's option. H. Credit may be transferred from one holder to another by any written instrument clearly identifying the credit issued under Subsection C of this section that is to be transferred, provided that such instrument is signed by both the transferror and transferee, and that the document is delivered to the City for registration of the change in ownership. I. In the event that land is annexed into the city from Gallatin County after the effective date of this chapter, and that road or fire impact fees have been previously paid to the County, an applicant proposing a development on the land may request in writing a credit against the transportation impact fee equal to the amount of any road impact fee paid to the County for the same land and may also request a credit against the fire protection impact fee equal to the amount of any fire protection impact fee paid to the County for the same land. Such written request must be filed not later than the time when an applicant applies for the first permit of a type listed in Sections 3.24.050(A)(1) or 3.24.060(A)(1) that creates an obligation to pay the type of development impact fee against which the credit is requested, or the applicant's claim shall be waived. 3.24.110 Miscellaneous Provisions A. Interest earned on monies in any impact fee fund shall be considered part of such fund and shall be subject to the same restrictions on use applicable to the impact fees deposited in such fund. B. No monies from any impact fee fund shall be spent for periodic or routine maintenance of any facility of any type or to cure deficiencies in public facilities existing on the effective date of this chapter. C. Nothing in this chapter shall restrict the City from requiring an applicant to construct reasonable project improvements required to serve the applicant's project, whether or not such improvements are of a type for which credit is available under Section 3.24.100. D. The City shall maintain accurate records of the development impact fees paid, including the name of the person paying such fees, the project for which the fees were paid, the date of payment of each fee, the amounts received in payment for each fee, and any other matters that the City deems appropriate or necessary to the accurate accounting of such fees, and such records shall be available for review by the public during city business hours. E. At least once during each fiscal year of the City, the City Administrative Services Director shall present to the City Commission a proposed impact fee capital improvements program for the transportation system, fire protection system, water system, and wastewater system, which identifies the capacity-adding capital improvements that will benefit new development subject to the terms of this chapter, exclusive of any improvements needed to correct existing deficiencies or for operation or maintenance purposes. Such capital improvements program shall assign monies from each impact fee fund to specific projects and related expenses for improvements Most Recently Amended By Ord. 1746 Effective 9/6/2008 p. 28 to the type of facilities or services for which the fees in that fund were paid. Any monies, including any accrued interest, not assigned to specific projects within such capital improvements program and not expended pursuant to Sections 3.24.090 or 3.24.100(G) shall be retained in the same impact fee fund until the next fiscal year. The Impact Fee Capital Improvements Program shall be adopted by the City Commission as a supplemental document to the city budget. The Impact Fee Capital Improvements Program shall schedule the construction of capital improvements to serve projected growth and project capital improvement costs, expenditures and impact fee fund revenues for a five year period. The individual fee funds shall maintain a positive fiscal balance. The program may be amended by a majority vote of the City Commission. The City Manager shall adopt and revise, as needed, an administrative impact fee manual to carry out the purposes of this chapter. F. The City shall be entitled to retain not more than five percent of the development impact fees collected as payment for the expenses of collecting the fee and administering this chapter. G. If a development impact fee has been calculated and paid based on a mistake or misrepresentation, it shall be recalculated. Any amounts overpaid by an applicant shall be refunded by the City to the applicant within thirty days after the City's acceptance of the recalculated amount, with interest at the rate of five percent per annum since the date of such overpayment. Any amounts underpaid by the applicant shall be paid to the City within thirty days after the City's acceptance of the recalculated amount, with interest at the rate of five percent per annum since the date of such underpayment. In the event the underpayment is caused by an error attributed solely to the City, the applicant shall pay the recalculated amount without interest. In the case of an underpayment to the City, the City shall not issue any additional permits or approvals for the project for which the development impact fee was previously paid until such underpayment is corrected; and if amounts owed to the City are not paid within such thirty day period, the City may also repeal any permits issued in reliance on the previous payment of such development impact fee and refund such fee to the then current owner of the land. H. In order to promote affordable workforce housing of the City, the City Commission may waive impact fees for Workforce Housing Lots approved by the City Commission pursuant to the BMC Title 17, Chapter 2 by paying some or all of the impact fee from other funds of the city that are not restricted to other uses. In order to promote the economic development of the city and the provision of affordable housing in the city, the City Commission may agree to pay some or all of the development impact fees imposed on a proposed development by this chapter from other funds of the city that are not restricted to other uses. Any such decision to pay development impact fees on behalf of an applicant shall be at the discretion of the City Commission and shall be made pursuant to goals and objectives previously adopted by the City Commission to promote economic development and/or affordable housing. I. Any determination made by any official of the city charged with the administration of any part of this chapter may be appealed to the Development Impact Fees Review Committee by filing: 1. A written notice of appeal on a form provided by the City; Most Recently Amended By Ord. 1746 Effective 9/6/2008 p. 29 2. A written explanation of why the appellant feels that a determination was in error; and 3. An appeal fee of five hundred dollars with the Impact Fee Coordinator within ten working days after the determination for which the appeal is being filed. The Development Impact Fees Review Committee shall meet to review the appeal within thirty working days of the date the written appeal was presented to the Impact Fee Coordinator. If the appellant is dissatisfied with the decision of the Development Impact Fees Review Committee, the appellant may appeal the decision to the City Commission by filing a written request with the City Clerk within ten working days of the Committee's decision. At the regular meeting following the filing of the appeal, the City Commission shall fix a time and place for hearing the appeal; and the City Clerk shall mail notice of the hearing to the appellant at the address given in the notice of appeal. The hearing shall be conducted at the time and place stated in such notice given by the City Commission. The determination of the City Commission shall be final. If the City Commission concludes that all or part of a determination made by an official of the city charged with the administration of any part of this chapter was in error, then the appeal fee described above shall be returned to the appellant. J. Updating of impact fee information. 1. The facility plans described in this chapter shall be reviewed by the City at least once every five years and if a revision of a facility plan to address changed conditions is deemed necessary, by the City, the plan shall be updated. 2. The development impact fees described in this chapter, fee studies, data and analysis relied upon and required by section 7-6-1602, MCA, and the administrative procedures and manual of this chapter shall be updated at least once every three fiscal years. 3. The impact fee capital improvement program shall be reviewed and updated as provided in section 3.24.110(E) above. 4. The purpose of the review and updating of impact fee related documentation is to ensure that: a The demand and cost assumptions underlying such fees are still valid; b. The resulting fees do not exceed the actual cost of constructing improvements that are of the type for which the fee was paid and that are required to serve new development; c. The monies collected or to be collected in each impact fee fund have been, and are expected to be, spent for improvements of the type for which such fees were paid; and d. That such improvements will benefit those developments for which the fees were paid. K. The development impact fees shown in Tables 3.24.050, 3.24.060, 3.24.070, and 3.24.080 shall be adjusted annually to reflect the effects of inflation on those costs for Most Recently Amended By Ord. 1746 Effective 9/6/2008 p. 30 improvements set forth in the impact fee studies. On January 1st of each year unless and until the fees in Tables 3.24.050, 3.24.060, 3.24.070, and/or 3.24.080 are revised or replaced, and then beginning in the subsequent calendar year, each fee amount set forth in each such table shall be adjusted by multiplying such amount by one (1) plus the value of the Construction Cost Index published in the first December edition of the current year. – Source: Engineering News Record. The right-of-way component of the transportation impact fee shall be adjusted by multiplying the value of the right-of-way component of the fee by one (1) plus the percentage value of the increase in taxable value from the preceding year. – Source: Montana Department of Revenue. Such adjustments in such fees shall become effective immediately upon calculation by the City and shall not require additional action by the City Commission to be effective. M. The section titles used in this chapter are for convenience only and shall not effect the interpretation of any portion of the text of this chapter. N. Any judicial action or proceeding to attack, review, set aside, or annul the reasonableness, legality, or validity of any development impact fee must be filed and service of process effected within ninety days following the date of imposition of the fee or the final determination of the City Commission, whichever is the later. STREET IMPACT FEE SCHEDULE - General ITE LUC Type of Land Use Unit Measure Amount Due Per Unit* RESIDENTIAL: 210 Single Family (Detached) Less than 1 500 sf and very low income(2)dwelling unit $1 380 70Less than 1,500 sf and very low income(2)dwelling unit $1,380.70 Less than 1,500 sf and low income (3) dwelling unit $2,001.41 Less than 1,500 sf dwelling unit $2,523.55 1,500 to 2,499 sf dwelling unit $3,431.72 2,500 sf or larger dwelling unit $3,868.00 220 Apartments dwelling unit $2,123.52 230 Residential Condominium/ Townhouse dwelling unit $1,873.58 240 Mobile Home Park dwelling unit $1,013.11 g LODGING: 310 Hotel room $1,947.99 320 Motel room $1,067.16 RECREATION: 430 Golf Course hole $7,819.30 411 City Park acre $347.24 444 Movie Theaters 1,000 sf $4,110.30 INSTITUTIONS:INSTITUTIONS: 610 Hospital 1,000 sf $3,830.47 620 Nursing Home bed $242.31 520 Elementary School student $200.33 530 High School student $303.36 540 University (7,500 or fewer students) (4) student $387.31 550 University (more than 7,500 students) (4) student $336.43 560 Church/ Synagogue 1,000 sf $1,544.15 ygg 565 Day Care 1,000 sf $4,727.20 OFFICE: 710 50,000 sf or less 1,000 sf $2,529.27 710 50,001-100,000 sf 1,000 sf $2,304.13 710 100,001-200,000 sf 1,000 sf $1,961.34 710 greater than 200,000 1,000 sf $1,564.50 720 Medical Office 1,000 sf $6,095.18 RETAIL:RETAIL: 820 under 50,000 sf 1,000 sf $5,964.17 820 50,000-99,000 sf 1,000 sf $6,097.08 820 100,000-199,000 sf 1,000 sf $5,934.28 820 200,000-299,000 sf 1,000 sf $5,448.39 820 greater than 300,000 sf 1,000 sf $5,179.37 812 Building Material/ Lumber 1,000 sf $13,488.38 813 Discount Super-Store 1,000 sf $17,168.76 p 817 Nursery/Garden Center 1,000 sf $12,021.82 851 Convenience Store 1,000 sf $28,368.90 931 Quality Restaurant 1,000 sf $14,014.33 934 Fast Food Rest w/ Drive-Thru 1,000 sf $38,937.52 841 New/Used Auto Sales 1,000 sf $7,652.68 890 Furniture Store 1,000 sf $1,070.98 912 Bank/ Savings Drive-in 1,000 sf $20,164.20 INDUSTRY:INDUSTRY: 110 General Light Industrial 1,000 sf $1,456.38 140 Manufacturing 1,000 sf $794.97 150 Warehouse 1,000 sf $1,034.73 151 Mini-Warehouse 1,000 sf $515.14 * Represents 60% of cost of service per Section 3.24.050 BMC CY 2010-v1 Effective January 1, 2010 FIRE IMPACT FEE SCHEDULE TYPE OF DEVELOPMENT Amount Due Per Unit Detached residential per dwelling unit $822.70 Attached residential, per dwelling unit $691.65 Commercial/Industrial/Institutional per 1,000 gross sq. ft. of building space $188.58 CY 2009-v1 Effective January 1, 2009 WATER IMPACT FEE SCHEDULE SIZE OF WATER METER COST PER METER 3/4 inch $3,625.38 1 inch $9,063.45 1.5 inch $18,126.90 2 inch $29,003.04 3 inch $58,006.09 Gtth3ih Cl ltdGreater than 3 inch Calculated CY 2010-v1 Effective January 1, 2010 SEWER IMPACT FEE SCHEDULE SIZE OF WATER METER* COST PER METER 3/4 inch $3,236.56 1 inch $8,091.94 15inch $16 182 781.5 inch $16,182.78 2 inch $25,892.45 3 inch $51,784.89 Greater than 3 inch Calculated *Demand for service assumed to correlate with water intake. CY 2010-v1 Effective January 1, 2010 STREET IMPACT FEE SCHEDULE - Trip Exchange District ITE LUC Type of Land Use Unit Measure Amount Due Per Unit* RESIDENTIAL: 210 Single Family (Detached) Less than 1,500 sf and very low income(2)dwelling unit $1,380.70 Less than 1,500 sf and very low income(2)dwelling unit $1,380.70 Less than 1,500 sf and low income (3) dwelling unit $2,001.41 Less than 1,500 sf dwelling unit $2,523.55 1,500 to 2,499 sf dwelling unit $3,431.72 2,500 sf or larger dwelling unit $3,868.00 220 Apartments dwelling unit $2,123.52 230 Residential Condominium/ Townhouse dwelling unit $1,873.58 240 Mobile Home Park dwelling unit $1,013.11 LODGING: 310 Hotel room $1,802.99 320 Motel room $847.75 RECREATION: 430 Golf Course hole $2,755.68 411 City Park acre $115.75 444 Movie Theaters 1,000 sf $1,483.73 INSTITUTIONS:INSTITUTIONS: 610 Hospital 1,000 sf $3,830.47 620 Nursing Home bed $242.31 520 Elementary School student $200.33 530 High School student $303.36 540 University (7,500 or fewer students) (4) student $387.31 550 University (more than 7,500 students) (4) student $336.43 560 Church/ Synagogue 1,000 sf $1,544.15 ygg ,$, 565 Day Care 1,000 sf $4,727.20 OFFICE: 710 50,000 sf or less 1,000 sf $2,026.85 710 50,001-100,000 sf 1,000 sf $1,851.32 710 100,001-200,000 sf 1,000 sf $1,574.04 710 greater than 200,000 1,000 sf $1,255.41 720 Medical Office 1,000 sf $6,095.18 RETAILRETAIL: 820 under 50,000 sf 1,000 sf $3,360.49 820 50,000-99,000 sf 1,000 sf $3,467.33 820 100,000-199,000 sf 1,000 sf $3,295.62 820 200,000-299,000 sf 1,000 sf $3,253.01 820 greater than 300,000 sf 1,000 sf $3,179.23 812 Building Material/ Lumber 1,000 sf $13,488.38 813 Discount Super-Store 1,000 sf $17,168.76813Discount Super-Store 1,000 sf $17,168.76 817 Nursery/Garden Center 1,000 sf $12,021.82 851 Convenience Store 1,000 sf $28,368.90 931 Quality Restaurant 1,000 sf $3,821.57 934 Fast Food Rest w/ Drive-Thru 1,000 sf $14,095.73 841 New/Used Auto Sales 1,000 sf $7,652.68 890 Furniture Store 1,000 sf $1,070.98 912 Bank/ Savings Drive-in 1,000 sf $15,347.97 INDUSTRY: 110 General Light Industrial 1,000 sf $1,456.38 140 Manufacturing 1,000 sf $794.97 150 Warehouse 1,000 sf $1,034.73 151 Mini-Warehouse 1,000 sf $515.14 * Represents 60% of cost of service per Section 3.24.050 BMC CY 2010-v1 Effective January 1, 2010 City of Bozeman Final Report Impact Fees for the Water System July 2007 Prepared by HDR Engineering, Inc. July 18, 2007 Mr. Chris Saunders City of Bozeman 20 E Olive Street Bozeman, MT 59715 Subject: Impact Fees for the Water System Dear Mr. Saunders: HDR Engineering Inc. was retained by the City of Bozeman (City) to develop recommended impact fees for the water and wastewater systems for new development. While the City currently has impact fees or system development charges for the water and wastewater systems, these fees need to be updated and assure compliance with Montana law. To that end, please find attached our final report detailing the findings, conclusions and recommendations of the review undertaken by HDR Engineering for the determination of cost based impact fee for the City’s water system. This final report has incorporated comments from the Southwest Montana Building Industry Association. HDR Engineering, Inc. recommends that the City have the charges set forth in this report reviewed by its legal counsel to assure compliance with Montana law. We appreciate the opportunity to provide this technical report to the City. Should you have any questions about this report, please call. It has been a pleasure working with you on this project. We look forward to the opportunity to continue to provide assistance to the City. Sincerely yours, HDR ENGINEERING INC. Randall P. Goff Project Principal Attachments Table of Contents i City of Bozeman, Montana Contents 1 Introduction and Overview of the Study 1.1 Introduction..........................................................................................................1-1 1.2 Overview of the Study.........................................................................................1-1 1.3 Disclaimer............................................................................................................1-2 1.4 Summary..............................................................................................................1-2 2 Overview of Impact Fees and “Generally Accepted” Utility Industry Practices 2.1 Introduction..........................................................................................................2-1 2.2 Defining Impact Fees...........................................................................................2-1 2.3 Historical Perspective..........................................................................................2-2 2.4 Impact Fees and “Generally Accepted” Practices ...............................................2-3 2.5 Financial Objectives of Impact Fees....................................................................2-6 2.6 Relationship of Impact Fees and New Construction Activity .............................2-7 2.7 Summary..............................................................................................................2-8 3 Overview of Impact Fee Methodologies 3.1 Introduction..........................................................................................................3-1 3.2 Impact Fee Criteria ..............................................................................................3-1 3.3 Overview of the Impact Fee Methodology..........................................................3-2 3.4 Summary..............................................................................................................3-4 4 Legal Considerations in Establishing Impact Fees for the City 4.1 Introduction..........................................................................................................4-1 4.2 Requirements under Montana Law......................................................................4-1 4.3 Summary..............................................................................................................4-4 5 Determination of the City Water Impact Fees 5.1 Introduction..........................................................................................................5-1 5.2 Overview of the City’s Water System.................................................................5-1 5.3 Present Water Impact Fees...................................................................................5-1 5.4 Service Areas.......................................................................................................5-2 5.5 Calculation of the City’s Water Impact Fees.......................................................5-2 5.6 Net Allowable Water Impact Fee ........................................................................5-6 5.7 Key Assumptions.................................................................................................5-7 5.8 Implementation of the Impact Fees......................................................................5-8 5.9 Consultant Recommendation...............................................................................5-8 5.10 Summary..............................................................................................................5-8 Table of Contents ii City of Bozeman, Montana Tables 5-1 Present Water Impact Fees...................................................................................5-1 5-2 Water System Planning Criteria...........................................................................5-3 5-3 Water System Equivalent Residential Units........................................................5-4 5-4 Allowable Water Impact Fees..............................................................................5-7 5-5 Allowable Water System Impact Fees.................................................................5-7 Figures 2-1 Overview of the Three-Interrelated Analyses to Review Rates...........................2-4 2-2 Overview of the “Cash-Basis” Approach to Establishing Revenue Requirements........................................................................................2-5 Appendix A – Water Impact Fees 1 Development of Level of Service and EDUs 2 Source of Supply 3 Distribution Storage 4 Transmission/Distribution Mains 5 Debt Service Credit 6 Summary 7 Large Meter Size Calculation Appendix B – Montana Code for Impact Fees Introduction and Overview of the Study 1-1 City of Bozeman, Montana “The objective of this report is to properly place in context the purpose of impact fees, and to determine cost based impact fees for the water system that complies with Montana law.” Section 1 Introduction and Overview of the Study 1.1 Introduction HDR Engineering, Inc. was retained by the City of Bozeman; Montana (City) to update and develop recommended cost based impact fees for the City’s water system that comply with Montana Code 7-6-1601 to 7-6-1604. This report provides details of the development of cost based impact fees for the City’s water system. Impact fees are a one-time assessment against new development to pay for the cost of infrastructure required to provide service. Impact fees provide the means of balancing the cost requirements for new utility infrastructure between existing customers and new customers. The portion of existing plant and future capital improvements that will provide service (capacity) to new customers is included in the impact fees. In contrast to this, the City has future capital improvement projects that are related to renewal and replacement of existing facilities in service. These infrastructure costs are typically included within the rates charged to the City’s customers, and are not included within the impact fee. Impact fees and rates exclude those portions of infrastructure directly related to individual development projects. By establishing cost-based impact fees, the City will assure that “growth pays for growth” and existing utility customers will be sheltered from the financial impacts of growth. The City formally adopted the policy of having beneficiaries of services pay for the services in 1983. The policy has remained in effect ever since and is reflected in many aspects of the City financial structure. 1.2 Overview of the Study This report is divided into five distinct components. The next section of the report, Section 2, provides a review of “generally accepted” utility industry practices as they relate to impact fees. At the same time, it also discusses the financial objectives of impact fees and the practices of other utilities in relation to this fee. Section 3 provides an overview of the criteria and methodologies used in the development of cost-based impact fees and Section 4 provides a summary of the legal requirements for the enactment of impact fees under Montana law. The cost based impact fee calculation for the City’s water system is provided in Section 5. The study relies upon the adopted water facility plan and other standards established by the City. These additional materials are cited to but not directly included in this study. Introduction and Overview of the Study 1-2 City of Bozeman, Montana 1.3 Disclaimer HDR Engineering, Inc., in its determination of impact fees presented in this report, has used “generally accepted” engineering, accounting and ratemaking principles. This should not be construed as a legal opinion with respect to Montana law. Prior to adoption of this study, the City conducted a legal analysis of its impact fee program, including this study, and concluded that the program conforms to all legal requirements. 1.4 Summary This section of the report has provided an overview of the report developed for the City concerning water impact fees. The next section of the report will discuss the “generally accepted” utility industry practices as they relate to impact fees. Overview of Impact Fees and “Generally Accepted” Utility Industry Practices 2-1 City of Bozeman, Montana “Impact fees are capital recovery fees that are generally established as one-time charges assessed against developers or new water customers as a way to recover a part or all of the cost of system capacity constructed for their use. Section 2 Overview of Impact Fees and “Generally Accepted” Utility Industry Practices 2.1 Introduction An important starting point in discussing the City’s continued implementation of water impact fees is an understanding of the purpose and concept of impact fees and the financial objective of those fees. This section of the report will discuss the concept of impact fees and the “generally accepted” practices of the industry. 2.2 Defining Impact Fees One must first define an “impact fee” before beginning an assessment and review of the fees. Impact fees are also often called system development charges (SDC’s), capacity charges, buy-in fees, facility expansion charges, plant investment fees, etc. Regardless of the name applied to the fee, the concept is still the same. Simply stated, impact fees “are capital recovery fees that are generally established as one-time charges assessed against developers or new water customers as a way to recover a part or all of the cost of system capacity constructed for their use. Their application has generally occurred in areas that are experiencing extensive new residential and/or commercial development.”1 The main objective of an impact fee is to assess against the benefiting party, their proportionate share of the cost of infrastructure required to provide them service. Stated another way, impact fees imply that new development creates new or additional costs on the system, and the impact fee assesses that cost in an equitable manner to those customers creating the additional cost. 1 George A. Raftelis, 2nd Edition, Comprehensive Guide to Water and Wastewater Finance and Pricing (Boca Raton: Lewis Publishers, 1993), p. 73. Overview of Impact Fees and “Generally Accepted” Utility Industry Practices 2-2 City of Bozeman, Montana 2.3 Historical Perspective Governments are established to protect the health and safety of the public. Provision of infrastructure, such as wastewater collection and treatment systems, directly advance this purpose by avoiding disease. Due to its importance, provision of adequate infrastructure to deliver adequate service has long been a concern of local, state, and federal governments. Historically, the financing of infrastructure was typically paid for via long-term debt and “pay as you go” rates. However, over the last twenty years, the use of impact fees as a method of financing growth and infrastructure has risen sharply. According to recent national surveys, about 60 percent of all cities with over 25,000 residents and almost 40 percent of all metropolitan counties use some form of impact fees. In California and Florida, the extent of cities and counties using impact fees is at 90 and 83 percent, respectively. Since1987, 26 states have passed impact fee enabling acts. Most of these states are located in the western United States, Great Lakes region, and on the Atlantic coast. Unfortunately, many of these acts are as prohibitive as they are permissive.2 At this time, the State of Montana has very specific legislation related to impact fees. This specific legislation regarding the fees provides the City specific authority to establish and collect impact fees. This authority is provided in Montana Code Section 7-6-1601 to 7-6- 1604. While many utility managers viewed impact fees as an important and alternative source of funding for new capital construction, these fees were also being rationalized from a number of different perspectives. Among these were the following:3 To shift the fiscal burdens from growth from existing development to new development To synchronize the construction of new or expanded facility capacity with the arrival of new development To ensure that new development decisions include broad and realistic cost information. To respond to locally vocal anti-growth sentiments Each of these different perspectives is discussed in more detail below. In addition, impact fees allow the continued ability to develop land by avoiding failed or insufficient infrastructure that constrains growth. Historically, existing development was often subsidized by federal or state resources. As an example, in the early 1970’s, many wastewater treatment plants in the U.S. were 90% grant funded by the Environmental Protection Agency (EPA). Today, grants are nearly extinct, replaced instead by low-interest state revolving fund (SRF) loans. City’s ability to issue bonds are constrained by state law and voter initiatives have limited the ability to increase taxes. Citizens of communities have also expressed increasing reluctance to increase their taxes and fees to provide benefits primarily to others. Therefore, as existing customers were being impacted by the cost of growth, local communities searched for methods to help minimize rate 2 www.impactfees.com. 3 Adapted from: Arthur C. Nelson, System Development Charges for Water, Wastewater and Stormwater Facilities (Boca Raton: Lewis Publishers, 1995) p. 6-7. Overview of Impact Fees and “Generally Accepted” Utility Industry Practices 2-3 City of Bozeman, Montana and the impacts of the cost of growth. Unchecked growth and inefficient low density development is very costly on a per unit basis. In response to this dilemma, many legislative bodies created urban growth boundaries. At the same time, utilities moved towards impact fee and extension policies that assist in managing system growth in an orderly and coordinated manner. As a result, improved planning and cost-based fees have helped utilities provide necessary services, manage the costs of growth, while stabilizing rates to existing customers. Establishing the price of a commodity equal to its cost is a basic economic and market principle. In theory, consumers of a service will make “optimal” consumption decisions when the price of the commodity is set equal to its cost. By establishing cost-based impact fees, developers should be in a position to make better and more rational decisions concerning new development. At the same time, proper pricing of impact fees also encourages “right sizing” of facilities to serve new development. In other words, given the proper price signal, the developer will properly size their service facilities to meet their realistic needs (e.g. installing a ¾-inch meter and service pipeline versus a 2" meter and service pipeline). Within all communities, there is a segment of the population that wishes to maintain the status quo. Concerns over the possibility of increased taxes and service rates and decreased quality of services due to new development can be a material factor in opposition to growth. Adoption of impact fees, even if only partially cost-based, helps to constrain cost impacts and loss of service quality to existing system users. Accountability, efficiency, and transparency of government has received greater emphasis over the past two decades. The process of developing and utilizing impact fees is heavily focused on clear identification of future demand, current conditions, and equitable assignment of costs. The use of impact fees helps coordinate provision of service to needed locations in a timely manner. Impact fees therefore, when use correctly, support accountability, efficiency, and transparency in government. In summary, the use of impact fees has changed over time, as historical funding sources such as grants have been reduced or eliminated. In response, many communities have moved towards adoption of cost-based impact fees, particularly in areas of high growth. 2.4 Impact Fees and “Generally Accepted” Practices Impact fees are one input into the rate setting process. Therefore, it is important to understand how, within the context of “generally accepted” utility industry practices, impact fees may be used. In conducting a comprehensive rate study, three interrelated analyses are typically conducted. They are a revenue requirement analysis, cost of service analysis and rate design analysis. Figure 2-1 provides an overview of each of these analyses. Overview of Impact Fees and “Generally Accepted” Utility Industry Practices 2-4 City of Bozeman, Montana Figure 2-1 Overview of the Three-Interrelated Analyses to Review Rates Impact fees are factored into the revenue requirement analysis. The revenue requirement analysis for most municipal utilities is referred to as the “cash basis” approach. Figure 2-2, shown below, provides an overview of the key components of the “cash basis” approach to developing revenue requirements. Revenue Requirement Analysis Compares the sources of funds (revenues) to the expenses of the utility to determine the overall adjustment to rates Cost of Service Analysis Allocates the total revenue requirements to the various customer classes of service in a “fair and equitable” manner Rate Design Analysis Consider both the level and the structure of the rate design to collect the appropriate and targeted level of revenue Overview of Impact Fees and “Generally Accepted” Utility Industry Practices 2-5 City of Bozeman, Montana Figure 2-2 Overview of the “Cash-Basis” Approach to Establishing Revenue Requirements As can be seen in Figure 2-2, there are two elements to establishing the “cash basis” revenue requirements. The top or blue box shows the four basic cost components that are included within the “cash basis” revenue requirements. In contrast, the bottom or yellow box illustrates the various methods used to fund capital infrastructure projects. It should be noted in Figure 2-2 that impact fees may be used (applied) in two different ways, each having a different impact upon the utility’s revenue requirements and rates. The first possible use of impact fees is shown in the bottom or yellow box. In that particular case, the impact fees are applied directly against growth or expansion related capital projects. The effect of using the funds in this manner is that it helps to minimize long-term borrowing. For each dollar of impact fees applied in this manner, one less dollar of long-term borrowing and associated interest costs is required. + Operation and Maintenance Expenses + Taxes / Transfer Payments + Debt Service (Net of Applied Impact Fees) + Capital Improvements Funded From Rates = Total Revenue Requirements – Miscellaneous Revenues = Total Required From Rates Total Capital Improvement Projects Less: Outside Funding Sources – Capital Reserves – Impact Fees – Grants – Long-Term Debt – Other Capital Funding Sources = Total Capital Improvements Funded From Rates i + term Overview of Impact Fees and “Generally Accepted” Utility Industry Practices 2-6 City of Bozeman, Montana “An impact fee represents a fee for service payable by all users creating additional demand on the facility. To understand this perspective, one must view new development as creating the need for new or expanded facilities.” The other potential use of impact fees is to apply the fees against growth-related debt service. As shown in Figure 2-2, debt service paid by rates is shown as net of any impact fees revenues used to pay debt service. In contrast to applying impact fees directly against the capital project, in this particular case, for every dollar applied in this manner, there is a corresponding dollar decrease in revenue requirements and the resulting rates. This is a very effective method to help minimize rates, but even better at matching the cost of growth to the way in which customer growth occurs. In other words, a utility may build or expand a facility with sufficient capacity to handle growth over the next ten to twenty years. That growth doesn’t occur in the first year, but rather, trickles in over a number of years. Therefore, applying the impact fees against the debt service associated with the project creates a better matching of the cost incurrence (debt payments) to the actual customer growth. 2.5 Financial Objectives of Impact Fees An impact fee represents a fee for service payable by all users creating additional demand on the facility. To understand this perspective, one must view new development as creating the need for new or expanded facilities. As a result, without payment of impact fees, the City would have insufficient revenues to provide the facilities, and therefore the community is unable to accommodate new development. Protection of public safety requires the provision of public infrastructure; therefore the City has adopted regulations which require its installation so that adequate service can be delivered. In some circumstances it is more effective and efficient to collect money payments. For example, rather than requiring each development to try to build a tiny part of a major water pipe Impact fees help the City achieve a number of different financial objectives. These objectives include financial equity between customers; maintaining cost effective services, avoiding costly debt, and protecting public safety. One key financial/rate objective that is achieved from impact fees is equity. Equity is achieved in two different ways. First, an impact fee establishes equity between existing (old) customers and new customers. For example, assume that a water treatment plant is expanded by 5 million gallons per day (MGD) to accommodate growth and the facility is financed over a 20-year period. Without an impact fee, new customers connect to the system and pay for the debt service on the facility via their rates. The customer that connects to the system in year one will contribute to the cost of that facility for 20 years. In contrast, the person who connects in year 10 will only pay for debt service on the facility for ten years, even though the “value” of the capacity was the same for the person connecting in year 1 or year 10. Impact fees create equity within the system by addressing the issue of timing and the “value” of the assets and the “value” of the capacity. The second way in which impact fees help to create equity is after a facility is paid for. Continuing with the example above, after the debt service is fully paid off in year 20, and Overview of Impact Fees and “Generally Accepted” Utility Industry Practices 2-7 City of Bozeman, Montana Most commonly, impact fees are adopted in high growth areas where infrastructure expansion has strained existing financial resources. Philosophically, many utilities desire to have a policy of “growth paying for growth.” assuming that capacity is still available, a new customer connecting to the system would “in theory” receive their capacity at zero cost, because the debt service is paid in full. All the existing customers connected to the system, over the past twenty years, paid for that customer’s capacity. Therefore, an impact fee is also a form of a financial reimbursement to existing ratepayers who paid for those facilities in advance of the new customer connecting to the system. Based upon the above example, impact fees also have an equity perspective associated with the rate setting process. That is, impact fees are a form of “system buy-in.” A properly established impact fee implies that a new customer connecting to the system has bought into the system at its current cost. Therefore, from a rate setting perspective the utility does not need to have rates for “old” and “new” customers. Again, existing customers have been equitably reimbursed for their past investments. Even with the above discussion, not all communities have impact fees. Most commonly, impact fees are adopted in high growth areas where infrastructure expansion has strained existing financial resources. Philosophically, many utilities desire to have a policy of “growth paying for growth.” Impact fees comport with that philosophy, and it is achieved by applying the impact fees either directly against the capital cost of the expansion facilities or against the debt service associated with it. 2.6 Relationship of Impact Fees and New Construction Activity There are a number of misconceptions surrounding impact fees. In a very broad sense, some may argue that impact fees are bad for economic development. These arguments center around two issues. These are as follows: Development will occur on those parcels with lower or non-existent impact fees. Impact fees raise the cost of doing business and hinder development Of the research conducted on these topics, just the opposite has been found. Provided below is a brief explanation of each. Developers look at many factors before a parcel is developed. One misconception concerns the selection of parcels for development and whether impact fees are applied to the land. “The argument goes that if a developer is choosing between two parcels of land on which to build—where the first parcel is inside a city where SDC’s (System Development Charge - impact fees) are charged and the second is just outside where lower or no SDC’s (impact fees) are charged—the developer will choose the second parcel. The trouble is this means that the owner of the first parcel does not make a sale. The Overview of Impact Fees and “Generally Accepted” Utility Industry Practices 2-8 City of Bozeman, Montana “As can be seen, at least in the opinion of Nelson, impact fees do not hinder growth, but in fact may help to spur growth.” landowner must lower the land price to offset the fee in order to make a sale. However, if the landowner does not lower the price, this indicates that the value of future development may be higher on that parcel. Thus, be wary of developers who claim they will choose the second parcel. Chances are they would not have chosen the first parcel anyway. In the meantime, the land market will be holding the first parcel available for higher value development. In effect what might look like a loss in the short term may be a much higher level of development in the long-term.”4 The other argument and misconception that one commonly hears about impact fees is that they are bad for economic development. The argument against this position is as follows: “The argument goes that because SDC’s (impact fees) raise the price of doing business, they frustrate economic development. However, just the opposite is really true. First, remember that SDC’s (impact fees) will be offset by reduced land prices and by enabling the community to more easily expand the supply of buildable land relative to demand. Now, consider what economic development really looks for: skilled labor, access to markets, and land with adequate infrastructure. Competitiveness for economic development will be stimulated by the new or expanded infrastructure paid in part by SDC’s (impact fees). Besides, local governments retain the option to waive SDC’s (impact fees) for specific kinds of economic development, such as development locating in enterprise zones. In the competition for certain kinds of development, it will be able to show developers the dollar value of SDC’s (impact fees) waived as a solid demonstration of the local government’s commitment to such development.”5 As can be seen, at least in the opinion of Nelson, availability charges do not hinder growth, but in fact may help to spur growth. It must be remembered that an important concept associated with impact fees is that the fees are required to develop infrastructure concurrently with or in advance of the actual development. From the developer’s perspective, absent impact fees (i.e. a moratorium on new connections) no new development can occur. Therefore, developers are generally supportive of equitable cost-based impact fees, particularly when it provides available capacity and opportunities for development. 4 Nelson. “System Development Charges for Water, Wastewater and Stormwater Facilities” P. 55. 5 Nelson, “System Development Charges for Water, Wastewater and Stormwater Facilities” P. 56. Overview of Impact Fees and “Generally Accepted” Utility Industry Practices 2-9 City of Bozeman, Montana 2.7 Summary This section of the report has provided an overview of the financial objectives associated with impact fees and some of the issues surrounding them. This section should have provided a basic understanding of the fees such that when the City is ready to have a policy discussion concerning the continued implementation of impact fees and the imposition of new impact fees, they can be placed in proper perspective. The next section of the report will provide an overview of methodologies for the imposition of impact fees. Overview of Impact Fee Methodologies 3-1 City of Bozeman, Montana “The use of system planning criteria is one of the more important aspects in the determination of the impact fees. System planning criteria provides the “rational nexus” or logical connection between the amount of infrastructure necessary to provide service and the charge to the customer.” Section 3 Overview of Impact Fee Methodologies 3.1 Introduction An important starting point in establishing impact fees is to have a basic understanding of the purpose of these charges, along with criteria and general methodology that is used to establish cost-based impact fees. Presented in the section of the report is an overview of impact fees criteria and general methodologies that are used to develop cost-based fees. 3.2 Impact fee Criteria In the determination and establishment of the impact fees, a number of different criteria are often utilized. The criteria often used by utilities to establish impact fees are as follows: Customer understanding System planning criteria Financing criteria, and State/local laws The component of customer understanding implies that the charge is easy to understand. This criterion has implications on the way that the fee is implemented, administered and assessed to the customer. Generally, for a water system, the fee is based on the size (capacity) of the meter. This makes it easy for the customer to understand the level of fee based on the size of a meter required to provide service. In some instances, larger meter sizes are calculated based on actual usage. While this is more complicated, it applies to very few customers and generally more sophisticated industrial customers. The other implication of this criterion is that the methodology is clear and concise in its calculation of the amount of infrastructure necessary to provide service. The use of system planning criteria is one of the more important aspects in the determination of impact fees. System planning criteria provides the “rational nexus” or logical connection between the amount of infrastructure necessary to provide service and the charge to the customer. The rational nexus test requires that there be a connection (nexus) established between new development and the existing or expanded facilities required to accommodate new development; and appropriate apportionment of the cost to the new development in relation to benefits reasonably received. An example using system-planning criteria is the determination that a single-family residential customer requires 227.24 gallons of water distribution storage. The impact fee methodology then charges the customer for 227.24 Overview of Impact Fee Methodologies 3-2 City of Bozeman, Montana gallons of water distribution storage at the cost of storage. One of the driving forces behind establishing cost-based impact fees is the City’s adopted policy since 1983 that “growth pays for growth.” Therefore, impact fees are typically established as a means of having new customers pay an equitable share of the cost of their required capacity (infrastructure). The financing criteria for establishing impact fees relates to the method used to finance infrastructure of the system and assures that customers are not paying twice for infrastructure – once through impact fees and again through rates. The double payment can come in through the imposition of impact fees and then the requirement to pay debt service within a customer’s rates. The financing criteria also reviews the basis under which main line extensions were provided and assures that customers are not charged for infrastructure that was provided (contributed) by developers. Many states and local communities have enacted laws which govern the calculation and imposition of impact fees. These laws must be followed in the determination of the impact fees. Most statutes require a “reasonable relationship” between the fee charged and the cost associated with providing service (capacity) to the customer. The charges do not need to be mathematically exact, but must bear a reasonable relationship to the cost burden imposed. As discussed above, the utilization of the planning criteria and the actual costs of construction and the planned costs of construction provide the nexus for the reasonable relationship requirement. 3.3 Overview of the Impact Fee Methodology There are “generally-accepted” methodologies that are used to establish impact fees. Within the “generally accepted” impact fee methodologies, there are a number of different steps undertaken. These steps are as follows: Determination of system planning criteria Determination of equivalent residential dwelling units (EDUs) Calculation of system component costs Determination of any credits The first step in establishing impact fees is the determination of the system planning criteria as established in the water facility plan. A common unit of capacity demand is needed in order to enable calculation of demand across many different types of users. This implies calculating the amount of water required to serve a single-family residential customer. Generally for a water system, two different criteria or common units of capacity demand are determined due to differences in planning criteria. The first common unit of capacity demand is the peak day water usage per EDU and the second is a water storage requirement per EDU. These two different common units of capacity demand are developed since a majority of the water system infrastructure is sized to meet the peak day demand, and water storage is sized to meet equalizing, emergency and fire flow requirements. Once the system planning criteria are determined, the number of EDUs able to be served by expansion of system capacity can be determined. For the water system, this is determined by utilizing the peak day water system demand and dividing it by the peak day water usage per EDU. This is a very important calculation since it provides the linkage between the amounts of infrastructure necessary to provide service to a set number of customers. This implies that if the Overview of Impact Fee Methodologies 3-3 City of Bozeman, Montana system is designed to provide service to demands up to the year 2025, then the infrastructure costs are divided by the EDUs in 2025 or added EDUs to 2025 to determine the cost per EDU. Once the number of EDUs has been determined, a component by component (e.g. source of supply, treatment, storage, etc.) analysis is undertaken to determine the component impact fee in $ per EDU. Individual plant components are analyzed separately for the water system given that the planning criteria for the design of the various system components differ. The calculation of the component impact fee includes both historical assets and planned future assets. Historical assets can be valued in a number of different ways. These include original cost plus interest, replacement cost and depreciated replacement costs. Costs are limited to those providing capacity expansion beyond that required for minimum local service needs, such as the local distribution system. As shown in Exhibit 4, these costs are not included in the impact fee calculation. The original cost plus interest method includes the actual cost of the asset plus ten (10) years worth of interest. This calculation is done to reflect the fact that existing customers have provided for excess capacity in the system and hence need to be reimbursed for not only their initial investment, but also the “carrying cost” on that investment. The reimbursement to existing customers is accomplished by the fact that without an impact fee, rates would otherwise be higher than they would be without impact fees. The replacement cost method values existing assets based on the cost to replace the assets in today’s dollars. This is done by escalating the original cost by the Engineering News Record Construction Cost (ENR) index. The theoretical basis for the use of replacement cost is that customers are indifferent since they would have to pay replacement cost if the infrastructure was built today to serve their needs. The use of depreciated replacement cost reflects the fact that the assets have been used and hence their value to the new customer is less that the replacement cost. Caution needs to be exercised in the use of depreciated replacement cost, since the book or accounting lives used by many utilities are not reflective of the actual life of the asset and may result in the assets being undervalued. An example is using a useful life for a storage reservoir of 40 years, when in reality, with maintenance, the actual life maybe between 60 to 80 years. Each of these three (3) methods are used in the industry and the appropriate method selected by the City should be based on the method that best reflects the cost of providing capacity in the systems. HDR Engineering, Inc. recommends the use of the original cost with interest method, since it will reflect the actual cost of the City’s system. The City’s system is developed to serve future development through existing capacity and planned future capacity additions. This has been accomplished by the City building excess capacity and using borrowing to finance this capacity and the by City building future capacity. Therefore, the use of the original cost with interest method will reflect the actual costs that have been incurred or will be incurred by the City in providing capacity to new development. This is also the most commonly used method to value capacity in water and wastewater systems. This method also appears to comply with the requirements under Montana law wherein in the “actual cost” of infrastructure is required. Overview of Impact Fee Methodologies 3-4 City of Bozeman, Montana Once the total cost of the capital infrastructure is determined, it is then divided by the appropriate number of equivalent dwelling units the infrastructure will serve to develop the cost per EDU for the specific plant component. After each plant component is analyzed and a cost per EDU is determined, the cost per EDU for each of the plant components is added together to determine the “gross impact fee.” The “gross impact fee” is calculated before any credits for debt service. The last step in the calculation of the impact fee is the determination of any credits. This is generally a calculation to assure that customers are not paying twice − once through impact fees and again through debt service included within the water rates. A crediting mechanism is also utilized if general obligation or tax revenue has been used to finance the infrastructure. The final impact fee is determined by taking the “gross impact fee” and subtracting any credits. This results in a “net impact fee” stated in $ per EDU. The general basis of this calculation for a water system is the assumption that an EDU is equivalent to 20 gpm flow rate. Larger meter sizes are then assigned fees based on the number of EDUs for a given meter size based on operating capacity. The number of EDUs per meter size is generally based on the safe operating capacity of the meter. The theory for this approach is that larger meter sizes create greater flows on the water system and hence impose additional costs on the water system. In order to maintain the necessary proportionality in cost to service benefits the impact fees need to be periodically updated. Updates should examine both increased costs of construction and changes in the number and type of infrastructure to be constructed. 3.4 Summary This section has provided a discussion of the criteria typically used in the determination of impact fees. In addition, an overview of the “generally accepted” methodology used in the calculation of the impact fees has been provided. Given this background, the next section of the report discusses any specific legal criteria that must be used by the City in the establishment of its impact fees. Legal Considerations in Establishing Capacity Charges for the City 4-1 City of Bozeman, Montana “The laws for the enactment of impact fees in Montana are found in 7-6-1601 to 7-6-1604 of the Montana Code. Section 4 Legal Considerations in Establishing Impact Fees for the City 4.1 Introduction An important consideration in establishing impact fees is any legal requirements at the state or local level. The legal requirements often establish the methodology around which the impact fees must be calculated or how the funds must be used. Given that, it is important for the City to understand these legal requirements. This section of the report provides an overview of the legal requirements for establishing impact fees under Montana law. The discussion within this section of the report is intended to be a summary of our understanding of the relevant Montana law as it relates to establishing impact fee. It in no way constitutes a legal interpretation of Montana law by HDR Engineering, Inc. 4.2 Requirements under Montana Law In establishing impact fees, an important requirement is that they be developed and implemented in conformance with local laws. In particular, many states have established specific laws regarding the establishment, calculation and implementation of capacity fees. The main objective of most state laws is to assure that these charges are established in such a manner that they are fair, equitable and cost-based. In other cases, state legislation may have been needed to provide the legislative powers to the utility to establish the charges. In general, the power to impose exactions must either be expressly granted by statute, or be reasonably inferred from express statutory provision. Montana Subdivision statutes authorize monetary exactions in separate sections of the Montana Code. Mont. Code Ann. § 76-3-510 provides that, as a condition of subdivision approval, the City may require that a development pay or guarantee payment for part or all of the costs of extending capital facilities related to the public health and safety, including but not limited to public roads, sewer lines, water supply lines, and storm drains to a subdivision. Mont. Code Ann. § 76-3-621 requires that subdividers dedicate a portion of a proposed subdivision for use as parks or open space. Alternatively, the statute authorizes the City to require the subdivider to pay the cash equivalent to the fair market value of the required portion that would have otherwise been utilized as a park. These statutes apply only to subdivisions. The Montana Supreme Court has also recognized a city’s authority to impose development fees in other circumstances. In Lechner v. City of Billings, (Mont. 1990) 797 P.2d 191, the Court concluded that if a statutory framework authorizing the operation of an improvement or system Legal Considerations in Establishing Capacity Charges for the City 4-2 City of Bozeman, Montana of improvements existed (e.g., sewer or water system), and a provision allowing for charge of a fee for the service or the improvement existed, then it is a reasonable extension of the city’s express statutory authority to accumulate fees to pay for the implementation of that authority. Cities and counties, prior to 2005, enacted impact fees through the authority of these and other statutes and powers. The Montana law enabling legislation for impact fees was enacted in 2005 via Senate Bill 185. This was comprehensive legislation specifically allowing public entities in the State of Montana to enact impact fees for various services. The legal basis for the enactment of impact fees is found in Title 7, Chapter 6, and Part 1601 to 1604 of the Montana Code. A summary of the Montana Code is provided below. A copy of the full code is provided as Appendix C. A summary of the requirements under Montana law is as follows: “7-6-1601. Definitions. As used in this part, the following definitions apply:... …5) (a) "Impact fee" means any charge imposed upon development by a governmental entity as part of the development approval process to fund the additional service capacity required by the development from which it is collected. An impact fee may include a fee for the administration of the impact fee not to exceed 5% of the total impact fee collected. (b)The term does not include: (i) a charge or fee to pay for administration, plan review, or inspection costs associated with a permit required for development; (ii) a connection charge; (iii) any other fee authorized by law, including but not limited to user fees, special improvement district assessments, fees authorized under Title 7 for county, municipal, and consolidated government sewer and water districts and systems, and costs of ongoing maintenance; or (iv) onsite or offsite improvements necessary for new development to meet the safety, level of service, and other minimum development standards that have been adopted by the governmental entity. 7-6-1602. Calculation of impact fees -- documentation required -- ordinance or resolution -- requirements for impact fees. (1) For each public facility for which an impact fee is imposed, the governmental entity shall prepare and approve documentation that: (a) describes existing conditions of the facility; (b) establishes level of service standards; (c) forecasts future additional needs for service for a defined period of time; (d) identifies capital improvements necessary to meet future needs for service; (e) identifies those capital improvements needed for continued operation and maintenance of the facility; (f) makes a determination as to whether one service area or more than one service area is necessary to establish a correlation between impact fees and benefits; Legal Considerations in Establishing Capacity Charges for the City 4-3 City of Bozeman, Montana (g) makes a determination as to whether one service area or more than one service area for transportation facilities is needed to establish a correlation between impact fees and benefits; (h) establishes the methodology and time period over which the governmental entity will assign the proportionate share of capital costs for expansion of the facility to provide service to new development within each service area; (i) establishes the methodology that the governmental entity will use to exclude operations and maintenance costs and correction of existing deficiencies from the impact fee; (j) establishes the amount of the impact fee that will be imposed for each unit of increased service demand; and (k) has a component of the budget of the governmental entity that: (i) schedules construction of public facility capital improvements to serve projected growth; (ii) projects costs of the capital improvements; (iii) allocates collected impact fees for construction of the capital improvements; and (iv) covers at least a 5-year period and is reviewed and updated at least every 2 years. ….5) An impact fee must meet the following requirements: (a) The amount of the impact fee must be reasonably related to and reasonably attributable to the development's share of the cost of infrastructure improvements made necessary by the new development. (b) The impact fees imposed may not exceed a proportionate share of the costs incurred or to be incurred by the governmental entity in accommodating the development. The following factors must be considered in determining a proportionate share of public facilities capital improvements costs: (i) the need for public facilities capital improvements required to serve new development; and (ii) consideration of payments for system improvements reasonably anticipated to be made by or as a result of the development in the form of user fees, debt service payments, taxes, and other available sources of funding the system improvements. (c) Costs for correction of existing deficiencies in a public facility may not be included in the impact fee. (d) New development may not be held to a higher level of service than existing users unless there is a mechanism in place for the existing users to make improvements to the existing system to match the higher level of service. (e) Impact fees may not include expenses for operations and maintenance of the facility. 7-6-1603. Collection and expenditure of impact fees -- refunds or credits -- mechanism for appeal required…. …(3) A governmental entity may recoup costs of excess capacity in existing capital facilities, when the excess capacity has been provided in anticipation of the needs of new development, by requiring impact fees for that portion of the Legal Considerations in Establishing Capacity Charges for the City 4-4 City of Bozeman, Montana facilities constructed for future users. The need to recoup costs for excess capacity must have been documented pursuant to 7-6-1602 in a manner that demonstrates the need for the excess capacity. This part does not prevent a governmental entity from continuing to assess an impact fee that recoups costs for excess capacity in an existing facility. The impact fees imposed to recoup the costs to provide the excess capacity must be based on the governmental entity's actual cost of acquiring, constructing, or upgrading the facility and must be no more than a proportionate share of the costs to provide the excess capacity.” The use of the methodology discussed in Section 3, is designed to assure that the proportional share standard is met and the impact fees are in compliance with Montana law. 4.3 Summary This section of the report has reviewed the legal basis for establishing impact fees in Montana. HDR concludes that the City has the authority to establish cost-based impact fees and the methodology used is designed to assure compliance with Montana law. Determination of the City’s Water Impact Fees 5-1 City of Bozeman, Montana Section 5 Determination of the City’s Water Impact Fees 5.1 Introduction This section of the report presents the development of the water impact fee. The calculation of the water impact fee presented in this section are based on the City’s fixed asset records, future capital improvements as identified in the City's Capital Improvement Plan, and planning criteria from the facility plan entitled, City of Bozeman Water Facility Plan, prepared by Allied Engineering Services, Inc. and Robert Peccia and Associates, dated October, 2006 (the water facility plan). To the extent that the cost and timing of future capital improvements change, then the impact fee presented in this section should be updated to reflect the cost of these adjustments. 5.2 Overview of the City’s Water System The City obtains its water supply from the Hyalite/Sourdough water treatment facility and the Lyman Creek System. The City also has three (3) distribution storage reservoirs for a total capacity of 11.3 million gallons. The capital improvement plan calls for expansion of the Hyalite/Sourdough water treatment plant to 22 MGD, permitting and design for the Sourdough Dam for raw water storage, the construction of a new 5.3 million gallon storage reservoir and for improvements to the transmission and distribution system to serve growth. 5.3 Present Water Impact Fees The City currently assesses an impact fee for connection to the water system. By policy, the City has chosen to only assess 80% of the allowable fee. The current allowable water impact fees and currently assessed water impact fees are shown in Table 5-1. Table 5-1 City Bozeman, Montana Present Water Impact Fees Meter Size EDU Factor Allowable Charge Assessed Charge (80%) ¾" 1.00 $2,792.64 $2,234.11 1” 2.50 6,981.59 5,585.27 1-1/4" 3.50 9,774.23 7,819.38 1-1/2" 5.00 13,963.19 11,170.55 2" 8.00 22,341.10 17,872.88 3" 16.00 44,682.20 35,745.76 4" 25.00 69,815.93 55,852.74 6" 50.00 139,631.86 111,705.49 8" 80.00 223,410.98 178,728.78 Determination of the City’s Water Impact Fees 5-2 City of Bozeman, Montana 5.4 Service Areas Pursuant to MCA 7-6-1602(1) (f), the following must be considered: “makes a determination as to whether one service area or more than one service area is necessary to establish a correlation between impact fees and benefits;” The City operates the water system as a single integrated utility. This allows all the water facilities to serve all customers. Based on these factors and a knowledge of the water system, the City determined that for the purpose of calculating and imposing Water Impact Fees, that the entire City would be treated as a single service area pursuant to MCA 7-6-1602(1) (f). 5.5 Calculation of the City’s Water Impact Fees As was discussed in Section 3, the process of calculating impact fees is based upon a four-step process. In summary form, these steps were as follows: Determination of system planning criteria Determination of equivalent dwelling units (EDU) Calculation of the impact fee for system component costs Determination of any impact fee credits Each of these areas is discussed in more detail below. 5.5.1 System Planning Criteria The number of equivalent dwelling units (EDUs) was determined based on the planning criteria from the water facility plan. The water facility plan used an equivalent dwelling unit usage of 202.49 gallons per EDU average flow which includes the a loss factor of 5 gpcd and a peaking factor of 2.30 to develop a peak day flow of 465.73 gallons per day per EDU. The storage capacity was developed based on the required storage in 2025, as identified in the water facility plan, divided by the total number of EDUs in 2025. A summary of the EDU conversion factors is presented in Table 5-3. Determination of the City’s Water Impact Fees 5-3 City of Bozeman, Montana Table 5-2 City of Bozeman, Montana Water System Planning Criteria Average Usage Residential 1 83.04 gallons per capita day Average Usage Residential with losses 2 88.04 gallon per capita day Number of Persons per Household 3 2.3 Average Day Flow 4 202.49 Gallons/Day/EDU Peak Day Flow 5 465.73 Gallons/Day/EDU EDU Storage Capacity 6 213.77 Gallons/EDU 1 - See page 14 Section 3.B of the Water Facility Plan – Average of Table 3.B.8. 2 - At 5 gpcd. 3 - See page 6 of Section 2 of the Water Facility Plan. 4 - Average Usage Residential times number of persons per Household. 5 - Average Day Usage times a peaking factor of 2.30 - See page 3 of Section 4.A of the Water Facility Plan. 6 – Total storage requirement in 2025 divided by 2025 EDUs - See page 26 Section 5.B of the Water Facility Plan. As discussed previously, certain facilities may be planned and sized around different planning criteria. Therefore, the system planning criteria shown above will be used for different plant components to determine the cost per EDU for that specific plant component. 5.5.2 Calculation of Equivalent Dwelling Units The planning horizon of this impact fee study was 2005 – 2025. This is the same planning horizon used in the water facility plan for which the City’s existing water system and future improvements will provide service to an expanded area As a part of this impact fee study, a projection of the number of new/additional EDUs per year must be determined, along with the total number of EDUs at 2025. The City’s total number of EDUs for each year was determined by dividing the peak day usage factor per EDU into total peak day demand. The number of EDUs added during each year of the study period was forecast based on a growth rate of 5% as used in the water facility plan (page 3, Section 4.A). A summary of the EDUs for 2005 and 2025 are presented in Table 5-3. Details of the determination of EDUs are provided in Exhibit 1 of the Technical Appendix. Determination of the City’s Water Impact Fees 5-4 City of Bozeman, Montana Table 5-3 City of Bozeman, Montana Water System Equivalent Dwelling Units Equivalent Dwelling Units – 2005 28,085 Equivalent Dwelling Units – 2025 74,464 After the determination of the total future water EDUs for each year of the planning period, the focus can shift to the calculation of the impact fee for each plant component. This aspect of the analysis is discussed in detail below. 5.5.3 Calculation of the Impact Fee for the Major System Components The next step of the analysis is to review each major functional component as identified in the water facility plan (see Section 5.B) of plant in service and determine the impact fee for that component. In calculating the water impact fee for the City, both existing plant assets with excess capacity, along with planned future capacity expanding projects were included within the calculation. Only existing and future assets with a useful life of 10 years or greater were included in the impact fee calculation. The major components of the City’s water system that were reviewed for purposes of calculating impact fee were as follows: Raw Water Storage Treatment Plant Distribution Storage Transmission and Distribution Mains A brief discussion of the impact fee calculated for each of the functional plant components is provided below. RAW WATER STORAGE – In order for the City to provide adequate raw water during the peak season, it will be necessary to build raw water storage. The City’s capital improvement plan has identified the need to start permitting and design on the Sourdough Creek Dam. Included in the impact fee calculation is an amount equal to twenty percent of the estimated construction cost for the dam. These costs are included in the impact fee for source of supply and treatment shown in Exhibit 2. TREATMENT PLANT – The City’s source of supply is provided by the Sourdough and Lyman treatment plants. The City intends to replace the Sourdough treatment plant with a new membrane plant to a initial capacity of 22 mgd which will replace the current 15 mgd plant. The cost of the existing assets that will provide service to the new plant were taken from the City’s fixed asset records and include up to ten years worth of interest. These were allocated to new development based on the amount of increased capacity to total capacity (7/22 mgd) that will serve new development. The estimated costs in the water facility plan were 2005 dollars. To Determination of the City’s Water Impact Fees 5-5 City of Bozeman, Montana more accurately reflect probable future costs the facility plan estimates were increased to 2007 dollars based on the rate of inflation. These costs were also allocated to new development based on the amount of increased capacity to total capacity. The total cost was then divided by the new capacity to determine a cost per gallon of $2.44. This was then multiplied by the peak day usage per EDU. Based on the costs and capacity of the sources of supply for the City, the impact fee for treatment plant is $1,138.09 per EDU. Details of the calculations are provided in Exhibit 2 of Technical Appendix. DISTRIBUTION STORAGE – The City currently has three (3) storage reservoirs with a total storage capacity of 10.3 million gallons (MG). The City’s capital improvement plan also calls for construction of an additional 5.3 MG Storage Reservoir. The cost of existing Lyman reservoir and the new future reservoir were allocated to serve new development. This cost was subsequently divided by storage capacity provided by these reservoirs to determine the cost of storage per gallon of $0.92. This was then multiplied by the amount of storage required per EDU. Based on the cost and capacity of distribution storage for the City, the impact fee for storage is $196.82 per EDU. Details of the calculations are provided as Exhibit 3 of Technical Appendix. TRANSMISSION AND DISTRIBUTION MAINS – The City’s transmission/distribution network consists of numerous lines from 4-inches in diameter up to 30-inches in diameter. To determine the impact fee for transmission and distribution mains, an inventory of the existing system was undertaken as well as those planned improvements as identified in the water facility plan. The historical investments of the City were adjusted for interest charges up to a maximum of ten years. Distribution and transmission mains greater than 8-inches and less than 75 year old were assumed to serve both existing and future development and were allocated to new development based on the ratio of new EDUs to total EDUs in 2025. Distribution line 8-inches or less were assumed to be contributed by development and hence excluded from the impact fee calculation. These were subsequently divided by the number of new EDUs in added from 2005 to 2025 to determine the cost per EDU. This approach provides that new development only pays its proportional share to the cost of existing assets providing service. Costs for future capital improvements that were identified in the water facility plan to serve new development for the planning horizon from 2005 to 2025 were divided by the number of new EDUs added over the planning horizon. Only those improvements that would provide new capacity were allocated to the impact fee. Those improvements required for current fire flow were excluded, and redundancy improvements were allocated based on new EDUs to total EDUs and assumes that development will contribute the first 8 inches of pipe. In the calculation of the impact fee for transmission and distribution plant, a number of items were excluded. First, all existing mains that were contributed by developers, financed through improvement districts or contributed by grants were excluded from the analysis. For future transmission and distribution plant, an item-by-item analysis was done to determine the percentage cost of these facilities that would not serve new development. Water main replacements which did not create additional capacity were excluded since these are not growth related and should be paid for through rates. For extensions to the system, it was assumed that new development would be required to pay for Determination of the City’s Water Impact Fees 5-6 City of Bozeman, Montana a pipe size up to 8-inches. The installation of 8” of less represents City minimum standard improvements which are the obligations of new development or the correction of existing deficiencies that are paid for by rates. This size is the smallest main allowed by the City’s Design Standards and Specifications Policy. In some circumstances an individual project may require more than the 8 inch water main to service its specific needs. Over-sizing beyond the minimum size of pipe may be paid for by the City through impact fees in compliance with the procedures for expending impact fee funds. Based on the costs incurred by the City, the impact fee for existing transmission and distribution mains is $709.91 per EDU. For future transmission and distribution mains, the impact fee is $1,105.08 per EDU. This results in a total impact fee of $1,814.99 per EDU for transmission and distribution mains. Details of the calculation are provided in Exhibit 4 of Technical Appendix. In comparing the cost of transmission and distribution for the water system to the cost of collection for the wastewater system, it should be noted that the provision of water service requires additional pipes. This is due to the need for looping of the water system to provide redundancy and to maintain adequate pressure. ADMINISTRATIVE CHARGE – Under Montana statute, an impact fee may include a fee for the administration of the impact fee program not to exceed 5% of the impact fee collected. The City will implement the allowed 5%. The City has included a water administrative charge of $157.50 per EDU. 5.5.4 Debt Service Credits The final step in calculating the water impact fees was to determine if a credit for payment on debt service for the City’s outstanding bonds. The City currently has an outstanding water revenue bond for the rehabilitation of the Lyman Creek plant which is not related to capacity expansion. The City does not plan on issuing new debt to pay for future water system improvements. Therefore, no debt service credit is applicable. 5.6 Net Allowable Water Impact Fees Based on the sum of the component costs calculated above, the net allowable water impact fee can be determined. “Net” refers to the “gross” impact fee, less any debt service credits. “Allowable” refers to the concept that the calculated impact fee as shown in Table 5-4 is the City’s cost-based impact fee. The City, as a matter of policy, may charge any amount up to the allowable impact fee, but not over that amount. Charging an amount greater than the allowable impact fee would not meet the nexus test of a cost-based impact fee. A summary of the calculated net allowable water impact fee for the City is shown in the Table 5-4. Determination of the City’s Water Impact Fees 5-7 City of Bozeman, Montana Table 5-4 City of Bozeman, Montana Allowable Water Impact Fees Plant Component Impact Fee Calculation Results Source of Supply $1,138.09 Distribution Storage 196.82 Transmission and Distribution Mains 1,814.99 Administrative Charge 157.50 Debt Service Credit for Bonds 0.00 Total $3,307.40 The total impact fee as shown for an EDU is $3,307.40 per EDU. The details of the net allowable impact fee are shown on Exhibit 5 of the Technical Appendix. For ease of administration, the recommended maximum allowable charge for an EDU is $3,310. Based on the impact fee for “1 EDU”, the charges for the various sized service lines would result in the following impact fees as shown in Table 5-5. Other meter sizes up to 3” are then weighted based on the American Water Works Association capacity flow ratings. Table 5-5 City of Bozeman, Montana Allowable Water System Impact Fees Meter Size EDU Factor Maximum Allowable Charge ¾" 1.00 $3,310 1" 2.50 8,275 1-1/2" 5.00 16,550 2" 8.00 26,480 3" 16.00 52,960 Over 3" Calculated In Table 5-5 the impact fees for the larger meter sizes up to 3” are determined by multiplying the impact fees for an EDU by the weighting factors. The weighting factors reflect the increased capacity that the customer can impose on the system and hence the increased cost required to provide capacity to the customer. For meter sizes over 3”, the impact fee is calculated based on the actual demand imposed on the water system. A detail discussion of the calculation method is provided in Exhibit 6. 5.7 Key Assumptions In the development of the impact fees for the City’s water system, a number of key assumptions were utilized. These are as follows: Determination of the City’s Water Impact Fees 5-8 City of Bozeman, Montana The City’s asset records were used to determine the nature and value of existing water treatment, storage and distribution assets. The interest rate used for calculating interest on existing investments was 5.0%. A maximum of 10 years worth of interest was included in the cost of existing plant. The findings required under MCA 7-6-1602 were provided in the water facility plan and this report 5.8 Implementation of the Impact Fees The methodology used to calculate the impact fees takes into account the cost of money or interest charges and inflation. Therefore, HDR Engineering, Inc. would recommend that the City adjust the impact fees each year by an escalation factor to reflect the cost of interest and inflation. The most frequently used source to escalate impact fees is the ENR index which tracks changes in construction costs for municipal utility projects. This method of escalating the City’s impact fee should be used for no more than a two-year period. After this time period, as required by Montana law, the City should update the charges based on the actual cost of infrastructure and any new planned facilities that would be contained in an updated facility plan or capital improvement plan. 5.9 Consultant Recommendations Based on our review and analysis of the City’s water system, HDR Engineering, Inc. makes the following recommendations: The City should implement impact fees for new and expanded connections to the water system that are no greater than the impact fees as set forth in this report. The City should update the impact fee calculations as required by State law and City ordinance. 5.10 Summary The water impact fees developed and presented in this section of the report are based on the engineering design criteria of the City’s water system, the value of the existing assets, future capital improvements and “generally accepted” impact fee calculation principles. Adoption of the proposed impact fees will provide multiple benefits to the system users as well as the City and create equitable and cost-based charges for new customers connecting to the City’s water system. TECHNICAL APPENDIX A WATER IMPACT FEES Water Impact Fees – Calculation Basis Exhibit 1 – Determination of LOS and Equivalent Dwelling Units Average Usage per EDU = Average Residential Usage (gpcd) * Persons per Household * loss factor. Peak Usage per EDU = Average Usage per EDU * peaking factor Storage Usage = Total Storage Requirement (million gallons) / EDUs in year of Storage Requirement EDUs = Peak Day Flow / Peak Day Usage per EDU Exhibit 2 – Source of Supply and Water Treatment Plant Impact Fee Source of Supply and Water Treatment Plant Impact Fee = Impact Fee Costs / Plant Capacity * Peak Usage per EDU Exhibit 3 – Distribution Storage Plant Impact Fee Distribution Storage Plant Impact Fee = Impact Fee Costs / Plant Capacity * Storage Usage per EDU Exhibit 4 – Distribution System Impact Fee Distribution System Impact Fee = Impact Fee Costs / Number New EDUs Served by Improvements (per Facility Plan) Exhibit 5 – Water Impact Fee Administrative Impact Fee = (Treatment Plant Impact Fee + Distribution Storage Impact Fee + Distribution System Impact Fee) * .05 Water Impact Fee = (Treatment Plant Impact Fee + Distribution Storage Impact Fee +Distribution System Impact Fee – Water Debt Service Credit) + Administrative Impact Fee Water Debt Service Credit Debt Service Credit = NPV from Year1 to Yearn of Impact Fee Revenue – Annual Debt Service/ ERUs 1 to n City of Bozeman, Montana Impact Fees for the Water System Determination of LOS and Equivalent Dwelling Units Exhibit 1 Average Usage Residential 1 83.04 gpcd Average Usage Residential with losses 2 88.04 Number of Persons per Household 3 2.3 Average Usage 4 202.49 per EDU Peak Day Usage 5 465.73 per EDU Storage Usage 6 213.77 per EDU 1 - See page 14 Section 3.B of the Water Facility Plan - Average of Table 3.B.8. 2 - At 5 gpcd. 3 - See page 6 of Section 2 of the Water Facility Plan. 4 - Average Usage Residential times number of persons per Household. 5 - Average Day Usage times a peaking factor of 2.30 - See page 3 of Section 4.A of the Water Facility Plan. 6 - Total storage requirement in 2025 divided by 2025 EDUs - See page 26 Section 5.B of the Water Facility Plan. 1 7/18/2007 City of Bozeman, Montana Impact Fees for the Water System Determination of LOS and Equivalent Dwelling Units Exhibit 1 Peak Day Equivalent Additional Year Demand 1 Dwelling Units 2 EDUs 2005 13.08 28,085 2006 13.74 29,492 1,406 2007 14.42 30,969 1,477 2008 15.15 32,519 1,551 2009 15.90 34,148 1,629 2010 16.70 35,858 1,710 2011 17.53 37,649 1,792 2012 18.41 39,531 1,881 2013 19.33 41,506 1,975 2014 20.30 43,579 2,074 2015 21.31 45,756 2,177 2016 22.37 48,035 2,278 2017 23.48 50,426 2,392 2018 24.65 52,937 2,511 2019 25.88 55,572 2,636 2020 27.17 58,339 2,767 2021 28.53 61,257 2,918 2022 29.96 64,321 3,064 2023 31.45 67,539 3,217 2024 33.03 70,917 3,378 2025 34.68 74,464 3,547 1 - See page 3 Section 4.A of the Water Facility Plan. 2 - Peak day demand divided by Peak Day EDU Usage Factor. 2 7/18/2007 City of Bozeman, Montana Impact Fees for the Water System Source of Supply and Treatment Exhibit 2 Original Impact Fee Cost Year Equipment List Cost Related 3 $2007 1,2 Existing Assets 1 2003 BIO-CAP ON PONDS 13,229$ 32% 5,146$ 1990 BOZEMAN CREEK 86,756 32% 45,221 1990 BOZEMAN CREEK HOUSE 45,322 32% 23,624 1990 BOZEMAN CREEK INTAKE MAIN 117,721 32% 61,362 1990 BOZEMAN CREEK OTHER 26,419 32% 13,771 1990 BOZEMAN CREEK WATER SUPPLY 433,589 32% 226,007 2000 CORROSION CONTROL BUILDING 155,487 32% 70,011 1990 LYMAN CREEK INTAKE 50,362 0% - 2003 PORTABLE CABIN 26,723 32% 10,394 1990 PRESEDIMENT BASIN 122,782 0% - 1990 RESERVOIR SUPPLY MAIN 467,936 32% 243,910 2000 CREEK SUPPLY 84,079 32% 37,858 1990 SOUTH BASIN 214,101 32% 111,599 1990 WATER PLANT 101,539 0% - 1990 WATER PLANT EXPANSION 756,712 0% - 1990 WATER TREATMENT PLANT 260,522 0% - 1990 WATER TREATMENT PLANT 2,880,746 0% - Total Existing Assets 848,903$ Future Construction Projects 2 2008 LYMAN - GROUNDWATER COLLECTION 699,758 100% 742,373 2011 WATER PLANT DESIGN 200,000 32% 67,898 2012 WATER PLANT DESIGN 3,000,000 32% 1,018,464 After 2012 22 MGD MEMBRANE WATER TREATMENT PLANT 30,000,000 32% 10,184,640 After 2012 SOURDOUGH CREEK DAM CONSTRUCTION 4 4,000,000 100% 4,243,600 Total Future Construction Projects 16,256,975$ Total Source of Supply and Treatment 17,105,878$ Plant Capacity (MGD) 3 7.00 Cost per Gallon 2.44$ Requirement per EDU 465.73 Impact Fee Source of Supply and Treatment per EDU 1,138.09$ 1 - Existing plant is increased by interest charges from the date of construction up to 10 years. 2 - Future plant is increased from 2005 construction costs by the rate of inflation. 3 - New membrane water treatment plant capacity allocated to new development. Based on current plant capacity of 15 MDG to new capacity (22 MGD). 4 - Includes only permitting and design. 7/18/2007 City of Bozeman, Montana Impact Fees for the Water System Distibution Storage Exhibit 3 Original Impact Fee Cost Year Equipment List Cost Related 3 $2007 1,2 Existing Assets 1 1957 4 MG SOURDOUGH TANK 431,644$ 0% -$ 1985 2 MG HILLTOP TANK (STEEL) 826,421 0% - 1989 5.3 MG LYMAN RESERVOIR (CONCRETE) 2,539,683 100% 4,136,875 Total Existing Assets 4,136,875$ After 2012 5.3 MG STORAGE RESERVIOR 5,300,000$ 100% 5,622,770$ Total Distrubution Storage 9,759,645$ Plant Capacity (MGD)10.60 Cost per Gallon 0.92$ Requirement per EDU 213.77 Impact Fee Distribution Storage per EDU 196.82$ 1 - Existing plant is increased by interest charges from the date of construction up to 10 years. 2 - Future plant is increased from 2005 construction costs by the rate of inflation. 3- Both the Lyman and new reservior are available to serve new development. 7/18/2007 City of Bozeman, Montana Impact Fees for the Water System Transmission/Distribution Mains Exhibit 4 Original Impact Fee Cost Year Equipment List Cost Related 3 $2007 1,2 Existing Assets 1 1910 1910 4" 28,378$ 0.00% -$ 1910 6" 219,237 0.00% - 1910 8" 37,098 0.00% - 1910 10" 23,514 0.00% - 1910 12" 38,965 0.00% - 1910 14" 52,604 0.00% - 1910 16" - 0.00% - 1910 18" 185,927 0.00% - 1910 20" - 0.00% - 1910 24" - 0.00% - 1910 30" - 0.00% - 1920 1920 4" 91,425$ 0.00% -$ 6" 367,726 0.00% - 8" 32,465 0.00% - 10" 43,259 0.00% - 12" 46,738 0.00% - 14" 37,033 0.00% - 16" 54,720 0.00% - 18" 292,024 0.00% - 20" - 0.00% - 24" - 0.00% - 30" - 0.00% - 1930 1930 4" 90,032$ 0.00% -$ 1930 6" 139,736 0.00% - 1930 8" 7,348 0.00% - 1930 10" - 0.00% - 1930 12" - 0.00% - 1930 14" - 0.00% - 1930 16" - 0.00% - 1930 18" - 0.00% - 1930 20" - 0.00% - 1930 24" - 0.00% - 1930 30" - 0.00% - 1940 1940 4" 37,858$ 0.00% -$ 1940 6" 164,835 0.00% - 1940 8" - 0.00% - 1940 10" - 62.28% - 1940 12" - 62.28% - 1940 14" - 62.28% - 1940 16" - 62.28% - 1940 18" - 62.28% - 1940 20" - 62.28% - 1940 24" - 62.28% - 1940 30" - 62.28% - 1950 1950 4" 49,058$ 0.00% -$ 1950 6" 214,442 0.00% - 1950 8" 64,513 0.00% - 1950 10" 225,423 62.28% 228,700 1950 12" 38,259 62.28% 38,815 1950 14" 322,807 62.28% 327,500 1950 16" - 62.28% - 1950 18" - 62.28% - 1950 20" - 62.28% - 1950 24" 695,286 62.28% 705,393 1950 30" - 62.28% - 1 7/18/2007 City of Bozeman, Montana Impact Fees for the Water System Transmission/Distribution Mains Exhibit 4 Original Impact Fee Cost Year Equipment List Cost Related 3 $2007 1,2 1960 1960 4" -$ 0.00% -$ 1960 6" 940,152 0.00% - 1960 8" 336,859 0.00% - 1960 10" 107,445 62.28% 109,007 1960 12" 42,881 62.28% 43,505 1960 14" 83,499 62.28% 84,712 1960 16" - 62.28% - 1960 18" - 62.28% - 1960 20" - 62.28% - 1960 24" - 62.28% - 1960 30" - 62.28% - 1970 1970 4" 57,266$ 0.00% -$ 1970 6" 1,583,458 0.00% - 1970 8" 1,232,305 0.00% - 1970 10" 768,899 62.28% 780,076 1970 12" 821,434 62.28% 833,374 1970 14" 301,728 62.28% 306,114 1970 16" - 62.28% - 1970 18" - 62.28% - 1970 20" - 62.28% - 1970 24" 140,402 62.28% 142,443 1970 30" - 62.28% - 1980 1980 4" 160,885$ 0.00% -$ 1980 6" 2,296,590 0.00% - 1980 8" 1,225,596 0.00% - 1980 10" 1,722,195 62.28% 1,747,229 1980 12" 1,062,913 62.28% 1,078,364 1980 14" 374,141 62.28% 379,580 1980 16" - 62.28% - 1980 18" 36,028 62.28% 36,551 1980 20" 134,255 62.28% 136,207 1980 24" 507,479 62.28% 514,856 1980 30" 2,805,243 62.28% 2,846,022 1990 1990 4" 333,459$ 0.00% -$ 6" 7,933,609 0.00% - 8" 11,846,645 0.00% - 10" 4,809,170 62.28% 4,879,078 12" 6,357,085 62.28% 6,449,494 14" 692,617 62.28% 702,685 16" 705,443 62.28% 715,697 2 7/18/2007 City of Bozeman, Montana Impact Fees for the Water System Transmission/Distribution Mains Exhibit 4 Original Impact Fee Cost Year Equipment List Cost Related 3 $2007 1,2 18" 155,384 62.28% 157,643 20" - 62.28% - 24" 755,379 62.28% 766,360 30" - 62.28% - 2000 2000 4" 116,617$ 0.00% -$ 2000 6" 91,366 0.00% - 2000 8" 24,837,024 0.00% - 2000 10" 1,528,730 62.28% 1,339,770 2000 12" 8,280,156 62.28% 7,256,685 2000 14" 151,169 62.28% 132,484 2000 16" - 62.28% - 2000 18" - 62.28% - 2000 20" - 62.28% - 2000 24" 122,108 62.28% 107,015 2000 30" 90,890 62.28% 79,656 Total Existing Assets 32,925,015$ EDUs added 2005 to 2025 46,379 Total Existing Transmission/Distribution Impact Fee per EDU 709.91$ Future Construction Projects 2 2008 SHOPS COMPLEX - PHASE 1 4,995,000$ 19.82% 990,009$ 2007-2037 REDUNDANCY - 10 inch 4, 5 296,438 22.42% 70,516 2007-2037 REDUNDANCY - 12 inch 4, 5 2,855,651 34.60% 1,048,291 2007-2037 REDUNDANCY - 14 inch 4, 5 1,629,291 41.95% 725,046 2007-2037 REDUNDANCY - 16 inch 4, 5 2,303,886 46.71% 1,141,751 2007-2037 REDUNDANCY - 24 inch 4, 5 1,101,716 55.36% 647,092 2007-2037 REDUNDANCY - 36 inch 4, 6 3,481,785 19.03% 702,977 2007-2038 REDUNDANCY - 48 inch 4, 6 16,187,712 37.95% 6,518,073 2007-2038 FUTURE TRANSMISSION - 8 inch5 187,746 0.00% - 2007-2038 FUTURE TRANSMISSION - 10 inch5 4,939,960 36.00% 1,886,689 2007-2038 FUTURE TRANSMISSION - 12 inch5 12,973,987 55.56% 7,646,724 2007-2038 FUTURE TRANSMISSION - 16 inch5 5,531,134 75.00% 4,400,985 2007-2038 FUTURE TRANSMISSION - 18 inch5 6,983,839 80.25% 5,945,618 2007-2038 FUTURE TRANSMISSION - 20 inch5 2,357,129 84.00% 2,100,570 2007-2038 FUTURE TRANSMISSION - 24 inch5 9,969,779 88.89% 9,401,723 2007-2038 FUTURE TRANSMISSION - 36 inch5 3,545,692 95.06% 3,575,865 2007-2038 FUTURE TRANSMISSION - 42 inch5 4,353,045 96.37% 4,450,594 Total Future Construction Projects 51,252,523$ EDUs added 2005 to 2025 46,379 Total Future Transmission/Distribution Impact Fee per EDU 1,105.08$ Total Transmission/Distribution Impact Fee per EDU 1,814.99$ 1 - Existing plant is increased by interest charges from the date of construction up to 10 years. 2 - Future plant is increased from 2005 construction costs by the rate of inflation. 3- All 4", 6" and 8" lines excluded and pipe greater that 75 years old. Allocation for existing plant based on new EDUs/total EDUs in 2025. Future plant allocation based on Water Facility plan. 4 - See Table 5.B.3 in the Water Facility Plan. Allocated based on new EDUs/total EDUs in 2025. 5 - See Table 5.B.5 in the Water Facility Plan. All 8" line assumed to be built by development. 6 - All water treament plant redundency greater than 30" excluded from the impact fee calculation. 3 7/18/2007 City of Bozeman, Montana Impact Fees for the Water System Summary Exhibit 5 Source of Supply $ 1,138.09 Storage 196.82 Distribution 1,814.99 Debt Service Credit - Total $3,149.90 Plus: Maximum Allowable of 5% 157.50 $3,307.40 Impact Fees by Meter Size (inches) Meter Size Weighting Factor 1 Impact Fee 3/4" 1.00 $3,310 1 2.50 8,275 1 1/2 5.00 16,550 2 8.00 26,480 3 16.00 52,960 Over 3"Calculated 1 - Weighting factor based on AWWA meter capacity ratings Water Impact Fee Calculation Results Proposed Water Impact Fee per EDU 7/18/2007] Page 1 Exhibit 6 Calculation Method for Large Service Line Sizes - Water Net Impact Fee Once all the components have been calculated for the impact fee, the net impact fee can be determined. The net impact fee is merely the sum of the various impact fee elements. This charge is calculated on an equivalent residential unit basis. The cost for varying service line sizes is calculated based on the equivalent weighting factor for these service line sizes. Table 1 provides a summary of the calculation of the net impact fee. Table 1 Allowable Water Impact Fee Description Impact Fee Source of Supply and Treatment $1,138.09 Distribution Storage 196.82 Distribution Main 1,814.99 Debt Service Credit 0.00 Administrative Charge 157.50 Total $3,307.40 Meter Size Weighting Factor Charge 3/4” 1.00 3,310 1" 2.50 8,275 1 1/2" 5.00 16,550 2” 8.00 26,480 3” 16.00 52,960 4 25.00 82,750 6 50.00 165,500 8 80.00 264,800 The use of weighting factors can result in an under collection of the impact fee for larger industrial customers who utilize the system in a manner far different from the average user. This is due to the fact that in the determination of the impact fees, average system usage is used as the design criteria. The design criteria as shown in Table 2, has been utilized in the calculation of the impact fees. Page 2 Table 2 Impact Fee Design Criteria Peak Day Flow 465.73 gallons/day/EDU Average Day Flow 202.49 gallons/day/EDU Storage Requirements 213.77 gallons/day/EDU To the extent that a customer takes water service different from the system average, a large shortfall in impact fee revenue can result. This is especially true for large service line sizes used by industrial customers. An example is an industrial customer with an 8” service. This type of line can allow a flow of 1,600 gallons per minute or approximately 2.3 mgd. If the large industrial customer were going to utilize the system such that the valve is opened up to its maximum flow capacity 365 days per year, it would be necessary for the City to construct approximately 2.3 mgd of source capacity. Based on current costs of $2.44 per gallon, it would cost approximately $5,600,000 just to construct 2.3 mgd in source capacity. This compares to an impact fee charge using weighting factors for an 8” service line of $284,400. This is only a comparison of source of supply cost to the total impact fee using weighting factors and does not include the other impact fee components. This large difference is due to the fact that the average customer only uses approximately 2% of the water, on the peak day, which could actually flow through the service line. Given the ability of large customers to impose far greater costs on the system it is recommended that impact fees for meter sizes over 3 inches be calculated based on the actual or anticipated EDU’s. This assures that the utility collects funds through the impact fees equal to the cost of providing the service and at the same time not impose a large administrative burden on the utilities staff associated with calculation of impact fees. For meter sizes greater than three (3) inches, the customer’s usage would be calculated based on storage use and peak day use. From these criteria, the number of EDUs for peak day use and storage use would be determined. These equivalent dwelling units would then be multiplied by the charge per EDU as specified under the impact fee charges to determine the total impact fee charge. Two components are calculated due to the fact that peak day usage is used as the design criteria for the majority of the utilities; however, the amount of storage requirement is based on a separate design criteria. Provided in Table 3 are the details of calculation of EDUs for peak day use and storage use. Page 3 Table 3 Determination of EDUs Peak Day EDUs = Peak Day Usage (gpd)/465.73 (gpd/EDU) Storage EDUs = (Average Day Usage x 1.06) (gpd)/213.77 (gpd/EDU) The storage requirement is determined by multiplying average use by 1.06 (213.77/202.49). This calucaltion is based on the assumption that the storage requirement is proportional to the average day use. These factors would then be multiplied by the peak day impact fee per EDU and the storage cost per EDU. These are detailed in Table 4. Table 4 Impact Fee Charges Peak Day Impact Fee Cost = $3,103 /peak day EDU Total Storage Impact Fee Cost = $207 /storage EDU The resultant product of the EDUs and impact fee costs would be the total impact fee charged. The charge would not depend on the meter size for customers greater than 3 inches, but on the customer’s usage. Page 4 Sample Resolution Language Section 3(b): The impact fee is calculated for a 3/4”service line. The impact fee for meter sizes up to 3” is determined by multiplying the impact fee for a meter by a weighting factor. The impact fee for meter sizes up to 3 inches is: Meter Size Weighting Factor (EDUs) Charge 3/4” 1.00 $3,310 1” 2.50 8,275 1-1/2” 5.00 16,550 2” 8.00 26,480 3” 16.00 52,960 Section 3(c): For service lines over 3”, the impact fee shall be determined based on the customers anticipated water usage. Anticipated peak day water usage will be divided by the peak day system design flow of 465.73 gallons per day per EDU to determined peak day EDUs. Anticipated average daily water usage will be multiplied by 1.06 and then divided by 213.77 gallons per day per EDU to determine storage EDUs. Peak day impact fee cost is: $3,103 per peak day EDU Storage impact fee cost is: $ 207 per storage EDU The impact fee shall be the sum of the peak day impact fee cost per EDU multiplied by the peak day EDUs and the storage impact fee cost per EDU multiplied by the storage EDUs. Section 3(d): The impact fee paid for service lines larger than 3 inches as of the effective date of this resolution may be adjusted based on actual usage. If usage is greater than 110% of anticipated volume during a 12 month period of time, an additional impact fee may be charged, using the same techniques for calculating peak day and storage EDUs and multiplying by the peak day impact fee cost per EDU and the storage impact fee cost per EDU then in effect. TECHNICAL APPENDIX B MONTANA CODE 7-6-1601. Definitions. As used in this part, the following definitions apply: (1) (a) "Capital improvements" means improvements, land, and equipment with a useful life of 10 years or more that increase or improve the service capacity of a public facility. (b) The term does not include consumable supplies. (2) "Connection charge" means the actual cost of connecting a property to a public utility system and is limited to the labor, materials, and overhead involved in making connections and installing meters. (3) "Development" means construction, renovation, or installation of a building or structure, a change in use of a building or structure, or a change in the use of land when the construction, installation, or other action creates additional demand for public facilities. (4) "Governmental entity" means a county, city, town, or consolidated government. (5) (a) "Impact fee" means any charge imposed upon development by a governmental entity as part of the development approval process to fund the additional service capacity required by the development from which it is collected. An impact fee may include a fee for the administration of the impact fee not to exceed 5% of the total impact fee collected. (b) The term does not include: (i) a charge or fee to pay for administration, plan review, or inspection costs associated with a permit required for development; (ii) a connection charge; (iii) any other fee authorized by law, including but not limited to user fees, special improvement district assessments, fees authorized under Title 7 for county, municipal, and consolidated government sewer and water districts and systems, and costs of ongoing maintenance; or (iv) onsite or offsite improvements necessary for new development to meet the safety, level of service, and other minimum development standards that have been adopted by the governmental entity. (6) "Proportionate share" means that portion of the cost of capital system improvements that reasonably relates to the service demands and needs of the project. A proportionate share must take into account the limitations provided in 7-6-1602. (7) "Public facilities" means: (a) a water supply production, treatment, storage, or distribution facility; (b) a wastewater collection, treatment, or disposal facility; (c) a transportation facility, including roads, streets, bridges, rights-of-way, traffic signals, and landscaping; (d) a storm water collection, retention, detention, treatment, or disposal facility or a flood control facility; (e) a police, emergency medical rescue, or fire protection facility; and (f) other facilities for which documentation is prepared as provided in 7-6-1602 that have been approved as part of an impact fee ordinance or resolution by: (i) a two-thirds majority of the governing body of an incorporated city, town, or consolidated local government; or (ii) a unanimous vote of the board of county commissioners of a county government. History: En. Sec. 1, Ch. 299, L. 2005. Page 1 of 17-6-1601. Definitions. 1/4/2006http://data.opi.state.mt.us/bills/mca/7/6/7-6-1601.htm 7-6-1602. Calculation of impact fees -- documentation required -- ordinance or resolution -- requirements for impact fees. (1) For each public facility for which an impact fee is imposed, the governmental entity shall prepare and approve documentation that: (a) describes existing conditions of the facility; (b) establishes level of service standards; (c) forecasts future additional needs for service for a defined period of time; (d) identifies capital improvements necessary to meet future needs for service; (e) identifies those capital improvements needed for continued operation and maintenance of the facility; (f) makes a determination as to whether one service area or more than one service area is necessary to establish a correlation between impact fees and benefits; (g) makes a determination as to whether one service area or more than one service area for transportation facilities is needed to establish a correlation between impact fees and benefits; (h) establishes the methodology and time period over which the governmental entity will assign the proportionate share of capital costs for expansion of the facility to provide service to new development within each service area; (i) establishes the methodology that the governmental entity will use to exclude operations and maintenance costs and correction of existing deficiencies from the impact fee; (j) establishes the amount of the impact fee that will be imposed for each unit of increased service demand; and (k) has a component of the budget of the governmental entity that: (i) schedules construction of public facility capital improvements to serve projected growth; (ii) projects costs of the capital improvements; (iii) allocates collected impact fees for construction of the capital improvements; and (iv) covers at least a 5-year period and is reviewed and updated at least every 2 years. (2) The data sources and methodology supporting adoption and calculation of an impact fee must be available to the public upon request. (3) The amount of each impact fee imposed must be based upon the actual cost of public facility expansion or improvements or reasonable estimates of the cost to be incurred by the governmental entity as a result of new development. The calculation of each impact fee must be in accordance with generally accepted accounting principles. (4) The ordinance or resolution adopting the impact fee must include a time schedule for periodically updating the documentation required under subsection (1). (5) An impact fee must meet the following requirements: (a) The amount of the impact fee must be reasonably related to and reasonably attributable to the development's share of the cost of infrastructure improvements made necessary by the new development. (b) The impact fees imposed may not exceed a proportionate share of the costs incurred or to be incurred by the governmental entity in accommodating the development. The following factors must be considered in determining a proportionate share of public facilities capital improvements costs: (i) the need for public facilities capital improvements required to serve new development; and (ii) consideration of payments for system improvements reasonably anticipated to be made by or as a result of the development in the form of user fees, debt service payments, taxes, and other available sources of funding the system improvements. (c) Costs for correction of existing deficiencies in a public facility may not be included in the impact fee. (d) New development may not be held to a higher level of service than existing users unless there is a mechanism in place for the existing users to make improvements to the existing system to match the higher level of service. (e) Impact fees may not include expenses for operations and maintenance of the facility. History: En. Sec. 2, Ch. 299, L. 2005. Page 1 of 17-6-1602. Calculation of impact fees -- documentation required -- ordinance or resolution -- requirement... 1/4/2006http://data.opi.state.mt.us/bills/mca/7/6/7-6-1602.htm 7-6-1603. Collection and expenditure of impact fees -- refunds or credits -- mechanism for appeal required. (1) The collection and expenditure of impact fees must comply with this part. The collection and expenditure of impact fees must be reasonably related to the benefits accruing to the development paying the impact fees. The ordinance or resolution adopted by the governmental entity must include the following requirements: (a) Upon collection, impact fees must be deposited in a special proprietary fund, which must be invested with all interest accruing to the fund. (b) A governmental entity may impose impact fees on behalf of local districts. (c) If the impact fees are not collected or spent in accordance with the impact fee ordinance or resolution or in accordance with 7-6-1602, any impact fees that were collected must be refunded to the person who owned the property at the time that the refund was due. (2) All impact fees imposed pursuant to the authority granted in this part must be paid no earlier than the date of issuance of a building permit if a building permit is required for the development or no earlier than the time of wastewater or water service connection or well or septic permitting. (3) A governmental entity may recoup costs of excess capacity in existing capital facilities, when the excess capacity has been provided in anticipation of the needs of new development, by requiring impact fees for that portion of the facilities constructed for future users. The need to recoup costs for excess capacity must have been documented pursuant to 7-6-1602 in a manner that demonstrates the need for the excess capacity. This part does not prevent a governmental entity from continuing to assess an impact fee that recoups costs for excess capacity in an existing facility. The impact fees imposed to recoup the costs to provide the excess capacity must be based on the governmental entity's actual cost of acquiring, constructing, or upgrading the facility and must be no more than a proportionate share of the costs to provide the excess capacity. (4) Governmental entities may accept the dedication of land or the construction of public facilities in lieu of payment of impact fees if: (a) the need for the dedication or construction is clearly documented pursuant to 7-6-1602; (b) the land proposed for dedication for the public facilities to be constructed is determined to be appropriate for the proposed use by the governmental entity; (c) formulas or procedures for determining the worth of proposed dedications or constructions are established as part of the impact fee ordinance or resolution; and (d) a means to establish credits against future impact fee revenue has been created as part of the adopting ordinance or resolution if the dedication of land or construction of public facilities is of worth in excess of the impact fee due from an individual development. (5) Impact fees may not be imposed for remodeling, rehabilitation, or other improvements to an existing structure or for rebuilding a damaged structure unless there is an increase in units that increase service demand as described in 7-6- 1602(1)(j). If impact fees are imposed for remodeling, rehabilitation, or other improvements to an existing structure or use, only the net increase between the old and new demand may be imposed. (6) This part does not prevent a governmental entity from granting refunds or credits: (a) that it considers appropriate and that are consistent with the provisions of 7-6-1602 and this chapter; or (b) in accordance with a voluntary agreement, consistent with the provisions of 7-6-1602 and this chapter, between the governmental entity and the individual or entity being assessed the impact fees. (7) An impact fee represents a fee for service payable by all users creating additional demand on the facility. (8) An impact fee ordinance or resolution must include a mechanism whereby a person charged an impact fee may appeal the charge if the person believes an error has been made. History: En. Sec. 3, Ch. 299, L. 2005. Page 1 of 17-6-1603. Collection and expenditure of impact fees -- refunds or credits -- mechanism for appeal requir... 1/4/2006http://data.opi.state.mt.us/bills/mca/7/6/7-6-1603.htm 7-6-1604. Impact fee advisory committee. (1) A governmental entity that intends to propose an impact fee ordinance or resolution shall establish an impact fee advisory committee. (2) An impact fee advisory committee must include at least one representative of the development community and one certified public accountant. The committee shall review and monitor the process of calculating, assessing, and spending impact fees. (3) The impact fee advisory committee shall serve in an advisory capacity to the governing body of the governmental entity. History: En. Sec. 4, Ch. 299, L. 2005. Page 1 of 17-6-1604. Impact fee advisory committee. 1/4/2006http://data.opi.state.mt.us/bills/mca/7/6/7-6-1604.htm City of Bozeman Final Report Impact Fees for the Wastewater System July 2007 Prepared by HDR Engineering, Inc. July 18, 2007 Mr. Chris Saunders City of Bozeman 20 E Olive Street Bozeman, MT 59715 Subject: Impact Fees for the Wastewater System Dear Mr. Saunders: HDR Engineering Inc. was retained by the City of Bozeman (City) to develop recommended impact fees for the water and wastewater systems for new development. While the City currently has impact fees for the water and wastewater systems, these fees need to be updated and assure compliance with Montana law. To that end, please find attached our final report detailing the findings, conclusions and recommendations of the review undertaken by HDR Engineering for the determination of cost based impact fee for the City’s wastewater system. This final report has incorporated appropriate comments from the Southwest Montana Building Industry Association. HDR Engineering, Inc. recommends that the City have the charges set forth in this report reviewed by its legal counsel to assure compliance with Montana law. We appreciate the opportunity to provide this technical report to the City. Should you have any questions about this report, please call. It has been a pleasure working with you on this project. We look forward to the opportunity to continue to provide assistance to the City. Sincerely yours, HDR ENGINEERING INC. Randall P. Goff Project Principal Attachments Table of Contents i City of Bozeman, Montana Contents 1 Introduction and Overview of the Study 1.1 Introduction..........................................................................................................1-1 1.2 Overview of the Study.........................................................................................1-1 1.3 Disclaimer............................................................................................................1-2 1.4 Summary..............................................................................................................1-2 2 Overview of Impact Fees and “Generally Accepted” Utility Industry Practices 2.1 Introduction..........................................................................................................2-1 2.2 Defining Impact Fees...........................................................................................2-1 2.3 Historical Perspective..........................................................................................2-2 2.4 Impact Fees and “Generally Accepted” Practices ...............................................2-3 2.5 Financial Objectives of Impact Fees....................................................................2-6 2.6 Relationship of Impact Fees and New Construction Activity .............................2-7 2.7 Summary..............................................................................................................2-9 3 Overview of Impact Fee Methodologies 3.1 Introduction..........................................................................................................3-1 3.2 Impact Fee Criteria ..............................................................................................3-1 3.3 Overview of the Impact Fee Methodology..........................................................3-2 3.4 Summary..............................................................................................................3-4 4 Legal Considerations in Establishing Impact Fees for the City 4.1 Introduction..........................................................................................................4-1 4.2 Requirements under Montana Law......................................................................4-1 4.3 Summary..............................................................................................................4-4 5 Determination of the City Wastewater Impact Fees 5.1 Introduction..........................................................................................................5-1 5.2 Overview of the City’s Wastewater System........................................................5-1 5.3 Present Wastewater Impact Fees .........................................................................5-1 5.4 Service Areas.......................................................................................................5-2 5.5 Calculation of the City’s Wastewater Impact Fees..............................................5-2 5.6 Net Allowable Wastewater Impact Fee ...............................................................5-5 5.7 Key Assumptions.................................................................................................5-6 5.8 Implementation of the Impact Fees......................................................................5-7 5.9 Consultant Recommendation...............................................................................5-7 5.10 Summary..............................................................................................................5-7 Table of Contents ii City of Bozeman, Montana Tables 5-1 Present Wastewater Impact Fees .........................................................................5-2 5-2 Wastewater System Equivalent Residential Units...............................................5-3 5-3 Allowable Wastewater Impact Fees.....................................................................5-5 5-4 Allowable Wastewater System Impact Fees........................................................5-6 Figures 2-1 Overview of the Three-Interrelated Analyses to Review Rates...........................2-5 2-2 Overview of the “Cash-Basis” Approach to Establishing Revenue Requirements........................................................................................2-6 Appendix A – Wastewater Impact Fees 1 Development of Level of Service and EDUs 2 Wastewater Treatment 3 Collection System 4 Summary 5 High Strength Summary Appendix B – Montana Code for Impact Fees Introduction and Overview of the Study 1-1 City of Bozeman, Montana “The objective of this report is to properly place in context the purpose of impact fees, and to determine cost based impact fees for the wastewater system that complies with Montana law.” Section 1 Introduction and Overview of the Study 1.1 Introduction HDR Engineering, Inc. was retained by the City of Bozeman; Montana (City) to update and develop recommended cost based impact fees for the City’s wastewater system that comply with Montana Code 7-6-1601 to 7-6-1604. This report provides details of the development of cost based impact fees for the City’s wastewater system. Impact fees are a one-time assessment against new development to pay for the cost of infrastructure required to provide service. Impact fees provide the means of balancing the cost requirements for new utility infrastructure between existing customers and new customers. The portion of existing plant and future capital improvements that will provide service (capacity) to new customers is included in the impact fees. In contrast to this, the City has future capital improvement projects that are related to renewal and replacement of existing facilities in service. These infrastructure costs are typically included within the rates charged to the City’s customers, and are not included within the impact fee. Impact fees and rates exclude those portions of infrastructure directly related to individual development projects. By establishing cost-based impact fees, the City will assure that “growth pays for growth” and existing utility customers will be sheltered from the financial impacts of growth. The City formally adopted the policy of having beneficiaries of services pay for the services in 1983. The policy has remained in effect ever since and is reflected in many aspects of the City financial structure. 1.2 Overview of the Study This report is divided into five distinct components. The next section of the report, Section 2, provides a review of “generally accepted” utility industry practices as they relate to impact fees. At the same time, it also discusses the financial objectives of impact fees and the practices of other utilities in relation to this fee. Section 3 provides an overview of the criteria and methodologies used in the development of cost-based impact fees and Section 4 provides a summary of the legal requirements for the enactment of impact fees under Montana law. The cost based impact fee calculation for the City’s wastewater system is provided in Section 5. The study relies upon the adopted wastewater facility plan and other standards established by the City. These additional materials are cited to but not directly included in this study. Introduction and Overview of the Study 1-2 City of Bozeman, Montana 1.3 Disclaimer HDR Engineering, Inc., in its determination of impact fees presented in this report, has used “generally accepted” engineering, accounting and ratemaking principles. This should not be construed as a legal opinion with respect to Montana law. Prior to adoption of this study, the City conducted a legal analysis of its impact fee program, including this study, and concluded that the program conforms to all legal requirements. 1.4 Summary This section of the report has provided an overview of the report developed for the City concerning wastewater impact fees. The next section of the report will discuss the “generally accepted” utility industry practices as they relate to impact fees. Overview of Impact Fees and “Generally Accepted” Utility Industry Practices 2-1 City of Bozeman, Montana “Impact fees are capital recovery fees that are generally established as one-time charges assessed against developers or new wastewater customers as a way to recover a part or all of the cost of system capacity constructed for their use. Section 2 Overview of Impact Fees and “Generally Accepted” Utility Industry Practices 2.1 Introduction An important starting point in discussing the City’s continued implementation of wastewater impact fees is an understanding of the purpose and concept of impact fees and the financial objective of those fees. This section of the report will discuss the concept of impact fees and the “generally accepted” practices of the industry. 2.2 Defining Impact Fees One must first define an “impact fee” before beginning an assessment and review of the fees. Impact fees are also often called system development charges (SDC’s), capacity charges, buy-in fees, facility expansion charges, plant investment fees, etc. Regardless of the name applied to the fee, the concept is still the same. Simply stated, impact fees “are capital recovery fees that are generally established as one-time charges assessed against developers or new wastewater customers as a way to recover a part or all of the cost of system capacity constructed for their use. Their application has generally occurred in areas that are experiencing extensive new residential and/or commercial development.”1 The main objective of an impact fee is to assess against the benefiting party, their proportionate share of the cost of infrastructure required to provide them service. Stated another way, impact fees imply that new development creates new or additional costs on the system, and the impact fee assesses that cost in an equitable manner to those customers creating the additional cost. 1 George A. Raftelis, 2nd Edition, Comprehensive Guide to Water and Wastewater Finance and Pricing (Boca Raton: Lewis Publishers, 1993), p. 73. Overview of Impact Fees and “Generally Accepted” Utility Industry Practices 2-2 City of Bozeman, Montana 2.3 Historical Perspective Governments are established to protect the health and safety of the public. Provision of infrastructure, such as wastewater collection and treatment systems, directly advance this purpose by avoiding disease. Due to its importance, provision of adequate infrastructure to deliver adequate service has long been a concern of local, state, and federal governments. Historically, the financing of infrastructure was typically paid for via long-term debt and “pay as you go” rates. However, over the last twenty years, the use of impact fees as a method of financing growth and infrastructure has risen sharply. According to recent national surveys, about 60 percent of all cities with over 25,000 residents and almost 40 percent of all metropolitan counties use some form of impact fees. In California and Florida, the extent of cities and counties using impact fees is at 90 and 83 percent, respectively. Since1987, 26 states have passed impact fee enabling acts. Most of these states are located in the western United States, Great Lakes region, and on the Atlantic coast. Unfortunately, many of these acts are as prohibitive as they are permissive.2 At this time, the State of Montana has very specific legislation related to impact fees. This specific legislation regarding the fees provides the City specific authority to establish and collect impact fees. This authority is provided in Montana Code Section 7-6-1601 to 7-6- 1604. While many utility managers viewed impact fees as an important and alternative source of funding for new capital construction, these fees were also being rationalized from a number of different perspectives. Among these were the following:3 To shift the fiscal burdens from growth from existing development to new development. To synchronize the construction of new or expanded facility capacity with the arrival of new development. To ensure that new development decisions include broad and realistic cost information. To respond to locally vocal anti-growth sentiments. Each of these different perspectives is discussed in more detail below. In addition, impact fees allow the continued ability to develop land by avoiding failed or insufficient infrastructure that constrains growth. Historically, existing development was often subsidized by federal or state resources. As an example, in the early 1970’s, many wastewater treatment plants in the U.S. were 90% grant funded by the Environmental Protection Agency (EPA). Today, grants are nearly extinct, replaced instead by low-interest state revolving fund (SRF) loans. City’s ability to issue bonds are constrained by state law and voter initiatives have limited the ability to increase taxes. Citizens of communities have also expressed increasing reluctance to increase their taxes and fees to provide benefits primarily to others. Therefore, as existing customers were being impacted by the cost of growth, local communities searched for methods to help minimize rate 2 www.impactfees.com. 3 Adapted from: Arthur C. Nelson, System Development Charges for Water, Wastewater and Stormwater Facilities (Boca Raton: Lewis Publishers, 1995) p. 6-7. Overview of Impact Fees and “Generally Accepted” Utility Industry Practices 2-3 City of Bozeman, Montana increases and the impacts of the cost of growth. Unchecked growth and inefficient low density development is very costly on a per unit of service capacity basis. In response to this dilemma, many legislative bodies created urban growth boundaries. At the same time, utilities moved towards impact fee and extension policies that assist in managing system growth in an orderly and coordinated manner. As a result, improved planning and cost-based fees have helped utilities provide necessary services, manage the costs of growth, while stabilizing rates to existing customers. Establishing the price of a commodity equal to its cost is a basic economic and market principle. In theory, consumers of a service will make “optimal” consumption decisions when the price of the commodity is set equal to its cost. By establishing cost-based impact fees, developers should be in a position to make better and more rational decisions concerning new development. At the same time, proper pricing of impact fees also encourages “right sizing” of facilities to serve new development. In other words, given the proper price signal, the developer will properly size their service facilities to meet their realistic needs (e.g. installing a ¾-inch meter and service pipeline versus a 2” meter and service pipeline). Within all communities, there is a segment of the population that wishes to maintain the status quo. Concerns over the possibility of increased taxes and service rates and decreased quality of services due to new development can be a material factor in opposition to growth. Adoption of impact fees, even if only partially cost-based, helps to constrain cost impacts and loss of service quality to existing system users. Accountability, efficiency, and transparency of government has received greater emphasis over the past two decades. The process of developing and utilizing impact fees is heavily focused on clear identification of future demand, current conditions, and equitable assignment of costs. The use of impact fees helps coordinate provision of service to needed locations in a timely manner. Impact fees therefore, when use correctly, support accountability, efficiency, and transparency in government. In summary, the use of impact fees has changed over time, as historical funding sources such as grants have been reduced or eliminated. In response, many communities have moved towards adoption of cost-based impact fees, particularly in areas of high growth. 2.4 Impact Fees and “Generally Accepted” Practices Impact fees are one input into the rate setting process. Therefore, it is important to understand how, within the context of “generally accepted” utility industry practices, impact fees may be used. In conducting a comprehensive rate study, three interrelated analyses are typically conducted. They are a revenue requirement analysis, cost of service analysis and rate design analysis. Figure 2-1 provides an overview of each of these analyses. Overview of Impact Fees and “Generally Accepted” Utility Industry Practices 2-4 City of Bozeman, Montana Figure 2-1 Overview of the Three-Interrelated Analyses to Review Rates Impact fees are factored into the revenue requirement analysis. The revenue requirement analysis for most municipal utilities is referred to as the “cash basis” approach. Figure 2-2, shown below, provides an overview of the key components of the “cash basis” approach to developing revenue requirements. Revenue Requirement Analysis Compares the sources of funds (revenues) to the expenses of the utility to determine the overall adjustment to rates Cost of Service Analysis Allocates the total revenue requirements to the various customer classes of service in a “fair and equitable” manner Rate Design Analysis Consider both the level and the structure of the rate design to collect the appropriate and targeted level of revenue Overview of Impact Fees and “Generally Accepted” Utility Industry Practices 2-5 City of Bozeman, Montana Figure 2-2 Overview of the “Cash-Basis” Approach to Establishing Revenue Requirements As can be seen in Figure 2-2, there are two elements to establishing the “cash basis” revenue requirements. The top or blue box shows the four basic cost components that are included within the “cash basis” revenue requirements. In contrast, the bottom or yellow box illustrates the various methods used to fund capital infrastructure projects. It should be noted in Figure 2-2 that impact fees might be used (applied) in two different ways, each having a different impact upon the utility’s revenue requirements and rates. The first possible use of impact fees is shown in the bottom or yellow box. In that particular case, the impact fees are applied directly against growth or expansion related capital projects. The effect of using the funds in this manner is that it helps to minimize long-term borrowing. For each dollar of impact fees applied in this manner, one less dollar of long-term borrowing and associated increased interest costs is required. + Operation and Maintenance Expenses + Taxes / Transfer Payments + Debt Service (Net of Applied Impact Fees) + Capital Improvements Funded From Rates = Total Revenue Requirements – Miscellaneous Revenues = Total Required From Rates Total Capital Improvement Projects Less: Outside Funding Sources – Capital Reserves – Impact Fees – Grants – Long-Term Debt – Other Capital Funding Sources = Total Capital Improvements Funded From Rates Overview of Impact Fees and “Generally Accepted” Utility Industry Practices 2-6 City of Bozeman, Montana “An impact fee represents a fee for service payable by all users creating additional demand on the facility. To understand this perspective, one must view new development as creating the need for new or expanded facilities.” The other potential use of impact fees is to apply the fees against growth-related debt service. As shown in Figure 2-2, debt service paid for by rates is shown as net of any impact fees revenues used to pay for debt service. In contrast to applying impact fees directly against the capital project, in this particular case, for every dollar applied in this manner, there is a corresponding dollar decrease in revenue requirements and the resulting rates. This is a very effective method to help minimize rates, but even better at matching the cost of growth to the way in which customer growth occurs. In other words, a utility may build or expand a facility with sufficient capacity to handle growth over the next ten to twenty years. That growth doesn’t occur in the first year, but rather, trickles in over a number of years. Therefore, applying the impact fees against the debt service associated with the project creates a better matching of the cost incurrence (debt payments) to the actual customer growth. 2.5 Financial Objectives of Impact Fees An impact fee represents a fee for service payable by all users creating additional demand on the facility. To understand this perspective, one must recognize that new development creates the need for new or expanded facilities. As a result, without payment of impact fees, the City would have insufficient revenues to provide the facilities, and therefore the community is unable to accommodate new development. Protection of public safety requires the provision of public infrastructure; therefore the City has adopted regulations which require its installation so that adequate service can be delivered. In some circumstances it is more effective and efficient to collect money payments. For example, rather than requiring each development to try to build a tiny part of a major wastewater pipe. Impact fees help the City achieve a number of different financial objectives. These objectives include financial equity between customers; maintaining cost effective services, avoiding costly debt, and protecting public safety. One key financial/rate objective that is achieved from impact fees is equity. Equity is achieved in two different ways. First, an impact fee establishes equity between existing (old) customers and new customers. For example, assume that a wastewater treatment plant is expanded by 5 million gallons per day (MGD) to accommodate growth and the facility is financed over a 20- year period. Without an impact fee, new customers connect to the system and pay for the debt service on the facility via their rates. The customer that connects to the system in year one will contribute to the cost of that facility for 20 years. In contrast, the person who connects in year 10 will only pay for debt service on the facility for ten years, even though the “value” of the capacity was the same for the person connecting in year 1 or year 10. Impact fees create equity within the system by addressing the issue of timing and the “value” of the assets and the “value” of the capacity. The second way in which impact fees help to create equity is after a facility is paid for. Overview of Impact Fees and “Generally Accepted” Utility Industry Practices 2-7 City of Bozeman, Montana Most commonly, impact fees are adopted in high growth areas where infrastructure expansion has strained existing financial resources. Philosophically, many utilities desire to have a policy of “growth paying for growth.” Continuing with the example above, after the debt service is fully paid off in year 20, and assuming that capacity is still available, a new customer connecting to the system would “in theory” receive their capacity at zero cost, because the debt service is paid in full. All the existing customers connected to the system, over the past twenty years, paid for that customer’s capacity. Therefore, an impact fee is also a form of a financial reimbursement to existing ratepayers who paid for those facilities in advance of the new customer connecting to the system. Based upon the above example, impact fees also have an equity perspective associated with the rate setting process. That is, impact fees are a form of “system buy-in.” A properly established impact fee implies that a new customer connecting to the system has bought into the system at its current cost. Therefore, from a rate setting perspective the utility does not need to have rates for “old” and “new” customers. Again, existing customers have been equitably reimbursed for past investments. Even with the above discussion, not all communities have impact fees. Most commonly, impact fees are adopted in high growth areas where infrastructure expansion has strained existing financial resources. Philosophically, many utilities desire to have a policy of “growth paying for growth.” Impact fees comport with that philosophy, and it is achieved by applying the impact fees either directly against the capital cost of the expansion facilities or against the debt service associated with it. 2.6 Relationship of Impact Fees and New Construction Activity There are a number of misconceptions surrounding impact fees. In a very broad sense, some may argue that impact fees are bad for economic development. These arguments center around two issues. These are as follows: Development will occur on those parcels with lower or non-existent impact fees. Impact fees raise the cost of doing business and hinder development Of the research conducted on these topics, just the opposite has been found. Provided below is a brief explanation of each. Developers look at many factors before a parcel is developed. One misconception concerns the selection of parcels for development and whether impact fees are applied to the land. “The argument goes that if a developer is choosing between two parcels of land on which to build—where the first parcel is inside a city where SDC’s (System Development Charge - impact fees) are charged and the second is just outside where lower or no SDC’s (impact fees) are charged—the developer will choose the second parcel. Overview of Impact Fees and “Generally Accepted” Utility Industry Practices 2-8 City of Bozeman, Montana “As can be seen, at least in the opinion of Nelson, impact fees do not hinder growth, but in fact may help to spur growth.” The trouble is this means that the owner of the first parcel does not make a sale. The landowner must lower the land price to offset the fee in order to make a sale. However, if the landowner does not lower the price, this indicates that the value of future development may be higher on that parcel. Thus, be wary of developers who claim they will choose the second parcel. Chances are they would not have chosen the first parcel anyway. In the meantime, the land market will be holding the first parcel available for higher value development. In effect what might look like a loss in the short term may be a much higher level of development in the long-term.”4 The other argument and misconception that one commonly hears about impact fees is that they are bad for economic development. The argument against this position is as follows: “The argument goes that because SDC’s (impact fees) raise the price of doing business, they frustrate economic development. However, just the opposite is really true. First, remember that SDC’s (impact fees) will be offset by reduced land prices and by enabling the community to more easily expand the supply of buildable land relative to demand. Now, consider what economic development really looks for: skilled labor, access to markets, and land with adequate infrastructure. Competitiveness for economic development will be stimulated by the new or expanded infrastructure paid in part by SDC’s (impact fees). Besides, local governments retain the option to waive SDC’s (impact fees) for specific kinds of economic development, such as development locating in enterprise zones. In the competition for certain kinds of development, it will be able to show developers the dollar value of SDC’s (impact fees) waived as a solid demonstration of the local government’s commitment to such development.”5 As can be seen, at least in the opinion of Nelson, impact fees do not hinder growth, but in fact may help to spur growth. It must be remembered that an important concept associated with impact fees is that the fees are required to develop infrastructure concurrently with or in advance of the actual development. From the developer’s perspective, absent impact fees (i.e. a moratorium on new connections) no new development can occur. Therefore, developers are generally supportive of equitable cost-based impact fees, particularly when it provides available capacity and opportunities for development. 4 Nelson. “System Development Charges for Water, Wastewater and Stormwater Facilities” P. 55. 5 Nelson, “System Development Charges for Water, Wastewater and Stormwater Facilities” P. 56. Overview of Impact Fees and “Generally Accepted” Utility Industry Practices 2-9 City of Bozeman, Montana 2.7 Summary This section of the report has provided an overview of the financial objectives associated with impact fees and some of the issues surrounding them. This section should have provided a basic understanding of the fees such that when the City is ready to have a policy discussion concerning the continued implementation of impact fees and the imposition of new impact fees, they can be placed in proper perspective. The next section of the report will provide an overview of methodologies for the imposition of impact fees. Overview of Impact Fee Methodologies 3-1 City of Bozeman, Montana “The use of system planning criteria is one of the more important aspects in the determination of the impact fees. System planning criteria provides the “rational nexus” or logical connection between the amount of infrastructure necessary to provide service and the charge to the customer.” Section 3 Overview of Impact Fee Methodologies 3.1 Introduction An important starting point in establishing impact fees is to have a basic understanding of the purpose of these charges, along with criteria and general methodology that is used to establish cost-based impact fees. Presented in the section of the report is an overview of impact fees criteria and general methodologies that are used to develop cost-based fees. 3.2 Impact fee Criteria In the determination and establishment of the impact fees, a number of different criteria are often utilized. The criteria often used by utilities to establish impact fees are as follows: Customer understanding System planning criteria Financing criteria, and State/local laws The component of customer understanding implies that the charge is easy to understand. This criterion has implications on the way that the fee is implemented, administered and assessed to the customer. For wastewater systems, the charge can be based on meter size or the type of dwelling or business type being assessed. For example, a school could be assessed based on a per student basis corresponding to the sanitary sewer flow per student. The other implication of this criterion is that the methodology is clear and concise in its calculation of the amount of infrastructure necessary to provide service. The use of system planning criteria is one of the more important aspects in the determination of impact fees. System planning criteria provides the “rational nexus”, or logical connection, between the amount of infrastructure necessary to provide service and the charge to the customer. The rational nexus test requires that there be a connection (nexus) established between new development and the existing or expanded facilities required to accommodate new development; and appropriate apportionment of the cost to the new development in relation to benefits reasonably received. An example using system-planning criteria is the determination that a single-family residential customer requires 204.7 gallons on average of wastewater treatment. The impact fee methodology then charges the customer for 204.7 gallons of wastewater treatment at the cost of treatment. Overview of Impact Fee Methodologies 3-2 City of Bozeman, Montana One of the driving forces behind establishing cost-based impact fees is the City’s adopted policy since 1983 that “growth pays for growth.” Therefore, impact fees are typically established as a means of having new customers pay an equitable share of the cost of their required capacity (infrastructure). The financing criteria for establishing impact fees relates to the method used to finance infrastructure of the system and assures that customers are not paying twice for infrastructure – once through impact fees and again through rates. The double payment can come in through the imposition of impact fees and then the requirement to pay debt service within a customer’s rates. The financing criterion also reviews the basis under which collection line extensions were provided and assures that customers are not charged for infrastructure that was provided (contributed) by developers. Many states and local communities have enacted laws, which govern the calculation and imposition of impact fees. These laws must be followed in the determination of the impact fees. Most statutes require a “reasonable relationship” between the fee charged and the cost associated with providing service (capacity) to the customer. The charges do not need to be mathematically exact, but must bear a reasonable relationship to the cost burden imposed. As discussed above, the utilization of the planning criteria and the actual costs of construction and the planned costs of construction provide the nexus for the reasonable relationship requirement. 3.3 Overview of the Impact Fee Methodology There are “generally-accepted” methodologies that are used to establish impact fees. Within the “generally accepted” impact fee methodologies, there are a number of different steps undertaken. These steps are as follows: Determination of system planning criteria Determination of equivalent residential dwelling units (EDUs) Calculation of system component costs Determination of any credits The first step in establishing impact fees is the determination of the system planning criteria as established in the wastewater facilities plan. A common unit of capacity demand is needed in order to enable calculation of demand across many different types of users. This is the amount of wastewater generated by a single-household residential customer, or EDU. For the wastewater system, the common unit of capacity demand is the average wastewater flow per EDU. The use of strength can also be developed if the system contains very high strength customers. While a wastewater system has many planning factors, such as peak flow, if these are consistent for customer types, then the use of average flow is appropriate. The average flow approach recognizes that the demand at a specific location may vary greatly over time. Since impact fees are a one time charge the average allows a reasonable representative calculation. Special cases may be identified that require an alternative approach. Such special cases will be addressed on a case by case basis. Once the system planning criteria are determined, the number of EDUs able to be served by expansion of system capacity can be determined. For the wastewater system total number of EDUs is determined by dividing the total system average flow by the average wastewater flow per EDU. This is a very important calculation since it provides the linkage between the amounts Overview of Impact Fee Methodologies 3-3 City of Bozeman, Montana of infrastructure necessary to provide service to a set number of customers. This implies that if the system is designed to provide service to flow up to the year 2025, then the infrastructure costs are divided by the EDUs in 2025. Once the number of EDUs has been determined, a component by component (e.g. treatment, collection, etc.) analysis is undertaken to determine the component impact fee in $ per EDU. Individual plant components are analyzed separately for the wastewater system given that the planning criteria for the design of the various system components differ. The calculation of the component impact fee includes both historical assets and planned future assets. Historical assets can be valued in a number of different ways. These include original cost plus interest, replacement cost and depreciated replacement costs. Costs are limited to those providing capacity expansion beyond that required for minimum local service needs, such as the local collection system. As shown in Exhibit 3, these costs are not included as part of the impact fee calculation. The original cost plus interest method includes original cost plus ten (10) years worth of interest. This calculation is done to reflect the fact that existing customers have provided for excess capacity in the system and hence need to be reimbursed for not only their initial investment, but also the “carrying cost” on that investment. The reimbursement to existing customers is accomplished by the fact that without an impact fee, rates would otherwise be higher than they would be without impact fees. The replacement cost method values existing assets based on the cost to replace the assets in today’s dollars. This is done by escalating the original cost by the Engineering News Record Construction Cost (ENR) index. The theoretical basis for the use of replacement cost is that customers are indifferent since they would have to pay replacement cost if the infrastructure was built today to serve their needs. The use of depreciated replacement cost reflects the fact that the assets have been used and hence their value to the new customer is less than the replacement cost. Caution needs to be exercised in the use of depreciated replacement cost, since the book or accounting lives used by many utilities are not reflective of the actual life of the asset and may result in the assets being undervalued. An example is using a useful life for a storage reservoir of 40 years, when in reality, with maintenance, the actual life maybe between 60 to 80 years. Each of these three (3) methods are used in the industry and the appropriate method selected by the City should be based on the method that best reflects the cost of providing capacity in the systems. HDR Engineering, Inc. recommends the use of the original cost with interest method, since it will reflect the actual cost of the City’s system. The City’s system is developed to serve future development through existing capacity and planned future capacity additions. This has been accomplished by the City building excess capacity. Therefore, the use of the original cost with interest method will reflect the actual costs that have been incurred or will be incurred by the City in providing capacity to new development. This is also the most commonly used method to value capacity in wastewater systems. This method also appears to comply with the requirements under Montana law wherein in the “actual cost” of infrastructure is required. Overview of Impact Fee Methodologies 3-4 City of Bozeman, Montana The total cost of the capital infrastructure is then divided by the appropriate number of equivalent dwelling units the infrastructure will serve to determine the cost per EDU for the specific plant component. After each plant component is analyzed and a cost per EDU is determined, the cost per EDU for each of the plant components is added together to determine the “gross impact fee.” The “gross impact fee” is calculated before any credits for debt service. The last step in the calculation of the impact fee is the determination of any credits. This is generally a calculation to assure that customers are not paying twice − once through impact fees and again through debt service included within the wastewater rates. A crediting mechanism is also utilized if general obligation or tax revenue has been used to finance the infrastructure. The final impact fee is determined by taking the “gross impact fee” and subtracting any credits. This results in a “net impact fee” stated in dollars per EDU. The general basis of this calculation for a wastewater system is the assumption of an EDU. Larger meter sizes are then assigned fees based on the number of EDUs for a given meter size based on operating capacity. The theory for this approach is that larger meter sizes create greater flows on the wastewater system and hence impose additional costs on the wastewater system. In order to maintain the necessary proportionality in cost to service benefits the impact fees need to be periodically updated. Updates should examine both increased costs of construction and changes in the number and type of infrastructure to be constructed. 3.4 Summary This section has provided a discussion of the criteria typically used in the determination of impact fees. In addition, an overview of the “generally accepted” methodology used in the calculation of the impact fees has been provided. Given this background, the next section of the report discusses any specific legal criteria that must be used by the City in the establishment of its impact fees. Legal Considerations in Establishing Capacity Charges for the City 4-1 City of Bozeman, Montana “The laws for the enactment of impact fees in Montana are found in 7-6-1601 to 7-6-1604 of the Montana Code. Section 4 Legal Considerations in Establishing Impact Fees for the City 4.1 Introduction An important consideration in establishing impact fees is any legal requirements at the state or local level. The legal requirements often establish the methodology around which the impact fees must be calculated or how the funds must be used. Given that, it is important for the City to understand these legal requirements. This section of the report provides an overview of the legal requirements for establishing impact fees under Montana law. The discussion within this section of the report is intended to be a summary of our understanding of the relevant Montana law as it relates to establishing impact fee. It in no way constitutes a legal interpretation of Montana law by HDR Engineering, Inc. 4.2 Requirements under Montana Law In establishing impact fees, an important requirement is that they be developed and implemented in conformance with local laws. In particular, many states have established specific laws regarding the establishment, calculation and implementation of capacity fees. The main objective of most state laws is to assure that these charges are established in such a manner that they are fair, equitable and cost-based. In other cases, state legislation may have been needed to provide the legislative powers to the utility to establish the charges. In general, the power to impose exactions must either be expressly granted by statute, or be reasonably inferred from express statutory provision. Montana Subdivision statutes authorize monetary exactions in separate sections of the Montana Code. Mont. Code Ann. § 76-3-510 provides that, as a condition of subdivision approval, the City may require that a development pay or guarantee payment for part or all of the costs of extending capital facilities related to the public health and safety, including but not limited to public roads, sewer lines, water supply lines, and storm drains to a subdivision. Mont. Code Ann. § 76-3-621 requires that subdividers dedicate a portion of a proposed subdivision for use as parks or open space. Alternatively, the statute authorizes the City to require the subdivider to pay the cash equivalent to the fair market value of the required portion that would have otherwise been utilized as a park. These statutes apply only to subdivisions. The Montana Supreme Court has also recognized a city’s authority to impose development fees in other circumstances. In Lechner v. City of Billings, (Mont. 1990) 797 P.2d 191, the Court concluded that if a statutory framework authorizing the operation of an improvement or system Legal Considerations in Establishing Capacity Charges for the City 4-2 City of Bozeman, Montana of improvements existed (e.g., sewer or water system), and a provision allowing for charge of a fee for the service or the improvement existed, then it is a reasonable extension of the city’s express statutory authority to accumulate fees to pay for the implementation of that authority. Cities and counties, prior to 2005, enacted impact fees through the authority of these and other statutes and powers. The Montana enabling legislation for impact fees was enacted in 2005 via Senate Bill 185. This was comprehensive legislation specifically allowing public entities in the State of Montana to enact impact fees for various services. The legal basis for the enactment of impact fees is found in Title 7, Chapter 6, and Part 1601 to 1604 of the Montana Code. A summary of the Montana Code is provided below. A copy of the full code is provided as Appendix B. A summary of the requirements under Montana law is as follows: “7-6-1601. Definitions. As used in this part, the following definitions apply:... …5) (a) "Impact fee" means any charge imposed upon development by a governmental entity as part of the development approval process to fund the additional service capacity required by the development from which it is collected. An impact fee may include a fee for the administration of the impact fee not to exceed 5% of the total impact fee collected. (b)The term does not include: (i) a charge or fee to pay for administration, plan review, or inspection costs associated with a permit required for development; (ii) a connection charge; (iii) any other fee authorized by law, including but not limited to user fees, special improvement district assessments, fees authorized under Title 7 for county, municipal, and consolidated government sewer and water districts and systems, and costs of ongoing maintenance; or (iv) onsite or offsite improvements necessary for new development to meet the safety, level of service, and other minimum development standards that have been adopted by the governmental entity. 7-6-1602. Calculation of impact fees -- documentation required -- ordinance or resolution -- requirements for impact fees. (1) For each public facility for which an impact fee is imposed, the governmental entity shall prepare and approve documentation that: (a) describes existing conditions of the facility; (b) establishes level of service standards; (c) forecasts future additional needs for service for a defined period of time; (d) identifies capital improvements necessary to meet future needs for service; (e) identifies those capital improvements needed for continued operation and maintenance of the facility; (f) makes a determination as to whether one service area or more than one service area is necessary to establish a correlation between impact fees and benefits; Legal Considerations in Establishing Capacity Charges for the City 4-3 City of Bozeman, Montana (g) makes a determination as to whether one service area or more than one service area for transportation facilities is needed to establish a correlation between impact fees and benefits; (h) establishes the methodology and time period over which the governmental entity will assign the proportionate share of capital costs for expansion of the facility to provide service to new development within each service area; (i) establishes the methodology that the governmental entity will use to exclude operations and maintenance costs and correction of existing deficiencies from the impact fee; (j) establishes the amount of the impact fee that will be imposed for each unit of increased service demand; and (k) has a component of the budget of the governmental entity that: (i) schedules construction of public facility capital improvements to serve projected growth; (ii) projects costs of the capital improvements; (iii) allocates collected impact fees for construction of the capital improvements; and (iv) covers at least a 5-year period and is reviewed and updated at least every 2 years. ….5) An impact fee must meet the following requirements: (a) The amount of the impact fee must be reasonably related to and reasonably attributable to the development's share of the cost of infrastructure improvements made necessary by the new development. (b) The impact fees imposed may not exceed a proportionate share of the costs incurred or to be incurred by the governmental entity in accommodating the development. The following factors must be considered in determining a proportionate share of public facilities capital improvements costs: (i) the need for public facilities capital improvements required to serve new development; and (ii) consideration of payments for system improvements reasonably anticipated to be made by or as a result of the development in the form of user fees, debt service payments, taxes, and other available sources of funding the system improvements. (c) Costs for correction of existing deficiencies in a public facility may not be included in the impact fee. (d) New development may not be held to a higher level of service than existing users unless there is a mechanism in place for the existing users to make improvements to the existing system to match the higher level of service. (e) Impact fees may not include expenses for operations and maintenance of the facility. 7-6-1603. Collection and expenditure of impact fees -- refunds or credits -- mechanism for appeal required…. …(3) A governmental entity may recoup costs of excess capacity in existing capital facilities, when the excess capacity has been provided in anticipation of the needs of new development, by requiring impact fees for that portion of the Legal Considerations in Establishing Capacity Charges for the City 4-4 City of Bozeman, Montana facilities constructed for future users. The need to recoup costs for excess capacity must have been documented pursuant to 7-6-1602 in a manner that demonstrates the need for the excess capacity. This part does not prevent a governmental entity from continuing to assess an impact fee that recoups costs for excess capacity in an existing facility. The impact fees imposed to recoup the costs to provide the excess capacity must be based on the governmental entity's actual cost of acquiring, constructing, or upgrading the facility and must be no more than a proportionate share of the costs to provide the excess capacity.” The use of the methodology discussed in Section 3, is designed to assure that the proportional share standard is met and the impact fees are in compliance with Montana law. 4.3 Summary This section of the report has reviewed the legal basis for establishing impact fees in Montana. HDR concludes that the City has the authority to establish cost-based impact fees and the methodology used is designed to assure compliance with Montana law. Determination of the City’s Wastewater Impact Fees 5-1 City of Bozeman, Montana Section 5 Determination of the City’s Wastewater Impact Fees 5.1 Introduction The calculation of wastewater impact fees presented in this section are based on the City’s fixed asset records, future capital improvements, and planning criteria from the facility plan entitled, Bozeman Wastewater Facilities Plan, dated March, 2007 (the wastewater facilities plan). To the extent that the cost and timing of future capital improvements change, then the impact fees presented in this section should be updated to reflect the cost of these adjustments. 5.2 Overview of the City’s Wastewater System The City’s wastewater system consists of conventional sewer mains and lift stations to deliver wastewater to the City’s treatment plant. The City has a single wastewater treatment plant with a current design capacity of 5.80 MGD average annual flow. To meet capacity and effluent quality requirements, the City’s capital improvement plan calls for a number of improvements to the solids handling processes and liquid treatment facilities at the wastewater treatment plan. These improvements will be accomplished in three phases. The improvements through Phase 3 will expand the wastewater treatment plant from 5.80 mgd average daily flow to 13.9 mgd average daily flow. The City will also need to make improvements to the existing collection system by upsizing existing pipe or paralleling existing pipe to accommodate growth. The City will also need to add a large number of new extensions and pump stations to the existing system to service growth in currently unsewered areas. The City’s discharge of treated wastewater is subject to permitting by the Montana Department of Environmental Quality. Recent changes in the pollutant discharge standards under which the permit is issued will have a substantial impact on the City treatment plant and future capacity expansion. 5.3 Present Wastewater Impact Fees The City currently assesses an impact fee for connection to the wastewater system. By policy, the City has chosen to only assess 80% of the allowable fee. The current allowable wastewater impact fees and currently assessed wastewater impact fees are shown in Table 5-1. Determination of the City’s Wastewater Impact Fees 5-2 City of Bozeman, Montana Table 5-1 City Bozeman, Montana Present Wastewater Impact Fees Meter Size EDU Factor Allowable Charge Assessed Charge (80%) ¾" 1.00 $3,540.57 $ 2,832.46 1” 2.50 8,852.08 7,081.67 1-1/4" 3.50 12,392.66 9,914.12 1-1/2" 5.00 17,702.86 14,162.29 2" 8.00 28,324.57 22,659.66 3" 16.00 56,649.14 45,319.31 4" 25.00 88,514.29 70,811.43 6" 50.00 177,028.57 141,622.86 8" 80.00 283,245.72 226,596.57 5.4 Service Areas Pursuant to MCA 7-6-1602(1) (f) in the determination of Wastewater Impact Fees, the following must be considered: “makes a determination as to whether one service area or more than one service area is necessary to establish a correlation between impact fees and benefits;” The City operates the wastewater system as a single integrated utility. This allows all assets to service all customers. Based on these factors and a knowledge of the wastewater system, the City has determined that for the purpose of calculating and imposing Wastewater Impact Fees, that the entire City will be treated as a single service area pursuant to MCA 7-6-1602(1) (f). 5.5 Calculation of the City’s Wastewater Impact Fees As was discussed in Section 3, the process of calculating impact fees is based upon a four-step process. In summary form, these steps were as follows: Determination of system planning criteria Determination of equivalent dwelling units (EDUs) Calculation of the impact fee for system component costs Determination of any impact fee credits Each of these areas is discussed in more detail below. Determination of the City’s Wastewater Impact Fees 5-3 City of Bozeman, Montana 5.5.1 System Planning Criteria The number of wastewater equivalent dwelling units (EDUs) was determined based on the wastewater facilities plan. The wastewater facilities plan determines average daily flow per capita. The facilities plan documents an average of 89 gallons per capita per day (gpcd) and incorporates the 2000 Census average number of persons per household of 2.3. This results in a usage per EDU of 204.70. 5.5.2 Calculation of Equivalent Dwelling Units The planning horizon of this impact fee study was 2005 – 2025. This is the same planning horizon used in the wastewater facilities plan for which the City’s existing wastewater system and future improvements will provide service to an expanded area. As a part of this impact fee study, a projection of the number of new/additional EDUs per year must be determined, along with the total number of EDUs at 2025. The City’s total number of EDUs for each year was determined by dividing the total system average flow by the average flow per EDU. The total system average flow was based on the flow projections per the wastewater facilities plan. A summary of the EDUs for 2005 and 2025 are presented in Table 5-2. Details of the determination of EDUs are provided in Exhibit 1 of the Technical Appendix. Table 5-2 City of Bozeman, Montana Number of Wastewater Equivalent Dwelling Units Equivalent Dwelling Units – 2005 25,403 Equivalent Dwelling Units – 2025 67,904 After the determination of the total future wastewater EDUs for each year of the planning period, the focus can shift to the calculation of the impact fee for each plant component. This aspect of the analysis is discussed in detail below. 5.5.3 Calculation of the Impact Fee for the Major System Components The next step of the analysis is to review each major functional component of plant in service and determine the impact fee for that component. In calculating the impact fee for the City, both existing plant assets with excess capacity, along with planned future improvements were included within the calculation. Only existing and future assets with a useful life of 10 years or greater were included in the impact fee calculation. The major components of the City’s wastewater system that were reviewed for purposes of calculating impact fees are as follows: Determination of the City’s Wastewater Impact Fees 5-4 City of Bozeman, Montana Wastewater Treatment Plant Collection System Administrative Charge A brief discussion of the impact fee calculated for each system component below. TREATMENT PLANT – The City currently operates a 5.80 million gallon per day wastewater treatment plant. This plant is currently at or near capacity and the City has begun design on an expansion to the treatment plant to accommodate growth and more rigorous regulatory standards. The new treatment plant will be constructed in three phases and will bring the total capacity of the treatment plant to 13.90 mgd. The estimated costs in the wastewater facilities plan were 2005 dollars. To more accurately reflect probable future costs the facilities plan estimates were increased to 2007 dollars based on the rate of inflation. Those costs which would provide new capacity were then allocated to the impact fee. A portion of the Phase 1 improvements were not included in the impact fee calculation, due to these improvements being required to treat existing flows to higher level and to correct current deficiencies at the wastewater treatment plant. The total cost of new wastewater treatment that would serve new development was divided by the additional capacity which resulted in a cost per gallon of $5.21. This cost per gallon was then multiplied by the usage per EDU to determine the wastewater treatment plant impact fee. Based on the costs and capacity of treatment plant for the City, the impact fee for treatment is $1,065.73 per EDU. Details of the calculations are provided in Exhibit 2 of Technical Appendix. COLLECTION SYSTEM – The City’s collection network consists of numerous pipes of varying diameters. To determine the impact fee for the wastewater collection system, an inventory of the existing system was undertaken, as well as those planned improvements, including both priority projects and expansion projects, as identified in the wastewater facility plan. The historical investments of the City were adjusted for interest charges up to a maximum of ten years and allocated to growth based on the number of new EDUs to total EDUs in 2025. All lines 8” and less were excluded from the impact fee calculation. For existing plant it was assumed that all lines were provided by development and therefore excluded from the impact fee calculation. The installation of 8” or less represents City minimum standard improvements which are the obligations of new development or the correction of existing deficiencies that are paid for by rates. The remaining investments were subsequently divided by the number of new EDUs added from 2005 to 2025 to determine the cost per EDU. This approach provides that new development only pay their proportional share to the cost of existing assets providing service. Future capital improvements were assumed to serve new development for the planning horizon from 2005 to 2025 and were then divided by the number of new EDUs added over the planning horizon. Only those improvements that would provide new capacity were allocated to the impact fee. A line by line review was undertaken of the improvements. For those improvements that would be oversized and replace an existing line, only new capacity was included in the impact fee. In the calculation of the impact fee for collection plant a number of items were excluded. First, all existing collection system expansions that were contributed by developers, financed through improvement districts or contributed by grants were excluded from the analysis. Additionally, for future collection plant, an item by item review was undertaken for future capital Determination of the City’s Wastewater Impact Fees 5-5 City of Bozeman, Montana improvements to determine the percentage that would serve new development. Replacements were also excluded since these are not growth related and should be paid for through rates. For extensions to the system, it was assumed that new development would be required to pay for a pipe size up to 8-inches. This size is the smallest main allowed by the City’s Design Standards and Specifications Policy. In some circumstances an individual project may require more than the 8 inch sewer main to service its specific needs. Over-sizing beyond the minimum size of pipe may be paid for by the City through impact fees in compliance with the procedures for expending impact fee funds. Based on the cost incurred by the City, the impact fee for existing collection system is $121.21 per EDU. For future collection system expansion, the impact fee is $1,625.59 per EDU. This results in a total impact fee for collection plant of $1,746.80 per EDU. Details of the calculation are provided in Exhibit 3 of the Technical Appendix. ADMINISTRATIVE CHARGE – Under Montana statute, an impact fee may include a fee for the administration of the impact fee program not to exceed 5% of the impact fee collected. The City will implement the allowed 5%. The City has included a wastewater administrative charge of $140.63 per EDU. 5.5.4 Debt Service Credits The final step in calculating the wastewater impact fee was to determine if a credit for payment on debt service for the City’s outstanding bonds. The City currently has no outstanding wastewater revenue bonds or loans and does not plan to issue additional revenue bonds to finance the wastewater treatment plant expansion. Therefore, no credit for debt service is required. 5.5 Net Allowable Wastewater Impact Fees Based on the sum of the component costs calculated above, the net allowable wastewater impact fee can be determined. “Net” refers to the “gross” impact fee, less any debt service credits. “Allowable” refers to the concept that the calculated impact fee shown in the following tables is the City’s cost-based impact fee. The City, as a matter of policy, may charge any amount up to the allowable impact fee, but not over that amount. Charging an amount greater than the allowable impact fee would not meet the nexus test of a cost-based impact fee. A summary of the calculated net allowable wastewater impact fees for the City are shown in the Table 5-3. Table 5-3 City of Bozeman, Montana Allowable Wastewater Impact Fee Plant Component Fee Wastewater Treatment $1,065.73 Collection 1,746.80 Administrative Charge 140.63 Debt Service Credit for Bonds 0.00 Total $2,953.16 Determination of the City’s Wastewater Impact Fees 5-6 City of Bozeman, Montana The impact fee for wastewater system is $2,953.16 per EDU. Details of the net allowable impact fees for the City are shown in Exhibit 4 in the Technical Appendix. For ease of administration, the recommended maximum allowable charge for an EDU is $2,955. Based on the impact fee for “1 EDU”, the charges for the various sized service lines would result in the following impact fees as shown in Table 5-4. Other meter sizes are then weighted based on American Water Works Association capacity flow ratings. Table 5-4 City of Bozeman, Montana Allowable Wastewater System Impact Fees Meter Size EDU Factor Maximum Allowable Charge 3/4” 1.00 $2,955 1” 2.50 7,388 1-1/2”” 5.00 14,775 2” 8.00 23,640 3” 16.00 47,280 Over 3” 1 Calculated 1 1 – The impact fee for meter sizes over 3” shall be calculated by first determining the number of EDUs by dividing the average annual daily flow by 204.70 gallons per EDU. The impact fee shall then be the number of EDUs times the impact fee for 1 EDU. A strength surcharge shall also apply based on the number of pounds. In Table 5-4 the impact fees for the larger meter sizes up to 3” are determined by multiplying the impact fees for an EDU by the weighting factors. The weighting factors reflect the increased flow that the customer can impose on the system and hence the increased cost required to provide capacity to the customer. For meter sizes over 3”, the wastewater impact fee is calculated based on the actual flow and the flow definition for an EDU. The wastewater impact fees as calculated assume a strength level equivalent to a single family residential unit. To the extent that a commercial or industrial customer has a strength level greater than a single family residential meter, then the treatment plant component of the impact fee will be increased in proportion to the increase strength and then multiplied by the EDU factor to reflect the additional treatment plant costs incurred by the City to treat the customer’s wastewater. See Exhibit 5 for the detailed calculations. 5.6 Key Assumptions In the development of the impact fees for the City’s wastewater system a number of key assumptions were utilized. These are as follows: The City’s asset records were used to determine the nature and value of existing wastewater collection and treatment assets. The interest rate used for calculating interest on existing investments was 5.0% 10 years worth of interest were included in the cost of existing plant. Determination of the City’s Wastewater Impact Fees 5-7 City of Bozeman, Montana The findings required under MCA 7-6-1602 were provided in the wastewater facilities plan and this report 5.7 Implementation of the Impact Fees The methodology used to calculate the impact fees takes into account the cost of money or interest charges and inflation. Therefore, HDR Engineering, Inc. would recommend that the City adjust the impact fees each year by an escalation factor to reflect the cost of interest and inflation. The most frequently used source to escalate impact fees is the ENR index which tracks changes in construction costs for municipal utility projects. This method of escalating the City’s impact fee should be used for no more than a two-year period. After this time period, as required by Montana law, the City should update the charges based on the actual cost of infrastructure and any new planned facilities that would be contained in an updated facilities plan, capital improvement plan or rate study. 5.8 Consultant Recommendations Based on our review and analysis of the City wastewater impact fees, HDR Engineering, Inc. makes the following recommendations: The City implement impact fees for new and expanded connections to the wastewater system that are no greater than the impact fees as set forth in this report. The City update the impact fees calculations based periodically as required by State law and City ordinance. 5.9 Summary The wastewater impact fees determined and presented in this section of the report are based on the engineering design criteria of the City’s wastewater system, the value of the existing assets, future capital improvements and “generally accepted” impact fee calculation principles. Adoption of the proposed impact fees will provide multiple benefits to the system users as well as the City and create equitable and cost-based charges for new customers connecting to the City’s wastewater system. TECHNICAL APPENDIX A WASTEWATER IMPACT FEES Wastewater Impact Fees – Calculation Basis Exhibit 1 – Determination of LOS and Equivalent Dwelling Units Average Usage per EDU = Average Residential Usage (gpcd) * Persons per Household EDUs = Average Flow / Average Usage per EDU Exhibit 2 – Wastewater Treatment Plant Impact Fee Treatment Plant Impact Fee = Impact Fee Costs / Plant Capacity * Average Usage per EDU * High Strength factor [only when applicable – See Exhibit 5] Exhibit 3 – Collection System Impact Fee Collection System Impact Fee = Impact Fee Costs / Number New EDUs Served by Improvements (per Facilities Plan) Exhibit 4 – Wastewater Impact Fee Administrative Impact Fee = (Treatment Plant Impact Fee + Collection System Impact Fee) * .05 Wastewater Impact Fee = (Treatment Plant Impact Fee + Collection System Impact Fee – Debt Service Credit)+ Administrative Impact Fee Wastewater Debt Service Credit Debt Service Credit = NPV from Year1 to Yearn of Impact Fee Revenue – Annual Debt Service/ ERUs 1 to n City of Bozeman, Montana Impact Fees for the Wastewater System Determination of LOS and Equivalent Dwelling Units Exhibit 1 Average Usage Residential 1 89.00 gpcd Number of Persons per Household 2 2.3 Average Usage 3 204.70 per EDU 1 - See page 2-19 of the Wastewater Facilities Plan. 2 - See page 2-10 of the Wastewater Facilities Plan. 3 - Average Usage Residential times number of persons per household. 1 5/14/2007 City of Bozeman, Montana Impact Fees for the Wastewater System Determination of LOS and Equivalent Dwelling Units Exhibit 1 Average Day Equivalent Additional Year Demand 1 Dwelling Units 2 EDUs 2005 5.20 25,403 2006 5.47 26,724 1,321 2007 5.75 28,113 1,390 2008 6.05 29,575 1,462 2009 6.37 31,113 1,538 2010 6.70 32,731 1,618 2011 7.03 34,326 1,595 2012 7.37 35,999 1,673 2013 7.73 37,754 1,755 2014 8.10 39,594 1,840 2015 8.50 41,524 1,930 2016 8.93 43,642 2,118 2017 9.39 45,867 2,226 2018 9.87 48,207 2,339 2019 10.37 50,665 2,458 2020 10.90 53,249 2,584 2021 11.44 55,902 2,653 2022 12.01 58,687 2,785 2023 12.61 61,611 2,924 2024 13.24 64,681 3,070 2025 13.90 67,904 3,223 1 - See page 2-17 of the Wastewater Facilities Plan. 2 - Average day demand divided by Average Day EDU Usage Factor. 2 5/14/2007 City of Bozeman, Montana Impact Fees for the Wastewater System Wastewater Treatment Exhibit 2 Original Impact Fee Cost Year Equipment List Cost Related 3 $2007 1,2 Future Construction Projects 1,2 2008 Phase 1 - Liquid Treatment Improvements 23,713,281$ 38% 9,746,348$ 2008 Phase 1 - Solids Handling and Treatment Improvements 8,830,469 38% 3,629,393 2008 Phase 1 - Engineering Legal and Contract Administration 5,556,250 38% 2,283,663 2014 Phase 2 - Liquid Treatment Improvements 11,708,537 100% 12,663,954 2014 Phase 2 - Solids Handling and Treatment Improvements 3,970,136 100% 4,294,099 2014 Phase 2 - Engineering Legal and Contract Administration 3,835,555 100% 4,148,537 2020 Phase 3 - Liquid Treatment Improvements 2,665,270 100% 2,882,756 2020 Phase 3 - Solids Handling and Treatment Improvements 1,499,214 100% 1,621,550 2020 Phase 3 - Engineering Legal and Contact Administration 832,897 100% 900,861 Total Future Construction Projects 42,171,161$ Total Wastewater Treatment 42,171,161$ Plant Capacity (MGD) 3 8.10 Cost per Gallon 5.21$ Requirement per EDU 204.70 Impact Fee Wastewater Treatment per EDU 1,065.73$ 1 - Existing plant was not included since treatment plant is at or near capacity. 2 - Future plant is increased from 2005 construction costs by the rate of inflation. 3 - New plant capacity to serve development to 2025. 1 5/14/2007 City of Bozeman, Montana Impact Fees for the Wastewater System Wastewater Treatment Phase 1 Allocation Exhibit 2 Total Non Impact Fee Impact Fee Equipment List Cost Related Related Headworks 3,159,512$ 2,155,902$ 1,003,610$ Primary Effluent Pumping 2,822,652 1,926,045 896,607 Activated sludge system 9,954,787 6,792,678 3,162,109 Secondary Effluent Pumping 2,090,854 1,426,700 664,154 Clarification 2,683,262 2,683,262 RAS and WAS pumps 2,555,488 1,743,745 811,743 Anaerobic Digestion 4,530,183 3,091,184 1,438,999 Dewatering 5,807,927 3,963,056 1,844,871 Disinfection 3,682,226 2,512,577 1,169,648 Outfall 813,110 813,110 Total 38,100,000$ 23,611,887$ 14,488,113$ Percent Impact Fee Related 38.03% 2 5/14/2007 City of Bozeman, Montana Impact Fees for the Wastewater System Collection System Exhibit 3 Original Impact Fee Cost Year Equipment List Cost Related 3 $2007 1,2 Existing Assets 1 1955 Pipelines -$ 62.59% -$ 1956 Pipelines 6 62.59% 6 1957 Pipelines - 62.59% - 1958 Pipelines - 62.59% - 1959 Pipelines - 62.59% - 1960 Pipelines - 62.59% - 1961 Pipelines - 62.59% - 1962 Pipelines 639 62.59% 651 1963 Pipelines 2,262 62.59% 2,306 1964 Pipelines - 62.59% - 1965 Pipelines - 62.59% - 1966 Pipelines - 62.59% - 1967 Pipelines - 62.59% - 1968 Pipelines - 62.59% - 1969 Pipelines 26,412 62.59% 26,928 1970 Pipelines - 62.59% - 1971 Pipelines - 62.59% - 1972 Pipelines 6,513 62.59% 6,640 1973 Pipelines 3,148 62.59% 3,209 1974 Pipelines 3,790 62.59% 3,864 1975 Pipelines 3,662 62.59% 3,734 1976 Pipelines 1,526 62.59% 1,556 1977 Pipelines 28,811 62.59% 29,374 1978 Pipelines 7,451 62.59% 7,597 1979 Pipelines - 62.59% - 1980 Pipelines 163,527 62.59% 166,720 1981 Pipelines 48,424 62.59% 49,369 1982 Pipelines - 62.59% - 1983 Pipelines - 62.59% - 1984 Pipelines 52,236 62.59% 53,256 1985 Pipelines 9,285 62.59% 9,467 1986 Pipelines 17,285 62.59% 17,622 1987 Pipelines - 62.59% - 1988 Pipelines 48,108 62.59% 49,047 1989 Pipelines - 62.59% - 1990 Pipelines 4,792 62.59% 4,886 1991 Pipelines - 62.59% - 1992 Pipelines 199,883 62.59% 203,785 1993 Pipelines 88,959 62.59% 90,696 1994 Pipelines 41,314 62.59% 42,120 1995 Pipelines 173,228 62.59% 176,610 1996 Pipelines 115,547 62.59% 117,802 1997 Pipelines 65,987 62.59% 67,275 1998 Pipelines 5,986 62.59% 5,812 1999 Pipelines 598,373 62.59% 553,338 2000 Pipelines 166,014 62.59% 146,209 2001 Pipelines 93,703 62.59% 78,595 2002 Pipelines 572,358 62.59% 457,213 2003 Pipelines 666,507 62.59% 507,068 2004 Pipelines - 62.59% - 1 5/14/2007 City of Bozeman, Montana Impact Fees for the Wastewater System Collection System Exhibit 3 Original Impact Fee Cost Year Equipment List Cost Related 3 $2007 1,2 2005 Pipelines - 62.59% - 1955 Manholes - 62.59% - 1956 Manholes - 62.59% - 1957 Manholes - 62.59% - 1958 Manholes 5 62.59% 5 1959 Manholes 78 62.59% 80 1960 Manholes 15 62.59% 16 1961 Manholes 249 62.59% 254 1962 Manholes 391 62.59% 398 1963 Manholes 35 62.59% 35 1964 Manholes 303 62.59% 309 1965 Manholes 179 62.59% 182 1966 Manholes 48 62.59% 49 1967 Manholes 241 62.59% 246 1968 Manholes 3,493 62.59% 3,561 1969 Manholes - 62.59% - 1970 Manholes - 62.59% - 1971 Manholes 1,755 62.59% 1,789 1972 Manholes 824 62.59% 840 1973 Manholes 1,751 62.59% 1,785 1974 Manholes 2,202 62.59% 2,245 1975 Manholes 4,982 62.59% 5,080 1976 Manholes 13,946 62.59% 14,219 1977 Manholes 13,498 62.59% 13,762 1978 Manholes 6,998 62.59% 7,135 1979 Manholes 53,274 62.59% 54,314 1980 Manholes 1,414 62.59% 1,442 1981 Manholes 6,514 62.59% 6,642 1982 Manholes 1,186 62.59% 1,209 1983 Manholes 30,500 62.59% 31,095 1984 Manholes 39,769 62.59% 40,545 1985 Manholes 21,436 62.59% 21,855 1986 Manholes 14,510 62.59% 14,793 1987 Manholes 14,972 62.59% 15,264 1988 Manholes 17,479 62.59% 17,820 1989 Manholes 18,755 62.59% 19,121 1990 Manholes 7,483 62.59% 7,629 1991 Manholes 75,778 62.59% 77,258 1992 Manholes 24,230 62.59% 24,703 1993 Manholes 34,116 62.59% 34,782 1994 Manholes 179,373 62.59% 182,875 1995 Manholes 82,159 62.59% 83,763 1996 Manholes 159,224 62.59% 162,332 1997 Manholes 88,586 62.59% 90,315 1998 Manholes 113,490 62.59% 110,196 1999 Manholes 336,774 62.59% 311,428 2000 Manholes 165,006 62.59% 145,321 2001 Manholes 415,513 62.59% 348,518 2002 Manholes 272,646 62.59% 217,796 2003 Manholes 195,741 62.59% 148,917 2004 Manholes 65,000 62.59% 47,096 2005 Manholes - 62.59% - Total Existing Assets 5,151,776$ EDUs added 2005 to 2025 42,501 Total Existing Collection System Impact Fee per EDU 121.21$ 2 5/14/2007 City of Bozeman, Montana Impact Fees for the Wastewater System Collection System Exhibit 3 Original Impact Fee Cost Year Equipment List Cost Related 3 $2007 1,2 Future Construction Projects 2 Priority Projects 4 2008 Shop Complex 4,995,000$ 19.82% 990,009$ 2008 E8 - Hospital Trunk 1,062,000 70.00% 743,400 2007-2025 S. Rosuse Trunk: E Babcock to Kagy 970,000 70.00% 679,000 2007-2025 Mendehall to Tramarack from Grand to Rouse 3,100,000 0.00% - 2007-2025 Front Street: Tramarack to Haggerty 1,800,000 70.00% 1,260,000 2007-2025 College to Babcock from 5th to 11th Avenue 3,400,000 0.00% - 2007-2025 21 inch Interstate Crossing/Wal-Mart 600,000 0.00% - 2007-2025 Front Street Collector 90,000 55.56% 54,080 2007-2025 Babcock between Hunter Way and Siver Maple 50,000 55.56% 30,044 2007-2025 South Black from College South 300,000 0.00% - 2007-2025 Durston between 10th and 11th to 9th and 10th Ave 50,000 0.00% - 2007-2025 Frontage Road Phase I 1,100,000 82.64% 983,204 2007-2025 Frontage Road Phase II 1,500,000 82.64% 1,340,733 2007-2025 Frontage Road Phase II 1,900,000 86.28% 1,773,142 2007-2025 Water Treatment Plant Interceptor 500,000 100.00% 540,800 2007-2025 Willson Improvements 200,000 0.00% - 2007-2025 Bridger Canyon Interceptor 400,000 75.00% 324,480 2007-2025 Trancy and Wilson 300,000 36.00% 116,813 2007-2025 Lincoln and 19th Replacement 500,000 55.56% 300,444 2007-2025 Mendehall from 3rd to 5th Avenue 80,000 0.00% - 2007-2025 Lamme/ Plum 100,000 0.00% - 2007-2025 Plum/ Davis 100,000 0.00% - 2007-2025 S Bozeman/ Garfield 60,000 0.00% - 2007-2025 Cottonwood/ East of Wallace 50,000 0.00% - 2007-2025 3rd/ Villard 100,000 0.00% - 2007-2025 Rouse/ N Frontage Replacement 800,000 0.00% - 2007-2025 Upper Rouse Replacement 300,000 0.00% - 2007-2025 Fairway Replacement 40,000 0.00% - 2007-2025 Other Annual Projects and Repair 140,000 0.00% - Extensions 5 2011 S15 - Install 21" Sewer Interceptor at Davis/Fowler 843,648 70.00% 590,554 2007-2025 8 inch 24,640,000 0.00% - 2007-2025 10 inch 7,990,000 36.00% 3,111,114 2007-2025 12 inch 15,786,000 55.56% 9,485,632 2007-2025 15 inch 13,658,000 71.56% 10,570,539 2007-2025 18 inch 7,938,000 80.25% 6,889,792 2007-2025 21 inch 4,584,352 85.49% 4,238,844 2007-2025 24 inch 4,896,000 88.89% 4,707,123 2007-2025 27 inch 1,378,000 91.22% 1,359,596 2007-2025 30 inch 1,372,000 92.89% 1,378,429 2007-2025 36 inch 7,847,000 95.06% 8,068,189 2007-2025 42 inch 34,000 96.37% 35,440 Pump Stations 2007-2025 Gooch Hill Lift Station and Force Main 1,800,000 100.00% 1,946,880 2007-2025 Hidden Valley Lift Station and Force Main 5,400,000 100.00% 5,840,640 2007-2025 Spring Hills Lift Station and Force Main 1,600,000 100.00% 1,730,560 Total Future Construction Projects 69,089,483$ EDUs added 2005 to 2025 42,501 Total Future Collection System Impact Fee per EDU 1,625.59$ Total Collection System Impact Fee per EDU 1,746.80$ 3 5/14/2007 City of Bozeman, Montana Impact Fees for the Wastewater System Collection System Exhibit 3 Original Impact Fee Cost Year Equipment List Cost Related 3 $2007 1,2 1 - Existing plant is increased by interest charges from the date of construction up to 10 years. 2 - Future plant is increased from 2005 construction costs by the rate of inflation. 3- All lines less than 8 inches excluded and pipe greater that 65 years old. Allocation for existing plant based on new EDUs/total EDUs in 2025. Future plant allocation see 4 and 5 below. 4 - Priority projects allocated to new development based on increased capacity per master plan. 5 - Extensions allocated to new development based on capacity above an 8 inch line. 4 5/14/2007 City of Bozeman, MontanaImpact Fees for the Wastewater SystemSummaryExhibit 4Wastewater Treatment $ 1,065.73 Collection 1,746.80 Debt Service Credit - Total $2,812.54 Plus: Maximum Allowable of 5% 140.63 $2,953.16 Impact Fees by Meter Size (inches)Meter SizeEDU Factor 1Treatment Impact FeeCollection Impact Fee Total Impact Fee3/4" 1.00 $1,118 $1,837 $2,9551 2.50 2,796 4,592 7,388 1 1/2 5.00 5,591 9,184 14,775 2 8.00 8,946 14,694 23,640 3 16.00 17,892 29,388 47,280 Over 3" 2Calculated Calculated Calculated1 - Weighting factor based on AWWA meter capacity ratingsWastewater Impact Fee Calculation ResultsProposed Wastewater Impact Fee per EDU2 – The impact fee for meter sizes over 3” shall be calculated by first determining the number of EDUs by dividing the average annual daily flow by 204.70 gallons per EDU. The impact fee shall then be the number of EDUs times the impact fee for 1 EDU. A strength surcharge shall also apply based on the number of pounds.5/14/2007] City of Bozeman, Montana Impact Fees for the Wastewater System High Strength Summary Exhibit 5 Allowable Strength (lbs per day) 1 Meter Size EDU Factor 2 BOD 3, 4 TSS 3, 4 3/4" 1.00 0.60 0.64 1 2.50 1.50 1.61 1 1/2 5.00 2.99 3.22 2 8.00 4.78 5.15 3 16.00 9.57 10.30 Over 3"55 5 1- Nitrogen and phosphate will be treated in the same manner if required. 2 - Weighting factor based on AWWA meter capacity ratings 3- See page 2-17 of the Wastewater Facility Plan. 4- If loadings exceed these levels, then the treatment plant component of the impact fee will be multiplied by actual lbs divided by allowable lbs. 5 - For meter sizes over 3" the EDU factor and allowable pounds of BOD and TSS will be equal to the number of EDUs determined by dividing the average annual daily flow by 204.70 gallons per EDU times the allowable pounds per 1 EDU. TECHNICAL APPENDIX B MONTANA CODE 7-6-1601. Definitions. As used in this part, the following definitions apply: (1) (a) "Capital improvements" means improvements, land, and equipment with a useful life of 10 years or more that increase or improve the service capacity of a public facility. (b) The term does not include consumable supplies. (2) "Connection charge" means the actual cost of connecting a property to a public utility system and is limited to the labor, materials, and overhead involved in making connections and installing meters. (3) "Development" means construction, renovation, or installation of a building or structure, a change in use of a building or structure, or a change in the use of land when the construction, installation, or other action creates additional demand for public facilities. (4) "Governmental entity" means a county, city, town, or consolidated government. (5) (a) "Impact fee" means any charge imposed upon development by a governmental entity as part of the development approval process to fund the additional service capacity required by the development from which it is collected. An impact fee may include a fee for the administration of the impact fee not to exceed 5% of the total impact fee collected. (b) The term does not include: (i) a charge or fee to pay for administration, plan review, or inspection costs associated with a permit required for development; (ii) a connection charge; (iii) any other fee authorized by law, including but not limited to user fees, special improvement district assessments, fees authorized under Title 7 for county, municipal, and consolidated government sewer and water districts and systems, and costs of ongoing maintenance; or (iv) onsite or offsite improvements necessary for new development to meet the safety, level of service, and other minimum development standards that have been adopted by the governmental entity. (6) "Proportionate share" means that portion of the cost of capital system improvements that reasonably relates to the service demands and needs of the project. A proportionate share must take into account the limitations provided in 7-6-1602. (7) "Public facilities" means: (a) a water supply production, treatment, storage, or distribution facility; (b) a wastewater collection, treatment, or disposal facility; (c) a transportation facility, including roads, streets, bridges, rights-of-way, traffic signals, and landscaping; (d) a storm water collection, retention, detention, treatment, or disposal facility or a flood control facility; (e) a police, emergency medical rescue, or fire protection facility; and (f) other facilities for which documentation is prepared as provided in 7-6-1602 that have been approved as part of an impact fee ordinance or resolution by: (i) a two-thirds majority of the governing body of an incorporated city, town, or consolidated local government; or (ii) a unanimous vote of the board of county commissioners of a county government. History: En. Sec. 1, Ch. 299, L. 2005. Page 1 of 17-6-1601. Definitions. 1/4/2006http://data.opi.state.mt.us/bills/mca/7/6/7-6-1601.htm 7-6-1602. Calculation of impact fees -- documentation required -- ordinance or resolution -- requirements for impact fees. (1) For each public facility for which an impact fee is imposed, the governmental entity shall prepare and approve documentation that: (a) describes existing conditions of the facility; (b) establishes level of service standards; (c) forecasts future additional needs for service for a defined period of time; (d) identifies capital improvements necessary to meet future needs for service; (e) identifies those capital improvements needed for continued operation and maintenance of the facility; (f) makes a determination as to whether one service area or more than one service area is necessary to establish a correlation between impact fees and benefits; (g) makes a determination as to whether one service area or more than one service area for transportation facilities is needed to establish a correlation between impact fees and benefits; (h) establishes the methodology and time period over which the governmental entity will assign the proportionate share of capital costs for expansion of the facility to provide service to new development within each service area; (i) establishes the methodology that the governmental entity will use to exclude operations and maintenance costs and correction of existing deficiencies from the impact fee; (j) establishes the amount of the impact fee that will be imposed for each unit of increased service demand; and (k) has a component of the budget of the governmental entity that: (i) schedules construction of public facility capital improvements to serve projected growth; (ii) projects costs of the capital improvements; (iii) allocates collected impact fees for construction of the capital improvements; and (iv) covers at least a 5-year period and is reviewed and updated at least every 2 years. (2) The data sources and methodology supporting adoption and calculation of an impact fee must be available to the public upon request. (3) The amount of each impact fee imposed must be based upon the actual cost of public facility expansion or improvements or reasonable estimates of the cost to be incurred by the governmental entity as a result of new development. The calculation of each impact fee must be in accordance with generally accepted accounting principles. (4) The ordinance or resolution adopting the impact fee must include a time schedule for periodically updating the documentation required under subsection (1). (5) An impact fee must meet the following requirements: (a) The amount of the impact fee must be reasonably related to and reasonably attributable to the development's share of the cost of infrastructure improvements made necessary by the new development. (b) The impact fees imposed may not exceed a proportionate share of the costs incurred or to be incurred by the governmental entity in accommodating the development. The following factors must be considered in determining a proportionate share of public facilities capital improvements costs: (i) the need for public facilities capital improvements required to serve new development; and (ii) consideration of payments for system improvements reasonably anticipated to be made by or as a result of the development in the form of user fees, debt service payments, taxes, and other available sources of funding the system improvements. (c) Costs for correction of existing deficiencies in a public facility may not be included in the impact fee. (d) New development may not be held to a higher level of service than existing users unless there is a mechanism in place for the existing users to make improvements to the existing system to match the higher level of service. (e) Impact fees may not include expenses for operations and maintenance of the facility. History: En. Sec. 2, Ch. 299, L. 2005. Page 1 of 17-6-1602. Calculation of impact fees -- documentation required -- ordinance or resolution -- requirement... 1/4/2006http://data.opi.state.mt.us/bills/mca/7/6/7-6-1602.htm 7-6-1603. Collection and expenditure of impact fees -- refunds or credits -- mechanism for appeal required. (1) The collection and expenditure of impact fees must comply with this part. The collection and expenditure of impact fees must be reasonably related to the benefits accruing to the development paying the impact fees. The ordinance or resolution adopted by the governmental entity must include the following requirements: (a) Upon collection, impact fees must be deposited in a special proprietary fund, which must be invested with all interest accruing to the fund. (b) A governmental entity may impose impact fees on behalf of local districts. (c) If the impact fees are not collected or spent in accordance with the impact fee ordinance or resolution or in accordance with 7-6-1602, any impact fees that were collected must be refunded to the person who owned the property at the time that the refund was due. (2) All impact fees imposed pursuant to the authority granted in this part must be paid no earlier than the date of issuance of a building permit if a building permit is required for the development or no earlier than the time of wastewater or water service connection or well or septic permitting. (3) A governmental entity may recoup costs of excess capacity in existing capital facilities, when the excess capacity has been provided in anticipation of the needs of new development, by requiring impact fees for that portion of the facilities constructed for future users. The need to recoup costs for excess capacity must have been documented pursuant to 7-6-1602 in a manner that demonstrates the need for the excess capacity. This part does not prevent a governmental entity from continuing to assess an impact fee that recoups costs for excess capacity in an existing facility. The impact fees imposed to recoup the costs to provide the excess capacity must be based on the governmental entity's actual cost of acquiring, constructing, or upgrading the facility and must be no more than a proportionate share of the costs to provide the excess capacity. (4) Governmental entities may accept the dedication of land or the construction of public facilities in lieu of payment of impact fees if: (a) the need for the dedication or construction is clearly documented pursuant to 7-6-1602; (b) the land proposed for dedication for the public facilities to be constructed is determined to be appropriate for the proposed use by the governmental entity; (c) formulas or procedures for determining the worth of proposed dedications or constructions are established as part of the impact fee ordinance or resolution; and (d) a means to establish credits against future impact fee revenue has been created as part of the adopting ordinance or resolution if the dedication of land or construction of public facilities is of worth in excess of the impact fee due from an individual development. (5) Impact fees may not be imposed for remodeling, rehabilitation, or other improvements to an existing structure or for rebuilding a damaged structure unless there is an increase in units that increase service demand as described in 7-6- 1602(1)(j). If impact fees are imposed for remodeling, rehabilitation, or other improvements to an existing structure or use, only the net increase between the old and new demand may be imposed. (6) This part does not prevent a governmental entity from granting refunds or credits: (a) that it considers appropriate and that are consistent with the provisions of 7-6-1602 and this chapter; or (b) in accordance with a voluntary agreement, consistent with the provisions of 7-6-1602 and this chapter, between the governmental entity and the individual or entity being assessed the impact fees. (7) An impact fee represents a fee for service payable by all users creating additional demand on the facility. (8) An impact fee ordinance or resolution must include a mechanism whereby a person charged an impact fee may appeal the charge if the person believes an error has been made. History: En. Sec. 3, Ch. 299, L. 2005. Page 1 of 17-6-1603. Collection and expenditure of impact fees -- refunds or credits -- mechanism for appeal requir... 1/4/2006http://data.opi.state.mt.us/bills/mca/7/6/7-6-1603.htm 7-6-1604. Impact fee advisory committee. (1) A governmental entity that intends to propose an impact fee ordinance or resolution shall establish an impact fee advisory committee. (2) An impact fee advisory committee must include at least one representative of the development community and one certified public accountant. The committee shall review and monitor the process of calculating, assessing, and spending impact fees. (3) The impact fee advisory committee shall serve in an advisory capacity to the governing body of the governmental entity. History: En. Sec. 4, Ch. 299, L. 2005. Page 1 of 17-6-1604. Impact fee advisory committee. 1/4/2006http://data.opi.state.mt.us/bills/mca/7/6/7-6-1604.htm CITY OF BOZEMAN TRANSPORTATION IMPACT FEE STUDY FINAL REPORT January 3, 2008 Prepared for: CITY OF BOZEMAN 20 E. Olive Street Bozeman, Montana 59715 Prepared by: Tindale-Oliver & Associates, Inc. 1000 N. Ashley Dr., #100 Tampa, Florida, 33602 ph (813) 224-8862, fax (813) 226-2106 497001-00.06 Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 i Impact Fee Study CITY OF BOZEMAN TRANSPORTATION IMPACT FEE STUDY Table of Contents 1.0 INTRODUCTION...................................................................................... 1 2.0 TRANSPORTATION IMPACT FEE CALCULATION....................... 4 2.1 Demand Component.............................................................................. 4 2.1.1 Individual Land Use Trip Characteristics.............................. 5 2.2 Cost Component of Transportation Capacity........................................ 9 2.2.1 City Costs............................................................................... 10 2.2.2 State Costs.............................................................................. 13 2.2.3 Summary of Costs (Blended Cost Analysis) ......................... 15 2.3 Credit Component ................................................................................. 16 2.3.1 Gasoline Tax Credit (Equivalent).......................................... 16 2.3.2 Facility Life............................................................................ 17 2.3.3 Interest Rate........................................................................... 18 2.3.4 Fuel Efficiency....................................................................... 18 2.3.5 Effective Days per Year......................................................... 19 2.4 Capacity per Lane Mile ........................................................................ 19 2.5 Cost per Vehicle Mile of Capacity ....................................................... 20 2.6 Interstate Adjustment Factor ................................................................ 21 2.7 Ad Valorem Tax Credit......................................................................... 22 3.0 PROPOSED TRANSPORTATION FEE SCHEDULE......................... 23 3.1 Proposed Transportation Impact Fee Schedule...................................... 23 3.2 Indexing................................................................................................. 31 3.3 Compliance with State Statute – City Impact Fee Expenditures........... 31 3.3.1 Preparation of Long Range Transportation Plan ................... 32 3.3.2 Classification of the Types of Projects .................................. 32 3.3.3 Development and Update of Capital Improvement Program 32 3.3.4 Project Implementation and Cost Verification ...................... 34 3.4 Revenue Projections............................................................................... 34 APPENDICES Appendix A– Trip Characteristics Database Appendix B– Cost Component Calculation Appendix C– Credit Component Calculation Appendix D– Ad Valorem Credit Calculation Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 ii Impact Fee Study Appendix E– Analysis of Travel Behavior of Low-Income Households Appendix F– Proposed City of Bozeman Transportation Impact Fee Schedule Appendix G– Indexing Appendix H– Revenue Projections Appendix I– Evaluation of Funding Sources Appendix J– Glossary of Acronyms and Definitions Appendix K– Trip Exchange District (TED) Definition Characteristics Appendix L– Transportation Impact Fee Comparison Appendix M– Compliance with State Statute Appendix N– Historical Street Impact Fee Funded Projects Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 1 Impact Fee Study 1.0 INTRODUCTION The City of Bozeman’s Street Impact Fee Ordinance (Bozeman Municipal Code (BMC), Chapter 3.24.050 – Street Impact Fees) was adopted in 1996. The impact fee ordinance was imposed to assist the City in providing adequate transportation facilities needed to accommodate the roadway capacity consumed by new development. The primary purpose of the roadway system is to ensure public safety, specifically in the event of an emergency such as providing a means of mobility for fire and ambulance response vehicles. In addition, the roadway system provides the transportation capacity needed to serve new development. Based on 2000 Census Data, between 1980 and 1990, the city’s population increased by 5 percent and between 1990 and 2000 by 21 percent. The 2007 City of Bozeman Sewer Facility Plan projects that the city’s population is expected to increase by approximately another 147 percent over the next 18 years. This growth results in a need for an increase in roadway capacity. Tindale-Oliver & Associates, Inc. (TOA) was retained to conduct the City’s 2007 Transportation Impact Fee Study. This summary report, which acts as a technical support document to the Ordinance, presents the results of this study. Included in this document is an updated fee schedule, as well as the necessary support material utilized in its calculation. It is recognized that this study is one component in an integrated transportation impact fee program which collectively satisfies the requirement of Title 7, Chapter 6, Part 16 of the Montana Code Annotated (MCA). Tindale-Oliver & Associates and the City of Bozeman have prepared, updated, and relied upon other documentation in developing the transportation facilities impact fee. Much of this information is immediately available to the public through the City of Bozeman website. All information cited is subject to change and updating to maintain currency and some elements are updated at least yearly. This information satisfies the requirements of section 7-6-1602 of the MCA and includes, but is not limited to the following: (1) Chapter 3.24, Impact Fees, Bozeman Municipal Code (2) Greater Bozeman Area Transportation Plan, 2001 Update; (3) Title 18, Unified Development Ordinance; BMC; (4) Design and Specifications Manual; (5) Street Impact Fee Capital Improvement Program; Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 2 Impact Fee Study (6) Capital Improvements Program for General Fund, Street Maintenance Fund, and Street Impact Fee Fund; (7) the City Budget; and (8) Specified bid tabulations. The purpose of this collective information and associated established procedures is to implement and administer the impact fee program in a manner that ensures that: a) The amount of the impact fee is reasonably related to and reasonably attributable to the development's share of the cost of capacity consumed per unit of development and the associated infrastructure improvements made necessary by the new development. b) The impact fees imposed do not exceed a proportionate share of the costs incurred or to be incurred by the governmental entity in accommodating the development. In accomplishing this, the following factors have been considered in determining a proportionate share of transportation capital improvements costs: (i) the need for public facilities capital improvements required to serve new development caused by consumption of capacity by new development; and (ii) consideration of payments for system improvements reasonably anticipated to be made by or as a result of the development in the form of user fees, debt service payments, taxes, and other available non-impact fee sources of funding the system improvements. c) Costs for correction of existing deficiencies in a public facility have been excluded from the impact fee calculation and expenditure of impact fee funds. d) New development has not been held to a higher level of service than existing users. e) Non-impact fee funding mechanisms have been identified to provide for installation of improvements necessary to address transportation needs not related to new development. f) Impact fees are prohibited from being used for operations and maintenance of the facility. g) Provision has been made for regular periodic review and updating of information and programs to maintain currency of information and to support development of an accurate fee. To accurately reflect the cost to provide roadway capacity, this study used recently bid roadway improvements to develop the input variables used herein. The increased impact Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 3 Impact Fee Study fees presented in this report are a direct result of cost increases in such items as concrete, asphalt, fuel, and steel. Specifically, in the last two years global demand for these inputs, with growth in other sectors, such as housing, has inflated the unit prices in the roadway construction industry. In addition, this report includes an evaluation of alternative funding sources to pay for capacity expansion and maintenance projects. New innovative financing sources for future roadway capacity expansion projects is necessary since current estimates project that the Highway Trust Fund balance (that provides a majority of funding for improvements on the state roadway system) will approach zero in 2009 or 2010. The general equation used to compute the transportation impact fee for a given land use is: Demand x Cost - Credits = Fee The demand for travel placed on the transportation system is usually expressed in units of vehicle miles or lane miles of roadway capacity consumed per unit of development. The cost of building capacity is typically expressed in units of dollars per vehicle-mile or lane- mile of roadway capacity. The credits are an estimate of non-impact fee revenues generated by a unit of each land use of new development that are allocated to roadway capacity expansion construction projects. Thus, the fee represents an "up front" payment for a portion of the cost to replace the transportation facilities consumed by each unit of new development. This study is based on a standards driven approach (consumption- based). In the case of a standards driven impact fee, roadway capacity is estimated to be consumed on all roads (state, county and local collector roads and above) by new development whether these roads are improved or not. This review and update recommends changes to the input variables used in the existing impact fee schedule. Additional information relevant to transportation impact fees was reviewed and used in the update process. The general topics considered for the update process are as follows: • Demand Component o Individual land use trip characteristics (local data collection) • Cost Component o City roadway improvement cost estimates o State roadway improvement cost estimates • Credit Component Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 4 Impact Fee Study o Gasoline tax distributions and allocations o Other funds • Other variables used in the impact fee formula These items are all discussed in subsequent sections of this document, with the result being an updated transportation impact fee rate schedule. 2.0 TRANSPORTATION IMPACT FEE CALCULATION There are 12 input variables used in the impact fee equation: • Number of daily trips generated • Length of those trips • Proportion of travel that is new travel, rather than travel that is already traveling on the road system • Cost per lane mile • Equivalent gas tax credit (pennies) • Facility life • Interest rate • Fuel efficiency • Effective days per year • Capacity per lane mile • Interstate adjustment factor • Ad valorem tax credit A review of these variables and corresponding recommendations are presented in the following sections. 2.1 Demand Component The Demand Component includes three of the twelve impact fee variables. These are the number of daily grips generated, the average length of those trips, and the proportion of those trips that are new trips, as opposed to trips that were already traveling on the road system. Each of these variables are discussed in this section. Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 5 Impact Fee Study 2.1.1 Individual Land Use Trip Characteristics The amount of road system capacity consumed by a new land development is calculated using the following units of measure: • Number of daily trips generated; • Length of those trips; and • Proportion of travel that is new travel, rather than travel that is estimated to have already been on the road system. For the purpose of this study, the trip characteristics variables have been obtained primarily from two sources: previous similar trip characteristics studies, including those conducted in the City of Bozeman, and from the Institute of Transportation Engineers’ (ITE) Trip Generation reference report (7th edition). The trip characteristics studies that were conducted as part of this current study are presented in the City of Bozeman Trip Characteristics Study report. These studies include a survey and review of travel characteristics for the following land uses: • single family residential; • residential condominium/townhouse; • office; and • shopping center. Local Trip Characteristics The analysis of trip characteristics data (trip generation rate, trip length, and percent new trips) is used to estimate the lane miles of capacity consumed by specific types of land uses. In order to better understand trip characteristics in the City of Bozeman, a total of 11 sites from the four identified land use categories were studied. This includes the review of three single-family residential sites, two residential condominium/townhouse sites, three office sites, and three shopping center sites. As previously mentioned, the details of these site surveys can be found in the document titled, City of Bozeman Trip Characteristics Study. Data resulting from the trip characteristics surveys are summarized in Table 1 and are used in the development of the demand component of the transportation impact fee for Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 6 Impact Fee Study the four land uses. Table 1 provides a summary of the data collected for the three variables (trip generation rate, trip length, and percent new trips) and the resulting vehicle miles of travel (VMT) for each land use category that was calculated. Land use-based survey/study results that were incorporated into the Trip Characteristics Database are included in Appendix A. This database was used to document the trip length, percent new trips, and trip rate for the land uses contained in the impact fee schedule. An analysis of the trip characteristics of lower income households is presented in Appendix E. The trip characteristics variables used in the calculation of the impact fee for each land use included in the proposed fee schedule are presented in Appendix F. Local Trip Characteristics Adjustment Factor The local trip characteristics data collected for the City of Bozeman land use sites were compared to data contained in the Trip Characteristics Database. Based on this review, trip length reduction factors were applied to both residential and non-residential land uses not studied as part of the local trip characteristics process. The specific adjustment factors presented below were applied to the trip lengths obtained from data in the Trip Characteristics Database for land uses not studied in the City of Bozeman. Appendix A presents the trip lengths for all land uses in the Trip Characteristics Database as well as the adjusted City of Bozeman trip lengths based on the application of the following reduction factors. 1. Single family trip length reduction factor (55%) was applied to the following land uses: • lodging land uses (hotel, motel) • recreation land uses (golf course, city park, movie theaters) 2. Residential condominium trip length reduction factor (55%) was applied to the following land uses: • mobile home park Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 7 Impact Fee Study Table 1 Summary of Bozeman Trip Characteristic Studies (1) Development TypeTrip Generation RateTrip LengthPercent New TripsVMTImpact Fee VMT(2)SINGLE FAMILY Site 1 Residential 142 dwelling unit 9.69 3.23 100% 31.30 15.65Site 2(3)Residential 105 dwelling unit N/A 1.59 100% N/A N/ASite 3 Residential 41 dwelling unit 9.32 4.53 100% 42.22 21.11RESIDENTIAL CONDOMINIUM/TOWNHOUSE Site 4 Residential 63 dwelling unit 7.70 2.67 100% 20.56 10.28Site 5 Residential 57 dwelling unit 5.74 3.58 100% 20.55 10.27OFFICE Site 6 Non-Residential 48,3441,000 sf 21.37 2.83 69% 41.73 20.86Site 7(4)Non-Residential 39,027 1,000 sf N/A 1.64 77% N/A N/ASite 8 Non-Residential 61,1991,000 sf 28.92 1.74 72% 36.23 18.12SHOPPING CENTER Site 9 Non-Residential 35,8881,000 sf 69.30 1.39 74% 71.28 35.64Site 10 Non-Residential 104,257 1,000 sf 46.96 3.35 49% 77.08 38.54Site 11 Non-Residential 159,852 1,000 sf 56.49 1.56 54% 47.59 23.79Net Size (1) Source: City of Bozeman Trip Characteristics Study, Tindale-Oliver & Associates, Inc., 2007 (2) VMT is divided by two to avoid over-charging a land use since ITE trips are trips to and from two land uses. (3) Trip generation was not calculated due to the presence of cut-through traffic from construction on adjacent street. (4) Trip generation was not calculated due to the presence of cut-through traffic from construction on adjacent street. Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 8 Impact Fee Study 3. Office trip length reduction factor (43%) was applied to the following land uses: • institution land uses (hospital, nursing home, elementary school, high school, university, church/synagogue, and day care center) • medical office • industrial land uses (general light industrial, manufacturing, warehouse, and mini-warehouse) 4. Retail trip length reduction factor (62%) was applied to the following land uses: • retail land uses (all retail tiers, building material/lumber, discount superstore, nursery/garden center, convenience store, quality restaurant, fast-food restaurant with drive-through, new/used auto sales, furniture store, bank/savings with drive-thru) In addition, it should be noted that a review of 2000 Census data specifically demographic (median age, age distribution, population, household size), economic (income distribution), and journey-to-work characteristics (travel time, travel mode, vehicle ownership) was conducted to establish a relationship between the studies in the Trip Characteristics Database and the City of Bozeman for land uses that were not studied locally. This review shows that the adjustment factor discussed previously for residential and non-residential trip lengths are justified since journey-to-work travel characteristics indicate that on average trip lengths in Bozeman are shorter than data collected from sites included in the Trip Characteristics Database. In addition, the trip generation rate data recommended in the fee schedule is primarily based on the (ITE) Trip Generation reference report (7th edition) which is a national source. Trip Exchange District (TED) Trip Characteristics In addition, adjustment factors were calculated for the percent new trips for non-residential land uses to account for the travel characteristics unique to the trip exchange district of the City of Bozeman. These adjustments were made to the lodging, recreation, office, retail, restaurant, and bank land uses. Typically, the adjustments reduced the percent new trips variable since in the trip exchange district people link trips as opposed to traveling by vehicle. The adjustment factors were calculated based on the City of Tampa Transportation Impact Fee Study, conducted by Kimley-Horn and Associates, 1988 using the relationship between trip purpose and person trips. The City of Tampa study utilized ITE trip generation rates and the results of a Downtown Portland Circulation Study Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 9 Impact Fee Study conducted by DeLeuw, Cather, and Company, 1973 that documented the reasons for individuals entering a building by their main purpose for coming downtown. The data facilitated the calculation of trip adjustment factors for percent new trips that reflect the high level of captured trips in the downtown area. In addition, this data presented the mode of travel to the downtown buildings. A local study in Montana, the Montana Three City Parking Generation/Land Use Pattern Correlation Study, 2004 also confirms the unique characteristics of the TED. This study collected survey data in the cities of Bozeman, Billings, and Great Falls to examine the relationship between trip purpose, number of stores visited, and duration of stay in the TED and other areas of the cities. The results of this study indicate there are more linked trips in the TED (more places are visited). In addition, the study recommends that parking requirements be reduced for businesses that locate in the TED due to parking efficiencies that arise from the linked trips. The results of this study confirm that given the mixture of land uses present in the TED, the travel characteristics of certain land uses in the TED warrant adjustments to the percent new trips variable since the capture rate (1 minus the percent new trips) is higher in the downtown area with trips being linked among land uses. Further, as long as the mix of land uses observed in the TED is present, the adjustment to travel characteristics is warranted regardless of the size of the TED (Portland, Tampa, Bozeman) 2.2 Cost Component of Transportation Capacity Cost Overview The cost of providing transportation system capacity has increased in recent years. Certain phases of lane widening projects, such as construction, have seen significant cost increases recently. Appreciation in land values has resulted in higher right-of-way costs. Information from the City of Bozeman and the Montana Department of Transportation (MDOT) was used to develop a unit cost for all phases involved in the addition of one lane mile of roadway capacity. It should be noted that Gallatin County does not construct any lane mile addition projects in the City of Bozeman. The following sub-sections detail the analyses that were undertaken to review the different costs associated with the construction of city and state roads. Appendix B provides the data and other support information utilized in these analyses. Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 10 Impact Fee Study The cost is separated into four phases: design, right-of-way (ROW), construction, and construction engineering/inspection (CEI) costs. Each of these cost components are further discussed for city and state roads below. 2.2.1 City Costs This section examines the construction costs of transportation capacity improvements associated with city roads in the City of Bozeman. For this purpose, recent bids and final project costs of two projects that were recently constructed were used to identify and provide supporting cost data for roadway improvements. Specifically, these two projects include the West Babcock Street project and the West Durston Road project. It should be noted that these improvements were built to be consistent with MDOT design standards. Based on discussion with City staff, design costs were estimated at 8.5 percent of construction costs. It should be noted that the design cost is a separate cost component and was calculated as a percentage of the construction cost. This percentage is based on recent construction project cost estimates and recently completed City projects. The ROW cost was developed based on a review of property acquisitions for the West Babcock Street (22) and West Durston Road (10) projects. Most of the ROW for construction of both projects was obtained in advance of the lane additions. Temporary easements were provided by property owners along the corridor at no cost to the city. City staff confirmed that the ROW acquisition for these two projects is typical of future roadway construction for improvements that will add left-turn storage along a two-lane undivided roadway segment. The weighted average ROW cost per lane mile is presented in Appendix B, Table B-1. As shown in the table, the weighted average ROW cost per lane mile is approximately $280,000 for city roads. As previously mentioned, the construction cost per lane mile was developed based on a review of recent bid prices for the West Babcock Street improvement and the West Durston Road projects in the City of Bozeman. City staff confirmed that the projects used to develop the construction cost are typical of the type of roadway project that the City intends to construct in the future. During discussion with City staff, it was noted that based on prior experience, the following three factors contribute to higher construction costs in the City of Bozeman (relative to other areas in the state of Montana): Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 11 Impact Fee Study • Labor market conditions - wage rates in Bozeman are comparatively higher than the rest of Gallatin County and other parts of Montana. • Lack of construction companies bidding on roadway projects. This lack of competition also leads to an increase in overall roadway construction costs. Based on discussion with City staff, the cost to build city collector roadways is fairly consistent with the state arterial roadway projects due to this competition. • Based on discussion with City staff, it was noted the city and state roads are built with the similar design specifications. Based on this analysis, the construction cost of $3.1 million per lane mile to build state roads that add two travel lanes to an existing two-lane divided section (a total of five lanes) was used as a proxy for city roadways of similar type. Since the construction cost per lane mile is intended to reflect the observed cost of future capacity, a weighting was assigned based on project types in the Greater Bozeman Area Transportation Plan, 2001 Update for all city roadway improvements (specifically for programmed projects). These improvements represent the impact fee eligible roads that have not been constructed to date and are contemplated to be built in the Bozeman area. Appendix B, Table B-3 provides the list of improvements and Table B-4 provides a summary of the lane miles by project type used to develop the percentages used in the weighted cost calculation. It should be noted that the Greater Bozeman Area Transportation Plan, 2001 Update has a planning horizon through 2020. The percentages used by improvement type are listed below: • New construction of two travel lanes and a continuous left turn lane (three-lane section) (16 percent). • The addition of a continuous left turn lane along a two-lane undivided roadway where the city only pays for the addition of the third lane (three-lane section) (28 percent). • The addition of a continuous left turn lane along a two-lane undivided roadway that is either a reconstruction of the existing lanes or an offset (three-lane section) (26 percent). • The addition of two travel lanes to an existing two-lane divided roadway (five lane section) (30 percent). As shown in Appendix B, Table B-6, the resulting city construction cost per lane mile is approximately $2.8 million. The two projects (West Babcock Street and West Durston Road) are being constructed as an urban cross-section and are consistent with MDOT and Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 12 Impact Fee Study City design standards. City staff also indicated that it is anticipated that all future city roadway projects will be built utilizing urban cross-section design. It should be noted that the City of Bozeman is currently updating the Greater Bozeman Area Transportation Plan. Upon completion of this update, it is recommended that the City evaluate the mix of planned future roadway improvements in the updated Greater Bozeman Transportation Plan to determine if adjustments in the mix of project types being used to estimate the construction cost per lane mile in the impact fee calculation need to be made. The mix (addition of travel lanes and continuous left turn lanes to existing two-lane undivided roadways) of future improvements is a policy decision based on the assessment of future growth needs. Further, as a policy decision and consistent with City Code, the City requires new development to construct the first two lanes of a new road project. If the City determines that it is in its best interests to construct a new three-lane roadway section, the City contributes the cost for the third lane. For projects where only two lanes are initially built, the City pays for the cost to improve the two-lane undivided segment to a three-lane section with the addition of the continuous left turn lane. It should be noted that the impact fee network that provides the basis for the consumption-based impact fee approach includes only two-lane undivided roadways and above given this requirement for new developments. The calculations used to develop the city construction costs are shown in Appendix B, Tables B-3 through B-6. Based on an analysis of the project cost information for city roadway capacity-adding projects, the total cost per lane mile is estimated at approximately $3.5 million. Table 2 presents the breakdown of the estimated average cost for each phase of a typical roadway capacity-expansion project in the City of Bozeman. Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 13 Impact Fee Study Table 2 Estimated Total Cost per Lane Mile by City Project Phase (in 2006 Dollars) Cost Phase Cost Per Lane Mile(1) Design $236,459 Right-of-Way $276,316 Construction $2,781,869 CEI $236,459 Total Cost $3,531,103 (1) Source: Appendix B, Table B-8 2.2.2 State Costs A similar review also was completed for state roadway projects in order to estimate the typical phase and total costs for capacity-adding projects. A total of four state projects were identified that were either completed (2) or the full project cost was programmed (2) in the FY 2006-2008 State Transportation Improvement Plan (STIP). Of the four projects, the two completed projects provided a basis with which to estimate construction costs for state projects in the City of Bozeman because they were found to be representative of future state projects in the City of Bozeman. The two projects with fully programmed costs from the STIP were used to develop a cost for urban-design state roadways in the City of Bozeman. The construction cost per lane mile was calculated based on weighting project types in the Greater Bozeman Area Transportation Plan, 2001 Update for all state roadway improvements. Appendix B, Table B-3 provides the list of improvements and Table B-4 provides a summary of the lane miles by project type used to develop the percentages used in the weighted cost calculation. The percentage used by improvement type includes the following: • The addition of a continuous left turn lane along a two-lane undivided roadway (three-lane section) (26 percent). • The addition of two travel lanes to an existing two-lane divided roadway (five-lane section) (74 percent). Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 14 Impact Fee Study The detailed calculations used to develop the state construction cost by section design are presented in Appendix B, Table B-6. As shown in that table, the resulting state construction cost per lane mile for an urban design arterial roadway is approximately $3.4 million. Based on discussion with MDOT staff, it was confirmed that the project used to develop the state costs, South 19th Avenue (Babcock Street to Kagy Boulevard), is typical of future roadway improvements. The South 19th Avenue project is typical of two travel lanes being added to a two-lane divided roadway. In addition, the bid tabulation for the South 19th Avenue project was used to develop standard quantities and current unit prices for estimating cost of adding a continuous left turn lane along a two-lane undivided roadway. The detailed analysis used to develop this construction cost is presented in Appendix B, Table B-5. The construction cost for the Rouse Avenue project were not used since the project scope includes additional features that have a financial impact on the overall project cost that are considered to be atypical when compared to future improvements of this type. Based on discussions with City and MDOT staff, this construction cost was not used in developing the weighted average construction cost per lane mile. It should be noted that other recently bid projects in the state of Montana were also reviewed to confirm consistency of unit prices and quantities with the projects used in this analysis. ROW cost data for the two roadway projects discussed above were used to estimate the ROW cost per lane mile. The ROW acquisitions associated with these improvements were confirmed to be typical of future improvements. Specifically, the ROW plans for the South 19th Avenue project were evaluated for acquisitions associated with the cross section width and easements. It should be noted that unlike the construction cost for the Rouse Avenue project, the ROW cost was considered typical of future improvements where a continuous left-turn lane is added to a two-lane undivided roadway. As shown in Appendix B, Table B-2, the weighted average ROW cost per lane mile is approximately $335,000. Table 3 summarizes the estimated average cost per lane mile for state roads. As shown in the table, the total average cost per lane mile for state roads (including all phases) is approximately $4.5 million. It should be noted that the mix of improvements (2 to 3 lane sections and 3 to 5 lane sections) explains the construction cost per lane mile differential between the city and the state. Based on the revised list of Greater Bozeman Area Transportation Plan, 2001 Update projects, the State is constructing a higher percentage five lane sections (74 percent) than the City (30 percent). As noted previously, state projects included in the analysis are presented in Appendix B, Table B-2. Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 15 Impact Fee Study Table 3 Estimated Total Cost per Lane Mile by State Project Phase (in 2006 Dollars) Cost Phase Cost Per Lane Mile(1) Design $343,101 Right-of-Way $335,446 Construction $3,431,005 CEI $343,101 Total Cost $4,452,653 (1) Source: Appendix B, Table B-8 2.2.3 Summary of Costs (Blended Cost Analysis) The weighted average cost per lane mile for city and state roads is calculated and presented in Table 4. The resulting weighted average cost of approximately $3.7 million per lane mile will be utilized as the cost input in the calculation of the impact fee schedule. This weighted average cost per lane mile includes city and state projects and is based on weighting by the distribution of city and state lane miles of roadway being constructed in the Greater Bozeman Area Transportation Plan, 2001 Update (Appendix B, Table B-7), which is 84 percent City roads and 16 percent State roads. As noted previously, the project information and methodology used in these calculations is included in Appendix B, Tables B-1 through B-8. Table 4 City of Bozeman City & State Roadway Capital Projects Estimated Adjusted Total Cost per Lane Mile (in 2006 Dollars) Cost Type City Roads State Roads City and State Roads Design $236,459 $343,101 $253,522 Construction $2,781,869 $3,431,005 $2,885,731 Right-of-Way $276,316 $335,446 $285,777 CEI $236,459 $343,101 $253,522 Total $3,531,103 $4,452,653 $3,678,552 (1) Source: Appendix B, Table B-8 Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 16 Impact Fee Study 2.3 Credit Component Based on the requirements of section 7-6-1602, (5) (b) (iii) of the MCA, a revenue credit is given for capacity expansion expenditures from non-impact fee revenue sources. Sections 2.3.1, 2.7, Appendix C, Tables C-1 through C-4, and Appendix D present the detailed calculations used to develop the revenue credit. 2.3.1 Gasoline Tax Credit (Equivalent) The present value of gasoline taxes generated by a new development over a 25-year period is credited against the cost of the system consumed by travel associated with new development. This is because travel from new development generates gasoline tax revenues, a portion of which is typically allocated to expansion of the transportation system. City A review of the city roadway financing program shows that a combination of impact fees and General Obligation (GO) Bonds are being used to fund capacity expansion projects. The City uses the local allocation of gas tax revenues provided annually by MDOT based on MCA Section 15-70-10 to fund maintenance-related projects such as roadway re- paving, traffic signal maintenance and drainage improvements. It should be noted as described below that the federal transfer of gas tax revenues known as “urban funds” are expended on capacity expansion projects and a credit is given under the state gas tax discussion. Since the City is not spending any of the locally allocated gas tax revenues on capacity expansion projects, no gas tax credit is given. The portion of the GO Bond that is allocated to capacity expansion projects and being backed by ad valorem funds will be discussed in a subsequent section of this report. County It should be noted that, based on a review of the Gallatin County roadway financing program, it was determined that Gallatin County has not programmed any funds to be spent on capacity expansion projects in the City of Bozeman. As such, no credit is given for gas tax revenues received by the County and spent in the City. Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 17 Impact Fee Study State State expenditures in Gallatin County were reviewed and a credit for the capacity expansion portion attributable to state projects was provided. It should be noted that these revenues known as “urban funds” originate from federal gas tax revenues requiring a match provided by MDOT using state gas tax revenues and are expended on state roadway projects identified as local priorities on state routes. The state credit includes this federal funding on projects identified as capacity expansion improvements on state routes. The equivalent number of pennies allocated to fund state projects was determined using information for a 9-year period of the MDOT Work Program (FY 2000 through FY 2008). A list of capacity-adding roadway projects was identified, including lane additions, new road construction, intersection improvements, traffic signal projects, and other capacity-addition projects. This review (which is summarized in Appendix C, Table C-4) indicates that MDOT spending generates an equivalent gas tax credit of 10.2 pennies of gas tax revenue annually. It should be noted that the historical work program for FY 2000 through FY 2006 included preliminary engineering for several capacity expansion projects discussed previously. As such, the variance in the annual revenues dedicated to capacity expansion projects between this period and FY 2007 through FY 2008 is explained by the fact that the ROW and construction phases are programmed in the current phase of the MDOT Work Program. Table 5 provides a summary of the results of the gas tax credit analysis. Table 5 Gas Tax Equivalent Pennies (in 2006 Dollars) Credit Equivalent Pennies per Gallon State Gas Tax Credit(1) $0.102 Total $0.102 (1) Source: Appendix C, Table C-4 2.3.2 Facility Life The facility life used in the proposed fee is 25 years, which represents the reasonable life of the roadway. Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 18 Impact Fee Study 2.3.3 Interest Rate This is the discount rate at which gasoline tax revenues might be bonded. It is used to compute the present value of the gasoline taxes generated by new development. The discount rate of 4.6 percent is determined based on discussions with representatives from the City’s Finance Department and reflects the rate at which the City is likely to borrow in the future. 2.3.4 Fuel Efficiency In order to calculate future gas tax revenues, it is necessary to estimate the future consumption of gas. The fuel efficiency (i.e., the average miles traveled per gallon of fuel consumed) of the fleet of motor vehicles was estimated using the quantity of gasoline consumed by travel associated with each unique land use. Appendix C documents the calculation of fuel efficiency value (Table C-5), based on the following equation, where “VMT” is vehicle miles of travel and “MPG” is fuel efficiency in terms of miles per gallon. ∑∑⎟⎟ ⎠ ⎞ ⎜⎜ ⎝ ⎛÷= TypeRoadwayTypeVehicle TypeVehicle TypeRoadway MPG VMTVMTEfficiencyFuel The methodology utilizes non-interstate VMT and average fuel efficiency data for passenger vehicles (i.e., passenger cars and other 2-axle, 4-tire vehicles, such as vans, pickups, and SUVs) and large trucks (i.e., single-unit, 2-axle, 6-tire or more trucks and combination trucks) to calculate the total gallons of fuel utilized by each of these vehicle types. The combined total VMT for the vehicle types is then divided by the combined total gallons of fuel consumed to calculate, in effect, a “weighted” fuel efficiency value that appropriately accounts for the existing fleet mix of traffic on non-interstate roadways. The VMT and average fuel efficiency data were obtained from the most recent Federal Highway Administration’s Highway Statistics 2005.1 Based on the calculation completed 1 The data used in Table C-5 in Appendix C was compiled from Table VM-1 (Section V) of the document, Highway Statistics 2005, Office of Highway Policy Information, Federal Highway Administration, Washington, D.C (see Table C-6). The document can be accessed on-line at http://www.fhwa.dot.gov/policy/ohim/hs05/re.htm. Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 19 Impact Fee Study in Table C-5 of Appendix C, the fuel efficiency rate to be used in the updated impact fee equation is 17.70 miles per gallon. 2.3.5 Effective Days per Year An effective 365 days per year of operation was estimated for all land uses in the proposed fee. While not all land uses operate 365 days per year (e.g., office buildings and seasonal land uses such as schools), the use of 365 days per year provides a "conservative" estimate of the amount of gas consumed annually, ensuring that gasoline taxes are adequately credited against the fee. 2.4 Capacity per Lane Mile The City of Bozeman’s adopted level of service standard of “C” is defined in Section 18.44.060.D of the Bozeman Municipal Code. This standard has been consistent during and after the preparation of the Greater Bozeman Area Transportation Plan, 2001 Update. The City uses this standard to make decisions as to what roads need capacity expansion. From an impact fee perspective, no impact fee funds are used to construct any road or portion of a road that is operating below the adopted level of service standard. An additional component of the impact fee equation is the capacity added per lane mile of roadway constructed. The capacities in the Greater Bozeman Area Transportation Plan, 2001 Update represent trigger volumes and are conservative for impact fee purposes. Based on discussion with City staff, the weighted average capacity added per lane mile was calculated using Table 4-1 of the Greater Bozeman Area Transportation Plan, 2001 Update (specifically for programmed projects). The plan was used because it reflects the most reasonable source of the type of roads and their associated capacity that are planned to be built in the future on which impact fee funds may be spent. City staff indicated that the capacity associated with ideal management conditions (the higher of the two capacity values from Table 4-1 of the Greater Bozeman Area Transportation Plan, 2001 Update) should be used in the calculation of the impact fee since current policies are in place to actively pursue improved access control and optimal signal timing. The use of this higher capacity in the impact fee calculations is conservative and further ensures that new development is not charged at a rate that corrects deficiencies or that is a higher standard than that enjoyed by existing users of the roadway network. Upon completion of the 2007 Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 20 Impact Fee Study Greater Bozeman Transportation Plan Update, the impact fee capacity figures should be reviewed and updated, if appropriate. The weighted average capacity per lane mile was estimated using the planning level capacities and weighted by the lane distribution of future roadway improvements by jurisdiction in the Greater Bozeman Area Transportation Plan, 2001 Update. As mentioned previously, the mix of future projects is strictly a policy decision based on the assessment of future growth needs. Appendix B, Table B-9 provides the detailed calculation used to develop the weighted average capacity added per lane mile. As shown in Table 6, the resulting weighted average capacity added per lane mile is 8,658. Table 6 Weighted Average Capacity per Lane Mile Jurisdiction Weighted Capacity Added per Lane Mile(1) Greater Bozeman Plan Lane Miles Jurisdiction Weight(2) Weighted Average Capacity Added per Lane Mile City Roads 8,438 84% 7,088 State Roads 9,813 16% 1,570 Total Weighted Average Capacity Added(3)8,658 (1) Source: Appendix B, Table B-9 for city and state roads respectively (2) Source: Appendix B, Table B-7 (3) Item (1) for city and state roads weighted by Item (2) 2.5 Cost per Vehicle Mile of Capacity The impact fee cost per unit of development is assessed based on the cost per vehicle mile of capacity. As shown in Tables 2, 3, and 6, the cost and capacity for city and state roads have been calculated based on typical roadway improvements. In order to estimate the weighted average cost per vehicle mile of capacity, the cost per vehicle mile of capacity for city and state roads was weighted by the lane distribution of future roadway improvements by jurisdiction in the Greater Bozeman Area Transportation Plan, 2001 Update. As shown in Table 7, the cost per vehicle mile of capacity for travel on all roads within the City of Bozeman is $424.87. This weighted average cost per vehicle mile of capacity figure is used in the impact fee calculation to determine the total impact cost per unit of development based on the vehicle miles of travel consumed. Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 21 Impact Fee Study Table 7 Weighted Average Cost per Vehicle Mile of Capacity City and State Roadways in Bozeman Source Greater Bozeman Plan Lane Miles Jurisdiction Weight(1) Cost per Lane Mile(2) Average Capacity Added Per Lane Mile(3) Cost per VMC(4) City Roads 84% $3,531,103 8,438 $418.48 State Roads 16%$4,452,653 9,813 $453.75 Total 100% Weighted Average(5)$3,678,551 8,658 $424.87 (1) Source: Appendix B, Table B-7 (2) Source: Table 2 for city roads and Table 3 for state roads (3) Source: Table 6 for city and state roads (4) Cost per lane mile (Item 2) divided by average capacity added per lane mile (Item 3) for city roads and state roads respectively (5) Cost per lane mile and average capacity added per lane mile weighted by Greater Bozeman Plan lane miles distribution in Item (1). Cost per VMC is based on weighted average cost per lane mile, Item (2) divided by weighted average capacity added per lane mile (Item 3). 2.6 Interstate Adjustment Factor This variable is used to recognize that interstate highway improvements are funded by the State using earmarked state and federal funds. Typically, impact fees are not used to pay for these improvements and the portion of vehicle miles traveled on the interstate system is therefore eliminated from the total travel for each use. Based on centerline street maintenance data obtained from the City of Bozeman Planning Department and the Montana Department of Transportation’s Urban Travel Demand Model, an interstate adjustment factor of 15 percent is incorporated into the impact fee calculations. It should be noted that the interstate adjustment factor calculation excludes external-to-external trips, which represent traffic that goes through the City of Bozeman using the interstate, but does not stop in the city. This traffic is excluded from the calculations since it does not travel on the local road system for which impact fees are allocated. Table 8 shows the calculation of the interstate adjustment factor. This factor is used to reduce the vehicle miles of travel that the impact fee charges for each land use. Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 22 Impact Fee Study Table 8 Interstate Adjustment Factor (1) Roadway 2007 (vehicle miles of travel) 2007 Distribution I-90 70,265 15.0% State Roads 244,438 53.0% County Roads 1,341 0.0% City Roads 147,227 32.0% All Roads 463,271 100.0% (1) Source: City of Bozeman Planning Department, Centerline Street Maintenance GIS Layer and MDOT Urban Travel Demand Model 2.7 Ad Valorem Tax Credit Based on a review of historical expenditures, the City of Bozeman has been using a portion of ad valorem revenues to fund capacity expansion projects. Of the ad valorem revenues available, approximately $271,417 is projected to be dedicated to transportation capacity expansion projects annually. The value per 1-mil from the general fund calculated based on the FY 2006/2007 City Budget is $63,251. Therefore the ad valorem revenues dedicated to capacity expansion projects translate into 4.29 mills ($217,417 divided by $63,251). Thus, the general fund millage used toward capacity expansion annually is approximately 4 percent (4.29 mills divided by 110.57 mills). Because the City does not have a dedicated percentage of the ad valorem taxes being applied to transportation capital expansion projects, the total ad valorem revenues used toward transportation capacity projects is estimated to be fixed at $271,417 per year. As such, as the tax base increases, the percent of total ad valorem revenues used for capacity projects will decrease. Since the City has historically used ad valorem revenues to retire the debt associated with the 1995 GO Bond that funds capacity expansion projects, a credit is given. Credit due to ad valorem tax revenues for residential uses is calculated based on a review of recent sale prices and taxable values of single family homes in the City of Bozeman, and discussions with the City’s Finance Division. The ad valorem tax credit for non-residential land uses is based on the taxable value of office and commercial properties within the City and Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 23 Impact Fee Study estimated unit values from the Consultant’s experience in other jurisdictions and industry knowledge. An explanation of the methodology used to estimate ad valorem tax credit figures is included in Appendix D. 3.0 PROPOSED TRANSPORTATION IMPACT FEE SCHEDULE 3.1 Proposed Transportation Impact Fee Schedule The impact fee calculations for each land use are included in Appendix F. This Appendix includes the major land use categories and the impact fees for the individual land uses contained in each of the major categories. For each land use, this Appendix illustrates the impact fee demand component variables (trip rate, trip length, and percent of new trips), the total impact fee cost, the annual gas tax credit and present value of the gas tax credit, the net impact fee, the current City of Bozeman impact fee, and the percent difference between the potential impact fee and the current impact fee. It should be noted that the net impact fee rates included in Appendix F represent the maximum reasonable defensible transportation impact fee per unit of land use that could be charged in the City of Bozeman. The methodology used herein to calculate these fees is commonly accepted as one that results in an impact fee rate that satisfies the proportionality concept of the dual rational nexus test. It should be noted that this methodology is consistent with the 2005 Montana impact fee law (Senate Bill 185, sections 7-6-1601 through 7-6-1604). As a result, development is charged based upon the proportion of vehicle miles of capacity it is expected to consume on the city roadway network. For clarification purposes, it may be useful to walk through the calculation of an impact fee for one of the land use categories. In the following example, the net impact fee is calculated for the single-family detached residential (1,500 to 2,499 square feet) land use category (ITE LUC 210). This example calculation uses information from the proposed impact fee schedule included in Appendix F, Table F-1 (Non-TED Impact Fee Schedule). For each land use category, the following equations are utilized to calculate the net impact fee: Net Impact Fee = Total Impact Cost – Gas Tax Credit – Ad Valorem Credit Where: Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 24 Impact Fee Study Total Impact Cost = ((Trip Rate × Assessable Trip Length × % New Trips) / 2) × (1 - Interstate Adj. Factor) × (Cost per Lane Mile / Avg. Capacity Added per Lane Mile) Total Gas Tax Credit = Present Value (Annual Gas Tax Credit), given 4.6% interest rate & 25-year facility life Annual Gas Tax Credit = (((Trip Rate × Total Trip Length × % New Trips) / 2) × Effective Days per Year × $/Gallon to Capital) / Fuel Efficiency Each of the inputs have been discussed previously in this document; however, for purposes of this example, brief definitions for each input are provided below, along with the actual inputs used in the calculation of the single-family detached residential (1,500 to 2,499 square feet) land use category: • Trip Rate = the average daily trip generation rate, in vehicle-trips/day (9.57) • Assessable Trip Length = the actual average trip length for the category, in vehicle- miles (3.52) • Total Trip Length = the assessable trip length plus an adjustment factor of half a mile is added to the trip length to account for the fact that gas taxes are collected for travel on all roads including local roads (3.52 + 0.50 = 4.02) • % New Trips = adjustment factor to account for trips that are already on the roadway (100%) • Divide by 2 = The total daily miles of travel generated by a particular category (i.e., rate X length X % new trips) is divided by two to prevent the double-counting of travel generated among land use codes since every trip has an origin and a destination. • Interstate Adjustment Factor = adjustment factor to account for the travel demand occurring on interstate highways (15.0%) • Cost per Lane Mile = unit cost to construct one lane mile of roadway, in $/lane- mile ($3,678,552) • Average Capacity Added per Lane Mile = represents the average daily traffic on one travel lane at capacity for one lane mile of roadway, in vehicles/lane-mile/day (8,658) • Cost per Vehicle Mile of Capacity = unit cost to construct to provide a vehicle mile of capacity ($424.87) • Present Value = calculation of the present value of a uniform series of cash flows, gas tax payments in this case, given an interest rate, “i,” and a number of periods, Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 25 Impact Fee Study “n;” for 4.6% interest and a 25-year facility life, the uniform series present worth factor is 14.6768 • Effective Days per Year = 365 days • $/Gallon to Capital = the amount of gas tax revenue per gallon of fuel that is used for capital improvements, in $/gallon ($0.102) • Fuel Efficiency = average fuel efficiency of vehicles, in vehicle-miles/gallon (17.70) Using these inputs, a net impact fee can be calculated for the single-family residential (1,500 to 2,499 square feet) land use category as follows. Total Impact Cost = ((9.57 * 3.52 * 1.0) /2) * (1–0.15) * ($3,678,552/8,658) = $6,083 Annual Gas Tax = (((9.57 * 4.02 * 1.0) /2) * 365 * $0.102) / 17.70 = $40 Gas Tax Credit = $40 * 14.6768 = $587 Ad Valorem Tax Credit = $100 (see Appendix E, Table E-1 for details of this calculation) Net Impact Fee = $6,083-$587-$100 = $5,396 Table 9 below presents the net impact fee for all land uses included in the proposed impact fee schedule in Appendix F, Table F-1. These fees will be charged for all areas not designated as the Trip Exchange District (TED) or that otherwise do not reflect travel characteristics of the TED area. Table 10 below presents the net impact fee for all land uses in the proposed fee schedule in Appendix F, Table F-2. These fees will be charged in areas designated as the TED or that other areas that exhibit characteristics as defined in Appendix K. Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 26 Impact Fee Study Table 9 Proposed Transportation Impact Fee Schedule (Non-TED) (1) Net ITE Impact LUC Unit Fee RESIDENTIAL: 210 Single Family (Detached) Less than 1,500 sf and very low income(2)du $2,171 Less than 1,500 sf and low income(3)du $3,147 Less than 1,500 sf du $3,968 1,500 to 2,499 sf du $5,396 2,500 sf or larger du $6,082 220 Apartments du $3,339 230 Residential Condominium/ Townhouse du $2,946 240 Mobile Home Park du $1,593 LODGING: 310 Hotel room $3,063 320 Motel room $1,678 RECREATION: 430 Golf Course hole $12,295 411 City Park acre $546 444 Movie Theaters 1,000 sf $6,463 INSTITUTIONS: 610 Hospital 1,000 sf $6,023 620 Nursing Home bed $381 520 Elementary School student $315 530 High School student $477 540 University (7,500 or fewer students)(4)student $609 550 University (more than 7,500 students)(4)student $529 Land Use Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 27 Impact Fee Study Table 9 Proposed Transportation Impact Fee Schedule (Non-TED) (continued) (1) Net ITE Impact LUC Unit Fee INSTITUTIONS: 560 Church/ Synagogue 1,000 sf $2,428 565 Day Care 1,000 sf $7,433 OFFICE: 710 50,000 sf or less 1,000 sf $3,977 710 50,001-100,000 sf 1,000 sf $3,623 710 100,001-200,000 sf 1,000 sf $3,084 710 greater than 200,000 sf 1,000 sf $2,460 720 Medical Office 1,000 sf $9,584 RETAIL: 820 under 50,000 sf 1,000 sf $9,378 820 50,000-99,000 sf 1,000 sf $9,587 820 100,000-199,000 sf 1,000 sf $9,331 820 200,000-299,000 sf 1,000 sf $8,567 820 greater than 300,000 sf 1,000 sf $8,144 812 Building Material/ Lumber 1,000 sf $21,209 813 Discount Super-Store 1,000 sf $26,996 817 Nursery/Garden Center 1,000 sf $18,903 851 Convenience Store 1,000 sf $44,607 931 Quality Restaurant 1,000 sf $22,036 934 Fast Food Rest w/ Drive-Thru 1,000 sf $61,225 841 New/Used Auto Sales 1,000 sf $12,033 890 Furniture Store 1,000 sf $1,684 912 Bank/ Savings Drive-in 1,000 sf $31,706 Land Use Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 28 Impact Fee Study Table 9 Proposed Transportation Impact Fee Schedule (Non-CBD) (continued) (1) Net ITE Impact LUC Unit Fee INDUSTRY: 110 General Light Industrial 1,000 sf $2,290 140 Manufacturing 1,000 sf $1,250 150 Warehouse 1,000 sf $1,627 151 Mini-Warehouse 1,000 sf $810 Land Use (1) Source: Appendix F, Table F-1 (2) Defined as 50% of city median income based on 2007 Gallatin County Average Median Income (AMI) (3) Defined as 80% of city median income based on 2007 Gallatin County Average Median Income (AMI) (4) Impact fee to be assessed on structures with classroom facilities. All auxiliary structures such as administrative buildings and research centers are to be charged at the office land use rate. Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 29 Impact Fee Study Table 10 Proposed Transportation Impact Fee Schedule (TED) (1) Net ITE Impact LUC Unit Fee RESIDENTIAL: 210 Single Family (Detached) Less than 1,500 sf and very low income(2)du $2,171 Less than 1,500 sf and low income(3)du $3,147 Less than 1,500 sf du $3,968 1,500 to 2,499 sf du $5,396 2,500 sf or larger du $6,082 220 Apartments du $3,339 230 Residential Condominium/ Townhouse du $2,946 240 Mobile Home Park du $1,593 LODGING: 310 Hotel room $2,835 320 Motel room $1,333 RECREATION: 430 Golf Course hole $4,333 411 City Park acre $182 444 Movie Theaters 1,000 sf $2,333 INSTITUTIONS: 610 Hospital 1,000 sf $6,023 620 Nursing Home bed $381 520 Elementary School student $315 530 High School student $477 540 University (7,500 or fewer students)(4)student $609 550 University (more than 7,500 students)(4)student $529 560 Church/Synagogue 1,000 sf $2,428 565 Day Care 1,000 sf $7,433 Land Use Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 30 Impact Fee Study Table 10 Proposed Transportation Impact Fee Schedule (TED) (continued) (1) Net ITE Impact LUC Unit Fee OFFICE: 710 50,000 sf or less 1,000 sf $3,187 710 50,001-100,000 sf 1,000 sf $2,911 710 100,001-200,000 sf 1,000 sf $2,475 710 greater than 200,000 sf 1,000 sf $1,974 720 Medical Office 1,000 sf $9,584 RETAIL: 820 under 50,000 sf 1,000 sf $5,284 820 50,000-99,000 sf 1,000 sf $5,452 820 100,000-199,000 sf 1,000 sf $5,182 820 200,000-299,000 sf 1,000 sf $5,115 820 greater than 300,000 sf 1,000 sf $4,999 812 Building Material/Lumber 1,000 sf $21,209 813 Discount Super-Store 1,000 sf $26,996 817 Nursery/Garden Center 1,000 sf $18,903 851 Convenience Store 1,000 sf $44,607 931 Quality Restaurant 1,000 sf $6,009 934 Fast Food Rest w/ Drive-Thru 1,000 sf $22,164 841 New/ Used Auto Sales 1,000 sf $12,033 890 Furniture Store 1,000 sf $1,684 912 Bank/ Savings Drive-in 1,000 sf $24,133 INDUSTRY: 110 General Light Industrial 1,000 sf $2,290 140 Manufacturing 1,000 sf $1,250 150 Warehouse 1,000 sf $1,627 151 Mini-Warehouse 1,000 sf $810 Land Use (1) Source: Appendix F, Table F-2 (2) Defined as 50% of city median income based on 2007 Gallatin County Average Median Income (AMI) (3) Defined as 80% of city median income based on 2007 Gallatin County Average Median Income (AMI) (4) Impact fee to be assessed on structures with classroom facilities. All auxiliary structures such as administrative buildings and research centers are to be charged at the office land use rate. Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 31 Impact Fee Study 3.2 Indexing Currently, the City of Bozeman indexes its transportation impact fees on an annual basis based on the Consumer Price Index (CPI). This section presents a method that calculates a combined index based on the cost variables included in the impact fee calculation. This method helps moderate annual fluctuations from one year to another. The cost variables being recommended for annual adjustment are design, construction, CEI, and ROW costs. First, the design, construction, and CEI costs should be indexed a fixed amount each year based on the Engineering News Record’s Construction Cost Index to account for general increases in the cost for construction materials. Similarly, the land value component of ROW costs should be indexed based on the five-year historical trend in total market values for all property as updated annually by the Gallatin County Property Appraiser. It should be noted that since total market values for all property were not available, the five-year historical trend for total taxable values was used. In addition, the source used to index the construction cost (Engineering News Record’s Construction Cost Index) may be underestimating the recent increase in construction costs. As such, it is recommended that the City consider conducting an independent evaluation of local construction cost increases on an annual basis for the next few years until the recent increases subside. If, however, the City chooses not to conduct such a study, the index included in this study will provide a conservative level of indexing. The method for developing an indexed transportation impact fee is further discussed in Appendix G. 3.3 Compliance with Montana Statute – City Impact Fee Expenditures The law relating to impact fees, Title 7, Chapter 6, Part 16 MCA, contains several restrictions on the use of impact fee funds. These restrictions are intended to ensure that impact fees charged are proportionate to the actual impacts of new development and that the fees are then used to off-set those impacts as required by law. The City ensures compliance with these restrictions through a four step process that examines need for and use of funds throughout the entire impact fee process. Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 32 Impact Fee Study 3.3.1 Preparation of Long Range Transportation Plan First, the City periodically prepares a long range transportation plan (LRTP) for the city and surrounding areas. This is done in cooperation with the Montana Department of Transportation, Gallatin County, and other partners. This document is currently titled the Greater Bozeman Area Transportation Plan, 2001 Update. The planning horizon time frame of this Plan is 20 years. The plan begins by identifying current conditions of the transportation network. Demand for transportation facilities needed to serve future growth is then forecast and the impact of that new demand on the transportation system is analyzed. The outcome of the analysis is the identification of future transportation programs and improvements projected to be required to meet the future travel demand at the adopted level of service standards. 3.3.2 Classification of the Types of Projects The second step is to identify those projects which will be required for maintenance, operations, and correction of existing deficiencies, in contrast to capacity expansion projects of existing and future roads on transportation network for which impact fees may be spent. Chapters 9 and 10 of the Greater Bozeman Area Transportation Plan, 2001 Update identify and describe the extensive list of projects. These descriptions give a summary of the problem the project is intended to solve and any known issues or challenges related to the project. This list includes all the projects anticipated to be required over a twenty year period. This first description of projects allows an initial examination of which projects are likely to be growth related. 3.3.3 Development and Update of Capital Improvement Program Twenty years is a long time and the development patterns and the timing of growth used to develop the Greater Bozeman Area Transportation Plan, 2001 Update can also change. Therefore, in order to meet the requirements of the MCA, the City, on an annual basis, looks more closely at where new growth is occurring and the additional demand for services being generated by that growth. This is the third step of the process and is where the City develops its Capital Improvement Program (CIP). The CIP is a five-year program of scheduled road construction projects. The CIP is updated each year in connection with preparation of the City’s budget. The City has a distinct transportation impact fee CIP which is also coordinated with other City CIP programs. The CIP identifies each specific project, including the project location, expected outcome of Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 33 Impact Fee Study construction, such as additional lanes, and what funding sources and amounts are to be used for project construction. Because the project is defined in more detail at this stage, a more accurate estimate of costs in total and those necessitated by new demand are identified. The City continually monitors its transportation network through review of proposed development, daily operations, and periodic formal monitoring such as traffic counts. This enables the City to identify locations where new development is creating the need for additional capacity on the transportation network. It is during this step that the City distinguishes planned improvements that are needed in part to correct existing deficiencies, for which impact fees cannot be used to fund the entire project and those that are needed because new growth has occurred and created an impact on the road system. This determination is based, in part, on an analysis of existing level of service standards. Appendix N provides a list of roadway capacity expansion projects that have been constructed over the past 11 years using impact fee and non-impact fee revenues. The following hypothetical example discusses how impact fees could be allocated for a project where the current level of service is deficient. A calculation would be performed to determine how much over the level of service “C” standard capacity the road is operating. If it was determined that the road was operating 2,000 vehicles per day over capacity at the adopted standard, and the capacity improvement being made would add a daily capacity increase of 10,000 vehicles per day, then at least 20 percent of the cost would need to be funded from non-impact fee funding sources because existing traffic is consuming 20 percent of the increased capacity. The remaining 80 percent of capacity resulting from the capacity improvement (10,000 increase in capacity less 2,000 vehicles over capacity) could be funded with impact fees since new growth has the benefit of the increased capacity. It is important to note that during this third step, the City Engineering Division works with other departments in preparation of the CIP. Individual citizens and developers may also nominate projects for inclusion on the CIP. If a project is approved to be listed on the CIP by the City Commission, it begins the process of design, right of way acquisition, and other steps needed to become a constructable project. As design proceeds, improved estimates of costs become available. These improved costs are incorporated into the next annual update of the CIP. The updated information also enables an annual re-evaluation of the appropriate blend of funding sources for each project. Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 34 Impact Fee Study 3.3.4 Project Implementation and Cost Verification The fourth step occurs once a project is ready for construction and the project is moved into the upcoming year’s budget. The City competitively bids its construction work. The actual bid prices, along with any approved change orders, ultimately determine the final cost of the construction. At the end of the process the City verifies the final costs of work done and whether that work was capacity expanding in nature. The final verification of costs then sets the ultimate payout of funds from the different funding sources which have been allocated for the project. This process has been used for years in Bozeman and has been refined as described above to ensure compliance with Montana Code requirements for impact fee implementation; in particular the requirements that impact fees (1) be proportionate in amount to the actual impacts of development paying the fee; and (2) be spent so as to benefit those paying them. This study, and its supporting documentation (see Appendix M for a cross- reference table providing specific section references to the impact fee statute and the documents that address these sections), ensures compliance with the first point and the procedures required by the impact fee ordinance itself ensure compliance with the second. Much of the process described in these four steps is formally incorporated into the City’s impact fee ordinance. Further, Chapter 3.24, BMC, requires the impact fee program to be periodically reviewed and updated to ensure that it continues to represent a reasonable basis upon which to collect and expend impact fees. It should also be noted that this process ensures that impact fees are not used to fund operations and maintenance of the existing facility (i.e., resurfacing projects) per section 7-6-1602, (5) (e) of the MCA. 3.4 Revenue Projections Based on the proposed impact fee schedule presented in Table 9, revenue estimates were developed for the City of Bozeman. The proposed impact fees have been calculated based on a standards driven approach (consumption-based), as such new development will be charged based on capacity consumed. It should be noted that, for impact fee purposes, revenue projections serve only as an overall guideline in planning future infrastructure needs. In their simplest form, impact fees charge each unit of new growth for the net cost (total cost less credits) of infrastructure needed to serve that unit of growth. If the growth rates remain high, the City will have more impact fee revenues to fund growth-related projects sooner rather than later. If the growth rate slows down, less revenue will be Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 35 Impact Fee Study generated, and the timing and need for future infrastructure improvements will be later rather than sooner. Appendix H presents revenue projections based on the proposed impact fees. APPENDIX A Trip Characteristics Database Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 A-1 Impact Fee Study Trip Characteristics Database The Trip Characteristics Database includes over 200 studies on 40 different residential and non-residential land uses collected over the last 18 years. Data from these studies include trip generation, trip length, and percent new trips for each land use. This information has been used in the development of impact fees and the creation of land use plan category trip characteristics for communities throughout Florida and the U.S. The trip generation rate for each respective land use is calculated using machine counts that record daily traffic into and out of the site studied. The traffic count hoses are set at entrances to residential subdivisions for the residential land uses and at all access points for non-residential land uses. The trip length information is obtained through origin-destination surveys that ask respondents where they came from prior to arriving at the site and where they intended to go after leaving the site. The results of these surveys were used to estimate average trip length by land use. Similarly, the percent new trip variable is based on assigning each trip collected through the origin-destination survey process a trip type (primary, secondary, diverted, and captured). The percent new trip variable is then calculated as 1 minus the percentage of trips that are captured. Single-Family Detached Housing (ITE LUC 210) - Bozeman Trip Characteristics Studies Bozeman, MT 41 Dec-06 180 180 9.32 - 4.53 N/A 42.22 Tindale-Oliver & Associates Bozeman, MT 105 Dec-06 249 249 N/A - 1.59 N/A N/A Tindale-Oliver & Associates Bozeman, MT 142 Dec-06 819 819 9.69 - 3.23 N/A 31.30 Tindale-Oliver & AssociatesTotal Size 183 Average Trip Length: 3.88 Weighted Average Trip Length: 3.52 Weighted Average Trip Generation Rate: N/A ITE Average Trip Generation Rate: 9.57 Average VMT:55.33 ITE Average Trip Generation Rate: 35.58 Total # Interviews Size / Units Trip Gen Rate Time Period Trip Length # Trip Length Interviews SourceVMTPercent New TripsLocation Date Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 A-2 Impact Fee Study Single-Family Detached Housing (ITE LUC 210) - Florida Trip Characteristics Studies Gwinnett Co., GA - 12/13-18/92 - - 5.80 - 5.40 N/A 31.32 Street Smarts Gwinnett Co., GA - 12/13-18/92 - - 5.40 - 6.10 N/A 32.94 Street Smarts Lake Co, FL 42 Dec-06 122 11.26 5.56 62.61 Tindale-Oliver & Associates Lake Co, FL 49 Apr-02 170 6.70 7a-6p 10.20 N/A 68.34 Tindale-Oliver & AssociatesLake Co, FL 51 Dec-06 346 18.22 9.46 172.36 Tindale-Oliver & AssociatesLake Co, FL 52 Apr-02 212 10.00 7a-6p 7.60 N/A 76.00 Tindale-Oliver & AssociatesPasco Co, FL 55 Apr-02 133 6.80 8a-6p 8.12 N/A 55.22 Tindale-Oliver & Associates Lake Co, FL 59 Dec-06 144 12.07 10.79 130.24 Tindale-Oliver & Associates Pasco Co, FL 60 Apr-02 106 7.73 8a-6p 8.75 N/A 67.64 Tindale-Oliver & Associates Pasco Co, FL 70 Apr-02 188 7.80 8a-6p 6.03 N/A 47.03 Tindale-Oliver & AssociatesPasco Co, FL 74 Apr-02 188 8.18 8a-6p 5.95 N/A 48.67 Tindale-Oliver & AssociatesHernando Co., FL 76 May-96 148 148 10.01 9a-6p 4.85 N/A 48.55 Tindale-Oliver & AssociatesSarasota Co, FL 76 Jun-93 70 70 10.03 - 6.00 N/A 60.18 Sarasota County Sarasota Co, FL 79 Jun-93 86 86 9.77 - 4.40 N/A 42.99 Sarasota County Collier Co, FL 90 Dec-99 91 12.80 8a-6p 11.40 N/A 145.92 Tindale-Oliver & Associates Lake Co, FL 90 Dec-06 194 9.12 5.78 52.71 Tindale-Oliver & AssociatesSarasota Co, FL 97 Jun-93 33 33 13.20 - 3.00 N/A 39.60 Sarasota CountyMarion Co, FL 102 Apr-02 167 8.02 7a-6p 5.10 N/A 40.90 Kimley-Horn & Associates Marion Co, FL 105 Apr-02 169 7.23 7a-6p 7.22 N/A 52.20 Kimley-Horn & Associates Citrus Co, FL 111 Oct-03 273 8.66 7a-6p 7.70 N/A 66.68 Tindale-Oliver & Associates Marion Co, FL 124 Apr-02 170 6.04 7a-6p 7.29 N/A 44.03 Kimley-Horn & Associates Lake Co, FL 126 Apr-02 217 8.50 7a-6p 8.30 N/A 70.55 Tindale-Oliver & AssociatesHernando Co., FL 128 May-96 205 205 8.17 9a-6p 6.03 N/A 49.27 Tindale-Oliver & AssociatesMarion Co, FL 132 Apr-02 171 7.87 7a-6p 7.00 N/A 55.09 Kimley-Horn & Associates Marion Co, FL 133 Apr-02 209 8.04 7a-6p 4.92 N/A 39.56 Kimley-Horn & Associates Sarasota Co, FL 135 Jun-93 75 75 8.05 - 5.90 N/A 47.50 Sarasota County Charlotte Co, FL 135 Oct-97 230 5.30 9a-5p 7.90 N/A 41.87 Tindale-Oliver & Associates Charlotte Co, FL 142 Oct-97 245 5.20 9a-5p 4.10 N/A 21.32 Tindale-Oliver & AssociatesCharlotte Co, FL 150 Oct-97 160 5.00 9a-5p 10.80 N/A 54.00 Tindale-Oliver & AssociatesSarasota Co, FL 152 Jun-93 63 63 8.55 - 7.30 N/A 62.42 Sarasota County Pasco Co, FL 189 Apr-02 261 7.46 8a-6p 8.99 N/A 67.07 Tindale-Oliver & Associates Sarasota Co, FL 193 Jun-93 123 123 6.85 - 4.60 N/A 31.51 Sarasota County Charlotte Co, FL 215 Oct-97 158 7.60 9a-5p 4.60 N/A 34.96 Tindale-Oliver & Associates Citrus Co, FL 231 Oct-03 155 5.71 7a-6p 4.82 N/A 27.52 Tindale-Oliver & AssociatesHernando Co., FL 232 May-96 182 182 7.24 9a-6p 5.04 N/A 36.49 Tindale-Oliver & AssociatesLake Co, FL 239 Dec-06 385 7.58 8.93 67.69 Tindale-Oliver & Associates Charlotte Co, FL 257 Oct-97 225 7.60 9a-5p 7.40 N/A 56.24 Tindale-Oliver & Associates Sarasota Co, FL 282 Jun-93 146 146 6.61 - 8.40 N/A 55.52 Sarasota County Hernando Co., FL 301 May-96 264 264 8.93 9a-6p 3.28 N/A 29.29 Tindale-Oliver & AssociatesCitrus Co, FL 306 Oct-03 146 8.40 7a-6p 3.94 N/A 33.10 Tindale-Oliver & AssociatesCharlotte Co, FL 345 Oct-97 161 7.00 9a-5p 6.60 N/A 46.20 Tindale-Oliver & AssociatesCitrus Co, FL 364 Oct-03 345 7.20 7a-6p 9.14 N/A 65.81 Tindale-Oliver & Associates Charlotte Co, FL 368 Oct-97 152 6.60 9a-5p 5.70 N/A 37.62 Tindale-Oliver & Associates Citrus Co, FL 374 Oct-03 248 12.30 7a-6p 6.88 N/A 84.62 Tindale-Oliver & Associates Charlotte Co, FL 383 Oct-97 516 8.40 9a-5p 5.00 N/A 42.00 Tindale-Oliver & AssociatesSarasota Co, FL 393 Jun-93 207 207 7.76 - 5.40 N/A 41.90 Sarasota CountyCollier Co, FL 400 Dec-99 389 7.80 8a-6p 6.40 N/A 49.92 Tindale-Oliver & AssociatesCharlotte Co, FL 441 Oct-97 195 8.20 9a-5p 4.70 N/A 38.54 Tindale-Oliver & Associates Collier Co, FL 770 Dec-99 175 4.32 8a-6p 4.96 N/A 21.41 Tindale-Oliver & Associates Charlotte Co, FL 1,169 Oct-97 348 6.10 9a-5p 8.00 N/A 48.80 Tindale-Oliver & Associates Total Size 10,147 Average Trip Length: 6.67 Weighted Average Trip Length: 6.43 Weighted Average Trip Generation Rate: 7.53 ITE Average Trip Generation Rate: 9.57 Average VMT:55.83 Note: Georgia studies are not included in summary statistics. Location Date SourceVMTPercent New Trips# Trip Length Interviews Trip Gen Rate Time Period Trip LengthTotal # InterviewsSize / Units Lake Co, FL 157 Dec-06 265 265 13.97 N/A 0.00 Tindale-Oliver & AssociatesLake Co, FL 169 Dec-06 212 8.09 N/A 0.00 Tindale-Oliver & Associates Sarasota Co, FL 212 Jun-93 42 42 5.78 - N/A - 0.00 Sarasota County Marion Co, FL 214 Apr-02 175 175 6.84 N/A 0.00 Kimley-Horn & Associates Lake Co, FL 226 Dec-06 301 6.74 N/A 0.00 Tindale-Oliver & AssociatesMarion Co, FL 240 Apr-02 174 174 6.96 N/A 0.00 Kimley-Horn & Associates Sarasota Co, FL 243 Jun-93 36 36 5.84 - N/A - 0.00 Sarasota County Lake Co, FL 250 Dec-06 135 135 6.71 N/A 0.00 Tindale-Oliver & AssociatesMarion Co, FL 288 Apr-02 175 175 5.66 N/A 0.00 Kimley-Horn & AssociatesMarion Co, FL 480 Apr-02 175 175 5.73 N/A 0.00 Kimley-Horn & Associates Marion Co, FL 500 Apr-02 170 170 5.46 N/A 0.00 Kimley-Horn & Associates Total Size 2,979 Average Trip Length: N/A ITE 1,696 Weighted Average Trip Length: N/A Blended total 4,675 Weighted Average Trip Generation Rate: 6.60 ITE Average Trip Generation Rate: 6.72 Blend of FL Studies and ITE Average Trip Generation Rate: 6.64 Apartment (ITE LUC 220) Size / UnitsLocation Date Total # Interviews # Trip Length Interviews Trip Gen Rate Time Period Trip Length Percent New Trips VMT Source Residential Condominium/Townhouse (ITE LUC 230) - Bozeman Trip Characteristics Studies Bozeman, MT 57 Jan-07 95 95 5.74 - 3.58 N/A 20.55 Tindale-Oliver & Associates Bozeman, MT 63 Dec-06 200 200 7.70 - 2.67 N/A 20.56 Tindale-Oliver & Associates Total Size 120 Average Trip Length: 3.13 Weighted Average Trip Length: 3.10 Weighted Average Trip Generation Rate: 6.77 ITE Average Trip Generation Rate: 5.86 Average VMT: 29.62 Size / Units Trip Length Percent New Trips Total # Interviews # Trip Length Interviews Trip Gen Rate Time PeriodLocation Date SourceVMT Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 A-3 Impact Fee Study Residential Condominium/Townhouse (ITE LUC 230) - Florida Trip Characteristics Studies Hernando Co., FL 31 May-96 31 31 6.12 9a-6p 4.98 N/A 30.5 Tindale-Oliver & AssociatesHernando Co., FL 128 May-96 198 198 6.47 9a-6p 5.18 N/A 33.5 Tindale-Oliver & Associates Pasco Co, FL 229 Apr-02 198 198 4.77 9a-6p 12.09 N/A 57.7 Tindale-Oliver & Associates Pasco Co, FL 248 Apr-02 353 353 4.24 9a-6p 3.53 N/A 15.0 Tindale-Oliver & Associates Total Size 636 Average Trip Length: 6.45 Weighted Average Trip Length: 7.01 Weighted Average Trip Generation Rate: 4.97 ITE Average Trip Generation Rate: 5.86 Average VMT: 34.16 Location Date SourceVMTTotal # Interviews # Trip Length Interviews Trip Gen Rate Time Period Trip Length Percent New Trips Size / Units Mobile Home Park (ITE LUC 240) Marion County, FL 67 Jul-91 22 22 5.40 48hrs. 2.29 N/A 12.37 Tindale-Oliver & Associates Marion County, FL 82 Jul-91 58 58 10.80 24hr. 3.72 N/A 40.18 Tindale-Oliver & Associates Marion County, FL 137 Jul-91 22 22 3.10 24hr. 4.88 N/A 15.13 Tindale-Oliver & AssociatesMarion Co, FL 188 Apr-02 147 - 3.51 24hr. 5.48 N/A 19.23 Kimley-Horn & AssociatesMarion Co, FL 227 Apr-02 173 - 2.76 24hr. 8.80 N/A 24.29 Kimley-Horn & AssociatesSarasota Co, FL 235 Jun-93 100 100 3.51 - 5.10 N/A 17.90 Sarasota County Marion Co, FL 297 Apr-02 175 - 4.78 24hr. 4.76 N/A 22.75 Kimley-Horn & Associates Sarasota Co, FL 996 Jun-93 181 181 4.19 - 4.40 N/A 18.44 Sarasota County Hernando Co., FL 1892 May-96 425 425 4.13 9a-6p 4.13 N/A 17.06 Tindale-Oliver & Associates Total Size 4,121 Average Trip Length: 4.84 Weighted Average Trip Length: 4.60 Bozeman Adjusted Trip Length: 2.02 Weighted Average Trip Generation Rate: 4.17 ITE Average Trip Generation Rate: 4.99 Average VMT: 20.82 Trip Length Percent New Trips Size / Units Total # Interviews # Trip Length Interviews Trip Gen Rate Time PeriodLocation Date SourceVMT Pinellas Co.,FL 114 Oct-89 30 14 7.30 12-7:30p 6.20 47.0 21.27 Tindale-Oliver & Associates Pinellas Co.,FL 174 Aug-89 134 106 12.50 7-11a/3-7p 6.30 79.0 62.21 Tindale-Oliver & AssociatesTotal Size 288.0 Average Trip Length: 6.25 ITE 4760.0 Weighted Average Trip Length: 6.26 Bozeman Adjusted Trip Length: 3.44 Blended total 5048.0 Weighted Percent New Trip Average: 66.3 Weighted Average Trip Generation Rate: 10.44 ITE Average Trip Generation Rate: 8.17 Blend of ITE & FL Studies - Average Trip Generation Rate: 8.30 Average VMT: 41.74 Hotel (ITE LUC 310) SourceSize (Rooms)Location Date Total # Interviews # Trip Length Interviews Trip Gen Rate Time Period Trip Length Percent New Trips VMT Motel (ITE LUC 320) Pinellas Co.,FL 48 Oct-89 46 24 - 10a-2:20p 2.80 65.0 - Tindale-Oliver & AssociatesPinellas Co.,FL 54 Oct-89 32 22 - 12p-7p 3.80 69.0 - Tindale-Oliver & AssociatesPinellas Co.,FL 120 Oct-89 26 22 - 2p-7p 5.20 84.6 - Tindale-Oliver & Associates Total Size 222 Average Trip Length: 3.93 Weighted Average Trip Length: 4.34Bozeman Adjusted Trip Length: 2.39Weighted Percent New Trip Average: 76.6 Weighted Average Trip Generation Rate: - ITE Average Trip Generation Rate: 5.63 Average VMT: - Trip Length Percent New Trips VMT Source Total # Interviews # Trip Length Interviews Trip Gen Rate Time PeriodLocation Date Size (Rooms) Movie Theater with Matinee (ITE LUC 444) Pinellas Co.,FL 8 Oct-89 151 116 113.10 2p-8p 2.70 77.0 235.13 Tindale-Oliver & Associates Pinellas Co.,FL 12 Sep-89 122 116 63.40 2p-8p 1.90 95.0 114.44 Tindale-Oliver & Associates Total Size 20 Average Trip Length: 2.30 Weighted Average Trip Length: 2.22 Bozeman Adjusted Trip Length: 1.22 Weighted Percent New Trip Average: 87.8 Weighted Average Trip Generation Rate: 83.28 ITE Average Trip Generation Rate (per 1,000 sf): 38.00Average VMT: 174.79 Trip Length Percent New Trips VMT Source Total # Interviews # Trip Length Interviews Trip Gen Rate Time PeriodSize (Screens)Location Date Pinellas Co. 5.6 Aug-89 94 66 67.00 7a-6p 1.90 70.0 89.11 Tindale-Oliver & AssociatesPinellas Co. 10.0 Sep-89 179 134 67.00 7a-6p 2.10 75.0 105.53 Tindale-Oliver & Associates Tampa, FL - Mar-86 28 25 - - 2.60 89.0 - Kimley-Horn & Associates Total Size 15.6 Average Trip Length: 2.20 ITE 30.0 Weighted Average Trip Length: 2.03 Blended total 45.6 Bozeman AdjustedTrip Length: 0.87 Weighted Percent New Trip Average: 73.2 Weighted Average Trip Generation Rate:66.99 ITE Average Trip Generation Rate: 79.26 Blend of ITE & FL Studies - Average Trip Generation Rate: 75.07 Average VMT: 97.32 VMT Source Total # Interviews # Trip Length Interviews Trip Gen Rate Time Period Day Care Center (ITE LUC 565) Trip Length Percent New Trips Size (1,000 sf)Location Date Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 A-4 Impact Fee Study Lakeland, FL 120 Mar-90 74 66 2.86 11a-4p 2.59 89.0 6.59 Tindale-Oliver & Associates Total Size 120 Average Trip Length: 2.59 ITE 415 Weighted Average Trip Length: 2.59 ITE Blended total 535.0 Bozeman Adjusted Trip Length: 1.11 Weighted Percent New Trip Average: 89.0 Weighted Average Trip Generation Rate:2.86 ITE Average Trip Generation Rate: 2.37Blend of ITE & FL Studies - Average Trip Generation Rate:2.48 Average VMT: 6.59 Nursing Home (ITE LUC 620) SourceTime Period Trip Length Percent New Trips VMTSize (Beds)Location Date Total # Interviews # Trip Length Interviews Trip Gen Rate General Office Building (ITE LUC 710) - Bozeman Trip Characteristics Studies Bozeman, MT 39.0 Dec-06 107 107 N/A - 1.64 77.0 - Tindale-Oliver & Associates Bozeman, MT 48.3 Dec-06 153 153 21.37 - 2.83 69.0 41.73 Tindale-Oliver & Associates Bozeman, MT 61.2 Dec-06 268 268 28.92 - 1.74 72.0 36.23 Tindale-Oliver & AssociatesTotal Size 109.5 Average Trip Length: 2.07 Weighted Average Trip Length: 2.22 Weighted Percent New Trip Average: 71.0 Weighted Average Trip Generation Rate:25.59ITE Average Trip Generation Rate: 11.01Average VMT: 38.98 Trip Length Percent New Trips VMT Source Total # Interviews # Trip Length Interviews Trip Gen Rate Time PeriodLocation Date Size (1,000 sf) General Office Building (ITE LUC 710) - Trip Characteristics Studies Sarasota Co, FL 14.3 Jun-93 14 14 46.85 - 11.30 - 529.41 Sarasota County Gwinnett Co., GA 98.0 12/13-18/92 - - 4.30 - 5.40 - - Street Smarts Gwinnett Co., GA 180.0 12/13-18/92 - - 3.60 - 5.90 - - Street Smarts Pinellas Co. 187.0 Oct-89 431 388 18.49 7a-5p 6.30 90.0 104.84 Tindale-Oliver & AssociatesSt. Petersburg, FL 262.8 Sep-89 291 274 - 7a-5p 3.40 94.0 - Tindale-Oliver & AssociatesTotal Size 742.1 Average Trip Length: 6.46 Weighted Average Trip Length: 5.15Weighted Percent New Trip Average: 92.3 Weighted Average Trip Generation Rate:10.84 ITE Average Trip Generation Rate: 11.01 Average VMT: 317.12 Size (1,000 sf)Location Date Total # Interviews # Trip Length Interviews Trip Gen Rate Time Period Trip Length Percent New Trips VMT Source Citrus Co, FL 5.3 Dec-03 20 29.36 8-5p 5.25 95.2 146.78 Tindale-Oliver & Associates Citrus Co, FL 10.0 Nov-03 340 40.56 8-630p 6.20 92.4 232.33 Tindale-Oliver & Associates Charlotte Co, FL 11.0 Oct-97 186 49.50 9a-5p 4.60 92.1 209.67 Tindale-Oliver & Associates Palm Harbor, FL 14.6 Oct-89 104 76 33.98 9a-5p 6.30 73.0 156.27 Tindale-Oliver & AssociatesHernando Co., FL 28.0 May-96 202 189 49.75 9a-6p 6.06 93.8 282.64 Tindale-Oliver & Associates Charlotte Co, FL 28.0 Oct-97 186 31.00 9a-5p 3.60 81.6 91.04 Tindale-Oliver & Associates Charlotte Co, FL 30.4 Oct-97 324 39.80 9a-5p 3.30 83.5 109.68 Tindale-Oliver & AssociatesCitrus Co, FL 38.9 Oct-03 168 32.26 8-6p 6.80 97.1 213.03 Tindale-Oliver & AssociatesHernando Co., FL 58.4 May-96 390 349 28.52 9a-6p 6.47 89.5 165.09 Tindale-Oliver & Associates St. Petersburg, FL - Nov-89 34 30 57.20 9a-4p 1.20 88.0 - Tindale-Oliver & Associates Tampa, FL - Mar-86 33 26 - - 6.00 79.0 - Kimley-Horn & Associates Total Size 224.5 Average Trip Length: 5.07 ITE 450.0 Weighted Average Trip Length: 5.55 Blended total 674.5 Bozeman Adjusted Trip Length: 2.39 Weighted Percent New Trip Average: 88.9 Bozeman Adjusted Percent New Trip Average(1):69.0 Average Trip Generation Rate:35.59 ITE Average Trip Generation Rate: 36.13Blend of ITE & FL Studies - Average Trip Generation Rate: 35.95 Average VMT: 178.51 Medical-Dental Office Building (ITE LUC 720) Size (1,000 sf)Location Date Total # Interviews # Trip Length Interviews Trip Gen Rate Time Period Trip Length (1) The percent new trips variable has been adjusted based on the relationship observed between the office land use studies conducted in Bozeman (71%) and those previously collected in the TCS Database (92%). Percent New Trips VMT Source Building Materials and Lumber Store (ITE LUC 812) Tampa, FL 86.9 Jun-93 40 - - 7a-430p 6.58 73.0 - Tindale-Oliver & Associates Tampa, FL 98.5 Jun-93 40 - - 7a-430p 6.00 - - Tindale-Oliver & Associates Tampa, FL - Jun-93 40 - - 7a-430p 5.87 75.7 - Tindale-Oliver & Associates Total Size 185.4 Average Trip Length: 6.15 Weighted Average Trip Length: 6.27 Bozeman Adjusted Trip Length: 3.89 .74.4 Weighted Average Trip Generation Rate:-ITE Average Trip Generation Rate: 45.16Average VMT: - VMT Source Trip Gen Rate Time Period Trip Length Percent New TripsSize (1,000 sf)Location Date Total # Interviews # Trip Length Interviews Free-Standing Discount Superstore (ITE LUC 813) Citrus Co, FL 203.6 Nov-03 236 55.01 8a-6p 5.91 91.8 298.55 Tindale-Oliver & Associates Total Size 203.6 Average Trip Length: 5.91 Weighted Average Trip Length: 5.91 Bozeman Adjusted Trip Length: 3.66 Weighted Percent New Trip Average: 91.8 Weighted Average Trip Generation Rate:55.01ITE Average Trip Generation Rate: 49.21Average VMT: 298.55 Total # Interviews # Trip Length Interviews Trip Gen Rate Time Period Trip Length Percent New Trips VMT SourceLocation Date Size (1,000 sf) Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 A-5 Impact Fee Study Shopping Center (ITE LUC 820) Tampa, FL - Mar-86 527 348 - - - 66.0 - Kimley-Horn & Associates Tampa, FL - Mar-86 170 - - - 1.70 - - Kimley-Horn & Associates Tampa, FL - Mar-86 354 269 - - - 76.0 - Kimley-Horn & Associates Tampa, FL - Mar-86 144 - - - 2.50 - - Kimley-Horn & Associates St. Petersburg, FL 1,192.0 Aug-89 384 298 - 11a-7p 3.60 78.0 - Tindale-Oliver & Associates Largo, FL 425.0 Aug-89 160 120 26.73 10a-6p 2.30 75.0 46.11 Tindale-Oliver & Associates Dunedin, FL 80.5 Sep-89 276 210 81.48 9a-5p 1.40 76.0 86.69 Tindale-Oliver & Associates Pinellas Park, FL 696.0 Sep-89 485 388 - 9a-6p 3.20 80.0 - Tindale-Oliver & Associates Seminole, FL 425.0 Oct-89 674 586 - - - 87.0 - Tindale-Oliver & Associates Hillsborough Co, FL 134.0 Jul-91 - - - - 1.30 74.0 - Tindale-Oliver & Associates Hillsborough Co, FL 151.0 Jul-91 - - - - 1.30 73.0 - Tindale-Oliver & Associates Collier Co, FL - Aug-91 68 64 - - 3.33 94.1 0.00 Tindale-Oliver & Associates Collier Co, FL - Aug-91 208 154 - - 2.64 74.0 0.00 Tindale-Oliver & Associates St.Petersburgh,FL 132.3 Sep-92 400 368 77.00 10a-7p 1.80 92.0 127.51 Tindale-Oliver & Associates Sarasota/Bradenton, FL 109.0 Sep-92 300 185 - 12a-6p - 61.6 - King Engineering Associates, Inc. Ocala, FL 133.4 Sep-92 300 192 - 12a-6p - 64.0 - King Engineering Associates, Inc. Gwinnett Co, GA 99.1 Dec-92 - - 46.00 - 3.20 70.0 103.04 Street Smarts Gwinnett Co, GA 314.7 Dec-92 - - 27.00 - 8.50 84.0 192.78 Street Smarts Sarasota Co, FL 110.0 Jun-93 58 58 122.14 - 3.20 - - Sarasota County Sarasota Co, FL 146.1 Jun-93 65 65 51.53 - 2.80 - - Sarasota County Sarasota Co, FL 157.5 Jun-93 57 57 79.79 - 3.40 - - Sarasota County Sarasota Co, FL 191.0 Jun-93 62 62 66.79 - 5.90 - - Sarasota County Hernando Co, FL 107.8 May-96 608 331 77.60 9a-6p 4.68 54.5 197.85 Tindale-Oliver & Associates Charlotte Co, FL 88.0 Oct-97 - - 73.50 9a-5p 1.80 57.1 75.56 Tindale-Oliver & Associates Charlotte Co, FL 191.9 Oct-97 - - 72.00 9a-5p 2.40 50.9 87.97 Tindale-Oliver & Associates Charlotte Co, FL 51.3 Oct-97 - - 43.00 9a-5p 2.70 51.8 60.08 Tindale-Oliver & Associates Lake Co, FL 67.8 Apr-01 246 177 102.60 - 3.40 71.2 248.37 Tindale-Oliver & Associates Lake Co, FL 72.3 Apr-01 444 376 65.30 - 4.50 59.0 173.37 Tindale-Oliver & Associates Pasco Co, FL 65.6 Apr-02 222 - 145.64 9a-5p 1.46 46.9 99.62 Tindale-Oliver & Associates Pasco Co, FL 75.8 Apr-02 134 - 38.23 9a-5p 2.36 58.2 52.52 Tindale-Oliver & Associates Citrus Co, FL 185.0 Oct-03 - 784 55.84 8a-6p 2.40 88.1 118.05 Tindale-Oliver & Associates Citrus Co, FL 91.3 Nov-03 - 390 54.50 8a-6p 1.60 88.0 76.77 Tindale-Oliver & Associates Bozeman, MT 104.3 Dec-06 359 359 46.96 - 3.35 49.0 77.08 Tindale-Oliver & Associates Bozeman, MT 159.9 Dec-06 502 502 56.49 - 1.56 54.0 47.59 Tindale-Oliver & Associates Bozeman, MT 35.9 Dec-06 329 329 69.30 - 1.39 74.0 71.28 Tindale-Oliver & Associates Total Size 5,757.5 Average Trip Length: 2.66 32.2 Weighted Average Trip Length: 3.00 169.3 Weighted Percent New Trip Average: 75.68 Weighted Average Trip Generation Rate:59.46ITE Average Trip Generation Rate: 42.94Note: Georgia study with trip length of 8.50 is an outlier and has been excluded from weighted average trip length calculation.Average VMT: 98.47 Location Date Size (1,000 sf) Total # Interviews # Trip Length Interviews Trip Gen Rate Time Period Trip Length Percent New Trips VMT Source St.Petersburg, FL 43.0 Oct-89 152 120 - 9am-5pm 4.70 79.0 - Tindale-Oliver & Associates Clearwater, FL 43.0 Oct-89 136 106 29.40 9am-5pm 4.50 78.0 103.19 Tindale-Oliver & AssociatesTotal Size 43.0 Average Trip Length: 4.60 ITE 374.0 Weighted Average Trip Length: 4.60 Bozeman Adjusted Trip Length: 2.85 Blended total 417.0 Weighted Percent New Trip Average: 78.5Weighted Average Trip Generation Rate: 29.40ITE Average Trip Generation Rate: 33.34 Blend of ITE & FL Studies - Average Trip Generation Rate: 32.93 Average VMT: 103.19 New Car Sales (ITE LUC 841) Total # Interviews # Trip Length Interviews Trip Gen Rate Time Period Trip Length Percent New Trips VMT Source Size (1,000 sf)Location Date Convenience Market-24hrs. (ITE LUC 851) Clearwater 2.1 Nov-89 143 50 635.24 24hr. 1.60 35.0 355.73 Tindale-Oliver & AssociatesMarion County, FL 2.5 Jun-91 94 43 787.20 48hrs. 1.52 46.2 552.80 Tindale-Oliver & Associates Marion County, FL 2.5 Jun-91 74 20 714.00 48hrs. 0.75 27.0 144.59 Tindale-Oliver & Associates Largo, FL 2.5 8/15,25/89 171 116 634.80 - 1.20 68.0 518.00 Tindale-Oliver & Associates Clearwater, FL 2.5 Aug-89 237 64 690.80 - 1.60 27.0 298.43 Tindale-Oliver & AssociatesGwinnett Co., GA 2.9 12/13-18/92 - - - - 2.30 48.0 - Street SmartsGwinnett Co., GA 3.2 12/13-18/92 - - - - - 37.0 - Street SmartsCollier County, FL - Aug-91 146 36 - - 2.53 24.7 - Tindale-Oliver & Associates Collier County, FL - Aug-91 148 38 - - 1.08 25.7 - Tindale-Oliver & Associates Tampa, FL - Mar-86 80 - - - 1.10 - - Kimley-Horn & Associates Total Size 18.2 Average Trip Length: 1.52 Weighted Average Trip Length: 1.52 Bozeman Adjusted Trip Length: 0.94 Weighted Percent New Trip Average: 41.3 Weighted Average Trip Generation Rate: 694.30ITE Average Trip Generation Rate: 737.99 Average VMT: 373.91 VMT Source Trip Gen Rate Time Period Trip Length Percent New TripsLocation Date Size (1,000 sf) Total # Interviews # Trip Length Interviews Furniture Store (ITE LUC 890) Largo, FL 15.0 7/28-30/92 64 34 - - 4.63 52.5 - Tindale-Oliver & AssociatesTampa, FL 16.9 Jul-92 68 39 - - 7.38 55.7 - Tindale-Oliver & Associates Total Size 31.9 Average Trip Length: 6.01Weighted Average Trip Length: 6.09Bozeman Adjusted Trip Length: 3.78Weighted Percent New Trip Average: 54.2 Average Trip Generation Rate: -ITE Average Trip Generation Rate: 5.06 Average VMT: - Trip Length Percent New Trips VMT Source Total # Interviews # Trip Length Interviews Trip Gen Rate Time PeriodLocation Date Size (per 1,000 sf) Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 A-6 Impact Fee Study Clearwater, FL 0.4 Aug-89 113 52 - 9am-6pm 5.20 46.0 - Tindale-Oliver & Associates Largo, FL 2.0 Sep-89 129 94 192.50 - 1.60 73.0 224.84 Tindale-Oliver & Associates Marion County, FL 2.3 Jun-91 69 29 680.00 24hr. 1.33 42.0 379.85 Tindale-Oliver & Associates Marion County, FL 2.4 Apr-02 70 - 642.00 24hr. 3.55 54.6 1245.31 Kimley-Horn & AssociatesMarion County, FL 2.5 Jul-91 57 26 386.00 48hrs. 2.70 45.6 475.24 Tindale-Oliver & Associates Marion County, FL 2.7 May-02 50 - 246.66 24hr. 2.66 40.5 265.44 Kimley-Horn & Associates Marion County, FL 3.1 Jun-91 47 32 580.80 24hr. 1.75 68.1 692.17 Tindale-Oliver & AssociatesSeminole, FL 4.5 Oct-89 - - 201.78 - - - - Tindale-Oliver & Associates Hernando Co., FL 5.4 May-96 164 41 364.72 9a-6p 2.77 24.7 249.54 Tindale-Oliver & Associates Tampa, FL - Mar-86 77 - - - 2.40 - - Kimley-Horn & Associates Tampa, FL - Mar-86 211 - - - - 54.0 - Kimley-Horn & AssociatesCollier County, FL - Aug-91 162 96 - 24hr. 0.88 59.3 - Tindale-Oliver & Associates Collier County, FL - Aug-91 116 54 - - 1.58 46.6 - Tindale-Oliver & Associates Collier County, FL - Aug-91 142 68 - - 2.08 47.9 - Tindale-Oliver & Associates Total Size 25.2 Average Trip Length: 2.38 ITE 76.0 Weighted Average Trip Length: 2.46 Blended total 101.2 Bozeman Adjusted Trip Length: 1.53 Weighted Percent New Trip Average: 46.2 Weighted Average Trip Generation Rate: 393.10ITE Average Trip Generation Rate: 246.49Blend of ITE & FL Studies - Average Trip Generation Rate: 281.55 Average VMT: 504.63 # Trip Length Interviews Trip Gen Rate Time Period Drive-In Bank (ITE LUC 912) Trip Length Percent New Trips VMT Source Total # Interviews Size (1,000 sf)Location Date St. Petersburg, FL 7.5 Oct-89 177 154 - 30-230/430-83 3.50 87.0 - Tindale-Oliver & Associates Clearwater, FL 8.0 Oct-89 60 40 110.60 10-230/5-830 2.80 67.0 207.49 Tindale-Oliver & Associates Tampa, FL - Mar-86 76 62 - - 2.10 82.0 - Kimley-Horn & Associates Total Size 8.0 15.5 Average Trip Length: 2.80 ITE 135.0 135.0 Weighted Average Trip Length: 3.14 Blended total 143.0 150.5 Bozeman Adjusted Trip Length: 1.95 Weighted Percent New Trip Average: 76.7 Weighted Average Trip Generation Rate:110.63ITE Average Trip Generation Rate: 89.95Blend of ITE & FL Studies - Average Trip Generation Rate: 91.10 Average VMT: 207.49 Quality Restaurant (ITE LUC 931) SourceTime Period Trip Length Percent New Trips VMTSize (1,000 sf)Location Date Total # Interviews # Trip Length Interviews Trip Gen Rate Marion County, FL 1.6 Jun-91 60 32 962.50 48hrs. 0.91 53.3 466.84 Tindale-Oliver & AssociatesPinellas Co. 2.2 Aug-89 81 48 502.80 11am-2pm 1.70 59.0 504.31 Tindale-Oliver & Associates Lake Co, FL 2.2 Apr-01 376 252 934.30 2.50 74.6 1742.47 Tindale-Oliver & Associates Pasco Co, Fl 2.7 Apr-02 100 46 283.12 9a-6p 5.10 46.0 664.20 Tindale-Oliver & AssociatesPasco Co, Fl 3.0 Apr-02 486 164 515.32 9a-6p 2.72 33.7 472.92 Tindale-Oliver & AssociatesHernando Co, FL 3.1 May-96 168 82 547.34 9a-6p 1.59 48.8 425.04 Tindale-Oliver & Associates Lake Co, FL 3.2 Apr-01 171 182 654.90 4.10 47.8 1283.47 Tindale-Oliver & Associates Lake Co, FL 3.8 Apr-01 188 137 353.70 3.30 70.8 826.38 Tindale-Oliver & AssociatesMarion County, FL 4.0 Jun-91 75 46 625.00 48hrs. 1.54 61.3 590.01 Tindale-Oliver & Associates Pinellas Co. 4.3 Oct-89 456 260 660.40 1 day 2.30 57.0 865.78 Tindale-Oliver & Associates Pasco Co, Fl 4.4 Apr-02 168 120 759.24 9a-6p 1.89 71.4 1024.99 Tindale-Oliver & Associates Hernando Co., FL 5.4 May-96 136 82 311.83 9a-6p 1.68 60.2 315.27 Tindale-Oliver & AssociatesTarpon Springs,FL - Oct-89 233 114 - 7am-7pm 3.60 49.0 - Tindale-Oliver & Associates Collier County, FL - Aug-91 66 44 - - 1.91 66.7 - Tindale-Oliver & Associates Collier County, FL - Aug-91 118 40 - - 1.17 33.9 - Tindale-Oliver & AssociatesTampa, FL - Mar-86 61 - - - 2.70 - - Kimley-Horn & AssociatesTampa, FL - Mar-86 306 - - - - 65.0 - Kimley-Horn & Associates Total Size 39.9 Average Trip Length: 2.42 ITE 63.0 Weighted Average Trip Length: 2.05 Blended total 102.9 Bozeman Adjusted Trip Length: 1.27(less TL exclusions) 34.0 Weighted Percent New Trip Average: 57.9 Weighted Average Trip Generation Rate: 564.46 ITE Average Trip Generation Rate: 496.12 Blend of ITE & FL Studies - Average Trip Generation Rate: 522.62 Note: Studies with trip length of 5.10 and 4.10 are outliers and have been excluded from weighted average trip length calculation. Average VMT: 765.14 Size (1,000 sf)Location Date Total # Interviews # Trip Length Interviews Trip Gen Rate Time Period Trip Length Percent New Trips VMT Source Fast Food Restaurant w/Drive Thru (ITE LUC 934) APPENDIX B Cost Component Calculation Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 B-1 Impact Fee Study Cost Component Calculations All information used to compute a typical cost per lane mile and a typical average daily capacity added per lane mile is presented in this Appendix. As noted, the primary sources for the city project data are recent engineer estimates and recent bids for projects being built and funded in the City of Bozeman. In the case of the state projects data, the source is the MDOT project reports for recently completed or fully programmed capacity expansion projects in the City of Bozeman. As mentioned previously, the cost calculations are based on city and state projects in the City of Bozeman (presented at the end of this section in Tables B-1, B-2, B-3, B-4, B-5, B- 6, B-7, and B-8). These projects were utilized in the calculation of the average cost per lane mile figure that is utilized in the update of the impact fee equation for the City of Bozeman. Right-Of-Way Cost City The ROW cost was developed based on two projects that are representative of future roadway improvements. Specifically, the ROW costs associated with the West Babcock Street and West Durston Road street projects were used to calculate a weighted average ROW cost per lane mile. The weighted average ROW cost per lane mile is presented in Table B-1. The weighted average ROW cost per lane mile is approximately $276,316 for city roads. Based on discussion with city staff it was noted that the City acquires right-of- way primarily through the development review process. State As mentioned in the report, ROW cost data for the South 19th Avenue and Rouse Avenue state projects are believed to be representative of typical state land acquisitions. These two projects had a weighted average ROW cost per lane mile of approximately $335,446. Given the fact that the projects evaluated include both future estimate and recent bid roadway improvements, it is expected that the recent increases in land values and recent land purchases associated with these state projects in the City of Bozeman were accounted for in the calculation, which is presented in Table B-2. The Rouse Avenue project costs are based on the acquisitions associated with the addition of a continuous left turn lane to the two-lane undivided roadway. Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 B-2 Impact Fee Study Construction Cost The same projects used to calculate the respective ROW costs for city and state projects were used to determine the cost of construction. Tables B-3 through B-8 present the construction cost calculations for the city and state roads. Table B-3 presents the list of projects that will be built based on the Greater Bozeman Area Transportation Plan, 2001 Update. Table B-4 presents a lane mile summary of the projects presented in Table B-3. Table B-5 presents the weighted average calculation for the addition of a continuous left turn lane along a two-lane undivided roadway for city projects. Table B-6 presents the weighted average construction cost per lane mile for city and state roads. Table B-7 presents the lane mile distribution for city and state roads based on the Greater Bozeman Area Transportation Plan, 2001 Update. Table B-8 presents the weighted average total cost per lane mile for city and state roads combined. Table B-9 presents the calculation of the weighted average capacity added per lane mile. Adjustments were made to account for the proportion of future roads based on project features expected to be representative of future City and the State projects. These adjustments were used to develop a weighted average construction cost per lane mile for both city and state roadways. Specifically, as shown in Table B-4 based on the Greater Bozeman Area Transportation Plan, 2001 Update, it is estimated that the following project types will be constructed by the City of Bozeman: • New construction of two travel lanes and a continuous left turn lane (three-lane section) (16 percent). • The addition of a continuous left turn lane along a two-lane undivided roadway where the city only pays for the addition of the third lane (three-lane section) (28 percent). • The addition of a continuous left turn lane along a two-lane undivided roadway that is either a reconstruction of the existing lanes or an offset (three-lane section) (26 percent). • The addition of two travel lanes to an existing two-lane divided roadway (five lane section) (30 percent). Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 B-3 Impact Fee Study Similarly, based on the Greater Bozeman Area Transportation Plan, 2001 Update, MDOT will construct the following project types within the City of Bozeman city limits: • The addition of a continuous left turn lane along a two-lane undivided roadway (three lane section) (26 percent). • The addition of two travel lanes to an existing two-lane divided roadway (five lane section) (74 percent). Again, based on a review of the Greater Bozeman Area Transportation Plan, 2001 Update Recommended Major Improvements Plan projects (specifically for programmed projects) and consultation with City staff, it is anticipated that all of the lane miles that the City will build in the future will consist of urban design cross-sections. It should be noted that design costs are estimated to be 8.5 percent of construction for city roads and 10 percent for state roads, based on discussions with the City and MDOT staff, respectively. The design and CEI costs are merely percentages of the construction cost and are separate components of the total cost for adding a lane mile of roadway. It is thus important to further note that these costs are not included in the construction costs. This estimate is based on design cost percentages observed on recently bid city and state projects. Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 B-4 Impact Fee Study Table B-1 City of Bozeman Roadway Projects (in 2006 Dollars)(1) 1 West Babcock StMain StYellowstone Ave Add Lanes and Reconstruct 2-3 Lanes Recent Bid Urban0.910.9$200,000$222,2222 West Durston Rd N 19th AveFowler AveAdd Lanes and Reconstruct 2-3 Lanes Recent Bid Urban1.011.0$325,000$325,000Total1.90$525,000 $276,316 (a)Project Status Description From FeatureLength (Miles) ToTotal Lane Miles Lanes AddedSection Design Project NumberROW CostROW Cost per Lane Mile (1) Source: City of Bozeman Engineering Division Table B-2 State Roadway Projects in the City of Bozeman (in 2006 Dollars) (1) 4952 S 19th AveBabcock St Kagy BlvdAdd Lanes and Reconstruct 3-5 Lanes Future Estimate Urban1.32 2.6 $708,750 $272,596 $8,113,987 $3,120,764(b)4805 Rouse Ave Main St Story Mill Rd Add Lanes and Reconstruct 2-3 Lanes Future Estimate Urban2.01 2.0 $834,300 $417,150 N/A N/ATotal4.6$1,543,050 $335,446 N/A N/A(a)MDOT Project NumberProject Status Lanes AddedFeatureLength (Miles) ToSection Design FromROW CostROW Cost per Lane MileDescriptionConstruction Cost CST Cost per Lane MileTotal Lane Miles (1) Source: Montana Department of Transportation Project Reports Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 B-5 Impact Fee Study Table B-3 Greater Bozeman Area Transportation Plan, 2001 Update – Recommended Major Improvements (1) Project Number2 to 3 Lane ClassificationCity/ State Description From ToRoadway Class Feature Section LengthLanes AddedTotal Lane Miles1 full reconstruct StateS 19th Ave College St Main StArterialAdd Lanes and Reconstruct 3-5 Lanes 2D-4D0.6 2 1.22 full reconstruct StateS 19th Ave Kagy Blvd College StArterialAdd Lanes and Reconstruct 3-5 Lanes 2D-4D0.8 2 1.63offsetCityKagy Blvd S 19th Ave Willson AveArterialAdd Lanes and Reconstruct 2-3 Lanes 2U-2D1.4 1 1.44offsetCityS 3rd Ave Graf St Kagy BlvdCollectorAdd Lanes and Reconstruct 2-3 Lanes 2U-2D1.9 1 1.95 full reconstruct StateRouse Ave Oak Street Story Mill RdArterialAdd Lanes and Reconstruct 2-3 Lanes 2U-2D1.0 1 1.06 full reconstruct CityCollege St W Main St S 19th AveArterialAdd Lanes and Reconstruct 2-5 Lanes 2U-4D0.5 3 1.57 city/developer CityCottonwood Rd-Part 1 Stucky Rd Huffine LnArterialAdd Lanes and Reconstruct 2-3 Lanes 2U-2D1.0 1 1.08offsetCityCottonwood Rd-Part 2 Huffine Ln Oak StreetArterialAdd Lanes and Reconstruct 2-5 Lanes 2U-4D1.5 3 4.59 city/developer CityCottonwood Rd-Part 3 Oak Street Valley Center RdArterialAdd Lanes and Reconstruct 2-3 Lanes 2U-2D2.5 1 2.510 city/developer CityFowler/Davis Ave Oak Street Valley Center RdArterialAdd Lanes and Reconstruct 2-3 Lanes 2U-2D2.2 1 2.211 full reconstruct CityDurston Road Fowler Avenue Cottonwood RdArterialAdd Lanes and Reconstruct 2-3 Lanes 2U-2D1.0 1 1.012 new construction CityOak Street N 19th Ave Cottonwood RdArterialNew Road Construction - 3 Lanes 0-2D1.1 3 3.313 offset CityOak Street N 19th Ave Cottonwood RdArterialAdd Lanes and Reconstruct 2-3 Lanes 2U-2D0.9 1 0.9Total24.0City Roads 2-3 Additional Lane (Offset)(2)81% 4.2City Roads 2-3 Additional Lane (Reconstruction)(3)19% 1.0 (1) Greater Bozeman Area Transportation Plan, 2001 Update and discussion with City staff regarding projects that have been constructed since the initial development of the plan. (2) Sum of total lane miles for Projects 3, 4 and 13 (3) Sum of total lane miles for Project 11 Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 B-6 Impact Fee Study Table B-4 Greater Bozeman Area Transportation Plan, 2001 Update – Recommended Major Improvements Lane Mile Summary Lane Miles PercentageLane Miles Percentage0 to 3(1)3.316%0.0 0% 3.32 to 3 (city/developer)(2)5.728%0.0 0% 5.72 to 3 (additional lane)(3)5.226%1.026%6.23 to 5(4)6.030%2.874%8.8Total 20.2 100% 3.8 100% 24.0Total Lane MilesProject TypeCity Roads State Roads (1) Source: Table B-3, total lane miles for project 12 (2) Source: Table B-3, total lane miles for projects 7, 9, and 10 (3) Source: Table B-3 for city roads and state roads (sum of projects 3, 4, 11, and 13 for city roads; project 5 for state roads) (4) Source: Table B-3 for city and state roads (sum of projects 6 and 8 for city roads; sum of projects 1 and 2 for state roads) Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 B-7 Impact Fee Study Table B-5 Weighted Average Construction Cost City Roads (2 to 3 Lane Sections – Offset and Reconstruction) (in 2006 Dollars) Jurisdiction Project FeatureCost per Lane Mile(3)Weight(4)Weighted Cost per Lane Mile(5)Full Reconstruct with Added Turn Lane(1)$4,800,000 19% $912,000Offset(2) $4,200,000 81% $3,402,000City Weighted Construction Cost per Lane Mile (2 to 3 Lanes)(6):$4,314,000City (1) Full reconstruction estimates that the City pays 100 percent for reconstructing the existing two lanes, adding, the third lane, new curb/gutter/sidewalk on one side (existing to remain on the other side), and all associated roadway costs. Note, the cost includes the addition of the third lane and the cost per lane mile for adding a travel lane (2) Offset construction estimates reasonable and usable sub-base on existing lanes overlaid with three-quarter inch of new asphalt. It also includes the cost of striping, new signals, drainage needs, and utility extensions to make the roadway segment functional (3) Cost per lane mile derived based on a review of quantities associated with each improvement type using unit prices from recently bid city projects (4) Source: Greater Bozeman Area Transportation Plan, 2001 Update projects adjusted by city staff and consultant comments and review (see Table B-3) (5) Cost per lane mile (Item 3) multiplied by weight (Item 4) for city project features (6) Sum of weighted cost per lane mile (Item 5) for city 2 to 3 lane projects Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 B-8 Impact Fee Study Table B-6 Weighted Average Construction Cost City and State Roads (in 2006 Dollars) Jurisdiction Project FeatureCost per Lane Mile Weight(7)Weighted Cost per Lane Mile(8)0-3 Lanes(1)$1,900,00016%$304,0002-3 Lanes - New Road City Contribution(2)$1,500,00028%$420,0002-3 Lanes - Offset and Reconstruction(3)$4,314,000 26% $1,121,6403-5 Lanes(4)$3,120,764 30% $936,229City Total Weighted Construction Cost per Lane Mile(9):$2,781,8692-3 Lanes(5)$4,314,000 26% $1,121,6403-5 Lanes(6)$3,120,764 74% $2,309,365State Total Weighted Construction Cost per Lane Mile(10):$3,431,005CityState (1) This improvement type estimates that the City pays for the cost associated with all three brand new lanes in a corridor where no road currently exists. These improvements will be constructed along corridors with no anticipated adjacent development to pay for the construction of the two new lanes consistent with the city code. (2) This improvement type estimates that the City only pays for the costs associated with a third lane in a corridor where no road currently exists. Given current city policy, the developer pays for the new construction of the two travel lanes associated with this improvement type. (3) Source: Table B-5 (4) Source: Table B-2, Item (b) (5) Source: Table B-5 (6) Source: Table B-2, Item (b) (7) Source: Table B-4 (8) Cost per lane mile multiplied by weight (Item 7) for city and state project features (9) Sum of weighted cost per lane mile (Item 8) for city project features (10) Sum of weighted cost per lane mile (Item 8) for state project features Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 B-9 Impact Fee Study Table B-7 Lane Mile Distribution Jurisdiction Lane Miles(1) Lane Mile Distribution City 20.2 84% State 3.8 16% Total 24.0 100% (1) Source: Table B-4 Table B-8 Weighted Average Cost per Lane Mile (in 2006 Dollars) Cost Type City Roads State Roads City and State Roads(5) Design (1) $236,459 $343,101 $253,522 Construction(2) $2,781,869 $3,431,005 $2,885,731 Right-of-Way(3) $276,316 $335,446 $285,777 CEI(4)$236,459 $343,101 $253,522 Total $3,531,103 $4,452,653 $3,678,552 (1) City roads estimated at 8.5 percent and state roads at 10 percent of the construction cost based on discussion with City and MDOT staff respectively (2) Source: Table B-6 for city and state roads respectively (3) Source: Table B-1, Item (a) for city roads and Table B-2, Item (a) for state roads (4) City roads estimated at 8.5 percent and state roads at 10 percent of construction cost based on discussion with City and MDOT staff respectively (5) Lane mile distribution from Table B-7 (84 percent city, 16 percent state), multiplied by the design, construction, CEI, and ROW phase costs by jurisdiction to develop a weighted average cost per lane mile Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 B-10 Impact Fee Study Table B-9 City of Bozeman Capacity Calculations Jurisdiction Project FeatureInitial Capacity(5)Final Capacity(6)Capacity Added(7)Lanes Added(8)Capacity Added per Lane Mile(9)Weight(10)Weighted Capacity Added per Lane Mile(11)0-3 Lanes(1)022,50022,50037,50016%1,2002-3 Lanes - New Road City Contribution(2)15,00022,5007,50017,50028%2,1002-3 Lanes - Offset and Reconstruction(3)15,000 22,500 7,500 1 7,50026%1,9503-5 Lanes(4)22,500 43,750 21,250 2 10,62530%3,188City Weighted Average Capacity Added(12)8,4382-3 Lanes(3)15,000 22,500 7,500 1 7,500 26% 1,9503-5 Lanes(4)22,500 43,750 21,250 2 10,625 74% 7,863State Weighted Average Capacity Added(13)9,813CityState (1) Project includes the initial construction of two travel lanes and addition of a continuous left turn lane to a two lane undivided roadway (2) Project includes the addition of a continuous left turn lane to a two lane undivided roadway. This project type estimates that the city will only contribute the funds associated with the addition of the third lane with the developer construction the first two lanes (3) Project includes the addition of a continuous left turn lane to a two lane undivided roadway (4) Project includes the addition of two travel lanes to a two lane divided roadway (5) Source: Table 4-1, Greater Bozeman Area Transportation Plan, 2001 Update ideal management condition volumes (6) Source: Table 4-1, Greater Bozeman Area Transportation Plan, 2001 Update ideal management condition volumes (7) Final capacity (Item 6) less initial capacity (Item 5) (8) Total lanes added based on project feature (9) Capacity added (Item 7) divided by lanes added (Item 8) (10) Source: Table B-4 (11) Capacity added per lane mile (Item 9) multiplied by weight (Item 10) for city project features (0 to 3 Lanes, 2 to 3 Lanes and 3 to 5 Lanes) (12) Sum of weighted capacity added per lane mile (Item 11) for city project features (13) Sum of weighted capacity added per lane mile (Item 11) for state project features APPENDIX C Credit Component Calculations Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 C-1 Impact Fee Study Montana Department of Transportation Fuel Tax Distribution Currently, the primary source of revenue for capacity expansion projects in the City of Bozeman is the impact fees and federal and state gas tax revenues. As discussed in the report, the city is allocated a portion of the federal and state gas tax revenues using a formula that accounts for lane miles and population as outlined in MCA 15-70-101. Ad valorem is another source of revenue and is presented in Appendix D of this report. The methodology used to calculate the fuel tax distribution per penny of gas tax is based on the following process summarized below and presented in Table C-1. It should be noted that the fuel tax distribution was calculated for Gallatin County since the impact fee is based on consumption of capacity on all roads regardless of ownership (city, county, and state), the revenue credit is applied to new development in the same manner. • Estimating the value per penny using the 2006 gross gasoline tax of $135,162,030 divided by 27 pennies • Calculating the value per penny per penny of gas tax • Estimating the fuel tax distribution in Gallatin County based on the value per penny per person multiplied by the 2006 population estimate Table C-1 MDOT Fuel Tax Distribution per Penny Item Value Value per Penny - State of Montana(1)$5,006,001 State of Montana 2006 Population Estimate(2)942,500 Value per Penny per Person(3)$5.31 Gallatin County 2006 Population Estimate(4)80,470 MDOT Fuel Tax Distribution per Penny to Gallatin County (5)$427,296 (1) Montana Department of Transportation (2), (4) 2006 population estimate obtained by applying the 2000-2005 average annual growth rate; 2000 population obtained from Census, 2005 population estimate provided by the Montana Department of Commerce, Census and Economics Information Center. (3) Value per penny (Item 1) divided by the 2006 population (Item 2) (5) Value per penny per person (Item 3) multiplied Gallatin County 2006 population (Item 4) Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 C-2 Impact Fee Study Gas Tax Credit City Portion A review of the City’s roadway projects and its funding sources reveals that the City uses all gas tax revenues on maintenance projects only. Because no capacity expansion projects are funded with this source now, or in the foreseeable future, no gas tax credit can be applied for City spending. State Portion In the calculation of the equivalent pennies of gas tax from the State, the MDOT Work Program was reviewed for capacity expansion projects in the City of Bozeman, as well as Gallatin County, for the 9-year period from 2000 to 2008. The two years of “future” roadway projects from the currently adopted 2007-2008 Work Program indicate a total state expenditure of almost $26.4 million for capacity-adding projects in the city and county. The specific State projects that were utilized in the equivalent penny calculations are summarized in Tables C-2 through C-3. On an annual basis, this level of expenditure is equivalent to 30.8 pennies of gas tax revenue. Comparatively, the total cost of the capacity-adding projects for the 7-year “historical” period from 2000 to 2006 equates to 4.3 pennies. The combined weighted average over the 9-year total of state expenditures in the City for capacity-adding roadway projects results in a total equivalency of 10.2 pennies. Table C-4 documents this calculation. Note that because most of the construction expenditures for the projects included in this analysis are programmed for construction in 2007 and 2008, the historical expenditures consist primarily of design costs only. Tindale-Oliver & Associates, Inc City of Bozeman January 2008 C-3 Impact Fee Study Table C-2 MDOT FY 2000 - 2006 Work Program – City of Bozeman and Gallatin County Expansion Projects Project NumberDescription On/From/To 2000 2001 2002 2003 2004 2005 2006 Total City of Bozeman Capacity Expansion Projects4918 Intersection Upgrade/Signals S 19th & College $0 $0 $616 $47,787 $75,924 $23,009 $79,511 $226,8474555 Intersection Upgrade/Signals Citywide $0 $5,652 $26,883 $22,333 $9,743 $13,526 $11,862 $89,9994713 Intersection Upgrade/Signals Signal- 19th & Koch $0 $0 $1,922 $10,142 $11,566 $14,346 $3,178 $41,1545376 Intersection Upgrade/Signals College St Signal $0 $0 $0 $0 $16,760 $16,902 $43,264 $76,9264952 Add Lanes & Reconstruct Babcock to Kagy $0 $0 $2,245 $669 $4,457 $5,696 $152,967 $166,0344805 Add Lanes & Reconstruct Rouse Ave $0 $0 $905 $2,153 $4,958 $41,018 $582,145 $631,179Gallatin County Capacity Expansion Projects4471 Intersection Upgrade/Signals Main & Jackrabbit $695 $3,855 $118,601 $109,155 $52,720 $106,867 $3,508,755 $3,900,6484008 Add Turn Lanes Little Bear Rd $39,009 $16,416 $51,300 $18,654 $904,308 $0 $0 $1,029,6874009 Intersection Upgrade/Signals US 20/US 191 Int $10,241 $55,725 $1,047,018 $0 $0 $0 $0 $1,112,9844026 Add Turn Lanes Turn Bays-S of Belgrade $33,371 $32,822 $15,468 $651,732 $0 $0 $0 $733,3934306 Add Lanes & Reconstruct Four Corners-North $615 $124,940 $135,913 $36,258 $44 $63,033 $139,207 $500,0104433 Add Turn Lanes W of Bozeman $0 $23,320 $23,025 $25,859 $73,426 $1,516,029 $0 $1,661,6594179 Intersection Upgrade/Signals 19th & Main$7,805 $61,508 $80,289 $56,445 $2,508,746 $0 ($2,000) $2,712,793Total $91,736 $324,238 $1,504,185 $981,187 $3,662,652 $1,800,426 $4,518,889 $12,883,313 Source: Montana Department of Transportation Tindale-Oliver & Associates, Inc City of Bozeman January 2008 C-4 Impact Fee Study Table C-3 MDOT FY 2007 - 2008 Work Program – City of Bozeman and Gallatin County Expansion Projects (1) Project NumberDescription On/From/To 2007 2008 Total City of Bozeman Capacity Expansion Projects4918 Intersection Upgrade/Signals S. 19th & College $3,962,423 $0 $3,962,4234555 Intersection Upgrade/Signals Citywide Signals - Bozeman $3,016,634 $0 $3,016,6344713 Intersection Upgrade/Signals Signal - 19th & Koch - Bozeman $232,737 $0 $232,7375376 Intersection Upgrade/Signals 2002- College Street Signal - Bozeman $278,769 $0 $278,7694952 Add Lanes & Reconstruct S. 19th Ave. from Babcock St. to Kagy Blvd. - Bozeman $0 $9,263,758 $9,263,7584805Add Lanes & Reconstruct(2)Rouse Avenue from Main St. to Story Mill Rd. - Bozeman $411,451 $0 $411,451Gallatin County Capacity Expansion Projects4306 Add Lanes & Reconstruct Four Corners- North $7,193 $9,164,693 $9,171,886Total $7,909,207 $18,428,451 $26,337,658 (1) Source: Montana Department of Transportation (2) Based on discussion with city staff, the construction phase of this project has been postponed until beyond 2011. As such the revenue credit has been adjusted accordingly. Table C-4 Equivalent Penny Calculation for State Portion (1) SourceCost of Projects(2)Number of YearsGas Tax Distribution to Gallatin County(3)Annual Revenue(4)Equivalent PenniesHistorical Work Program (2000-2006) $12,883,313 7$427,296 $1,840,473 $0.043Future Work Program (2007-2008) $26,337,6582$427,296 $13,168,829 $0.308Total $39,220,971 9$427,296 $4,357,886 $0.102 (1) Source: Montana Department of Transportation (2) Source: Table C-2 for the historical work program and Table C-3 for the future work program (3) Source: Table C-1 (4) Total cost of projects (Item 2) divided by number of years. Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 C-5 Impact Fee Study Table C-5 Average Motor Vehicle Fuel Efficiency – Excluding Interstate Travel (1) 19.7 6.7 @ 19.7 mpg @ 6.7 mpgOther Arterial Rural356,437,241,650 40,123,037,750 396,560,279,400 90% 10%Other Rural348,080,891,010 28,852,429,199 376,933,320,209 92% 8%Other Urban1,414,612,160,557 62,088,922,445 1,476,701,083,001 96% 4%Total 2,119,130,293,217 131,064,389,393 2,250,194,682,610 94% 6%Gallons @ 19.7 mpg Gallons @ 6.7 mpg 2,250,195 miles (millions)Other Arterial Rural18,093,260,997 5,988,513,097 24,081,774,094 127,132 gallons (millions)Other Rural17,669,080,762 4,306,332,716 21,975,413,478 17.70 mpgOther Urban71,807,723,886 9,267,003,350 81,074,727,236 Total 107,570,065,645 19,561,849,163 127,131,914,808 Vehicle Miles of Travel (VMT) @Fuel ConsumedTravelPercent VMTTotal Mileage and Fuel (1) Source: Table VM-1 (Section V) of the document, Highway Statistics 2005, Office of Highway Policy Information, Federal Highway Administration, Washington, D.C (See Table C-6) Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 C-6 Impact Fee Study Table C-6 Annual Vehicle Miles Traveled and Related Data – By Highway Category and Vehicle Type (1) SUBTOTALSSINGLE-UNIT PASSENGER SINGLE-UNIT ALLYEAR ITEM OTHER 2-AXLE 6-TIRE CARS 2-AXLE 6-TIRE MOTORPASSENGER MOTOR- BUSES2-AXLE 4-TIREOR MORE COMBINATION AND OR MORE AND VEHICLESCARS CYCLES VEHICLES 2/ TRUCKS 3/ TRUCKS OTHER 2-AXLE COMBINATION4-TIRE VEHICLESTRUCKS Motor-Vehicle Travel: (millions of vehicle-miles)2005 Interstate Rural 122,470 1,433 971 82,208 7,758 43,950 204,679 51,708 258,7902004 129,415 1,354 999 83,181 7,713 43,583 212,596 51,296 266,2452005 Other Arterial Rural 208,127 1,411 961 148,310 14,102 26,021356,437 40,123398,9322004 217,495 1,435 992 148,802 14,276 26,414 366,297 40,690 409,4132005 Other Rural 208,472 1,624 1,658 139,609 14,716 14,136348,081 28,852380,2152004 217,599 1,593 1,700 142,532 15,028 14,316 360,131 29,344 392,7682005 All Rural 539,070 4,467 3,589 370,127 36,577 84,107 909,197 120,683 1,037,9372004 564,509 4,381 3,691 374,515 37,017 84,313 939,024 121,330 1,068,4262005 Interstate Urban 259,602 2,296 964 166,144 10,492 29,572 425,746 40,063 469,0702004 258,666 2,089 986 155,714 9,729 28,355 414,379 38,083 455,5382005 Other Urban 891,293 4,006 2,093 523,319 32,105 29,9841,414,612 62,0891,482,8002004 876,715 3,652 2,124 496,935 31,696 29,702 1,373,651 61,398 1,440,8242005 All Urban 1,150,895 6,302 3,057 689,463 42,597 59,556 1,840,359 102,152 1,951,8702004 1,135,381 5,741 3,110 652,649 41,424 58,056 1,788,030 99,481 1,896,3622005 Total Rural and Urban 1,689,965 10,770 6,646 1,059,590 79,174 143,662 2,749,555 222,836 2,989,8072004 1,699,890 10,122 6,801 1,027,164 78,441 142,370 2,727,054 220,811 2,964,7882005 Number of motor vehicles 136,568,083 6,227,146 807,053 95,336,839 6,395,240 2,086,759 231,904,922 8,481,999 247,421,1202004 registered 4/ 136,430,651 5,767,934 795,274 91,845,327 6,161,028 2,010,335 228,275,978 8,171,364 243,010,5502005 Average miles traveled 12,375 1,729 8,235 11,114 12,380 68,845 11,856 26,272 12,0842004 per vehicle 12,460 1,755 8,552 11,184 12,732 70,819 11,946 27,023 12,2002005 Person-miles of travel 5/ 2,670,145 13,677 140,910 1,836,988 79,174 143,662 4,507,133 222,836 4,884,5572004 (millions) 2,685,827 12,855 144,188 1,780,771 78,441 142,370 4,466,598 220,811 4,844,4522005 Fuel consumed 6/ 73,870,371 215,393 1,329,254 65,419,170 9,042,283 24,410,512 139,289,541 33,452,796 174,286,9842004 (thousand gallons) 75,401,891 202,447 1,360,178 63,417,148 8,958,622 24,190,904 138,819,039 33,149,526 173,531,1902005 Average fuel consumption per 541 35 1,647 686 1,414 11,698 601 3,944 7042004 vehicle (gallons) 6/ 553 35 1,710 690 1,454 12,033 608 4,057 7142005 Average miles traveled per 22.9 50.0 5.0 16.2 8.8 5.919.7 6.717.22004 gallon of fuel consumed 6/ 22.5 50.0 5.0 16.2 8.8 5.9 19.6 6.7 17.1 1/ The 50 states and the District of Columbia report travel by highway category, number of motor vehicles registered, and total fuel consumed. The travel and fuel data by vehicle type and stratification of trucks are estimated by the Federal Highway Administration (FHWA). Entries for 2004 may have been revised based on the availability of more current data. Estimation procedures include use of State-supplied data, the 2002 Census of Transportation Vehicle Inventory and Use Survey (VIUS), and other sources. Some States may still be using 1990 Census-based urbanized area boundaries which may in turn affect highway data by category. 2/ Other 2-Axle 4-Tire Vehicles which are not passenger cars. These include vans, pickup trucks, and sport/utility vehicles. 3/ Single-Unit 2-Axle 6-Tire or More Trucks on a single frame with at least two axles and six tires. 4/ Truck registration figures are from tables MV-1 and MV-9 with truck distribution estimated by the FHWA using the 2002 VIUS. 5/ Vehicle occupancy is estimated by the FHWA from the 2001 National Household Travel Survey (NHTS) with nominal values for heavy trucks. 6/ Total fuel consumption figures are from tables MF-21 and MF-27. Distribution by vehicle type is estimated by the FHWA based on miles per gallon for both diesel and gasoline powered vehicles using State-supplied data, the 2002 VIUS, and other sources with nominal values for motorcycles and buses (revised). APPENDIX D Transportation Ad Valorem Credit Calculations Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 D-1 Impact Fee Study This Appendix presents the calculations used to determine the credit due to ad valorem tax revenues being used to fund capacity expansion projects. The following sections provide an explanation of credit calculations. Residential Land Uses In determining the ad valorem credit for residential land uses, the study evaluated recent single family home sales and determined the taxable value of a home. Discussions with the City of Bozeman Chamber of Commerce provided a typical home value that could be used for estimating the ad valorem credit for residential land uses. Staff at the Chamber of Commerce provided information regarding recent home sales in the City of Bozeman. Based on this review of sales information, the average market value of a single family home was estimated at $346,112. To determine, the average taxable value of a single family home, the relationship between market and taxable values for non-residential uses was evaluated. Based on this analysis, a taxable value of approximately $211,000 was used for single family homes in the City of Bozeman. It should be noted that the ad valorem revenues used for transportation capital projects are estimated as a percentage of the City’s ad valorem revenues based on the General Obligation Bond being used by the City of Bozeman to finance transportation improvements. Over the next five years and beyond, this amount is projected to be approximately four percent per year based on the capacity expansion expenditures of the General Obligation Bond (specifically the ad valorem revenues being used to retire this debt). Table D-1 presents the projected ad valorem contributions of a new home over a 24- year period, beginning with the 2006 taxable value of approximately $211,000. An eight percent annual increase is applied to provide a generous credit (which results on a conservative impact fee) for the increase in the value of homes in the City of Bozeman. This is based on the increase in taxable values observed between 2002 and 2006. The resulting ad valorem taxes are brought to present value based on an interest rate of 4.6 percent, which is consistent with the interest rate at which the City currently borrows. Table D-1 also provides the portion of the ad valorem collections that would be applied toward transportation capital expansion projects, and the total credit per square foot. Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 D-2 Impact Fee Study Table D-1 Ad Valorem Credit Calculation for Single Family Home Land Use (Based on Taxable Value) Total allocation from the General Fund FY 2007(1)$6,993,655 City General Fund Millage(2)110.57 Revenues generated from 1-mil(3)$63,251 Annual ad valorem revenue that goes to transportation capacity(4)$271,417 Total mills dedicated transportation capacity(5)4.29 Percentage of millage used for transportation capacity addition projects(6)4% Average value of a home subject to tax(7)$211,128 Annual increase in citywide taxable values(8)8% Value Used Ad Valorem Present for Credit for Transportation(10)Value(11) 2007 $211,128 $211 $8 $8 2008 $7 $7 2009 $6 $5 2010 $6 $5 2011 $6 $5 2012 $6 $5 2013 $6 $5 2014 $6 $4 2015 $6 $4 2016 $6 $4 2017 $6 $4 2018 $6 $4 2019 $6 $3 2020 $6 $3 2021 $6 $3 2022 $6 $3 2023 $6 $3 2024 $6 $3 2025 $6 $3 2026 $6 $3 2027 $6 $2 2028 $6 $2 2029 $6 $2 2030 $6 $2 Total $147 $92 Square footage(12)2,219 Credit per square foot $0.04 Interest Rate(13)4.6% Period 24 Year 1-Mil Tax (9) Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 D-3 Impact Fee Study (1) Source: City of Bozeman FY 2006-2007 Approved Budget; General Fund allocation obtained by attributing 68 percent of the total property taxes levied in 2007 to the General Fund (General Fund Levy of 110.57 divided by Total Levies of 163.42 is 68%) (2) Total millage assessed to city residents within Bozeman applied to the General Fund. (3) Total allocation from the ad valorem FY 07 (Item 1) divided by City’s millage rate (Item 2). (4) Portion of the General Obligation Bond being used for capacity expansion. (5) Annual ad valorem that goes to transportation capacity (Item 4) divided by revenue generated by 1-mil (Item 3). (6) Total mills dedicated to transportation capacity (Item 5) divided by city general fund millage (Item 2). (7) Source: Market value obtained from discussions with local realtors and adjusted to taxable value (39%) (8) Annual increase in total citywide taxable values between 2002 and 2006 in the City of Bozeman. (9) Average home value used for credit divided by 1,000. (10) 1-mil tax (Item 8) multiplied by the percentage dedicated to transportation capital additions (Item 5). (11) Present value of the ad valorem for transportation (Item 9) based on an annual interest rate of 4.6 percent (Item 12). (12) Average size of a home based on 2004 sales. (13) 4.6 percent discount rate is used based on discussions with the City’s Finance Department To determine the credit for other residential uses (with the exception of multi-family), ad valorem credit per square foot is calculated based on the above table ($0.04 per square foot) and multiplied by the average size of each category. The average size is determined based on home size information obtained from the Montana Department of Revenue. Non-Residential Land Uses Table D-2 provides an explanation of how the ad valorem credit was calculated for non- residential land uses. It should be noted that the ad valorem credit calculations for these land uses represent broad estimates based on data obtained from the Montana Department of Revenue, as available, and the Consultant’s experience in other jurisdictions and knowledge of the industry. Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 D-4 Impact Fee Study Table D-2 Ad Valorem Credit Calculation for Non-Residential Land Uses ITE LUC Land Use UnitTaxable Value(1)Annual Portion to Expansion(2)Total Ad Valorem Credit (3)110 Industrial sq ft $66,020 $2.64 $19.82150 Warehouse sq ft $44,080 $1.76 $13.90151 Mini Warehouse sq ft $59,840 $2.39 $18.65220 Multi-Family sq ft $135,391 $5.42 $42.47310 Hotel room $23,884 $0.96 $7.47320 Motel sq ft $17,913 $0.72 $5.64411 City Park acre $85,000 $3.40 $26.59430 Golf Course hole $595,000 $23.80 $186.25444 Movie Theater sf $300,000 $12.00 $93.94520 Schools student $40,000 $1.60 $12.47565 Daycare Center sq ft $222,000 $8.88 $69.47610 Hospital sq ft $255,500 $10.22 $79.92620 Nursing Home bed $20,000 $0.80 $6.25710 Office (Multiple stories) sq ft $88,970 $3.56 $27.86720 Medical Office sq ft $63,440 $2.54 $19.91812 Building/Lumber Storage sq ft $15,680 $0.63 $4.95813 Discount Store sq ft $60,120 $2.40 $18.68820 Retail/Office (1-2 stories) sq ft $62,510 $2.50 $19.62851 Convenience Store sq ft $91,140 $3.65 $28.58912 Banks sq ft $121,980 $4.88 $38.19931 Quality Restaurant sq ft $100,820 $4.03 $31.59934 Fast-Food Restaurant sq ft $127,410 $5.10 $39.92 (1) Source: Montana Department of Revenue (2) Annual ad valorem credit based on one percent dedication to capacity expansion expenditures. (3) Total ad valorem credit based over a 25-year period in present day dollars. APPENDIX E Analysis of Travel Behavior of Low-Income Households Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 E-1 Impact Fee Study Analysis of the Travel Behavior of Low-Income Households The City of Bozeman has begun the process of evaluating workforce and affordable housing options within the city planning process. To accommodate this, an analysis was completed on the comparative relationship between housing unit size and household travel behavior. In addition, an analysis was completed on the travel behavior of lower income households. These analyses utilized data from the 2001 National Household Travel Survey (NHTS) and the 2005 American Housing Survey (AHS) to examine the overall trip-making characteristics of low-income households in the United States. Table E-1 (presented at the end of this section) presents the existing trip characteristics being utilized in the proposed impact fee schedule for the Single Family (Detached) subcategory. The 2001 NHTS database was used to assess average annual household vehicle miles of travel (VMT) for various annual household income levels. In addition, the 2005 AHS database was used to compare median annual family/household incomes with housing unit size. It is important to recognize that the use of the income variable in each of these databases is completed simply to provide a convenient linking mechanism between household VMT from the NHTS and housing unit size from the AHS. This review helped develop three potential tiers for the Single Family (Detached) category based on ranges of housing unit size: less than 1,500 sf, 1,500 to 2,499 sf, and 2,500 sf or more. The results of the analyses of these two sources are included in Tables E-2 and E- 4(presented at the end of this section). First, the data shown in Table E-2 indicate that the median income in the U.S. for families/ households living in housing units smaller than 1,500 square feet in size ($34,579) is significantly lower than even the overall median income for the U.S. ($49,702). Then, in Table E-4, annual average household VMT was calculated from the NHTS database for a number of different income levels and ranges related to the resulting AHS income data in Table E-2. These ranges are selected based on the reporting of NHTS data in income ranges of $4,999 increments (i.e. $30,000 to $34,999). In addition, annual average household VMT was calculated for two additional income levels based on the 2007 Gallatin County definitions for low income (<$46,720) and very low income (<$29,200) households, based on a household size of 4 persons as shown in Table E-3(presented at the end of this section). Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 E-2 Impact Fee Study The results of these analyses indicate that the most logical income-restricted categories to utilize in conjunction with the smallest Single Family (Detached) housing unit size is the less-than-$46,720 (i.e., median of $23,360 category from Table E-4) and the less-than- $29,200 (i.e., median of $14,600 category from Table E-4) segments. In order to calculate a corresponding trip rate for these new subcategories, however, it was necessary to rely on comparative ratios. The term median is used since as mentioned previously, the NHS data is stratified in increments and the specific income level was estimated using an interpolation procedure. As an example, consider the subcategory for the Single Family (Detached) that is less than 1,500 sf and low income. First, it was determined that the average annual household VMT for the median income level of the less-than-$46,720 segment (median of $23,360 category from Table E-4) is 16,701 miles. This figure was then compared to the overall average annual VMT per household in the U.S., normalized to the median-of-$57,167 (28,541 miles) category to derive a ratio of 0.585. Next, this ratio was applied to the daily VMT for the average Single Family (Detached) housing unit size (i.e., 1,500 to 2,499 s.f.) to generate a daily VMT of 19.71 for the new subcategory, as shown in Table E-5. This daily VMT figure was then divided by the proposed assessable trip length of 3.52 miles to obtain a typical trip rate of 5.60 trips per day. 1 It should be noted that the second income-restricted subcategory was derived in this same manner for the Single Family (Detached) residential land use category of less than 1,500 s.f. and very low income, or annual household income of less than $29,200 (using the normalized ratio to the mean for the median of $14,600 income category from Table E-4). The travel rate calculations for this subcategory are the same as that described previously for the other new subcategory. The calculated daily trip rate for this subcategory is 3.88 trips. Then, these two trip rates were placed in the impact fee schedule to generate a net impact fee value for the new “income-restricted” subcategories. Table E-6 illustrates the impact that the incorporation of the housing unit size and low- income tiers for the Single Family (Detached) land use has on the City’s proposed impact fee schedule. As shown in the table, the net impact fee for a housing unit of less than 1,500 square feet and very low income is $2,171. The net impact fee for a housing unit of less than 1,500 square feet and low income is $3,147. 1 Assessable trip length is assumed to be 3.52 miles based on the trip characteristics studies performed in the City of Bozeman. Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 E-3 Impact Fee Study Table E-1 Proposed Values Excluding Tiering Assessable Daily Ratio Trip Rate Trip Length VMT to Mean Single Family (Detached) 9.57 3.52 33.69 1.00 Source: Proposed City of Bozeman Transportation Impact Fee Schedule. Table E-2 Table E-3 2005 AHS Median Income Data by Annual City of Bozeman Housing Unit Size (US) Income SHIP Definitions Less than 1,500 sf $34,579 1,500 to 2,499 sf $57,167 Median income ---> $58,400 2,500 sf or more $80,889 Low income ---> Less than $46,720 Mean of All Housing Unit Sizes $49,702 Very low income ---> Less than $29,200 Table E-4 2001 NHTS Travel Data by Annual Daily Ratio Normalized Annual HH Income (US) VMT/HH Days VMT to Mean to 1.128 Median of $14,600 11,559 365 31.67 0.457 0.405 Median of $23,360 16,701 365 45.76 0.660 0.585 Median of $34,579 20,976 365 57.47 0.829 0.735 Mean --->Total 25,294 365 69.30 1.000 Median of $57,167 28,541 365 78.19 1.128 1.000 Median of $80,889 32,285 365 88.45 1.276 1.131 Source: 2001 National Household Travel Survey Database, Federal Highway Administration. Table E-5 Estimation of Trip Rate By Tier Assessable Daily Ratio Trip Rate Trip Length VMT to Mean Single Family (Detached) Less than 1,500 sf and very low income 3.88 3.52 13.64 0.405 Less than 1,500 sf and low income 5.60 3.52 19.71 0.585 Less than 1,500 sf 7.03 3.52 24.76 0.735 Mean --->1,500 to 2,499 sf 9.57 3.52 33.69 1.000 2,500 sf or larger 10.82 3.52 38.10 1.131 Table E-6 Impact of Tiering on Fee Schedule Assessable Daily Net Trip Rate Trip Length VMT Fee Single Family (Detached) Less than 1,500 sf and very low income 3.88 3.52 13.64 $2,171 Less than 1,500 sf and low income 5.60 3.52 19.71 $3,147 Less than 1,500 sf 7.03 3.52 24.76 $3,968 Mean --->1,500 to 2,499 sf 9.57 3.52 33.69 $5,396 2,500 sf or larger 10.82 3.52 38.10 $6,082 Source: American Housing Survey for the United States in 2005, U.S. Census Bureau, Table 2-18. Source: Gallatin County Average Median Income - "Road to Home" - Downpayment Assistance Program . Very low income is define as 50 percent of the median income and low income is 80 percent of the median income for a family of four persons. APPENDIX F Proposed City of Bozeman Transportation Impact Fee Schedule Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 F-1 Impact Fee Study Table F-1 Proposed City of Bozeman Transportation Impact Fee Schedule (Non-TED) Unit Construction Cost: $3,678,552$0.102 Capacity per lane mile: 8,658 Interstate Adjustment Factor: 15%25 Fuel Efficiency: 17.70 mpgCost per VMC: $424.874.6% Effective days per year: 365Recommended Assessable Total Recommended Recommended% New Total Annual Gas Ad Net Current Fee PercentITE Trip Trip Rate Trip Trip Trip Length % New Trips Net Impact Gas Tax Valorem Impact (100%) Increase/LUC Unit Rate Source Length Length Source Trips SourceVMT(1)Cost Tax Credit Credit Fee 1996 Study DecreaseRESIDENTIAL:210 Single Family (Detached)Less than 1,500 sf and very low income(2)du 3.88ITE (NPTS,AHS, Census)3.52 4.02Local Studies (Bozeman)100% n/a 5.80 $2,466 $16 $235 $60.00 $2,171 $2,241 97%Less than 1,500 sf and low income(3)du 5.60ITE (NPTS,AHS, Census)3.52 4.02Local Studies (Bozeman)100% n/a 8.38 $3,559 $24 $352 $60.00 $3,147 $2,241 140%Less than 1,500 sf du 7.03ITE (NPTS,AHS, Census)3.52 4.02Local Studies (Bozeman)100% n/a 10.52 $4,468 $30 $440 $60.00 $3,968 $2,241 177%1,500 to 2,499 sf du 9.57ITE (NPTS,AHS, Census)3.52 4.02Local Studies (Bozeman)100% n/a 14.32 $6,083 $40 $587 $100.00 $5,396 $2,241 241%2,500 sf or larger du 10.82ITE (NPTS,AHS, Census)3.52 4.02Local Studies (Bozeman)100% n/a 16.19 $6,877 $46 $675 $120.00 $6,082 $2,241 271%220 Apartments du 6.64Blend of ITE 7th & TC Studies3.10 3.60Same as LUC 230100% n/a 8.75 $3,717 $25 $367 $10.51 $3,339 $1,519 220%230 Residential Condominium/ Townhouse du 5.86 ITE 7th Edition 3.10 3.60Local Studies (Bozeman)100% n/a 7.72 $3,280 $22 $323 $10.51 $2,946 $1,519 194%240 Mobile Home Park du 4.99 ITE 7th Edition 2.02 2.52TC Studies (Adjusted)100% n/a 4.28 $1,820 $13 $191 $36.00 $1,593 $1,130 141%LODGING:310 Hotel room 8.30Blend of ITE 7th & TC Studies3.44 3.94TC Studies (Adjusted)66%TC Studies 8.01 $3,403 $23 $338 $1.93 $3,063 $2,040 150%320 Motel room 5.63 ITE 7th Edition 2.39 2.89TC Studies (Adjusted)77%TC Studies 4.40 $1,871 $13 $191 $1.55 $1,678 $2,040 82%RECREATION:430 Golf Course hole 35.74 ITE 7th Edition 2.37 2.87TIF Schedules (Adjusted)90%TC Studies 32.40 $13,766 $97 $1,424 $46.51 $12,295 $7,791 158%411 City Park acre 1.59 ITE 7th Edition 2.37 2.87Same as ITE LUC 43090%TC Studies 1.44 $612 $4 $59 $6.69 $546 $232 236%444 Movie Theaters 1,000 sf 38.00 ITE 7th Edition 1.22 1.72TC Studies (Adjusted)88%TC Studies 17.34 $7,367 $60 $881 $23.50 $6,463 $7,173 90%INSTITUTIONS:610 Hospital 1,000 sf 17.57 ITE 7th Edition 2.75 3.25TIF Schedules (Adjusted)77%TIF Schedules15.81 $6,718 $46 $675 $19.99 $6,023 $2,465 244%620 Nursing Home bed 2.48Blend of ITE 7th & TC Studies1.11 1.61TC Studies (Adjusted)89%TC Studies 1.04 $442 $4 $59 $1.69 $381 $788 48%Land UseGasoline Tax$$ per gallon to capital:Facility life (years):Interest rate: Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 F-2 Impact Fee Study Table F-1 (continued) Proposed City of Bozeman Transportation Impact Fee Schedule (Non-TED) Recommended Assessable Total Recommended Recommended% New Total Annual Gas Ad Net Current Fee PercentITE Trip Trip Rate Trip Trip Trip Length % New Trips Net Impact Gas Tax Valorem Impact (100%) Increase/LUC Unit Rate Source Length Length Source Trips SourceVMT(1)Cost Tax Credit Credit Fee 1996 Study DecreaseINSTITUTIONS:520 Elementary School student 1.29 ITE 7th Edition 1.94 2.44TIF Schedules (Adjusted)80%TIF Schedules0.85 $362 $3 $44 $3.14 $315 $190 166%530 High School student 1.71 ITE 7th Edition 1.94 2.44TIF Schedules (Adjusted)90%TIF Schedules1.27 $539 $4 $59 $3.14 $477 $402 119%540University (7,500 or fewer students)(4)student 2.00 ITE 7th Edition 2.37 2.87TIF Schedules (Adjusted)80%TIF Schedules1.61 $685 $5 $73 $3.14 $609 N/A N/A550University (more than 7,500 students)(4)student 1.50 ITE 7th Edition 2.37 2.87TIF Schedules (Adjusted)92%TIF Schedules1.39 $591 $4 $59 $3.14 $529 $1,349 39%560 Church/ Synagogue 1,000 sf 9.11 ITE 7th Edition 1.84 2.34TIF Schedules (Adjusted)90%TIF Schedules6.41 $2,724 $20 $294 $1.93 $2,428 $1,369 177%565 Day Care 1,000 sf 75.07Blend of ITE 7th & TC Studies0.87 1.37TC Studies (Adjusted)73%TC Studies 20.26 $8,609 $79 $1,159 $17.40 $7,433 $1,397 532%OFFICE:71050,000 sf or less(5)1,000 sf 15.65ITE 7th equation2.22 2.72Local Studies (Bozeman)71%Local Studies (Bozeman)10.48 $4,454 $32 $470 $6.95 $3,977 $3,895 102%71050,001-100,000 sf(6)1,000 sf 14.25ITE 7th equation2.22 2.72Local Studies (Bozeman)71%Local Studies (Bozeman)9.55 $4,056 $29 $426 $6.95 $3,623 $3,895 93%710100,001-200,000 sf(6)1,000 sf 12.15ITE 7th equation2.22 2.72Local Studies (Bozeman)71%Local Studies (Bozeman)8.14 $3,458 $25 $367 $6.95 $3,084 $3,895 79%710greater than 200,000 sf(6)1,000 sf 9.70ITE 7th equation2.22 2.72Local Studies (Bozeman)71%Local Studies (Bozeman)6.50 $2,761 $20 $294 $6.95 $2,460 $3,895 63%720 Medical Office 1,000 sf 35.95Blend of ITE 7th & TC Studies2.39 2.89TC Studies (Adjusted)69%TC Studies (Adjusted)25.20 $10,705 $75 $1,101 $19.91 $9,584 $7,081 135%RETAIL: 820under 50,000 sf(5)1,000 sf 86.56ITE 7th equation1.24 1.74TC Curve55%TC Curve25.09 $10,660 $87 $1,277 $4.95 $9,378 $6,341 148%82050,000-99,000 sf(6)1,000 sf 75.10ITE 7th equation1.38 1.88TC Curve58%TC Curve25.55 $10,854 $86 $1,262 $4.95 $9,587 $6,669 144%820100,000-199,000 sf(6)1,000 sf 58.93ITE 7th equation1.57 2.07TC Curve63%TC Curve24.77 $10,525 $81 $1,189 $4.95 $9,331 $6,283 149%820200,000-299,000 sf(6)1,000 sf 49.28ITE 7th equation1.62 2.12TC Curve67%TC Curve22.73 $9,658 $74 $1,086 $4.95 $8,567 $5,791 148%820greater than 300,000 sf(6)1,000 sf 38.66ITE 7th equation1.75 2.25TC Curve75%TC Curve21.57 $9,162 $69 $1,013 $4.95 $8,144 $5,462 149%812 Building Material/Lumber 1,000 sf 45.16 ITE 7th Edition 3.89 4.39TC Studies (Adjusted)74%TC Studies 55.25 $23,474 $154 $2,260 $4.95 $21,209 $3,750 566%813 Discount Super-Store 1,000 sf 49.21 ITE 7th Edition 3.66 4.16TC Studies (Adjusted)92%TC Studies 70.42 $29,921 $198 $2,906 $18.68 $26,996 $6,466 417%817 Nursery/Garden Center 1,000 sf 36.08 ITE 7th Edition 3.78 4.28Same as ITE LUC 89085%TIF Schedules49.27 $20,933 $138 $2,025 $4.95 $18,903 $3,326 568%Land Use Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 F-3 Impact Fee Study Table F-1 (continued) Proposed City of Bozeman Transportation Impact Fee Schedule (Non-TED) Recommended Assessable Total Recommended Recommended% New Total Annual Gas Ad Net Current Fee PercentITE Trip Trip Rate Trip Trip Trip Length % New Trips Net Impact Gas Tax Valorem Impact (100%) Increase/LUC Unit Rate Source Length Length Source Trips SourceVMT(1)Cost Tax Credit Credit Fee 1996 Study DecreaseRETAIL: 851 Convenience Store 1,000 sf 737.99 ITE 7th Edition 0.94 1.44TC Studies (Adjusted)41%TC Studies 120.88 $51,358 $458 $6,722 $28.58 $44,607 $13,716 325%931 Quality Restaurant 1,000 sf 91.10Blend of ITE 7th & TC Studies.1.95 2.45TC Studies (Adjusted)77%TC Studies 58.13 $24,700 $181 $2,656 $7.92 $22,036 $8,897 248%934 Fast Food Rest w/ Drive-Thru 1,000 sf 522.62Blend of ITE 7th & TC Studies.1.27 1.77TC Studies (Adjusted)58%TC Studies 163.61 $69,513 $564 $8,278 $9.95 $61,225 $11,749 521%841 New/ Used Auto Sales 1,000 sf 32.93Blend of ITE 7th & TC Studies2.85 3.35TC Studies (Adjusted)79%TC Studies 31.51 $13,388 $92 $1,350 $4.95 $12,033 $4,417 272%890 Furniture Store 1,000 sf 5.06ITE 7th Edition3.78 4.28TC Studies (Adjusted)54%TC Studies 4.39 $1,865 $12 $176 $4.95 $1,684 $400 421%912 Bank/ Savings Drive-in 1,000 sf 281.55Blend of ITE 7th & TC Studies1.53 2.03TC Studies (Adjusted)46%TC Studies 84.22 $35,781 $277 $4,065 $9.56 $31,706 $9,859 322%INDUSTRY:110 General Light Industrial 1,000 sf 6.97ITE 7th Edition2.21 2.71TIF Schedules (Adjusted)92%TC Studies 6.02 $2,559 $18 $264 $4.98 $2,290 $1,635 140%140 Manufacturing 1,000 sf 3.82ITE 7th Edition2.21 2.71TIF Schedules (Adjusted)92%TC Studies 3.30 $1,402 $10 $147 $4.98 $1,250 $904 138%150 Warehouse 1,000 sf 4.96ITE 7th Edition2.21 2.71TIF Schedules (Adjusted)92%TC Studies 4.29 $1,821 $13 $191 $3.41 $1,627 $1,144 142%151 Mini-Warehouse 1,000 sf 2.50ITE 7th Edition2.21 2.71TIF Schedules (Adjusted)92%TC Studies 2.16 $918 $7 $103 $4.77 $810 $614 132%Land Use (1) Net VMT calculated as ((Trip Generation Rate* Trip Length* % New Trips)*(1-Interstate/Toll Facility Adjustment Factor)/2). This reflects the unit of vehicle miles of capacity consumed per unit of development and is multiplied by the cost per vehicle mile of capacity to determine the total impact cost. (2) Defined as 50% of city median income based on 2007 Gallatin County Average Median Income (AMI) (3) Defined as 80% of city median income based on 2007 Gallatin County Average Median Income (AMI) (4) Impact fee to be assessed on structures with classroom facilities. All auxiliary structures such as administrative buildings and research centers are to be charged at the office land use rate. (5) The trip generation rate recommended for the office and retail less than 50,000 sf categories used the end-point of 50,000 (6) The trip generation rate recommended for all other office and retail tiered categories used the mid-point of each tier of the respective category Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 F-4 Impact Fee Study Table F-2 Proposed City of Bozeman Transportation Impact Fee Schedule (TED) Unit Construction Cost: $3,678,552$0.102 Capacity per lane mile: 8,658 Interstate Adjustment Factor: 15%25 Fuel Efficiency: 17.70 mpgCost per VMC: $424.874.6% Effective days per year: 365Recommended Assessable Total Recommended Recommended % New Total Annual Gas Ad Net Current Fee PercentITE Trip Trip Rate Trip Trip Trip Length % New Trips Net Impact Gas Tax Valorem Impact (100%) Increase/LUC Unit Rate Source Length Length Source Trips SourceVMT(1)Cost Tax Credit Credit Fee 1996 Study DecreaseRESIDENTIAL:210 Single Family (Detached)Less than 1,500 sf and very low income(1)du 3.88ITE (NPTS,AHS, Census)3.52 4.02Local Studies (Bozeman)100% n/a 5.80 $2,466 $16 $235 $60.00 $2,171 $2,241 97%Less than 1,500 sf and low income(2)du 5.60ITE (NPTS,AHS, Census)3.52 4.02Local Studies (Bozeman)100% n/a 8.38 $3,559 $24 $352 $60.00 $3,147 $2,241 140%Less than 1,500 sf du 7.03ITE (NPTS,AHS, Census)3.52 4.02Local Studies (Bozeman)100% n/a 10.52 $4,468 $30 $440 $60.00 $3,968 $2,241 177%1,500 to 2,499 sf du 9.57ITE (NPTS,AHS, Census)3.52 4.02Local Studies (Bozeman)100% n/a 14.32 $6,083 $40 $587 $100.00 $5,396 $2,241 241%2,500 sf or larger du 10.82ITE (NPTS,AHS, Census)3.52 4.02Local Studies (Bozeman)100% n/a 16.19 $6,877 $46 $675 $120.00 $6,082 $2,241 271%220 Apartments du 6.64Blend of ITE 7th & TC Studies3.10 3.60Same as LUC 230100% n/a 8.75 $3,717 $25 $367 $10.51 $3,339 $1,519 220%230 Residential Condominium/ Townhouse du 5.86 ITE 7th Edition 3.10 3.60Local Studies (Bozeman)100% n/a 7.72 $3,280 $22 $323 $10.51 $2,946 $1,519 194%240 Mobile Home Park du 4.99 ITE 7th Edition 2.02 2.52TC Studies (Adjusted)100% n/a 4.28 $1,820 $13 $191 $36.00 $1,593 $1,130 141%LODGING:310 Hotel room 8.30Blend of ITE 7th & TC Studies3.44 3.94TC Studies (Adjusted)61%City of Tampa CBD Study7.40 $3,145 $21 $308 $1.93 $2,835 $2,040 139%320 Motel room 5.63 ITE 7th Edition 2.39 2.89TC Studies (Adjusted)61%City of Tampa CBD Study3.49 $1,482 $10 $147 $1.55 $1,333 $2,040 65%RECREATION:430 Golf Course hole 35.74 ITE 7th Edition 2.37 2.87TIF Schedules (Adjusted)32%City of Tampa CBD Study11.52 $4,894 $35 $514 $46.51 $4,333 $7,791 56%411 City Park acre 1.59 ITE 7th Edition 2.37 2.87Same as ITE LUC 43032%City of Tampa CBD Study0.51 $218 $2 $29 $6.69 $182 $232 79%444 Movie Theaters 1,000 sf 38.00 ITE 7th Edition 1.22 1.72TC Studies (Adjusted)32%City of Tampa CBD Study6.30 $2,679 $22 $323 $23.50 $2,333 $7,173 33%INSTITUTIONS:610 Hospital 1,000 sf 17.57 ITE 7th Edition 2.75 3.25TIF Schedules (Adjusted)77%TC Studies 15.81 $6,718 $46 $675 $19.99 $6,023 $2,465 244%620 Nursing Home bed 2.48Blend of ITE 7th & TC Studies1.11 1.61TC Studies (Adjusted)89%TC Studies 1.04 $442 $4 $59 $1.69 $381 $788 48%Land UseGasoline Tax$$ per gallon to capital:Facility life (years):Interest rate: Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 F-5 Impact Fee Study Table F-2 (continued) Proposed City of Bozeman Transportation Impact Fee Schedule (TED) Recommended Assessable Total Recommended Recommended % New Total Annual Gas Ad Net Current Fee PercentITE Trip Trip Rate Trip Trip Trip Length % New Trips Net Impact Gas Tax Valorem Impact (100%) Increase/LUC Unit Rate Source Length Length Source Trips SourceVMT(1)Cost Tax Credit Credit Fee 1996 Study DecreaseINSTITUTIONS:520 Elementary School student 1.29 ITE 7th Edition 1.94 2.44TIF Schedules (Adjusted)80%TIF Schedules0.85 $362 $3 $44 $3.14 $315 $190 166%530 High School student 1.71 ITE 7th Edition 1.94 2.44TIF Schedules (Adjusted)90%TIF Schedules1.27 $539 $4 $59 $3.14 $477 $402 119%540University (7,500 or fewer students)(4)student 2.00 ITE 7th Edition 2.37 2.87TIF Schedules (Adjusted)80%TIF Schedules1.61 $685 $5 $73 $3.14 $609 N/A N/A550University (more than 7,500 students)(4)student 1.50 ITE 7th Edition 2.37 2.87TIF Schedules (Adjusted)92%TIF Schedules1.39 $591 $4 $59 $3.14 $529 $1,349 39%560 Church/Synagogue 1,000 sf 9.11 ITE 7th Edition 1.84 2.34TIF Schedules (Adjusted)90%TIF Schedules6.41 $2,724 $20 $294 $1.93 $2,428 $1,369 177%565 Day Care 1,000 sf 75.07Blend of ITE 7th & TC Studies0.87 1.37TC Studies (Adjusted)73%TC Studies 20.26 $8,609 $79 $1,159 $17.40 $7,433 $1,397 532%OFFICE:71050,000 sf or less(5)1,000 sf 15.65ITE 7th equation2.22 2.72Local Studies (Bozeman)57%Local Studies-Bozeman (adjusted)8.42 $3,576 $26 $382 $6.95 $3,187 $3,895 82%71050,001-100,000 sf(6)1,000 sf 14.25ITE 7th equation2.22 2.72Local Studies (Bozeman)57%Local Studies-Bozeman (adjusted)7.66 $3,256 $23 $338 $6.95 $2,911 $3,895 75%710100,001-200,000 sf(6)1,000 sf 12.15ITE 7th equation2.22 2.72Local Studies (Bozeman)57%Local Studies-Bozeman (adjusted)6.53 $2,776 $20 $294 $6.95 $2,475 $3,895 64%710greater than 200,000 sf(6)1,000 sf 9.70ITE 7th equation2.22 2.72Local Studies (Bozeman)57%Local Studies-Bozeman (adjusted)5.22 $2,216 $16 $235 $6.95 $1,974 $3,895 51%720 Medical Office 1,000 sf 35.95Blend of ITE 7th & TC Studies2.39 2.89TC Studies (Adjusted)69%TC Studies (Adjusted)25.20 $10,705 $75 $1,101 $19.91 $9,584 $7,081 135%RETAIL: 820under 50,000 sf(5)1,000 sf 86.56ITE 7th equation1.24 1.74TC Curve31%City of Tampa CBD Study14.14 $6,008 $49 $719 $4.95 $5,284 $6,341 83%82050,000-99,000 sf(6)1,000 sf 75.10ITE 7th equation1.38 1.88TC Curve33%City of Tampa CBD Study14.54 $6,176 $49 $719 $4.95 $5,452 $6,669 82%820100,000-199,000 sf(6)1,000 sf 58.93ITE 7th equation1.57 2.07TC Curve35%City of Tampa CBD Study13.76 $5,847 $45 $660 $4.95 $5,182 $6,283 82%820200,000-299,000 sf(6)1,000 sf 49.28ITE 7th equation1.62 2.12TC Curve40%City of Tampa CBD Study13.57 $5,766 $44 $646 $4.95 $5,115 $5,791 88%820greater than 300,000 sf(6)1,000 sf 38.66ITE 7th equation1.75 2.25TC Curve46%City of Tampa CBD Study13.23 $5,620 $42 $616 $4.95 $4,999 $5,462 92%812 Building Material/Lumber 1,000 sf 45.16 ITE 7th Edition 3.89 4.39TC Studies (Adjusted)74%TC Studies 55.25 $23,474 $154 $2,260 $4.95 $21,209 $3,750 566%813 Discount Super-Store 1,000 sf 49.21 ITE 7th Edition 3.66 4.16TC Studies (Adjusted)92%TC Studies 70.42 $29,921 $198 $2,906 $18.68 $26,996 $6,466 417%817 Nursery/Garden Center 1,000 sf 36.08 ITE 7th Edition 3.78 4.28Same as ITE LUC 89085%TIF Schedules49.27 $20,933 $138 $2,025 $4.95 $18,903 $3,326 568%Land Use Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 F-6 Impact Fee Study Table F-2 (continued) Proposed City of Bozeman Transportation Impact Fee Schedule (TED) Recommended Assessable Total Recommended Recommended % New Total Annual Gas Ad Net Current Fee PercentITE Trip Trip Rate Trip Trip Trip Length % New Trips Net Impact Gas Tax Valorem Impact (100%) Increase/LUC Unit Rate Source Length Length Source Trips SourceVMT(1)Cost Tax Credit Credit Fee 1996 Study DecreaseRETAIL: 851 Convenience Store 1,000 sf 737.99 ITE 7th Edition 0.94 1.44TC Studies (Adjusted)41%TC Studies 120.88 $51,358 $458 $6,722 $28.58 $44,607 $13,716 325%931 Quality Restaurant 1,000 sf 91.10Blend of ITE 7th & TC Studies.1.95 2.45TC Studies (Adjusted)21%City of Tampa CBD Study15.85 $6,736 $49 $719 $7.92 $6,009 $8,897 68%934 Fast Food Rest w/ Drive-Thru 1,000 sf 522.62Blend of ITE 7th & TC Studies.1.27 1.77TC Studies (Adjusted)21%City of Tampa CBD Study59.24 $25,168 $204 $2,994 $9.95 $22,164 $11,749 189%841 New/ Used Auto Sales 1,000 sf 32.93Blend of ITE 7th & TC Studies2.85 3.35TC Studies (Adjusted)79%TC Studies 31.51 $13,388 $92 $1,350 $4.95 $12,033 $4,417 272%890 Furniture Store 1,000 sf 5.06ITE 7th Edition3.78 4.28TC Studies (Adjusted)54%TC Studies 4.39 $1,865 $12 $176 $4.95 $1,684 $400 421%912 Bank/ Savings Drive-in 1,000 sf 281.55Blend of ITE 7th & TC Studies1.53 2.03TC Studies (Adjusted)35%City of Tampa CBD Study64.08 $27,225 $210 $3,082 $9.56 $24,133 $9,859 245%INDUSTRY:110 General Light Industrial 1,000 sf 6.97ITE 7th Edition2.21 2.71TIF Schedules (Adjusted)92%TC Studies 6.02 $2,559 $18 $264 $4.98 $2,290 $1,635 140%140 Manufacturing 1,000 sf 3.82ITE 7th Edition2.21 2.71TIF Schedules (Adjusted)92%TC Studies 3.30 $1,402 $10 $147 $4.98 $1,250 $904 138%150 Warehouse 1,000 sf 4.96ITE 7th Edition2.21 2.71TIF Schedules (Adjusted)92%TC Studies 4.29 $1,821 $13 $191 $3.41 $1,627 $1,144 142%151 Mini-Warehouse 1,000 sf 2.50ITE 7th Edition2.21 2.71TIF Schedules (Adjusted)92%TC Studies 2.16 $918 $7 $103 $4.77 $810 $614 132%Land Use (1) Net VMT calculated as ((Trip Generation Rate* Trip Length* % New Trips)*(1-Interstate/Toll Facility Adjustment Factor)/2). This reflects the unit of vehicle miles of capacity consumed per unit of development and is multiplied by the cost per vehicle mile of capacity to determine the total impact cost. (2) Defined as 50% of city median income based on 2007 Gallatin County Average Median Income (AMI) (3) Defined as 80% of city median income based on 2007 Gallatin County Average Median Income (AMI) (4) Impact fee to be assessed on structures with classroom facilities. All auxiliary structures such as administrative buildings and research centers are to be charged at the office land use rate. (5) The trip generation rate recommended for the office and retail less than 50,000 sf categories used the end-point of 50,000 (6) The trip generation rate recommended for all other office and retail tiered categories used the mid-point of each tier of the respective category APPENDIX G Indexing Calculations Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 G-1 Impact Fee Study Land Cost As shown in Table G-1, the taxable property values for the City of Bozeman increased over the past five years by approximately 8.2 percent per year between 2002 and 2006. It should be noted that market values are typically used to determine the actual increase in land values. Since these data were not available, to provide a conservative estimate of the increase in land values, taxable values were used. Table G-1 City of Bozeman Taxable Property Value Increase (1) Year City of Bozeman Taxable Values Percent Change 2002 $42,450,000 N/A 2003 $46,055,000 8.5% 2004 $49,559,000 7.6% 2005 $52,985,000 6.9% 2006 $58,063,000 9.6% 8.2%Average (1) Source: City of Bozeman Annual Financial Report, Part III, Revenue Capacity Construction Cost For construction costs, it is recommended that the construction cost index provided by Engineering News Record be used for indexing purposes. The average annual increases in the construction cost index are used for the design, CEI, and construction cost components of the transportation impact fee indexing. As shown in Table G-2, over the past five years the average annual index is 4.4 percent. It should be noted that this index does not reflect the actual increases in construction costs that have occurred over the past five years. As mentioned previously, the City may consider conducting a separate analysis to determine the increase in local construction costs, or at a minimum, review annual increases in the construction cost per lane mile figures provided by MDOT and consider adjusting the index accordingly. In the absence of such studies or analyses, the index calculated in this section provides a conservative estimate. Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 G-2 Impact Fee Study Table G-2 ENR Construction Cost Index (1) Year Annual Avg Percent Change 2002 6,538 N/A 2003 6,694 2.4% 2004 7,115 6.3% 2005 7,446 4.7% 2006 7,751 4.1% Average 4.4% (1) Source: Engineering News Record’s Construction Cost Index (2002-2006) Application As presented in Table G-3, of the weighted average total cost per lane mile, 93 percent is for Design, CEI, and Construction Cost, and 7 percent is for ROW. As shown in the table, applying these percentages to the average cost increases presented previously would provide a combined index of 4.7 percent, which then can be applied to the cost component for all land uses presented in the transportation impact fee schedule. Table G-3 Indexing Application Phase Cost per Lane Mile(1) Percent of Total Cost(2) Annual Increase(3)Index(4) Design $253,522 6.9% 4.4% 0.3% ROW $285,777 7.8% 8.2% 0.6% Construction/CEI $3,139,253 85.3% 4.4% 3.8% Total Cost $3,678,552 Total Applicable Index(5)4.7% (1) Source: Table 4 (2) Source: Item (1) for each phase (design, ROW, construction/CEI) divided by total cost (3) Source: Table G-1 for ROW costs and Table G-2 for design and construction/CEI (4) Annual increase (Item 3) multiplied by the percent of total (Item 2) (5) Sum of index components for design, ROW, and construction/CEI With this index, net impact fee for the single family 1,500 – 2,499 s.f. detached land use would increase to $5,650 ($5,396 x 1.047) at the end of first year after adoption and Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 G-3 Impact Fee Study implementation of the updated fee schedule. This index would change all fees within the fee schedule accordingly. APPENDIX H Revenue Projections Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 H-1 Impact Fee Study REVENUE PROJECTIONS Revenue estimates are based on a review of building permit activity and future population growth estimates. The impact fee schedule by land use presented in Appendix F, Table F- 1, provides the basis for this analysis. Table H-1 presents the projected residential units per year through 2025. These population projections are based on the information from the 2007 Sewer Facility Plan and reflect the most recent and localized data. The following estimates were made by projecting the transportation impact fee revenues based on a review of the City of Bozeman historical building permit activity. • Based on historical impact fee revenue collections, revenues from residential land uses represent 61 percent of total collections and non-residential land uses represent 39 percent. • Residential building permits are estimated to be generated by single family units (37 percent), townhomes (8 percent), multi-family (53 percent), and mobile homes (2 percent). • The rate of growth of building permits is projected to increase through 2025 as the City continues annex urbanizing areas in its geographic proximity. • The average annual number of building permits between 2002 and 2006 was 724. Based on projected population, approximately 23,406 new homes will be constructed in the next 18 years as the county approaches its build-out population in 2025. • The projection of revenues will be based on an average of 1,300 new homes per year between now and 2025 given the expected population growth. Table H-1 Residential Units per Year (2008-2025) Year Population Item 2008 39,602 2025 92,500 Population Growth (2008-2025)(1)52,898 Residents Per Dwelling Unit(2)2.26 New Homes (2008-2025)(3)23,406 New Homes per Year(4)1,300 (1) Source: Source: Bozeman Sewer Facility Plan, 2007 (2) Source: 2000 Census Data, Table P17 (3) Population growth (Item 1) divided by residents per dwelling unit (Item 2). (4) New homes (2008-2025) (Item 3) divided by 18 years. Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 H-2 Impact Fee Study As shown in Table H-2, the transportation impact fee program will generate a total of approximately $154.8 million, generating an average of approximately $8.6 million annually through 2025. These estimates are based on using the population growth approach. Compared to historical collections, these projections are optimistic since they are based on a higher annual projected number of building permits. Table H-2 Projected Transportation Impact Fee Revenues (2008-2025) (in 2007 Dollars) Land Use Distribution(1) Permits(2) Impact Fee(3) Total Revenues(4) Single Family 37% 8,661 $5,396 $46,734,756 Townhomes 8% 1,872 $2,946 $5,514,912 Multi-Family (Apartments) 53% 12,405 $3,339 $41,420,295 Mobile Home Park 2% 468 $1,593 $745,524 Total Residential Revenues 100% 23,406 N/A $94,415,487 Non-Residential Impact Fee Revenues(5) $60,364,000 Total Residential and Non-residential Impact Fee Revenues(6)$154,779,487 (1) Source: Distribution of historical building permits from 2002 through 2006 (2) Source: Table H-1 for total permits. Permits distributed for residential uses by estimated percentages in (Item 1) (3) Source: Appendix F, Table F-1 (4) Permits (Item 2) multiplied by impact fee (Item 3) (5) Non-residential revenues are estimated to be 39 percent of total collections (6) Sum of total residential impact fees and total non-residential impact fee revenues (Item 5) Based on the analysis shown in these tables, the City of Bozeman is projected to generate an average of $8.6 million annually in transportation impact fee revenue between 2008 and 2025, and a total of $154.8 million during this 18-year time period. This projection is in 2007 dollars and does not take into account the indexing of the impact fees. APPENDIX I Evaluation of Funding Sources Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 I-1 Impact Fee Study Current Conditions The City’s roadway financing program, including expenditure and revenue policies that have historically been used for capital and operations, was evaluated. It is recommended that the City evaluate alternative revenue sources once every three years to make sure that a dynamic process is in place in case there are any new revenue options. As a part of this review, historical expenditures were reviewed dating to Fiscal Year 2002. Specifically, expenditures were categorized as personnel, operations, capital, other, and capacity expansion. Table I-1 provides a summary of the percentage of the annual street maintenance expenditures by funding source. As shown in the table, the primary funding source has been the Street Maintenance District Fund. Similarly, there has been a strong increase in revenues from impact fees in more recent years primarily due to the settlement of a law suit such that the City could begin expending the impact fees that were collected during the litigation period. Table I-1 Historical Roadway Expenditures by Funding Source(1) 2002 2003 2004 2005 2006 2007 Average Street Maintenance 76% 57% 68% 19% 11% 19% 42% Gas Tax Allocation 22% 37% 28% 6% 4% 6% 17% Special Improvement Districts 0% 0% 0% 51% 11% 0% 10% Impact Fees 2% 3% 2% 23% 74% 58% 27% G.O. Bonds 0%3%2%1%0%17%4% % of Total Expenditures by Funding Source Funding Source (1) Source: City of Bozeman Finance Department Table I-2 presents transportation expenditures by task as a percentage of total expenditure. As shown in the table, the three categories that dominate transportation expenditures on average since 2002 are operations, capacity expansion, and personnel projects. Specifically, an average of 30 percent of funds has been devoted to operations and capacity expansion, while 25 percent has been expended on personnel. Capital expenditures refer to the purchase of specific equipment needed to support the roadway program’s capacity expansion and operational activities. As mentioned previously, as impact fees became available as a source of funding, the percentage of total funds being allocated to capacity expansion projects increased. Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 I-2 Impact Fee Study Table I-2 Historical Roadway Maintenance Expenditure by Task (1) 2002 2003 2004 2005 2006 2007 Average Personnel 44% 39% 41% 9% 6% 10% 25% Operations 39% 28% 34% 55% 16% 9% 30% Capital 15% 28% 22% 8% 3% 12% 15% Capacity Expansion 2% 5% 3% 28% 74% 69% 30% % of Total Expenditures by Task Task (1) Source: City of Bozeman Finance Department Surrounding Communities Table I-3 below presents the funding sources of various cities near the City of Bozeman. The most common source of funding comes from gas tax revenue as distributed by the State of Montana Department of Transportation. It should be noted that this funding source is used primarily for maintenance related expenditures by the City of Bozeman. As shown in the table, the City of Billings has enacted an arterial street fee as an innovative way of generating revenues for the construction and reconstruction of arterial streets within the city. Similarly, special assessments, or special improvement districts, as well as, impact fees, are also common sources of revenue to meet the transportation needs of other communities besides the City of Bozeman. Table I-3 Comparison of Funding Sources for Transportation Expenditures (1) City General Fund Special Assessment/ Improvement Districts Other Debt (e.g. General Obligation Bonds) Impact Fees Arterial Street Fees Gas Tax Federal Grants City of Bozeman X X X X X City of Billings X X X X X X City of Great Falls X X City of Missoula X X City of Belgrade X X X Gallatin County X X X X (1) Source: Adopted budgets for Fiscal Year 2007 Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 I-3 Impact Fee Study Funding Options Aside from the funding sources presented in Table I-3, two other possible funding sources were evaluated. First, a retail sales tax scenario was examined and is presented in Table I-4 below. We understand that the implementation of sales tax may be difficult; since recently the state legislature did not consider this to be a feasible funding option at this time. However, since the sales tax has the potential of generating significant revenues, the sales tax analysis is included as one of the options for purposes of illustration. Based on data collected on retail sales in the City of Bozeman, as well as for the State of Montana, the estimated 2007 retail sales is multiplied by each sales tax scenario. For example, it is estimated that a one-half cent sales tax in the City of Bozeman will generate approximately $4.4 million in revenue annually. Table I-4 Sales Tax Scenario Calculation Step Retail Sales Estimated Sales Tax Revenue(5) Estimated 2007 City of Bozeman Retail Sales State of Montana 2002(1)$10,122,625,000 State of Montana 2005(2)$11,886,957,000 State of Montana Average Annual Growth Rate Of Retail Sales 5.5% City of Bozeman 2002(3)$679,846,000 Number of Years Between 2002-2007 5 Estimated 2007 City of Bozeman(4)$888,531,533 Sales Tax Scenario $0.005 $4,442,658 $0.010 $8,885,315 $0.020 $17,770,631 (1) Source: 2002 Economic Census (2) Source: Montana Department of Commerce, Census and Economics Information Center (3) Source: 2002 Economic Census (4) Based on the average annual growth rate of retail sales in the State of Montana (5) Sales tax multiplied by the estimated 2007 retail sales in the City of Bozeman (Item 4) Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 I-4 Impact Fee Study Table I-5 shows the equivalent pennies of gas tax calculation for the three sales tax scenarios that can be applied to the transportation impact fee in the same way gas tax credit is applied. Table I-6 presents the credit that would be applied to the transportation impact fee for selected land uses if a sales tax were to be implemented. Three credit scenarios are shown to reflect the three sales tax scenarios presented above in Table I-4. Note that this analysis estimates that 100 percent of all sales tax revenue collected will be allocated to road capacity expansion projects. As an example, an additional $602 would be credited to the single family land use if a $0.005 sales tax were to be implemented. It should be noted that additional sales tax revenues are not likely given recent state legislative action. Table I-5 Equivalent Pennies Sales Tax Scenario Estimated Annual Sales Tax Revenue(1) MDOT Fuel Tax Distribution per Penny to Gallatin County(2) Equivalent Pennies $0.005 $4,442,658 $427,296 $0.104 $0.010 $8,885,315 $427,296 $0.208 $0.020 $17,770,631 $427,296 $0.416 (1) Source: Table I-4 (2) Source: Appendix C, Table C-1 Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 I-5 Impact Fee Study Table I-6 Transportation Impact Fee Sales Tax Credit (1) Land Use UnitRecommended Trip RateTotal Trip LengthRecommended % New TripsAnnual Sales Tax Credit ($0.005)Total Sales Tax Credit ($0.005)Annual Sales Tax Credit ($0.01)Total Sales Tax Credit ($0.01)Annual Sales Tax Credit ($0.02)Total Sales Tax Credit ($0.02)Single Family (1,500 to 2,499 sf) du 9.57 4.02 100% $41 $602 $83 $1,218 $165 $2,422Office (50,000 sf) 1,000 sf 15.65 2.72 71% $32 $470 $65 $954 $130 $1,908Retail (100,000 sf) 1,000 sf 58.93 2.07 63% $82 $1,203 $165 $2,422 $330 $4,843Quality Restaurant 1,000 sf 91.10 2.45 77% $184 $2,701 $367 $5,386 $734 $10,773Bank/Savings Drive-in 1,000 sf 281.55 2.03 46% $283 $4,154 $566 $8,307 $1,133 $16,629General Light Industrial 1,000 sf 6.97 2.71 92% $19 $279 $37 $543 $75 $1,101 (1) Trip characteristics variables are presented in the demand component in Appendix F, Table F-1. Sales tax credit is based on a facility life of 25 years, 4.6 percent interest rate, 365 effective days, and a fuel efficiency of 17.70 miles per gallon. (2) This scenario estimate 100 percent of the sales tax revenue will be allocated to capacity expansion projects. Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 I-6 Impact Fee Study A millage option was also evaluated as a form of revenue to fund transportation projects. Presented in Table I-6 are various scenarios of levying a millage tax. Based on the revenues generated from 1-mil as presented in Appendix D, Table D-1, a one mil levy will generate approximately $63,251 in revenue per year. Similarly, a three mil levy will generate approximately $189,753 in annual revenue. Table I-7 Millage Tax Scenario Calculation Step Estimated Revenues(2) Revenue Generated from 1-mil(1)$63,251 Millage Scenario: 1.0 $63,251 2.0 $126,502 3.0 $189,753 (1) Source: Appendix D, Table D-1 (2) Millage scenario multiplied by the amount of revenue generated from one mil (Item 1). As presented in Table I-6 in the sales tax scenario, Table I-8 below presents the effect on the transportation impact fee if the City of Bozeman levied a 1, 2, or 3-mil tax for the single family (1,500 to 2,499 sf) land use. The additional ad valorem credit that would be applied to various non-residential land uses is presented in Table I-9. Note that the calculation for this analysis is done in the same manner as presented in the applied ad valorem credit analysis in Appendix D. For example, the additional ad valorem credit for the mid-tier single family detached land use of levying a 1-mil tax would be $75. The additional credit that would be applied to a 50,000 square foot office land use is $6.95 if a 1-mil tax were implemented. As shown in the analysis of funding sources presented above, the City has the option of using two primary funding sources (sales tax and ad valorem tax) to finance operations expenditures. It should be noted that additional mills require an independent vote from city residents. These funding sources can be used to develop a cost affordable maintenance program that meets the growing demands of the roadway system. In addition, depending of the use of the special improvement district funds these additional revenues can be used to provide leverage for any funding shortfalls. Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 I-7 Impact Fee Study Table I-8 Additional Transportation Impact Fee Ad Valorem Credit for the Single Family (1,500 to 2,499 sf) Land Use Mil Scenario Credit per Square Foot Additional Ad Valorem Credit(1) 1.0 $0.03 $75.00 2.0 $0.07 $175.00 3.0 $0.10 $250.00 (1) Credit per square foot multiplied by 2,500 sf Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 I-8 Impact Fee Study Table I-9 Additional Transportation Impact Fee Ad Valorem Credit for Sample Non-Residential Land Uses* Annual Portion to Expansion(1)Total Ad Valorem Credit(2)Annual Portion to Expansion(3)Total Ad Valorem Credit(4)Annual Portion to Expansion(5)Total Ad Valorem Credit(6)Office (50,000 sf)$0.89 $6.95 $1.78 $13.96 $2.67 $20.89Retail (100,000 sf)$0.63 $4.95 $1.25 $9.80 $1.88 $14.74Quality Restaurant$1.01 $7.92 $2.02 $15.73 $3.02 $23.59Fast Food Rest w/ Drive-Thru$1.27 $9.95 $2.55 $19.94 $3.82 $29.98Bank/Savings Drive-in$1.22 $9.56 $2.44 $19.14 $3.66 $28.64General Light Industrial$0.66 $4.98 $1.32 $9.74 $1.98 $14.791 Mil 2 Mil 3 MilLand Use Note: Credit shown for all land uses is per 1,000 square feet (1) Taxable value of land use divided by 1,000 and multiplied by the percentage of one mill that is attributed to transportation capacity expansion (1%) (2), (4), (6) Total ad valorem credit over the 24-year period in present day dollar (3) Taxable value of land use divided by 1,000 and multiplied by the percentage of one mill that is attributed to transportation capacity expansion (2%) (5) Taxable value of land use divided by 1,000 and multiplied by the percentage of one mill that is attributed to transportation capacity expansion (3%) APPENDIX J Acronyms and Definitions Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 J-1 Impact Fee Study Acronyms AMI - Average Median Income CBD - Central Business District CEI - Construction Engineering/Inspection CPI - Consumer Price Index GO Bonds - General Obligation Bonds ITE - Institute of Transportation Engineers LUC - Land Use Code MDOT - Montana Department of Transportation MPG - Miles per Gallon PNT - Percent (%) New trips PV - Present Value ROW - Right-of-Way STIP - State Transportation Improvement Plan TC Database - Trip Characteristics Database TGR - Trip Generation Rate TL - Trip Length VMC - Vehicle Miles of Capacity VMT - Vehicle Miles of Travel Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 J-2 Impact Fee Study Definitions “Ad Valorem Tax Credit” shall mean a credit applied to the total impact cost that is based on an estimate of the property tax revenues per millage that is generated by a unit of each land use of new development that are allocated to transportation system capacity expansion. “Average Median Income” shall mean the mid-point value in the total distribution of all income levels in the United States. “Capacity” shall mean the maximum number of vehicles for a given time period which a road can safely and efficiently carry, expressed in terms of vehicles per day. “Capacity per Lane Mile” shall mean the number of vehicles added to the roadway network based on an additional lane mile of roadway constructed. “Central Business District” shall mean is the commercial (and often) geographic heart of a city. The CBD is also commonly referred to as “downtown.” “Construction Engineering/Inspection” shall mean the review process of ensuring that roadway construction projects are built in accordance with their plans and specifications. “Consumer Price Index (CPI)” shall mean inflationary indicator that measures the change in the cost of a fixed basket of products and services, including housing, electricity, food, and transportation. The CPI is published monthly. Also called cost-of-living index. “Cost per Lane Mile” shall mean the unit cost to construct on lane mile of roadway. “Design” shall mean to the process of developing a roadway design plan based on a selected roadway section alternative. “Dollar ($)/Gallon to Capital” shall mean the amount of gas tax revenue per gallon of fuel that is used for capital improvements, in $/gallon. “Effective Days per Year” shall mean the total number of days used in the impact fee equation to calculate the consumption of gasoline taxes credited against the fee. “Facility Life” shall mean the reasonable life of a roadway which is proposed at 25 years Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 J-3 Impact Fee Study “Fuel Efficiency” shall mean the average energy efficiency of a particular vehicle model, where its total output (mileage) is given as a ratio of range units per a unit amount of input fuel (gasoline, diesel, etc.). “Gas Tax Credit” shall mean a credit applied to the total impact cost that is based on an estimate of the gas tax revenues per gallon of future gasoline consumption that is generated by a unit of each land use of new development that are allocated to roadway construction or transportation system capacity expansion. “General Obligation Bonds” shall mean a municipal bond secured by the taxing and borrowing power of the municipality issuing it. “Interest Rate” shall mean the discount rate at which gasoline tax revenues might be bonded. “Institute of Transportation Engineers” shall mean the ITE Trip Generation 7th Edition, Journal. The three-volume report contains introductory and instructional material as well as two data volumes with land use descriptions, trip generation rates, equations and data plots. Data from more than 500 sites has been included in the seventh edition, bringing the number of data points contained in the database to more than 4,250. In addition, the seventh edition contains a total of 150 land use classifications. “Interstate Adjustment Factor” shall mean an adjustment factor applied to an impact fee calculation to account for the travel demand occurring on interstate highways. “Land Use Code” shall mean the three (3) digit number designated to a specific land use by the Institute of Transportation Engineers. “Montana Department of Transportation” shall mean the governmental entity assigned the task of providing a transportation system and services that emphasize quality, safety, cost effectiveness, economic vitality and sensitivity to the environment for the citizens of the state of Montana. “Miles per Gallon” shall mean the number of miles a vehicle can travel per gallon of gasoline consumed. “Net Impact Fee” shall mean the “up-front” fee that is charged to new development based on the adopted City of Bozeman Impact Fee Schedule. “Percent (%) New Trips” shall mean the proportion of travel that is new travel, rather than travel that is estimated to have already been on the road system. Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 J-4 Impact Fee Study “Present Value” shall mean the calculation of the present value of a uniform series of cash flows, given an interest rate, “i,” and a number of periods, “n.” “Right-of-Way” shall mean an easement or strip of land granted for transportation purposes. “Square Foot” as referred to in the Fee Schedule, it means total square footage under roof used for occupancy or storage. “Square Footage” shall mean the gross area measured in square feet from the exterior faces of exterior walls or other exterior boundaries of the building, including all floors and mezzanines within said building, but excluding areas within the interior of the building which are utilized for parking. “State Transportation Improvement Plan” shall mean the five-year capital and maintenance program developed by the Montana Department of Transportation. The plan is developed in accordance with the requirements of Section 135 of 23 USC (United States Code). “Total Trip Length” shall mean the (assessable) trip length plus an adjustment factor of half a mile to account for the fact that gas taxes are collected for travel on all roads, including local roads. “Transportation Impact Fee” shall mean a one-time, "up front" payment for a portion of the cost to replace the transportation facilities consumed by each unit of new development “Trip” shall mean a one-way movement of vehicular travel from an origin (one trip end) to a destination (the other trip end). “Trip Characteristics Database” shall mean the database of information collected by TOA containing trip characteristic data for a variety of land uses spanning the state of Florida. Trip characteristic data includes trip lengths, trip generation rates and percent new trips. “Trip Generation Rate” shall mean the average number of daily trips caused by a given land use, given in vehicle-trips/day. “Trip Length” shall mean the average length of daily trips (in miles) or travel by land use. “Vehicle Miles of Capacity” shall mean the average daily traffic on one travel lane at capacity for one lane mile of roadway, in vehicles/lane-mile/day. “Vehicle Miles of Travel” shall mean a measurement of the total miles traveled for each respective land use in the impact fee schedule and provides the basis for the gross fee Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 J-5 Impact Fee Study calculation. It is calculated by multiplying the trip generation rate, trip length, and percent new trips variable. For impact fee purposes, to allocate the assessment for a trip evenly between origin-end development and destination-end development, the vehicle miles of travel are divided in half. APPENDIX K Trip Exchange District (TED) Definition Characteristics Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 K-1 Impact Fee Study Trip Exchange District (TED) Defining Characteristics The City of Bozeman is committed to having impact fees which accurately reflect demand on the transportation system. Therefore, the City has adopted different impact fees for the Trip Exchange District (TED) than for other areas in the community. This reflects a difference in the travel characteristics of travel in the TED and a corresponding lower consumption of transportation capacity per unit of development within the TED. Over time, other areas of the community may develop similar travel characteristics and should therefore pay a similar transportation impact fee as development does within the TED. Development that desires to be categorized as “TED” has the responsibility to demonstrate that their travel demand on the transportation system will have a similar demand as do development projects being built in the TED. Some of the defining characteristics of the TED, relating to different demands on transportation are: • Shared and consolidated parking; • A high degree of pedestrian and bicycle access to and throughout the TED; • Public Transit availability. • Extensive trip capture within the TED where a person will make one vehicle trip to the TED and then visit multiple businesses via a mode other than automobile thereby reducing the overall vehicle miles of capacity being consumed; Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 K-2 Impact Fee Study Example potential reductions in trip capture are illustrated in Table K-1 below. Table K-1 TED Percent New Trips Reductions Non TED TED Office 71 57 20% Shopping Center Low 55 31 44% Shopping Center High 74 46 38% Quality Restaurant 77 21 73% Fast Food Restaurant 58 21 64% Bank 46 35 24% General Light Industrial 92 92 0% Hotel 66 61 8% Motel 77 61 21% Sample Land Uses Percent New Trips % Reduction (1) Sources: City of Tampa Transportation Impact Fee Study, 1988 and Downtown Portland Circulation Study conducted by DeLeuw, Cather, and Company, 1973 Some of the physical development characteristics of the TED that facilitate the different travel characteristics are: • Multi-story development for the majority of buildings, often more than two stories; • Diverse business proprietorships within the TED area; • Primary use at the ground floor is commercial operations of some type; • Businesses tending to be smaller scale (e.g., less than 20,000 sf for the majority of the businesses); • Structures are in near proximity to each other and the public street (with small or even zero foot setbacks); • Having a high percentage of each lot covered by buildings and a ratio of total building floor area typically in excess of 0.5; • The physical characteristics are shared among the entire business area, not just one or a few of the businesses. Each potential development desiring to be categorized as a TED type development will be reviewed on a case by case basis. APPENDIX L Transportation Impact Fee Comparison Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 L-1 Impact Fee Study Transportation Impact Fee Comparison As part of the work effort in developing the City of Bozeman transportation impact fee program, a comparison of transportation impact fee schedules of surrounding jurisdictions was completed. In addition, two impact fee schedules were developed for the City of Bozeman. Specifically, a fee schedule for the Trip Exchange District (TED) and a fee schedule for the non-TED area were calculated. The TED fee schedule provides a reduction to the percent new trips variable for certain recreation, lodging, retail, office, restaurant, and bank land uses. Table L-1 presents the existing City of Bozeman impact fees and proposed City of Bozeman impact fees compared to transportation impact fees in the other jurisdictions. Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 L-2 Impact Fee Study Table L-1 Transportation Impact Fee Comparison TEDNon-TED Date of Last Update 2007 2007 1996 2007 2007Residential:Single Family Detached (2,000 sq ft) du $5,396 $5,396 $2,241 $1,192 $2,506Non-residential:General Light Industrial 1,000 sf $2,290 $2,290 $1,635 N/A $904Office (50,000 sf) 1,000 sf $3,187 $3,977 $3,895 N/A $2,028Quality Restaurant 1,000 sf $6,009 $22,036 $8,897 N/A $6,318Retail (100,000 sf) 1,000 sf $5,182 $9,331 $6,283 N/A $5,272Bank w/Drive-In 1,000 sf $24,133 $31,706 $9,859 N/A $6,318Gallatin County (Adopted)(2)City of Belgrade (Adopted)(3)Land UseCity of Bozeman (Existing @ 100%)UnitCity of Bozeman (Proposed)(1) (1) Source: Appendix F, Table F-2 for TED and Table F-1 for Non-TED (2) Source: Gallatin County Transportation Impact Fee Study, March 2007. Note, fees shown include a five percent administration charge and represent the BOCC adoption of the full cost at 30 percent for residential uses and an exemption of impact fee for all non-residential land uses (3) Source: City of Belgrade Transportation Impact Fee Study, February 2007. The commercial/shopping center (50,000 sf or less) fee is shown for the quality restaurant and bank w/drive-in land uses. Impact Fees for the City of Belgrade have been adopted at 65 percent of the impact fee in the 2007 Technical Report APPENDIX M Compliance with Statute Review Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 M-1 Impact Fee Study CITY OF BOZEMAN DEPARTMENT OF PLANNING AND COMMUNITY DEVELOPMENT Alfred M. Stiff Professional Building 20 East Olive Street P.O. Box 1230 Bozeman, Montana 59771-1230 phone 406-582-2260 fax 406-582-2263 planning@bozeman.net www.bozeman.net Compliance with MCA Requirements for Street Impact Fee Development Section 7-6-1602 MCA establishes the requirements in state law for documentation for the development of an impact fee. The statute leaves to the judgment of each community where each piece of information is organized. The table below lists each element and shows where in the City of Bozeman documentation of facility planning and fee calculation the required item is provided. The listed section(s) is a primary, but not exclusive, location where the subject is discussed. Collectively the facility plan, design standards and specifications policy, fee study, capital improvement program, unified development ordinance, and impact fee ordinance satisfy the required documentation. All referenced documents are available through the City offices. It should be noted that the document was initially issued on October 31, 2007 as a memorandum to the Impact Fee Committee; it has since been updated by TOA Inc. Section Reference Documentation Item Document(s) Page or Section Greater Bozeman Transportation Plan, 2001 Update Chapter 2, Existing Conditions (1)(a) describes existing conditions of the facility Title 18, Unified Development Ordinance, BMC Chapters 18.44 (Transportation Facilities and Access) and 18.78 (trip study) 2001 Greater Bozeman Transportation Plan, 2001 Update; Chapter 11 (Recommended Major Street Network and Street Standards) (1)(b) establishes level of service standards Title 18, Unified Development Ordinance, BMC, Design and Specifications Manual Chapter 18.44 (Transportation Facilities and Access) Greater Bozeman Transportation Plan, 2001 Update Chapters 3 and 4 (1)(c) forecasts future additional needs for service for a defined period of time Street Impact Fee Study Chapter 2 Greater Bozeman Transportation Plan, 2001 Update Chapters 4, 6, 9, 10, 11 (1)(d) identifies capital improvements necessary to meet future needs for service (please note the plan calls for improvements when demand requires, not on a fixed time frame) Title 18, Unified Development Ordinance, BMC Chapter 18.78 (trip study) Greater Bozeman Transportation Plan, 2001 Update Chapters 4, 9-11 (1)(e) identifies those capital improvements needed for continued operation and maintenance of the facility Title 18, Unified Development Ordinance, BMC Chapter 18.78 (trip study) (1)(g) makes a determination as to whether one service area or more than one service area for transportation facilities is needed to establish a correlation between impact fees and benefits Street Impact Fee Study Chapter 2, Appendix K Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 M-2 Impact Fee Study (1)(h) establishes the methodology and time period over which the governmental entity will assign the proportionate share of capital costs for expansion of the facility to provide service to new development within each service area Street Impact Fee Study Chapters 2 and 3, Appendices B-D Greater Bozeman Transportation Plan, 2001 Update Chapters 4, 9-11, 13 Street Impact Fee Study Chapter 2, Appendices C&D (1)(i) establishes the methodology that the governmental entity will use to exclude operations and maintenance costs and correction of existing deficiencies from the impact fee Street Impact Fee Capital Improvement Program Street CIP; individual project review by City staff (1)(j) establishes the amount of the impact fee that will be imposed for each unit of increased service demand Street Impact Fee Study Chapters 2 and 3, Appendix B has a component of the budget of the governmental entity that: (i) schedules construction of public facility capital improvements to serve projected growth Capital Improvements Program for General Fund, Street Maintenance Fund and Street Impact Fee Fund Section for each fund when applicable to an individual funding source (ii) projects costs of the capital improvements Capital Improvements Program for General Fund, Street Maintenance Fund and Street Impact Fee Fund Section for each fund when applicable to an individual funding source (iii) allocates collected impact fees for construction of the capital improvements Capital Improvements Program for General Fund, Street Maintenance Fund and Street Impact Fee Fund Section for each fund when applicable to an individual funding source (1)(k) (iv) covers at least a 5-year period and is reviewed and updated at least every 2 years Capital Improvements Program for General Fund, Street Maintenance Fund and Street Impact Fee Fund Section for each fund when applicable to an individual funding source (2) The data sources and methodology supporting adoption and calculation of an impact fee must be available to the public upon request Greater Bozeman Transportation Plan, 2001 Update & Street Impact Fee Study, Unified Development Ordinance, Design and Specification Manual, City Budget, bid tabulations, impact fee ordinance All documents are available at City offices, many are also available on-line (3) The amount of each impact fee imposed must be based upon the actual cost of public facility expansion or improvements or reasonable estimates of the cost to be incurred by the governmental entity as a result of new development. The calculation of each impact fee must be in accordance with generally accepted accounting principals. Street Impact Fee Study Chapters 2 and 3, Appendix B (4) The ordinance or resolution adopting the impact fee must include a time schedule for periodically updating the documentation required under subsection (1) Chapter 3.24, BMC Section 3.24.110 Tindale-Oliver & Associates, Inc. City of Bozeman January 2008 M-3 Impact Fee Study An impact fee must meet the following requirements: (a) The amount of the impact fee must be reasonably related to and reasonably attributable to the development’s share of the cost of infrastructure improvements made necessary by the new development Street Impact Fee Study Chapters 2 and 3, Appendices B & F (b) The impact fees imposed may not exceed a proportionate share of the costs incurred or to be incurred by the governmental entity in accommodating the development. The following factors must be considered in determining a proportionate share of public facilities capital improvements cost; (i) the need for public facilities capital improvements required to serve new development Street Impact Fee Study Chapters 2 and 3 (ii) consideration of payments for system improvements reasonably anticipated to be made by or as a result of development in the form of user fees, debt service payments, taxes, and other available sources of funding the system improvements Street Impact Fee Study Chapters 2 and 3, Appendix C (c) costs for correction of existing deficiencies in a public facility may not be included in the impact fee; Street Impact Fee Study Chapters 2, Section 2.4 (d) new development may not be held to a higher level of service than existing users unless there is a mechanism in place for the existing users to make improvements to the existing system to match the higher level of service Street Impact Fee Study Chapters 2, Section 2.4 (5) (e) impact fees may not include expenses for operations and maintenance of the facility Street Impact Fee Study Chapters 2 and 3, Appendix C APPENDIX N Street Impact Fee Funded Projects planning • zoning • subdivision review • annexation • historic preservation • housing • grant administration • neighborhood coordination CITY OF BOZEMAN DEPARTMENT OF PLANNING AND COMMUNITY DEVELOPMENT Alfred M. Stiff Professional Building 20 East Olive Street P.O. Box 1230 Bozeman, Montana 59771-1230 phone 406-582-2260 fax 406-582-2263 planning@bozeman.net www.bozeman.net MEMORANDUM ____________________________________________________________________________________ TO: Impact Fee Advisory Committee FROM: Chris Saunders DATE: November 8, 2007 RE: Street Impact Fee Funded Projects List ____________________________________________________________________________________ The City’s impact fee program became effective on March 26, 1996. Since that time the City has used impact fee revenues to construct various capacity expanding projects. A list of projects is presented below. The majority of these projects also received funding other than impact fees. Lane Additions N 19th Avenue – Oak Street to Baxter Lane, included signal installation N 19th Avenue – Baxter Lane to Valley Center Valley Center – N 19th Avenue to N 27th Avenue Baxter Lane – N 19th Avenue to the east Durston Road – N 19th Avenue to Fowler Avenue Babcock Street – Main Street to Meagher Avenue Signal Installation or Upgrade N 19th Avenue/ Durston Road S 19th Avenue/ Kagy Boulevard Main Street / Cottonwood Road Main Street/ Ferguson Avenue Durston Road/ N 15th Avenue Rouse Avenue/Griffin Drive* Rouse Avenue/Oak Street City of Bozeman Final Report Impact Fees for Fire and EMS Services July 2008 Prepared by HDR Engineering, Inc. 1001 SW Fifth Avenue Phone: (503) 423-3700 Suite 1800 Fax: (503) 423-3737 Portland, OR 97204-1134 www.hdrinc.com July 30 2008 Mr. Chris Saunders City of Bozeman 20 E Olive Street Bozeman, MT 59715 Subject: Final Report Impact Fees for Fire and EMS Services Dear Mr. Saunders: HDR Engineering, Inc. (HDR) was retained by the City of Bozeman (City) to determine impact fees for fire and EMS services for new development. To that end, please find attached our final report detailing the findings, conclusions, and recommendations of the review undertaken by HDR for the determination of cost-based impact fees for the City’s fire and EMS services. HDR recommends that the City have the charges set forth in this report reviewed by its legal counsel to assure compliance with Montana law. We appreciate the opportunity to provide this technical report to the City. Should you have any questions, please call. It has been a pleasure working with you on this project. We look forward to the opportunity to continue to provide assistance to the City. Sincerely yours, HDR Engineering, Inc. Randall P. Goff Project Principal Attachment Table of Contents i City of Bozeman, Montana Contents 1 Introduction and Overview of the Study 1.1 Introduction..........................................................................................................1-1 1.2 Overview of the Study.........................................................................................1-1 1.3 Disclaimer............................................................................................................1-1 1.4 Summary..............................................................................................................1-1 2 Legal Considerations in Establishing Impact Fees for the City 2.1 Introduction..........................................................................................................2-1 2.2 Requirements under Montana Law......................................................................2-1 2.3 Summary..............................................................................................................2-3 3 Determination of the City’s Fire and EMS Impact Fees 3.1 Introduction..........................................................................................................3-1 3.2 Present Fire and EMS Impact Fees......................................................................3-1 3.3 Calculation of the City’s Fire and EMS Impact Fees..........................................3-2 3.4 Key Assumptions.................................................................................................3-5 3.5 Implementation of the Impact Fees......................................................................3-6 3.6 Consultant Recommendations .............................................................................3-6 3.7 Summary..............................................................................................................3-6 Tables 3-1 2008 Fire and EMS Impact Fees..........................................................................3-2 3-2 Allowable Fire Impact Fees.................................................................................3-5 Appendix – Fire Impact Fee Exhibits Exhibit 1: A) Montana Code Annotated 2005 and B) NFPA 1710 Exhibit 2: Incident Distribution by Occupancy Exhibit 3: Fire Suppression Asset Costs Exhibit 4: Present and Future Land Use Classifications Exhibit 5: Allowable Residential Impact Fees Exhibit 6: Allowable Commercial and Industrial Impact Fees Exhibit 7: Compliance with MCA Requirements Introduction and Overview of the Study 1-1 City of Bozeman, Montana “The objective of this report is to properly place in context the purpose of impact fees, and to determine cost based impact fees for fire service that complies with Montana law.” Section 1 Introduction and Overview of the Study 1.1 Introduction HDR Engineering, Inc. was retained by the City of Bozeman, Montana (City) to update and determine cost-based impact fees for the City’s fire services that comply with SB 185 (Montana Code 7-6-1601 to 7-6-1604). This report provides details of the development of cost based impact fees for the City’s fire and EMS services. Impact fees are a one-time assessment against new development to pay for the cost of infrastructure required to provide service. Impact fees provide the means of balancing the cost requirements for new infrastructure (buildings and equipment) between existing and new customers. The portion of future capital improvements that will provide service to new customers is included in the impact fees. In contrast to this, the City’s future capital projects and equipment requirements that are related to curing existing deficiencies in fire and EMS services are excluded. These costs must be funded by other sources and are not included within the impact fee. By establishing cost-based impact fees, the City will equitably ensure that “growth pays for growth” and existing residents and businesses will be sheltered from the negative financial impacts of growth. 1.2 Overview of the Study This report is divided into three distinct components. The next section of the report, Section 2, provides a summary of the legal requirements for the enactment of impact fees under Montana law. The cost based impact fee calculation for the City’s fire services is provided in Section 3. 1.3 Disclaimer HDR, in its determination of impact fees presented in this report, has used “generally accepted” planning and accounting principles. This should not be construed as a legal opinion with respect to Montana law. HDR recommends the City have its legal counsel review the methodology as discussed herein to ensure compliance with Montana law. Prior to adoption of this study, the City conducted a legal analysis of its impact fee program, including this study, and concluded that the program conforms to all legal requirements. 1.4 Summary This section of the report has provided an overview of the report developed for the City concerning impact fees. The next section of the report will discuss the legal requirement for impact fees under Montana law. Legal Considerations in Establishing Impact Fees for the City 2-1 City of Bozeman, Montana “The laws for the enactment of impact fees in Montana are found in 7-6-1601 to 7-6-1604 of the Montana Code.” Section 2 Legal Considerations in Establishing Impact Fees for the City 2.1 Introduction In January 1996, the City Commission of the City of Bozeman voted to establish impact fees in order to prevent the lack of infrastructure from stopping new development and to more equitably balance cost burdens of new infrastructure. An important consideration in establishing impact fees is any legal requirements at the state or local level. The legal requirements often establish the methodology around which the impact fees must be calculated or how the funds must be used. Because of this, it is important for the City to understand these legal requirements. This section of the report provides an overview of the legal requirements for establishing impact fees under Montana law. The discussion within this section of the report is intended to be a summary of our understanding of the relevant Montana law as it relates to establishing impact fee. It in no way constitutes a legal interpretation of Montana law by HDR. 2.2 Requirements under Montana Law In establishing impact fees, an important requirement is that they be developed and implemented in conformance with local laws. In particular, many states have established specific laws regarding the establishment, calculation, and implementation of impact fees. The main objective of most state laws is to ensure these charges are established in such a manner that they are fair, equitable, and cost-based. In other cases, state legislation may have been needed to provide the legislative powers to the utility to establish the charges. The Montana law enabling legislation for impact fees was enacted in 2005 via Senate Bill 185. This was comprehensive legislation allowing public entities in the State of Montana to enact impact fees for various services. The legal basis for the enactment of impact fees is found in Title 7, Chapter 6, and Part 1601 to 1604 of the Montana Code. A summary of the Montana Code is provided below. A copy of the full code is provided in Exhibit 1A of the Appendix. A summary of the requirements under Montana law is as follows: “7-6-1601. Definitions. As used in this part, the following definitions apply:... …5) (a) "Impact fee" means any charge imposed upon development by a governmental entity as part of the development approval process to fund the additional service capacity required by the development from which it is collected. An impact fee may include a fee for the administration of the impact fee Legal Considerations in Establishing Impact Fees for the City 2-2 City of Bozeman, Montana not to exceed 5% of the total impact fee collected. (b)The term does not include: (i) a charge or fee to pay for administration, plan review, or inspection costs associated with a permit required for development; (ii) a connection charge; (iii) any other fee authorized by law, including but not limited to user fees, special improvement district assessments, fees authorized under Title 7 for county, municipal, and consolidated government sewer and water districts and systems, and costs of ongoing maintenance; or (iv) onsite or offsite improvements necessary for new development to meet the safety, level of service, and other minimum development standards that have been adopted by the governmental entity. 7-6-1602. Calculation of impact fees -- documentation required -- ordinance or resolution -- requirements for impact fees. (1) For each public facility for which an impact fee is imposed, the governmental entity shall prepare and approve documentation that: (a) describes existing conditions of the facility; (b) establishes level of service standards; (c) forecasts future additional needs for service for a defined period of time; (d) identifies capital improvements necessary to meet future needs for service; (e) identifies those capital improvements needed for continued operation and maintenance of the facility; (f) makes a determination as to whether one service area or more than one service area is necessary to establish a correlation between impact fees and benefits; (g) makes a determination as to whether one service area or more than one service area for transportation facilities is needed to establish a correlation between impact fees and benefits; (h) establishes the methodology and time period over which the governmental entity will assign the proportionate share of capital costs for expansion of the facility to provide service to new development within each service area; (i) establishes the methodology that the governmental entity will use to exclude operations and maintenance costs and correction of existing deficiencies from the impact fee; (j) establishes the amount of the impact fee that will be imposed for each unit of increased service demand; and (k) has a component of the budget of the governmental entity that: (i) schedules construction of public facility capital improvements to serve projected growth; (ii) projects costs of the capital improvements; (iii) allocates collected impact fees for construction of the capital improvements; and (iv) covers at least a 5-year period and is reviewed and updated at least every 2 years. Legal Considerations in Establishing Impact Fees for the City 2-3 City of Bozeman, Montana ….5) An impact fee must meet the following requirements: (a) The amount of the impact fee must be reasonably related to and reasonably attributable to the development's share of the cost of infrastructure improvements made necessary by the new development. (b) The impact fees imposed may not exceed a proportionate share of the costs incurred or to be incurred by the governmental entity in accommodating the development. The following factors must be considered in determining a proportionate share of public facilities capital improvements costs: (i) the need for public facilities capital improvements required to serve new development; and (ii) consideration of payments for system improvements reasonably anticipated to be made by or as a result of the development in the form of user fees, debt service payments, taxes, and other available sources of funding the system improvements. (c) Costs for correction of existing deficiencies in a public facility may not be included in the impact fee. (d) New development may not be held to a higher level of service than existing users unless there is a mechanism in place for the existing users to make improvements to the existing system to match the higher level of service. (e) Impact fees may not include expenses for operations and maintenance of the facility. 7-6-1603. Collection and expenditure of impact fees -- refunds or credits -- mechanism for appeal required…. …(3) A governmental entity may recoup costs of excess capacity in existing capital facilities, when the excess capacity has been provided in anticipation of the needs of new development, by requiring impact fees for that portion of the facilities constructed for future users. The need to recoup costs for excess capacity must have been documented pursuant to 7-6-1602 in a manner that demonstrates the need for the excess capacity. This part does not prevent a governmental entity from continuing to assess an impact fee that recoups costs for excess capacity in an existing facility. The impact fees imposed to recoup the costs to provide the excess capacity must be based on the governmental entity's actual cost of acquiring, constructing, or upgrading the facility and must be no more than a proportionate share of the costs to provide the excess capacity.” The use of the methodology discussed in Section 3 should ensure the proportional share standard is met and impact fees are in compliance with Montana law. 2.3 Summary This section of the report has reviewed the legal basis for establishing impact fees in Montana. HDR concludes that the City has the authority to establish cost-based impact fees and the methodology used ensures compliance with Montana law. Determination of the City’s Fire and EMS Impact Fees 3-1 City of Bozeman, Montana Section 3 Determination of the City’s Fire and EMS Impact Fees 3.1 Introduction This section of the report presents the development of the fire and EMS impact fees. The calculation of the fire and EMS impact fees presented in this section is based on the City’s planning criteria and future capital improvements as identified in the “City of Bozeman Fire Protection Master Plan” (the “Fire Master Plan”), prepared by Emergency Services Consulting, Inc. in August 2006. To the extent that the cost and timing of future capital improvements change, then the impact fee presented in this section should be updated to reflect the cost of these adjustments. 3.2 Present Fire and EMS Impact Fees The City currently assesses an impact fee for the fire and EMS services. A summary of the 2008 fire impact fees is provided in Table 3-1. These fees were based on a 1997 study prepared for the City. The study allocated fire and EMS costs to various land use categories based on fire flow and other factors (i.e., building proximity), which resulted in different fees for various land use categories. Determination of the City’s Fire and EMS Impact Fees 3-2 City of Bozeman, Montana Table 3-1 City of Bozeman, Montana 2008 Fire and EMS Impact Fees* Development Type 2008 Fire Impact Fee RESIDENTIAL Per Dwelling Unit Single-family, Detached $246.26 Single-family, Attached $206.81 Duplex $155.10 Multi-family $112.93 Mobile home $112.93 OFFICE/INSTITUTIONAL Per 1,000 sq. ft. Under 10,000 sq. ft. $125.17 Between 10,000 and 49,999 sq. ft. $240.82 50,000 sq. ft. and over $483.00 COMMERCIAL/HOTEL Per 1,000 sq. ft. Under 10,000 sq. ft. $240.82 Between 10,000 and 49,999 sq. ft. $367.35 Between 50,000 and 99,999 sq. ft. $608.17 100,000 sq. ft. and over $723.82 INDUSTRIAL Per 1,000 sq. ft. Under 10,000 sq. ft. $240.82 Between 10,000 and 49,999 sq. ft. $483.00 50,000 sq. ft. and over $723.82 *Bozeman Fire Impact Fee Schedule, Effective January 1, 2008 3.3 Calculation of the City’s Fire and EMS Impact Fees The process of calculating impact fees is based on a multistep process. In summary, these steps were to determine the following: Fire and EMS impact fee zones Planning standards Building and equipment costs Credits Fire and EMS impact fees for residential and commercial development The methodology used in the determination of the fire and EMS impact fees in this report is different that the methodology used to establish the current fire and EMS impact fees. While the basic approach is the same, the main difference is in the allocation of fire and EMS costs to various land use categories. Based on the Fire Master Plan and discussions with the City and the Impact Fee Advisory Committee (IFAC), it was determined that the number of calls was a better representation of the costs imposed by each land use category. The use of this approach apportions the costs based on the use of the fire and EMS services. At the time of the previous study, this data was not available. Each of these areas is discussed in more detail below. Determination of the City’s Fire and EMS Impact Fees 3-3 City of Bozeman, Montana Fire and EMS Impact Fee Zones Pursuant to MCA 7-6-1602(1) (f), the following must be considered: “…makes a determination as to whether one service area or more than one service area is necessary to establish a correlation between impact fees and benefits;” The City operates fire and EMS services as a single integrated service. While a first response time period is established for each fire and EMS station, the other stations provide backup and additional fire and EMS support within prescribed time frames. An example is the deployment of a ladder truck within nine minutes. Based on these factors and a knowledge of the fire and EMS services provided by the City, the City and IFAC determined that, for the purpose of calculating and imposing Fire and EMS Impact Fees, the entire City would be treated as a single service area pursuant to MCA 7-6- 1602(1) (f). Planning Standards The Fire Master Plan states that “the Fire Department has established a six-minute response time (two minutes preparation and four minutes of travel) as a level of service (LOS) standard” (p. 13). The Fire Master Plan made the recommendation that “the City Commission of the City of Bozeman adopt and maintain a time objective for Bozeman FD emergency response in accordance with appropriate NFPA Standards” (p. 81). The LOS standard was adopted as part of the Fire Master Plan by Commission Resolution 3972. NFPA 1710 Standard for the Organization and Deployment of Fire Suppression Operation, Emergency Medical Operations, and Special Operations to the Public by Career Fire Departments establishes a response time for first-arriving fire apparatus at 5 minutes or less, 90 percent of the time (see Exhibit 1B). This refers to the time after dispatch, including turnout and response time. Although the 4 minute response time is not a legal requirement, it is a useful benchmark against which to measure a fire department’s performance. Analysis of the current geographic-based coverage of Bozeman’s two fire stations found that “the four-minute response footprint is slightly larger than the 1.5 mile travel zone used by the ISO for optimum community fire protection scoring in engine company distribution” (p. 54). The Fire Master Plan found that 61.5% of the projected service demand can be reached within four minutes of travel time with the current facility deployment (p. 126). However, only 28% of the projected future geographic area was found to be covered within four minutes response time by the current facility deployment. NFPA 1710 establishes a response time objective of 90% of calls within four minutes of travel time for the first due agency (NFPA 1710-4.1.2.1.2). The Fire Master Plan determined that five additional fire stations would need to be constructed to meet future residential and commercial development needs and maintain compliance with NFPA 1710. These are Fire Station Nos. 3, 4, 5, 6, and 7. These stations collectively provide service to cover the adopted LOS standard throughout the service area as established in the Fire Master Plan. In addition, Fire Station No. 2 is planned for replacement at its current location. The population in Bozeman in 2007 was projected to be 37,775 (Fire Master Plan, p. 114). In 2024, Determination of the City’s Fire and EMS Impact Fees 3-4 City of Bozeman, Montana it is estimated that the population will increase to 49,400, an increase of approximately 11,625 people from 2007. Population and geographic distribution are from the Bozeman 2020 Community Plan, which was adopted by Commission resolution 3486 and the Fire Master Plan. Building and Equipment Costs The next step of the analysis is to review each major functional component of providing fire and EMS service and determine the impact fee for that component. In calculating the fire and EMS impact fee for the City, only planned future capital improvement projects were included within the calculation. The components of the City’s fire and EMS service that were reviewed for purposes of calculating impact fee were: New fire stations and equipment Administration costs of the fire and EMS impact fee A brief discussion of the impact fee calculated for each of the components is provided below. FIRE STATIONS AND EQUIPMENT – To serve new development, the City’s Fire Master Plan identified five new stations plus equipment necessary to maintain the service standards under NFPA 1710 within the City (Fire Master Plan). The total cost for Fire Station Number 3 was reduced by the amount of fire impact fees that have been collected by the City for financing of this station ($2,428,672). For Fire Stations 4, 5, 6, and 7 the cost allocated to new development was only that amount of new development that would occur in the planning horizon to 2020. Based on residential and commercial development, this resulted in 48% of the costs of these facilities allocated to the fire and EMS impact fee. The costs of development of new fire and EMS stations as developed in the Fire Master Plan did not include land purchase costs. The cost of land purchase was added based on the current cost of land procurement as provided by the City. These costs were then allocated to residential and commercial development based on the number of calls initiated by each type of development over the period 2004-2006 (Exhibit 2). The result was a total cost of $7,442,878 of which $3,822,089 is attributable to residential development and $3,620,788 is attributable to commercial development. Details of the calculations are provided in Exhibit 3. ADMINISTRATIVE CHARGE – Under Montana statute, an impact fee may include a fee for the administration of the impact not to exceed 5% of the impact fee collected; therefore, the City has included a fire impact fee administrative charge of 5% of the impact fee collected. Credits The City currently pays for operation of the Fire and EMS stations through taxes from the general fund. The City also passed a new levy in November 2007 to pay for replacement of equipment not eligible for inclusion in the impact fee (asset life less than 10 years) and operation of Station No. 4; therefore, no credit is required in the calculation of the Fire and EMS Impact Fee. Net Allowable Fire and EMS Impact Fees by Development Type Based on the sum of the component costs calculated above, the net allowable fire and EMS impact fee can be determined. “Net” refers to the “gross” impact fee, less any credits. “Allowable” refers to the concept that the calculated impact fee shown in the following tables are Determination of the City’s Fire and EMS Impact Fees 3-5 City of Bozeman, Montana the City’s cost-based impact fees. The City, as a matter of policy, may charge any amount up to the allowable impact fee, but not over that amount. Charging an amount greater than the allowable impact fee would not meet the proportionality test of a cost-based impact fee. Residential fire and EMS impact fees were developed based on population projections from 2006 to 2024 in the City of Bozeman 2020 Community Plan and Fire Master Plan. To determine the residential development fire and EMS impact fee, the allocated portion of fire service costs is divided by the population base that will be served to determine a cost per person. This cost is then multiplied by the number of persons per dwelling type to determine a fire and EMS impact fee by residential development type. For commercial development, the allocated fire service costs are divided by the estimated amount of new commercial building space (per 1,000 sq. ft.) that will be developed over the planning horizon. Commercial fire impact fees were developed based on land use data provided in the Bozeman 2020 Community Plan (pages 6-14 and 6-20) and referenced in the Fire Master Plan. Analysis of data provided in the Community Plan indicated that approximately 574 acres of land zoned for commercial or industrial use would be developed between 2007 and 2020 (Exhibit 4). This represents 48% of the land available for development consistent with the allocation of fire and EMS costs. The fire and EMS impact fee calculation for commercial/industrial development assumes an average building density of 37,070 sq. ft. gross building area per acre. Calculations of the residential and commercial/industrial development impact fees are included in Exhibits 5 and 6, respectively. A summary of the calculated net allowable fire impact fees by development type are shown in Table 3-2. Table 3-2 City of Bozeman, Montana Allowable Fire Impact Fees Development Type Impact Fee Calculation Results Detached residential per unit $780.20 Attached residential, per unit $655.92 Commercial/Industrial/Institutional per 1,000 sq. ft. of building space $178.84 The total impact fee as shown for a detached residential unit is $780.20 per unit and for an attached residential unit is $643.39. The fire and EMS impact fee for commercial development was calculated at $172.98 per 1,000 sq. ft. of building space. The details of the net allowable impact fees are shown in Exhibit 5 and Exhibit 6 of the Appendix. 3.4 Key Assumptions In the development of the impact fees for the City’s fire and EMS system, a number of key assumptions were utilized: The City’s capital improvements and costs were used in the calculation. The number of calls by development type was based on historical call records. Determination of the City’s Fire and EMS Impact Fees 3-6 City of Bozeman, Montana Population and land development projections were used based on those developed in the Bozeman 2020 Community Plan and Fire Master Plan. The amount of commercial land projected to be developed in 2020 was provided by the City. The average building size per acre for commercial development was based on historical development records. 3.5 Implementation of the Impact Fees The methodology used to calculate the impact fees takes into account the cost of money or interest charges and inflation. Therefore, HDR recommends the City adjust the impact fees each year by an escalation factor to reflect the cost of interest and inflation. The most frequently used source to escalate impact fees is the ENR index, which tracks changes in construction costs for municipal projects. This method of escalating the City’s impact fee should be used for no more than a two-year period. After this time period, City should update the charges based on the actual cost of infrastructure and any new planned facilities that would be contained in an updated master plan or capital improvement plan. 3.6 Consultant Recommendations Based on HDR’s review and analysis of the City’s fire and EMS service, the following recommendations: The City should implement impact fees for fire and EMS service that are no greater than the impact fees as set forth in this report. The City should routinely update the actual calculations for the impact fees based on the methodology as approved by the resolution or ordinance setting forth the methodology for impact fees as required by Montana law. 3.7 Summary The fire impact fees developed and presented in this section of the report are based on the planning of the City’s service, future capital improvements, and “generally accepted” rate- making principles. Adoption of the proposed impact fees will provide multiple benefits to the City and create equitable and cost-based charges for new customers. Exhibit 1 Exhibit 1A Montana Code Annotated 2005 Exhibit 1B NFPA 1710 Standard for the Organization and Deployment of Fire Suppression Operation, Emergency Medical Operations, and Special Operations to the Public by Career Fire Departments 7-6-1601. Definitions. As used in this part, the following definitions apply: (1) (a) "Capital improvements" means improvements, land, and equipment with a useful life of 10 years or more that increase or improve the service capacity of a public facility. (b) The term does not include consumable supplies. (2) "Connection charge" means the actual cost of connecting a property to a public utility system and is limited to the labor, materials, and overhead involved in making connections and installing meters. (3) "Development" means construction, renovation, or installation of a building or structure, a change in use of a building or structure, or a change in the use of land when the construction, installation, or other action creates additional demand for public facilities. (4) "Governmental entity" means a county, city, town, or consolidated government. (5) (a) "Impact fee" means any charge imposed upon development by a governmental entity as part of the development approval process to fund the additional service capacity required by the development from which it is collected. An impact fee may include a fee for the administration of the impact fee not to exceed 5% of the total impact fee collected. (b) The term does not include: (i) a charge or fee to pay for administration, plan review, or inspection costs associated with a permit required for development; (ii) a connection charge; (iii) any other fee authorized by law, including but not limited to user fees, special improvement district assessments, fees authorized under Title 7 for county, municipal, and consolidated government sewer and water districts and systems, and costs of ongoing maintenance; or (iv) onsite or offsite improvements necessary for new development to meet the safety, level of service, and other minimum development standards that have been adopted by the governmental entity. (6) "Proportionate share" means that portion of the cost of capital system improvements that reasonably relates to the service demands and needs of the project. A proportionate share must take into account the limitations provided in 7-6-1602. (7) "Public facilities" means: (a) a water supply production, treatment, storage, or distribution facility; (b) a wastewater collection, treatment, or disposal facility; (c) a transportation facility, including roads, streets, bridges, rights-of-way, traffic signals, and landscaping; (d) a storm water collection, retention, detention, treatment, or disposal facility or a flood control facility; (e) a police, emergency medical rescue, or fire protection facility; and (f) other facilities for which documentation is prepared as provided in 7-6-1602 that have been approved as part of an impact fee ordinance or resolution by: (i) a two-thirds majority of the governing body of an incorporated city, town, or consolidated local government; or (ii) a unanimous vote of the board of county commissioners of a county government. History: En. Sec. 1, Ch. 299, L. 2005. Page 1 of 17-6-1601. Definitions. 1/4/2006http://data.opi.state.mt.us/bills/mca/7/6/7-6-1601.htm 7-6-1602. Calculation of impact fees -- documentation required -- ordinance or resolution -- requirements for impact fees. (1) For each public facility for which an impact fee is imposed, the governmental entity shall prepare and approve documentation that: (a) describes existing conditions of the facility; (b) establishes level of service standards; (c) forecasts future additional needs for service for a defined period of time; (d) identifies capital improvements necessary to meet future needs for service; (e) identifies those capital improvements needed for continued operation and maintenance of the facility; (f) makes a determination as to whether one service area or more than one service area is necessary to establish a correlation between impact fees and benefits; (g) makes a determination as to whether one service area or more than one service area for transportation facilities is needed to establish a correlation between impact fees and benefits; (h) establishes the methodology and time period over which the governmental entity will assign the proportionate share of capital costs for expansion of the facility to provide service to new development within each service area; (i) establishes the methodology that the governmental entity will use to exclude operations and maintenance costs and correction of existing deficiencies from the impact fee; (j) establishes the amount of the impact fee that will be imposed for each unit of increased service demand; and (k) has a component of the budget of the governmental entity that: (i) schedules construction of public facility capital improvements to serve projected growth; (ii) projects costs of the capital improvements; (iii) allocates collected impact fees for construction of the capital improvements; and (iv) covers at least a 5-year period and is reviewed and updated at least every 2 years. (2) The data sources and methodology supporting adoption and calculation of an impact fee must be available to the public upon request. (3) The amount of each impact fee imposed must be based upon the actual cost of public facility expansion or improvements or reasonable estimates of the cost to be incurred by the governmental entity as a result of new development. The calculation of each impact fee must be in accordance with generally accepted accounting principles. (4) The ordinance or resolution adopting the impact fee must include a time schedule for periodically updating the documentation required under subsection (1). (5) An impact fee must meet the following requirements: (a) The amount of the impact fee must be reasonably related to and reasonably attributable to the development's share of the cost of infrastructure improvements made necessary by the new development. (b) The impact fees imposed may not exceed a proportionate share of the costs incurred or to be incurred by the governmental entity in accommodating the development. The following factors must be considered in determining a proportionate share of public facilities capital improvements costs: (i) the need for public facilities capital improvements required to serve new development; and (ii) consideration of payments for system improvements reasonably anticipated to be made by or as a result of the development in the form of user fees, debt service payments, taxes, and other available sources of funding the system improvements. (c) Costs for correction of existing deficiencies in a public facility may not be included in the impact fee. (d) New development may not be held to a higher level of service than existing users unless there is a mechanism in place for the existing users to make improvements to the existing system to match the higher level of service. (e) Impact fees may not include expenses for operations and maintenance of the facility. History: En. Sec. 2, Ch. 299, L. 2005. Page 1 of 17-6-1602. Calculation of impact fees -- documentation required -- ordinance or resolution -- requirement... 1/4/2006http://data.opi.state.mt.us/bills/mca/7/6/7-6-1602.htm 7-6-1603. Collection and expenditure of impact fees -- refunds or credits -- mechanism for appeal required. (1) The collection and expenditure of impact fees must comply with this part. The collection and expenditure of impact fees must be reasonably related to the benefits accruing to the development paying the impact fees. The ordinance or resolution adopted by the governmental entity must include the following requirements: (a) Upon collection, impact fees must be deposited in a special proprietary fund, which must be invested with all interest accruing to the fund. (b) A governmental entity may impose impact fees on behalf of local districts. (c) If the impact fees are not collected or spent in accordance with the impact fee ordinance or resolution or in accordance with 7-6-1602, any impact fees that were collected must be refunded to the person who owned the property at the time that the refund was due. (2) All impact fees imposed pursuant to the authority granted in this part must be paid no earlier than the date of issuance of a building permit if a building permit is required for the development or no earlier than the time of wastewater or water service connection or well or septic permitting. (3) A governmental entity may recoup costs of excess capacity in existing capital facilities, when the excess capacity has been provided in anticipation of the needs of new development, by requiring impact fees for that portion of the facilities constructed for future users. The need to recoup costs for excess capacity must have been documented pursuant to 7-6-1602 in a manner that demonstrates the need for the excess capacity. This part does not prevent a governmental entity from continuing to assess an impact fee that recoups costs for excess capacity in an existing facility. The impact fees imposed to recoup the costs to provide the excess capacity must be based on the governmental entity's actual cost of acquiring, constructing, or upgrading the facility and must be no more than a proportionate share of the costs to provide the excess capacity. (4) Governmental entities may accept the dedication of land or the construction of public facilities in lieu of payment of impact fees if: (a) the need for the dedication or construction is clearly documented pursuant to 7-6-1602; (b) the land proposed for dedication for the public facilities to be constructed is determined to be appropriate for the proposed use by the governmental entity; (c) formulas or procedures for determining the worth of proposed dedications or constructions are established as part of the impact fee ordinance or resolution; and (d) a means to establish credits against future impact fee revenue has been created as part of the adopting ordinance or resolution if the dedication of land or construction of public facilities is of worth in excess of the impact fee due from an individual development. (5) Impact fees may not be imposed for remodeling, rehabilitation, or other improvements to an existing structure or for rebuilding a damaged structure unless there is an increase in units that increase service demand as described in 7-6- 1602(1)(j). If impact fees are imposed for remodeling, rehabilitation, or other improvements to an existing structure or use, only the net increase between the old and new demand may be imposed. (6) This part does not prevent a governmental entity from granting refunds or credits: (a) that it considers appropriate and that are consistent with the provisions of 7-6-1602 and this chapter; or (b) in accordance with a voluntary agreement, consistent with the provisions of 7-6-1602 and this chapter, between the governmental entity and the individual or entity being assessed the impact fees. (7) An impact fee represents a fee for service payable by all users creating additional demand on the facility. (8) An impact fee ordinance or resolution must include a mechanism whereby a person charged an impact fee may appeal the charge if the person believes an error has been made. History: En. Sec. 3, Ch. 299, L. 2005. Page 1 of 17-6-1603. Collection and expenditure of impact fees -- refunds or credits -- mechanism for appeal requir... 1/4/2006http://data.opi.state.mt.us/bills/mca/7/6/7-6-1603.htm 7-6-1604. Impact fee advisory committee. (1) A governmental entity that intends to propose an impact fee ordinance or resolution shall establish an impact fee advisory committee. (2) An impact fee advisory committee must include at least one representative of the development community and one certified public accountant. The committee shall review and monitor the process of calculating, assessing, and spending impact fees. (3) The impact fee advisory committee shall serve in an advisory capacity to the governing body of the governmental entity. History: En. Sec. 4, Ch. 299, L. 2005. Page 1 of 17-6-1604. Impact fee advisory committee. 1/4/2006http://data.opi.state.mt.us/bills/mca/7/6/7-6-1604.htm NFPA 1710 Standard for the Organization and Deployment of Fire Suppression Operations, Emergency Medical Operations, and Special Operations to the Public by Career Fire Departments 2001 Edition NFPA, 1 Batterymarch Park, PO Box 9101, Quincy, MA 02269-9101 An International Codes and Standards Organization NFPA License Agreement This document is copyrighted by the National Fire Protection Association (NFPA), 1 Batterymarch Park, Quincy, MA 02269-9101 USA. All rights reserved. NFPA grants you a license as follows: The right to download an electronic file of this NFPA document for temporary storage on one computer for purposes of viewing and/or printing one copy of the NFPA document for individual use. Neither the electronic file nor the hard copy print may be reproduced in any way. 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Copyright © 2001, National Fire Protection Association, All Rights Reserved NFPA 1710 Standard for the Organization and Deployment of Fire Suppression Operations, Emergency Medical Operations, and Special Operations to the Public by Career Fire Departments 2001 Edition This edition of NFPA 1710,Standard for the Organization and Deployment of Fire Suppression Operations, Emergency Medical Operations, and Special Operations to the Public by Career Fire Depart- ments,was prepared by the Technical Committee on Fire and Emergency Service Organiza- tion and Deployment — Career and acted on by NFPAat its MayAssociation Technical Meet- ing held May 13–17, 2001, inAnaheim, CA. It was issued by the Standards Council on July 13, 2001, with an effective date of August 2, 2001. This edition of NFPA 1710 was approved as an American National Standard on August 2, 2001. Origin and Development of NFPA 1710 The development of this benchmark standard is the result of a considerable amount of hard work and tenacity by Technical Committee members and the organizations they repre- sent. In the case of this standard, their work is the first organized approach to defining levels of service, deployment capabilities, and staffing levels for those “substantially” career fire departments. Research work and empirical studies in North America were used by the Committee as a basis for developing response times and resource capabilities for those services being pro- vided, as identified by the fire department. Committee members have collectively well over 1000 years of fire-fighting experience in small, medium, and metro fire departments. The work done by the Committee provides the user with a template for developing an implementation plan on the standard. Most importantly, it will provide the body politic and the citizens a true picture of the risks in their community, and the fire department’s capabili- ties to respond to and manage those risks. 1710–1 Technical Committee on Fire and Emergency Service Organization and Deployment — Career Alan V. Brunacini,Chair City of Phoenix Fire Department, AZ [E] Richard M. Duffy,Secretary International Association of Fire Fighters, DC [L] (Alt. to IAFF Reps.) Terry Allen,City of Cambridge, Ontario, Canada [E] Rep. NFPA Fire Service Section and OAFC Robert C. Barr,Firescope, Inc., MA [SE] Wayne Bernard,City of Surrey Fire Department, British Columbia, Canada [E] Rep. Fire Chiefs’Association of British Columbia William L. Bingham,City of Boynton Beach, FL [U] Rep. International Fire Marshals Association Diane Breedlove,City of Sugar Land, TX [C] Kenneth E. Buzzell,United Firefighters of LA City, CA [L] Rep. International Association of Fire Fighters Ross Chadwick,City of Denton, TX [E] Welling S. Clark,ITT Industries, CO [RT] John L. Cochran,U.S. Fire Administration, MD [SE] Dennis R. Compton,Mesa Fire Department, AZ [E] Rep. International Association of Fire Chiefs Don R. Forrest,United Firefighters of Los Angeles City, CA [L] Lawrence D. Garcia,City of Wichita, KS [E] Rep. International Association of Fire Chiefs Harold B. Hairston,City of Philadelphia Fire Department, PA [E] Rep. Metropolitan Fire Chiefs Patrick K. Hughes,North Richland Hills Fire Department, TX [U] Rep. International Fire Service Accreditation Congress William D. Killen,U.S. Department of the Navy, DC [U] John K. King,City of Detroit Fire Department, MI [L] Cortez Lawrence,Auburn Public Safety Department, AL [E] Jim Lee,Toronto Professional Fire Fighters’Association, Ontario, Canada [L] Rep. International Association of Fire Fighters Valerie Lemmie,City of Dayton, OH [C] David McCormack,International Association of Fire Fighters, DC [L] Larry Mullikin,Stillwater Fire Department, OK [M] Christopher E. Platten,Wylie, McBride, Jesinger, Sure & Platten, CA [SE] Franklin D. Pratt,Los Angeles County Fire Department, CA [SE] Gary Rainey,Miami Dade Fire Rescue, FL [L] Ken Riddle,City of Las Vegas Fire Department, NV [U] Nick Russo,Department of Fire/Rescue & Emergency Services, MA [E] Rep. International Association of Fire Chiefs Mark A. Sanders,Cincinnati Fire Fighters Union, OH [L] Patrick Smith,U.S. Department of Energy, ID [U] Charles C. Soros,Spencer Safety Products Co., WA [M] Rep. Fire Department Safety Officers Association Edward L. Stinnette,Fairfax County Fire and Rescue Department, VA [E] Alternates Ricky Black,City of Southlake, TX [E] (Alt. to C. Lawrence) Sallie Clark,Colorado Springs, CO [RT] (Alt. to W. S. Clark) Brian D. Johnson,International Association of Fire Chiefs, CO [E] (Alt. to D. R. Compton, L. D. Garcia, N. Russo) Steve Kreis,City of Phoenix Fire Department, AZ [E] (Alt. to A. V. Brunacini) Don N. Whittaker,Bechtel BWXT Idaho, LLC (BBWI), ID [U] (Alt. to P. Smith) Milt Wilson,City of Oshawa, ON [E] Rep. NFPA Fire Service Section/OAFC (Alt. to T. Allen) Stephen N. Foley,NFPA Staff Liaison Committee Scope:This Committee shall have primary responsibility for documents on the organization, operation, deployment, and evaluation of substantially all career public fire protection and emergency medi- cal services. This list represents the membership at the time the Committee was balloted on the final text of this edition. Since that time, changes in the membership may have occurred. A key to classifications is found at the back of the document. NOTE: Membership on a committee shall not in and of itself constitute an endorsement of theAssociation or any document developed by the committee on which the member serves. 1710–2 ORGANIZATION AND DEPLOYMENT OF FIRE SUPPRESSION OPERATIONS BY CAREER FIRE DEPARTMENTS 2001 Edition Contents Chapter 1 Administration ...............................1710–4 1.1 Scope ................................................1710–4 1.2 Purpose .............................................1710–4 1.3 Equivalency ........................................1710–4 Chapter 2 Referenced Publications ..................1710–4 2.1 General .............................................1710–4 Chapter 3 Definitions ....................................1710–4 3.1 General .............................................1710–4 3.2 NFPA Official Definitions .......................1710–4 3.3 General Definitions ..............................1710–4 Chapter 4 Organization .................................1710–6 4.1 Fire Department Organizational Statement ...........................................1710–6 4.2 Fire Suppression Services .......................1710–7 4.3 Emergency Medical Services ...................1710–7 4.4 Special Operations ...............................1710–7 4.5 Airport Rescue and Fire-Fighting Services ..1710–7 4.6 Marine Rescue and Fire-Fighting Services ..1710–7 4.7 Wildland Fire Suppression Services ...........1710–7 4.8 Intercommunity Organization .................1710–7 Chapter 5 Fire Department Services .................1710–7 5.1 Purpose .............................................1710–7 5.2 Fire Suppression Services .......................1710–7 5.3 Emergency Medical Services ...................1710–9 5.4 Special Operations Response ..................1710–9 5.5 Airport Rescue and Fire-Fighting Services ..1710–10 5.6 Marine Rescue and Fire-Fighting (MRFF) Services .............................................1710–10 5.7 Wildland Fire Suppression Services ..........1710–11 Chapter 6 Systems ........................................1710–12 6.1 Safety and Health System .......................1710–12 6.2 Incident Management System .................1710–12 6.3 Training Systems ..................................1710–12 6.4 Communications Systems .......................1710–12 6.5 Pre-Incident Planning ...........................1710–12 Annex A Explanatory Material .........................1710–12 Annex B Informational References ..................1710–16 Index ...........................................................1710–18 1710–3CONTENTS 2001 Edition NFPA 1710 Standard for the Organization and Deployment of Fire Suppression Operations, Emergency Medical Operations, and Special Operations to the Public by Career Fire Departments 2001 Edition NOTICE: An asterisk (*) following the number or letter designating a paragraph indicates that explanatory material on the paragraph can be found in Annex A. Areference in brackets [ ] following a section or paragraph indicates material that has been extracted from another NFPA document. The complete title and edition of the document the material is extracted from is found in Annex B. Editorial changes to extracted material consist of revising references to an appropriate division in this document or the inclusion of the document number with the division number when the reference is to the original document. Requests for interpreta- tions or revisions of extracted text shall be sent to the appro- priate technical committee. Information on referenced publications can be found in Chapter 2 and Annex B. Chapter 1 Administration 1.1* Scope. 1.1.1 This standard contains minimum requirements relat- ing to the organization and deployment of fire suppression operations, emergency medical operations, and special opera- tions to the public by substantially all career fire departments. 1.1.2 The requirements address functions and objectives of fire department emergency service delivery, response capabili- ties, and resources. 1.1.3 This standard also contains minimum requirements for managing resources and systems, such as health and safety, incident management, training, communications, and pre- incident planning. 1.1.4 This standard addresses the strategic and system issues involving the organization, operation, and deployment of a fire department and does not address tactical operations at a specific emergency incident. 1.2 Purpose. 1.2.1*The purpose of this standard is to specify the minimum criteria addressing the effectiveness and efficiency of the ca- reer public fire suppression operations, emergency medical service, and special operations delivery in protecting the citi- zens of the jurisdiction and the occupational safety and health of fire department employees. 1.2.2 Nothing herein is intended to restrict any jurisdiction from exceeding these minimum requirements. 1.3 Equivalency.Nothing in this standard is intended to pro- hibit the use of systems, methods, or approaches of equivalent or superior performance to those prescribed in this standard. Technical documentation shall be submitted to the Authority Having Jurisdiction to demonstrate equivalency. Chapter 2 Referenced Publications 2.1 General.The documents or portions thereof listed in this chapter are referenced within this standard and shall be con- sidered part of the requirements of this document. 2.1.1 NFPA Publications.National Fire Protection Associa- tion, 1 Batterymarch Park, P.O. Box 9101, Quincy, MA 02269- 1901. NFPA 295,Standard for Wildfire Control,1998 edition. NFPA 403,Standard for Aircraft Rescue and Fire-Fighting Ser- vices at Airports,1998 edition. NFPA472,Standard forProfessional Competence of Responders to Hazardous Materials Incidents,1997 edition. NFPA1221,StandardfortheInstallation,Maintenance,andUse of Emergency Services Communications Systems,1999 edition. NFPA 1500,Standard on Fire Department Occupational Safety and Health Program,1997 edition. NFPA 1561,Standard on Emergency Services Incident Manage- ment System,2000 edition. NFPA1670,Standard on Operations and Training for Technical Rescue Incidents,1999 edition. 2.1.2 Other Publications. 2.1.2.1 U.S.GovernmentPublications.U.S.GovernmentPrint- ing Office, Washington, DC 20402. Title 29,Code of Federal Regulations, Part 1910.120,“Hazard- ous Waste Operations and Emergency Response,”1986. Title 29,Code of Federal Regulations, Part 1910.146,“Permit- Required Confined Space.” Chapter 3 Definitions 3.1 General.The definitions contained in this chapter shall apply to the terms used in this standard. Where terms are not included, common usage of the terms shall apply. 3.2 NFPA Official Definitions. 3.2.1* Approved.Acceptable to the authority having jurisdic- tion. 3.2.2* Authority Having Jurisdiction.The organization, of- fice, or individual responsible for approving equipment, ma- terials, an installation, or a procedure. 3.2.3 Shall.Indicates a mandatory requirement. 3.2.4 Should.Indicates a recommendation or that which is advised but not required. 3.3 General Definitions. 3.3.1 Aid. 3.3.1.1* Automatic Aid.A plan developed between two or more fire departments for immediate joint response on first alarms. [1142:1.4] 1710–4 ORGANIZATION AND DEPLOYMENT OF FIRE SUPPRESSION OPERATIONS BY CAREER FIRE DEPARTMENTS 2001 Edition 3.3.1.2* Mutual Aid.Reciprocal assistance by emergency ser- vices under a prearranged plan. [402:1.4] 3.3.2* Aircraft Rescue and Fire Fighting.The fire-fighting actions taken to rescue persons and to control or extinguish fire involving or adjacent to aircraft on the ground. [1500:1.5] 3.3.3* Aircraft Rescue and Fire-Fighting (ARFF) Vehicle.A vehicle intended to carry rescue and fire-fighting equipment for rescuing occupants and combating fires in aircraft at, or in the vicinity of, an airport. [1002:1.4] 3.3.4* Airport Fire Department Personnel.Personnel under the operational jurisdiction of the chief of the airport fire de- partment assigned to aircraft rescue and fire fighting or other emergency response activities. [403:1.3] 3.3.5* Alarm.A signal or message from a person or device indicating the existence of a fire, medical emergency, or other situation that requires fire department action. [1221:1.4] 3.3.6*Apparatus.Amotor-drivenvehicleorgroupofvehicles designed and constructed for the purpose of fighting fires. [295:1.3] 3.3.6.1 Fire Apparatus.Afire department emergency vehicle used for rescue, fire suppression, or other specialized func- tions. [1404:1.4] 3.3.6.2 Quint Apparatus.A fire department emergency ve- hicle with a permanently mounted fire pump, a water tank, a hose storage area, an aerial device with a permanently mounted waterway, and a complement of ground ladders. 3.3.6.3 Specialized Apparatus.Afire department emergency vehicle that provides support services at emergency scenes, including command vehicles, rescue vehicles, hazardous ma- terial containment vehicles, air supply vehicles, electrical gen- eration and lighting vehicles, or vehicles used to transport equipment and personnel. 3.3.7 Attack. 3.3.7.1 Initial Attack.Fire-fighting efforts and activities that occur in the time increment between the arrival of the fire department on the scene of a fire and the tactical decision by the incident commander that the resources dispatched on the original response will be insufficient to control and extinguish the fire, or that the fire is extinguished. 3.3.7.2 Sustained Attack.The activities of fire confinement, control, and extinguishment that are beyond those assigned to the initial responding companies. 3.3.8* Company.A group of members: (1) Under the direct supervision of an officer; (2) Trained and equipped to per- form assigned tasks; (3) Usually organized and identified as engine companies, ladder companies, rescue companies, squad companies, or multi-functional companies; (4) Operat- ing with one piece of fire apparatus (engine, ladder truck, elevating platform, quint, rescue, squad, ambulance) except where multiple apparatus are assigned that are dispatched and arrive together, continuously operate together, and are managed by a single company officer; (5) Arriving at the inci- dent scene on fire apparatus. 3.3.9 Emergency Incident.A specific emergency operation. [1500:1.5] 3.3.10 Emergency Medical Care.The provision of treatment to patients, including first aid, cardiopulmonary resuscitation, basic life support (EMT level), advanced life support (Para- medic level), and other medical procedures that occur prior to arrival at a hospital or other health care facility. [1581:1.3] 3.3.11 Emergency Operations.Activities of the fire depart- ment relating to rescue, fire suppression, emergency medical care, and special operations, including response to the scene of the incident and all functions performed at the scene. [1500:1.5] 3.3.12 Fire Chief.The highest ranking officer in charge of a fire department. [1201:1.7] 3.3.13 Fire Department Member.See 3.3.29 Member. [1500:1.5] 3.3.14 Fire Department Vehicle.Any vehicle, including fire apparatus, operated by a fire department. [1002:1.4] 3.3.15 Fire Protection.Methods of providing for fire control or fire extinguishment. [801:1.5] 3.3.16* Fire Suppression.The activities involved in control- ling and extinguishing fires. [1500:1.5] 3.3.17* First Responder (EMS).Functional provision of ini- tial assessment (i.e., airway, breathing, and circulatory sys- tems) and basic first-aid intervention, including CPR and au- tomatic external defibrillator (AED) capability. 3.3.18 Forcible Entry.Techniques used by fire personnel to gain entry into buildings, vehicles, aircraft, or other areas of confinement when normal means of entry are locked or blocked. 3.3.19* Hazard.The potential for harm or damage to people, property, or the environment. [1500:1.5] 3.3.20 Hazardous Material.A substance that presents an un- usual danger to persons due to properties of toxicity, chemical reactivity, or decomposition, corrosivity, explosion or detona- tion, etiological hazards, or similar properties. [1500:1.5] 3.3.21* High Hazard Occupancy.Building that has high haz- ard materials, processes, or contents. 3.3.22 Incident Commander.The fire department member in overall command of an emergency incident. [1500:1.5] 3.3.23* Incident Management System (IMS).An organized system of roles, responsibilities, and standard operating proce- dures used to manage emergency operations. [1021:1.4] 3.3.24 Incident Safety Officer.An individual appointed to respond or assigned at an incident scene by the incident com- mander to perform the duties and responsibilities of that po- sition as part of the command staff. 3.3.25 Initial Full Alarm Assignment.Those personnel, equipment, and resources ordinarily dispatched upon notifi- cation of a structural fire. 3.3.26 InitialRapidInterventionCrew(IRIC).Twomembers of the initial attack crew who are assigned for rapid deploy- ment to rescue lost or trapped members. 3.3.27 Life Support. 3.3.27.1 Advanced Life Support (ALS).Functional provision of advanced airway management, including intubation, ad- vanced cardiac monitoring, manual defibrillation, establish- ment and maintenance of intravenous access, and drug therapy. 1710–5DEFINITIONS 2001 Edition 3.3.27.2* Basic Life Support (BLS).Functional provision of patient assessment, including basic airway management; oxygen therapy; stabilization of spinal, musculo-skeletal, soft tissue, and shock injuries; stabilization of bleeding; and stabilization and in- tervention for sudden illness, poisoning and heat/cold injuries, childbirth, CPR, and automatic external defibrillator (AED) capability. 3.3.28* Marine Rescue and Fire Fighting.The fire-fighting action taken to prevent, control, or extinguish fire involved in or adjacent to a marine vessel and the rescue actions for occu- pants using normal and emergency routes for egress. 3.3.29* Member.Aperson involved in performing the duties and responsibilities of a fire department under the auspices of the organization. [1500:1.5] 3.3.30 Officer. 3.3.30.1* Company Officer.Asupervisor of a crew/company of personnel. 3.3.30.2* Supervisory Chief Officer.A member whose re- sponsibilityistoassumecommandthroughaformalizedtrans- fer of command process and to allow company officers to di- rectly supervise personnel assigned to them. 3.3.31* Public Fire Department.An organization providing rescue, fire suppression, emergency medical services, and re- lated activities to the public. 3.3.32 Public Safety Answering Point (PSAP).Any facility where 911 calls are answered, either directly or through re- routing. [1221:1.4] 3.3.33* Rapid Intervention Crew (RIC).A dedicated crew of fire fighters who are assigned for rapid deployment to rescue lost or trapped members. 3.3.34 Related Activities.Any and all functions that fire de- partment members can be called upon to perform in the per- formance of their duties. [1500:1.5] 3.3.35 Rescue.Those activities directed at locating endan- gered persons at an emergency incident, removing those per- sons from danger, treating the injured, and providing for transport to an appropriate health care facility. [1410:1.3] 3.3.36* Special Operations.Those emergency incidents to which the fire department responds that require specific and advanced training and specialized tools and equipment. [1561:1.3] 3.3.37* Staff Aide.A fire fighter or fire officer assigned to a supervisory chief officer to assist with the logistical, tactical, and accountability functions of incident, division, or sector command. 3.3.38 Standard Operating Procedure.An organizational di- rective that establishes a standard course of action. 3.3.39 Structural Fire Fighting.The activities of rescue, fire suppression, and property conservation in buildings, enclosed structures, aircraft interiors, vehicles, vessels, aircraft, or like properties that are involved in a fire or emergency situation. [1500:1.5] 3.3.40 Tactical Considerations.Specific fire-fighting objec- tives that will present an unusually significant fire or life safety hazard when they are conducted in a fire or other emergency. 3.3.41 Team.Two or more individuals who have been as- signed a common task and are in communication with each other, coordinate their activities as a work group, and support the safety of one another. 3.3.42 Time. 3.3.42.1 Alarm Time.The point of receipt of the emergency alarm at the public safety answering point to the point where sufficient information is known to the dispatcher to deploy applicable units to the emergency. 3.3.42.2 Call Processing Time.See 3.3.42.3 Dispatch Time. 3.3.42.3* Dispatch Time.The point of receipt of the emer- gency alarm at the public safety answering point to the point where sufficient information is known to the dispatcher and applicable units are notified of the emergency. 3.3.42.4 Response Time.The time that begins when units are en route to the emergency incident and ends when units arrive at the scene. 3.3.42.5 Turnout Time.The time beginning when units ac- knowledge notification of the emergency to the beginning point of response time. Chapter 4 Organization 4.1 Fire Department Organizational Statement. 4.1.1*The authority having jurisdiction shall maintain a writ- ten statement or policy that establishes the following: (1) Existence of the fire department (2) Services that the fire department is required to provide (3) Basic organizational structure (4) Expected number of fire department members (5) Functions that fire department members are expected to perform 4.1.2*The fire department organizational statement shall in- clude service delivery objectives. 4.1.2.1 These objectives shall include specific response time objectives for each major service component (i.e., fire sup- pression, EMS, special operations, aircraft rescue and fire fighting, marine rescue and fire fighting, and/or wildland fire fighting) and objectives for the percentage of responses that meet the response time objectives. 4.1.2.1.1 The fire department shall establish the following time objectives: (1) One minute (60 seconds) for turnout time (2)*Four minutes (240 seconds) or less for the arrival of the first arriving engine company at a fire suppression inci- dent and/or 8 minutes (480 seconds) or less for the de- ployment of a full first alarm assignment at a fire suppres- sion incident (3) Four minutes (240 seconds) or less for the arrival of a unit with first responder or higher level capability at an emer- gency medical incident (4) Eight minutes (480 seconds) or less for the arrival of an advanced life support unit at an emergency medical inci- dent, where this service is provided by the fire department 4.1.2.1.2 The fire department shall establish a performance objective of not less than 90 percent for the achievement of each response time objective specified in 4.1.2.1.1. 4.1.2.1.3 The fire department shall evaluate its level of ser- vice and deployment delivery and response time objectives on 1710–6 ORGANIZATION AND DEPLOYMENT OF FIRE SUPPRESSION OPERATIONS BY CAREER FIRE DEPARTMENTS 2001 Edition an annual basis. The evaluations shall be based on data relat- ing to level of service, deployment, and the achievement of each response time objective in each geographic area within the jurisdiction of the fire department. 4.1.2.1.4 The fire department shall provide the authority hav- ing jurisdiction with a written report, quadrennially, which shall be based on the annual evaluations required by 4.1.2.1.3. 4.1.2.1.4.1 The quadrennial report shall define the geo- graphic areas and/or circumstances in which the require- ments of this standard are not being met. 4.1.2.1.4.2 This report shall explain the predictable conse- quences of these deficiencies and address the steps that are necessary to achieve compliance. 4.2 Fire Suppression Services.The fire department organiza- tional statement shall set forth the criteria for the various types of fire suppression incidents to which the fire department is required to respond. 4.3 Emergency Medical Services. 4.3.1 The fire department organizational statement shall set forth the criteria for the various types of emergency medical incidents to which the fire department is required and/or ex- pected to respond. 4.3.2 The fire department organizational statement shall en- sure that the fire department’s emergency medical response capability includes personnel, equipment, and resources to deploy at the first responder level with automatic external defibrillator (AED) or higher treatment level. 4.3.2.1 Where emergency medical services beyond the first responder with automatic defibrillator level are provided by another agency or private organization, the authority hav- ing jurisdiction, based upon recommendations from the fire department, shall include the minimum staffing, de- ployment and response criteria as required in Section 5.3 in the following: (1) The fire department organizational statement (2) Any contract, service agreement, governmental agree- ment,ormemorandumofunderstandingbetweentheau- thority having jurisdiction and the other agency or private organization 4.4 Special Operations. 4.4.1 The fire department organizational statement shall set forth the criteria for the various types of special operations response and mitigation activities to which the fire depart- ment is required and/or expected to respond. 4.4.2*The fire department organizational statement shall en- sure that the fire department’s hazardous materials response capability includes personnel, equipment, and resources to deploy at the first responder operational level as required by 29 CFR 1910.120. 4.4.3 The fire department organizational statement shall en- sure that the fire department’s confined space response capa- bility includes personnel, equipment, and resources to deploy at the confined space operational level as required by 29 CFR 1910.146. 4.4.4 The fire department organizational statement shall set forth the criteria for the various types of fire department re- sponse during natural disasters or terrorism incidents, weap- ons of mass destruction incidents, or large scale or mass casu- alty events. 4.5 Airport Rescue and Fire-Fighting Services.The fire de- partment organizational statement shall set forth the criteria for the various types of airport rescue and fire-fighting inci- dents to which the fire department is required and/or ex- pected to respond. 4.6 Marine Rescue and Fire-Fighting Services.The fire de- partment organizational statement shall set forth the criteria for the various types of marine rescue and fire-fighting inci- dents to which the fire department is required and/or ex- pected to respond. 4.7 Wildland Fire Suppression Services.The fire department organizational statement shall set forth the criteria for the various types of wildland fire suppression incidents to which the fire department is required and/or expected to respond. 4.8 Intercommunity Organization. 4.8.1*Mutual aid, automatic aid, and fire protection agree- ments shall be in writing and shall address such issues as liabil- ity for injuries and deaths, disability retirements, cost of ser- vice, authorization to respond, staffing, and equipment, including the resources to be made available and the designa- tion of the incident commander. 4.8.2 Procedures and training of personnel for all fire depart- ments in mutual aid, automatic aid, and fire protection agree- ment plans shall be comprehensive to produce an effective fire force and to ensure uniform operations. 4.8.3 Companies responding to mutual aid incidents shall be equipped with communications equipment that allow person- nel to communicate with incident commander and division supervisors, group supervisors, or sector officers. Chapter 5 Fire Department Services 5.1 Purpose. 5.1.1 The services provided by the fire department shall in- clude those activities as required by Chapter 4. 5.1.2 The procedures involved in these services, including operations and deployment, shall be established through writ- ten administrative regulations, standard operating proce- dures, and departmental orders. 5.2* Fire Suppression Services.Fire suppression operations shall be organized to ensure that the fire department’s fire suppression capability includes personnel, equipment, and re- sources to deploy the initial arriving company, the full initial alarm assignment, and additional alarm assignments. The fire department shall be permitted to use established automatic mutual aid and mutual aid agreements to comply with the requirements of Section 5.2. 5.2.1 Staffing. 5.2.1.1*On-duty fire suppression personnel shall be com- prised of the numbers necessary for fire-fighting performance relative to the expected fire-fighting conditions. These num- bers shall be determined through task analyses that take the following factors into consideration: (1) Life hazard to the populace protected 1710–7FIRE DEPARTMENT SERVICES 2001 Edition (2) Provisions of safe and effective fire-fighting performance conditions for the fire fighters (3) Potential property loss (4) Nature, configuration, hazards, and internal protection of the properties involved (5) Types of fireground tactics and evolutions employed as standard procedure, type of apparatus used, and results expected to be obtained at the fire scene 5.2.1.2*On-duty personnel assigned to fire suppression shall be organized into company units and shall have appropriate apparatus and equipment assigned to such companies. 5.2.1.2.1*The fire department shall identify minimum com- pany staffing levels as necessary to meet the deployment crite- ria required in 5.2.3 to ensure that a sufficient number of members are assigned, on duty, and available to safely and effectively respond with each company. 5.2.1.2.2 Eachcompanyshallbeledbyanofficerwhoshallbe considered a part of the company. 5.2.1.2.3*Supervisory chief officers shall be dispatched or no- tified to respond to all full alarm assignments. 5.2.1.2.4 The supervisory chief officer shall ensure that the incident management system is established as required in Sec- tion 6.2. 5.2.1.2.5*Supervisory chief officers shall have staff aides de- ployed to them for purposes of incident management and ac- countability at emergency incidents. 5.2.2 Operating Units.Fire company staffing requirements shall be based on minimum levels for emergency operations for safety, effectiveness, and efficiency. 5.2.2.1 Fire companies whose primary functions are to pump and deliver water and perform basic fire fighting at fires, including search and rescue, shall be known as engine companies. 5.2.2.1.1 These companies shall be staffed with a minimum of four on-duty personnel. 5.2.2.1.2 In jurisdictions with tactical hazards, high hazard occupancies, high incident frequencies, geographical restric- tions, or other pertinent factors as identified by the authority having jurisdiction, these companies shall be staffed with a minimum of five or six on-duty members. 5.2.2.2 Fire companies whose primary functions are to per- form the variety of services associated with truck work, such as forcibleentry,ventilation,searchandrescue,aerialoperations for water delivery and rescue, utility control, illumination, overhaul, and salvage work, shall be known as ladder or truck companies. 5.2.2.2.1 These companies shall be staffed with a minimum of four on-duty personnel. 5.2.2.2.2 In jurisdictions with tactical hazards, high hazard occupancies, high incident frequencies, geographical restric- tions, or other pertinent factors as identified by the authority having jurisdiction, these companies shall be staffed with a minimum of five or six on-duty personnel. 5.2.2.3 Other types of companies equipped with specialized apparatus and equipment shall be provided to assist engine and ladder companies where deemed necessary as part of es- tablished practice. 5.2.2.3.1 These companies shall be staffed with a minimum number of on-duty personnel as required by the tactical haz- ards, high hazard occupancies, high incident frequencies, geographical restrictions, or other pertinent factors as identi- fied by the authority having jurisdition. 5.2.2.4 Fire companies that deploy with quint apparatus, de- signed to operate as either an engine company or a ladder company, shall be staffed as specified in 5.2.2. If the company is expected to perform multiple roles simultaneously, addi- tional staffing, above the levels specified in 5.2.2, shall be pro- vided to ensure that those operations can be performed safely, effectively, and efficiently. 5.2.3 Deployment. 5.2.3.1 Initial Arriving Company. 5.2.3.1.1 The fire department’s fire suppression resources shall be deployed to provide for the arrival of an engine com- pany within a 4-minute response time and/or the initial full alarm assignment within an 8-minute response time to 90 per- cent of the incidents as established in Chapter 4. 5.2.3.1.2*Personnel assigned to the initial arriving company shall have the capability to implement an initial rapid inter- vention crew (IRIC). 5.2.3.2 Initial Full Alarm Assignment Capability. 5.2.3.2.1*The fire department shall have the capability to de- ploy an initial full alarm assignment within an 8-minute re- sponse time to 90 percent of the incidents as established in Chapter 4. 5.2.3.2.2 The initial full alarm assignment shall provide for the following: (1) Establishment of incident command outside of the haz- ard area for the overall coordination and direction of the initial full alarm assignment. A minimum of one indi- vidual shall be dedicated to this task. (2) Establishment of an uninterrupted water supply of a mini- mum 1480 L/min (400 gpm) for 30 minutes. Supply line(s) shall be maintained by an operator who shall en- sure uninterrupted water flow application. (3) Establishment of an effective water flow application rate of 1110 L/min (300 gpm) from two handlines, each of which shall have a minimum of 370 L/min (100 gpm). Attack and backup lines shall be operated by a minimum of two personnel each to effectively and safely maintain the line. (4) Provision of one support person for each attack and backup line deployed to provide hydrant hookup and to assist in line lays, utility control, and forcible entry. (5) Aminimum of one victim search and rescue team shall be part of the initial full alarm assignment. Each search and rescue team shall consist of a minimum of two personnel. (6) A minimum of one ventilation team shall be part of the initial full alarm assignment. Each ventilation team shall consist of a minimum of two personnel. (7) If an aerial device is used in operations, one person shall function as an aerial operator who shall maintain primary control of the aerial device at all times. (8) Establishment of an IRIC that shall consist of a minimum of two properly equipped and trained personnel. 5.2.3.3 Additional Alarm Assignments. 5.2.3.3.1 The fire department shall have the capability for additional alarm assignments that can provide for additional 1710–8 ORGANIZATION AND DEPLOYMENT OF FIRE SUPPRESSION OPERATIONS BY CAREER FIRE DEPARTMENTS 2001 Edition personnel and additional services, including the application of water to the fire; engagement in search and rescue, forcible entry, ventilation, and preservation of property; accountability for personnel; and provision of support activities for those situations that are beyond the capability of the initial full alarm assignment. 5.2.3.3.2 When an incident escalates beyond an initial full alarm assignment or when significant risk is present to fire fighters due to the magnitude of the incident, the incident commander shall upgrade the IRIC to a full rapid interven- tion crew(s) (RIC) that consists of four fully equipped and trained fire fighters. 5.2.3.3.3 An incident safety officer shall be deployed to all incidents that escalate beyond an initial full alarm assignment or when significant risk is present to fire fighters.The incident safety officer shall ensure that the safety and health system is established as required in Section 6.1. 5.3* Emergency Medical Services. 5.3.1 Purpose.EMS operations shall be organized to ensure that the fire department’s emergency medical capability in- cludes personnel, equipment, and resources to deploy the ini- tial arriving company and additional alarm assignments. The fire department shall be permitted to use established auto- matic mutual aid or mutual aid agreements to comply with the requirements of Section 5.3. 5.3.1.1 The purpose of this section shall be to provide stan- dards for the delivery of EMS by fire departments. 5.3.1.2 The fire department shall clearly document its role, responsibilities, functions, and objectives for the delivery of EMS. 5.3.2* System Components. 5.3.2.1 The basic treatment levels within an EMS system, for the purposes of this standard, shall be categorized as first re- sponder, basic life support (BLS), and advanced life support (ALS). The specific patient treatment capabilities associated with each level shall be determined by the authority having jurisdiction for the approval and licensing of EMS providers within each state and province. 5.3.2.2 The minimal level of training for all fire fighters that respond to emergency incidents shall be to the first responder/ AED level. The authority having jurisdiction shall determine if further training is required. 5.3.3 EMS System Functions. 5.3.3.1 The five basic functions within a career fire depart- ment EMS system shall be as follows: (1) Initial response to provide medical treatment at the loca- tion of the emergency (first responder with AED capabil- ity or higher) (2) BLS response (3) ALS response (4) Patient transport in an ambulance or alternative vehicle designed to provide for uninterrupted patient care at the ALS or BLS level while en route to a medical facility (5) Assurance of response and medical care through a quality management program 5.3.3.2 The fire department shall be involved in providing any or all of the functions as identified in 5.3.3.1(1) through 5.3.3.1(5). 5.3.3.3 Staffing. 5.3.3.3.1 On-duty EMS units shall be staffed with the mini- mum numbers of personnel necessary for emergency medi- cal care relative to the level of EMS provided by the fire department. 5.3.3.3.2 EMS staffing requirements shall be based on the minimum levels needed to provide patient care and member safety. 5.3.3.3.2.1 Units that provide emergency medical care shall be staffed at a minimum with personnel that are trained to the first responder/AED level. 5.3.3.3.2.2 Units that provide BLS transport shall be staffed and trained at the level prescribed by the state or provincial agency responsible for providing emergency medical services licensing. 5.3.3.3.2.3 Units that provide ALS transport shall be staffed and trained at the level prescribed by the state or provincial agency responsible for providing emergency medical services licensing. 5.3.3.4 Service Delivery Deployment. 5.3.3.4.1 The fire department shall adopt service delivery ob- jectives based on time standards for the deployment of each service component for which it is responsible. 5.3.3.4.2 The fire department’s EMS for providing first re- sponder with AED shall be deployed to provide for the arrival of a first responder with AED company within a 4-minute re- sponse time to 90 percent of the incidents as established in Chapter 4. 5.3.3.4.3*When provided, the fire department’s EMS for pro- viding ALS shall be deployed to provide for the arrival of an ALS company within an 8-minute response time to 90 percent of the incidents as established in Chapter 4. 5.3.3.4.4 Personnel deployed to ALS emergency responses shall include a minimum of two members trained at the emer- gency medical technician –paramedic level and two members trained at the emergency medical technician –basic level ar- riving on scene within the established response time. 5.3.4 Quality Management. 5.3.4.1 The fire department shall institute a quality manage- ment program to ensure that the service has appropriate re- sponse times as required in 4.1.2.1.1 for all medical responses. 5.3.4.2 All first responder and BLS medical care provided by the fire department shall be reviewed by the fire department medical personnel. This review process shall be documented. 5.3.4.3 All fire departments with ALS services shall have a named medical director with the responsibility to oversee and ensure quality medical care in accordance with state or provincial laws or regulations. This review process shall be documented. 5.3.4.4 Fire departments providingALS services shall provide a mechanism for immediate communications with EMS super- vision and medical oversight. 5.4 Special Operations Response. 5.4.1 Special operations shall be organized to ensure that the fire department’s special operations capability includes per- sonnel,equipment,andresourcestodeploytheinitialarriving 1710–9FIRE DEPARTMENT SERVICES 2001 Edition company and additional alarm assignments providing such services. The fire department shall be permitted to use estab- lished automatic mutual aid or mutual aid agreements to com- ply with the requirements of Section 5.4. 5.4.2 The fire department shall adopt a special operations response plan and standard operating procedures that specify the role and responsibilities of the fire department and the authorized functions of members responding to hazardous materials emergency incidents. 5.4.3 All fire department members who are expected to re- spond to emergency incidents beyond the first responder op- erations level for hazardous materials response shall be trained to the applicable requirements of NFPA 472,Standard for Professional Competence of Responders to Hazardous Materials Incidents. 5.4.4 All fire department members who are expected to re- spond to emergency incidents beyond the confined space op- erations level for confined space operations shall be trained to the applicable requirements of NFPA 1670,Standard on Opera- tions and Training for Technical Rescue Incidents. 5.4.5 The fire department shall have the capacity to imple- ment an RIC during all special operations incidents that would subject fire fighters to immediate danger of injury, or in the event of equipment failure or other sudden events, as re- quired by NFPA 1500,Standard on Fire Department Occupational Safety and Health Program. 5.4.6 If a higher level of emergency response is needed be- yond the capability of the fire department for special opera- tions, the fire department shall determine the availability of outside resources that deploy these capabilities and the proce- dures for initiating their response. The fire department shall belimitedtoperformingonlythosespecificspecialoperations functions for which its personnel have been trained and are properly equipped. 5.5 Airport Rescue and Fire-Fighting Services. 5.5.1 Airport fire departments shall adopt operations re- sponse plan and standard operating procedures (SOPs) that specify the roles and responsibilities for non-aircraft incidents as required by 5.1.2. 5.5.2 Airport rescue and fire-fighting operations shall be or- ganized to ensure that the fire department’s capability in- cludes personnel, equipment, and resources to deploy the ini- tial arriving company, the full initial alarm assignment, and additional alarm assignments as required in 5.2.3. 5.5.3 Airport fire departments shall have access to special tools, equipment, supplies, personal protective equipment (PPE), and other airport resources that are required to per- form operations safely and effectively in their assigned roles and responsibilities. 5.5.4 Deployment. 5.5.4.1 The airport fire department’s ARFF resources shall deploy the required number of vehicles as required for the airport assigned category as established by NFPA403,Standard forAircraft Rescue and Fire-Fighting Services at Airports. 5.5.4.2 Airport fire department companies equipped with specialized apparatus and equipment shall be provided to as- sist ARFF companies where deemed necessary as identified in 5.5.1. 5.5.4.3 Airport fire department companies that deploy to structural incidents on airport property shall meet the re- sponse time requirements of 4.1.2.1.1. 5.5.4.4 Airport fire department companies that deploy to emergency medical incidents on airport property shall meet the response time requirements of 5.3.3.4. 5.5.4.5 The airport fire department shall be permitted to use established automatic mutual aid or mutual aid agreements to comply with the requirements of Section 5.5. 5.5.5 Staffing. 5.5.5.1 Airport fire department ARFF companies shall be staffed as required by NFPA403,Standard forAircraft Rescue and Fire-Fighting Services at Airports. 5.5.5.2 Airport fire department companies that deploy to structural incidents on airport property shall meet the staffing requirements of 5.2.1. 5.5.5.3 Airport fire department companies that deploy to emergency medical incidents on airport property shall meet the staffing requirements of 5.3.3.3. 5.5.6 Emergency Operations. 5.5.6.1 At all emergency scene operations, an Incident Man- agement System shall be used that meets the requirements of Section 6.2. 5.5.6.2*Incident command shall be established outside of the hazard area for the overall coordination and direction of the initial full alarm assignment. 5.5.6.3 An individual shall be dedicated to this task of Inci- dent Commander. 5.5.6.4 An incident safety officer shall be deployed to all inci- dents that escalate beyond a full alarm assignment or when there is a significant risk to fire fighters. The incident safety officer shall ensure that the safety and health system is estab- lished as required in Section 6.1. 5.6* Marine Rescue and Fire-Fighting (MRFF) Services. 5.6.1 MRFF operations shall be organized to ensure that the fire department’s marine capability includes personnel, equipment, and resources to deploy to the alarm assignments associated with a marine emergency incident. 5.6.2 The fire department shall adopt a marine operations response plan and SOPs that specify the roles and responsibili- ties of the fire department and the authorized functions of members responding to marine emergencies. 5.6.2.1 Fire department marine SOPs shall be coordinated with the applicable agencies, such as the port or harbor au- thority and supporting agencies. 5.6.3 Marine fire departments shall have access to special tools, equipment, supplies, PPE, and other marine resources that are required to perform operations safely and effectively in their assigned roles and responsibilities. 5.6.4 Staffing. 5.6.4.1 On-duty marine personnel shall be comprised of the numbers necessary for safe and effective fire-fighting perfor- mance relative to the expected MRFF conditions. 5.6.4.1.1 These numbers shall be determined through task analyses as required for types of marine vessels and through 1710–10 ORGANIZATION AND DEPLOYMENT OF FIRE SUPPRESSION OPERATIONS BY CAREER FIRE DEPARTMENTS 2001 Edition additional task analyses that take the following factors into consideration: (1) Life hazard to the populace protected (2) Provisions of safe and effective fire-fighting performance conditions for the fire fighters (3) Potential property loss (4) Nature, configuration, hazards, and internal protection of the properties involved (5) Types of tactics and evolutions employed as standard pro- cedure, type of marine vessel used, and results expected to be obtained at the fire scene (6) Requirements of the regulatory authorities having juris- diction over navigable waters, ports, and harbors 5.6.4.2 On-duty personnel assigned to marine fire fighting shall be organized into company units and shall have appro- priate vessels and equipment assigned to such companies. 5.6.4.2.1 Each marine company shall be led by an officer who shall be considered a part of the company. 5.6.5 Operating Units. 5.6.5.1*Fire companies whose primary function is to deliver and pump water and extinguishing agents at the scene of a marine incident shall be known as marine companies. 5.6.5.2 These companies shall be staffed with a minimum number of on-duty personnel as required by the tactical and occupancy hazards to which the marine vessel responds and by the regulatory authorities having jurisdiction over navi- gable waters, ports, and harbors. 5.7 Wildland Fire Suppression Services. 5.7.1 Wildland fire suppression operations shall be organized to ensure that the fire department’s wildland fire suppression capability includes personnel, equipment, and resources to deploy wildland direct operations that can address marginal situations before they get out of control and wildland indirect fire-fighting operations that can be assembled and placed into operation against major wildland fires. 5.7.2 Fire departments performing wildland operations shall adopt a wildland fire-fighting operations response plan and SOPs that specify the roles and responsibilities of the fire de- partment and the authorized functions of members respond- ing to wildland fire emergencies. 5.7.2.1 All wildland fire suppression operations shall be orga- nized to ensure compliance with NFPA 295,Standard for Wild- fire Control. 5.7.3 Fire departments performing wildland operations shall have access to special tools, equipment, supplies, PPE, and other wildland resources that are required to perform operations safely and effectively in their assigned roles and responsibilities. 5.7.4 Staffing. 5.7.4.1 On-duty wildland fire-fighting personnel shall be comprised of the numbers necessary for safe and effective fire- fighting performance relative to the expected wildland fire- fighting conditions. 5.7.4.1.1 These numbers shall be determined through task analyses that take the following factors into consideration: (1) Life hazard to the populace protected (2) Provisions of safe and effective fire-fighting performance conditions for the fire fighters (3) The number of trained response personnel available to the department including mutual aid resources (4) Potential property loss (5) Nature, configuration, hazards, and internal protection of the properties involved (6) Types of wildland tactics and evolutions employed as stan- dard procedure, type of apparatus used, and results ex- pected to be obtained at the fire scene (7) Topography, vegetation, and terrain in the response area(s) 5.7.4.2 On-duty personnel assigned to wildland operations shall be organized into company units and shall have appro- priate apparatus and equipment assigned to such companies. 5.7.4.2.1 The fire department shall identify minimum com- pany staffing levels as necessary to meet the deployment crite- ria to ensure that a sufficient number of members are as- signed, on duty, and available to safely and effectively respond with each company. 5.7.4.2.2 Eachcompanyshallbeledbyanofficerwhoshallbe considered a part of the company. 5.7.4.2.3 Supervisory chief officers shall be dispatched or no- tified to respond to all full alarm assignments.The supervisory chief officer shall ensure that the incident management sys- tem is established as required in Section 6.2. 5.7.5 Operating Units. 5.7.5.1 Fire companies whose primary function is to deliver and pump water and extinguishing agents at the scene of a wildland fire shall be known as wildland companies. 5.7.5.1.1 These companies shall be staffed with a minimum of four on-duty personnel. 5.7.5.2 Engine and ladder (truck) companies that respond to wildland fire-fighting and/or urban interface wildland fire- fighting incidents shall be staffed as required by 5.2.2. 5.7.5.3 Other types of companies equipped with special- ized apparatus and equipment for wildland fire fighting, including aircraft, heavy equipment, mini pumpers, and fast attack vehicles, shall be provided to assist wildland en- gine and ladder companies where deemed necessary as part of established practice. 5.7.5.3.1 These companies shall be staffed with a minimum number of on-duty personnel as required by the tactical, topo- graphical, environmental, fuel (vegetation), and occupancy hazards. 5.7.6 Deployment. 5.7.6.1 Required Number of Vehicles.The fire department’s wildland resources shall deploy the required number of ve- hicles as required for a direct and/or an indirect attack. 5.7.6.1.1*Prior to the initiation of any wildland fire attack, the fire department shall have the capacity to establish a look- out(s), communications with all crew members, escape route(s), and safety zone(s) for vehicles and personnel. 5.7.6.2 Direct Attack. 5.7.6.2.1 The fire department shall have the capability to safely initiate a direct wildland attack within 10 minutes after arrival of the initial company or crew at the fire scene. 1710–11FIRE DEPARTMENT SERVICES 2001 Edition 5.7.6.2.2 One individual in the first arriving company or crew shall be assigned as the incident commander for the overall coordination and direction of the direct attack activities. 5.7.6.2.3 The direct wildland attack shall include the follow- ing: (1) Establishment of an effective water flow application rate of 111 L/min (30 gpm) from at least two 150 m (500 ft) 11⁄2 in. diameter attack handlines from two engines. Each attack handline shall be operated by a minimum of two personnel to effectively and safely deploy and maintain the line. (2) Provision of one operator who shall remain with each fire apparatus supplying water flow to ensure uninterrupted water flow application. (3) Provision of a wildland crew leader or company officer with each crew who shall be responsible for overall super- vision of each of the crew and for maintaining personnel accountability and crew safety. 5.7.6.3 Indirect Attack. 5.7.6.3.1 The fire department providing wildland fire sup- pression operations shall have the capability to deploy an indi- rect attack, including application of water to the fire, engage- ment in search and rescue and preservation of property, accountability for personnel, and provision of support activi- ties for those situations that are beyond the capability of the direct attack. 5.7.6.3.2 An incident safety officer shall be deployed to all incidents that escalate beyond a direct attack alarm assign- ment or when there is a significant risk to fire fighters. 5.7.7 Nonwildland Emergencies. 5.7.7.1 Wildland companies that deploy to structural inci- dents shall meet the response time requirements of 4.1.2.1.1. 5.7.7.2 Wildland companies that deploy to emergency medi- cal incidents shall meet the response time requirements of 4.1.2.1.1. Chapter 6 Systems 6.1 Safety and Health System.A fire-fighter occupational safety and health program shall be provided in accordance with NFPA1500,Standard on Fire Department Occupational Safety and Health Program. 6.2* Incident Management System. 6.2.1 An incident management system shall be provided in accordance with NFPA 1561,Standard on Emergency Services In- cident Management System, to form the basic structure of all emergency operations of the fire department, regardless of the scale of the department or the emergency. 6.2.2*An effective incident management system shall be de- signed to manage incidents of different types, including struc- ture fires, wildland fires, hazardous materials incidents, emer- gency medical operations, and other types of emergencies that could be handled by the department. 6.3 Training Systems.The fire department shall have a train- ing program and policy that ensures that personnel are trained and competency is maintained to execute all responsi- bilities consistent with the department’s organization and de- ployment as addressed in Chapters 4 and 5. 6.4 Communications Systems. 6.4.1 The fire department shall have a reliable communica- tions system to facilitate prompt delivery of public fire sup- pression, emergency medical services, and special operations. 6.4.2 All communications facilities, equipment, staffing, and operating procedures shall comply with NFPA 1221,Standard for the Installation, Maintenance, and Use of Emergency Services Communications Systems. 6.4.3 Operating procedures for radio communications shall provide for the use of standard protocols and terminology at all types of incidents. 6.4.3.1 Standard terminology, in compliance with NFPA 1561, Standard on Emergency Services Incident Management System, shall be es- tablished to transmit information, including strategic modes of op- eration, situation reports, and emergency notifications of imminent hazards. 6.5*Pre-IncidentPlanning.Thefiredepartmentshallsetforth operational requirements to conduct pre-incident planning. Particular attention shall be provided to all target hazards. Annex A Explanatory Material Annex A is not a part of the requirements of this NFPA document but is included for informational purposes only. This annex contains explanatory material, numbered to correspond with the applicable text paragraphs. A.1.1 The standard includes minimum requirements that are intended to provide effective, efficient, and safe protective ser- vices that operate on a sound basis to prevent fires and reduce risktolivesandproperty,todealwithincidentsthatoccur,and to prepare for anticipated incidents. It sets minimum stan- dards considered necessary for the provision of public fire protection by career fire departments. It addresses the struc- ture and operation of organizations providing such services, including fire suppression and other assigned emergency re- sponse responsibilities, which include emergency medical ser- vices and special operations. A.1.2.1 A fundamental concept of fire risk is associated with modern society. Public fire service organizations are expected to reduce the risk within their areas of jurisdiction by taking measures to prevent the outbreak of fires, to limit the extent and severity of fires, to provide for the removal or rescue of endangered persons, to control and extinguish fires that occur within the jurisdiction, and to perform other emergency response operations and delivery of emer- gency medical services. The cumulative effects of preventive efforts, risk reduction and control, and fire suppression capabilities result in variable levels of risk to the jurisdictions and their residents. Theriskremainingafterdeductingthecumulativeeffectof the public fire service organization’s efforts is the responsibil- ity of each individual, including owners, operators, occupants, and casual visitors to properties. It should be noted that fire risk cannot be completely avoided or eliminated. A.3.2.1 Approved.The National Fire Protection Association does not approve, inspect, or certify any installations, proce- dures, equipment, or materials; nor does it approve or evalu- 1710–12 ORGANIZATION AND DEPLOYMENT OF FIRE SUPPRESSION OPERATIONS BY CAREER FIRE DEPARTMENTS 2001 Edition ate testing laboratories. In determining the acceptability of installations, procedures, equipment, or materials, the author- ity having jurisdiction may base acceptance on compliance with NFPA or other appropriate standards. In the absence of such standards, said authority may require evidence of proper installation, procedure, or use. The authority having jurisdic- tion may also refer to the listings or labeling practices of an organization that is concerned with product evaluations and is thus in a position to determine compliance with appropriate standards for the current production of listed items. A.3.2.2 Authority Having Jurisdiction.The phrase “authority having jurisdiction”is used in NFPA documents in a broad manner, since jurisdictions and approval agencies vary, as do their responsibilities. Where public safety is primary, the au- thority having jurisdiction may be a federal, state, local, or other regional department or individual such as a fire chief; fire marshal; chief of a fire prevention bureau, labor depart- ment, or health department; building official; electrical in- spector; or others having statutory authority. For insurance purposes, an insurance inspection department, rating bureau, or other insurance company representative may be the au- thority having jurisdiction. In many circumstances, the prop- erty owner or his or her designated agent assumes the role of the authority having jurisdiction; at government installations, the commanding officer or departmental official may be the authority having jurisdiction. A.3.3.1.1 Automatic Aid.The capabilities of personnel and equipment for a predetermined response to a neighboring jurisdiction upon receipt of an alarm, this process is accom- plished through simultaneous dispatch, is documented in writing, and is included as part of a communication center’s dispatch protocols. A.3.3.1.2 Mutual Aid.A written policy or contract that allows for the deployment of personnel and equipment to respond to an alarm in another jurisdiction, this is part of the written deployment criteria for response to alarms as dispatched by a communication center.(See also 3.3.1.1.) A.3.3.2 Aircraft Rescue and Fire Fighting.Such rescue and fire-fighting actions are performed both inside and outside of the aircraft. A.3.3.3 AircraftRescueandFire-Fighting(ARFF)Vehicle.The apparatus is typically equipped with a large water tank (com- mencing at 1000 gal and extending to over 6000 gal); a supply of fire-fighting extinguishing agents; remote-controlled large roof turret(s), extendable turret nozzle(s), and bumper turret(s) (ground sweep nozzles) that are used for the discharge of extin- guishing agent; and pre-connected handlines. A.3.3.4 Airport Fire Department Personnel.These individuals can also be responsible for additional fire protection and sup- pression, emergency medical, and other emergency response within the boundaries of the airport facility. A.3.3.5 Alarm.In some jurisdictions this is referred to as an incident or call for service. A.3.3.6 Apparatus.Examples include fire engines, water ten- ders, and ladder trucks. A.3.3.8 Company.For fire suppression, jurisdictions exist where the response capability of the initial arriving company is configured with the response of two apparatus. In some juris- dictions, apparatus is not configured with seated and belted positions for four personnel and therefore would respond with an additional vehicle in consort with the initial arriving engine to carry additional personnel. This response would be to ensure that a minimum of four personnel are assigned to and deployed as a company. The intent of this definition and the requirements in the standard are to ensure that these two (or more) pieces of apparatus would always be dispatched and respond together as a single company. Some examples of this include the following: (1) Engine and tanker/tender that would be responding out- side a municipal water district (2) Multiple-piececompanyassignment,specifiedinafirede- partment’s response SOPs, such as an engine company response with a pumper and a hose wagon (3) Engine with a vehicle personnel carrier (4) Engine with an ambulance or rescue unit “Company,”as used in this standard, is synonymous with company unit, response team, crew, and response group, rather than a synonym for a fire department. A.3.3.16 Fire Suppression.Fire suppression includes all activi- ties performed at the scene of a fire incident or training exer- cise that expose fire department members to the dangers of heat, flame, smoke, and other products of combustion, explo- sion, or structural collapse. A.3.3.17 First Responder (EMS).The first responder also as- sists higher level emergency medical service providers. A.3.3.19 Hazard.Hazards include the characteristics of fa- cilities, equipment systems, property, hardware, or other objects; and the actions and inactions of people that create such hazards. A.3.3.21 High Hazard Occupancy.Also included would be high-risk residential occupancies, neighborhoods with structures in close proximity to one another, special medi- cal occupancies, high-rise occupancies, and hazardous ma- terials occupancies. A.3.3.23 Incident Management System (IMS).Such systems are often referred to as incident command systems (ICS). A.3.3.27.2 Basic Life Support (BLS).Basic life support per- sonnel also assist higher level EMS providers. A.3.3.28 Marine Rescue and Fire Fighting.Marine companies can be utilized for special operations, including a platform for dive and scuba operations and for providing a secure water supply for land-based operations. A.3.3.29 Member.A fire department member can be a full- time or part-time employee or a paid or unpaid volunteer, can occupy any position or rank within the fire department, and can engage in emergency operations. A.3.3.30.1 Company Officer.This person can be someone ap- pointed in an acting capacity. The rank structure could be either sergeant, lieutenant, or captain. A.3.3.30.2 Supervisory Chief Officer.A supervisory chief of- ficer is above that of a company officer, who responds auto- matically and/or is dispatched to an alarm beyond the initial alarm capabilities, or other special calls. In some jurisdictions this is the rank of battalion chief, district chief, deputy chief, assistant chief, or senior divisional officer (UK fire service). A.3.3.31 Public Fire Department.The term fire department in- cludes any public, governmental, private, or military organiza- tion engaging in this type of activity. 1710–13ANNEX A 2001 Edition A.3.3.33 Rapid Intervention Crew (RIC).The RIC report di- rectly to the incident commander or operations chief. This dedicated crew is not to be confused with the IRIC. A.3.3.36 Special Operations.Special operations include wa- ter rescue, extrication, hazardous materials, confined space entry, high-angle rescue, aircraft rescue and fire fighting, and other operations requiring specialized training. A.3.3.37 Staff Aide.This member is assigned to a supervisory chief officer who assists at incident scene operations, which can include personnel accountability, communications, and other logistical and administrative support. In addition, this member can assist in coordinating training activities, respond to citizen inquiries, coordinate staffing issues and sick leave follow-up, and resource allocations for facilities and apparatus under the supervisory chief officer’s jurisdiction. Staff aides can be known as field incident technician, staff assistant, bat- talion fire fighter, or battalion adjutant. A.3.3.42.3 Dispatch Time.Dispatch times are addressed in NFPA1221,Standard for the Installation, Maintenance, and Use of Emergency Services Communications Systems. These include call- taking and call-processing requirements. A.4.1.1 The authority having jurisdiction generally has the responsibility to determine the following: (1) Scopeandlevelofserviceprovidedbythefiredepartment (2) Necessary level of funding (3) Necessary level of personnel and resources, including facilities In order to provide service, the authority having jurisdic- tion should have the power to levy taxes or solicit funding, to own property and equipment, and to cover personnel costs. The authority necessary is conveyed by law to a local jurisdiction. In addition, the governing body also should monitor the achievement of the management goals of the department, such as fire prevention, community life safety education, fire suppression, employee training, communications, mainte- nance, and department administration. The organizational statement is a very important basis for many of the provisions of this standard. The statement sets forth the legal basis for operating a fire department, the orga- nizational structure of the fire department, number of mem- bers, training requirements, expected functions, and authori- ties and responsibilities of various members or defined positions. A key point is to clearly set out the specific services the fire department is authorized and expected to perform. Most fire departments are responsible to a governing body. The govern- ing body has the right and should assert its authority to set the specific services and the limits of the services the fire depart- ment will provide, and it has the responsibility to furnish the necessary resources for delivery of the designated services. The fire department should provide its governing body with a specific description of each service with options or alternatives and an accurate analysis of the costs and resources needed for each service. Such services could include structural fire fighting, wild- land fire fighting, airport/aircraft fire fighting, emergency medical services, hazardous materials response, high angle rescue, heavy rescue, and others. Spelling out the specific parameters of services to be pro- vided allows the fire department to plan, staff, equip, train, and deploy members to perform these duties. It also gives the governing body an accounting of the costs of services and al- lows it to select those services they can afford to provide. Like- wise, the governing body should identify services it cannot af- ford to provide and cannot authorize the fire department to deliver, or it should assign those services to another agency. The fire department should be no different than any other government agency that has the parameters of its authority and services clearly defined by the governing body. Legal counsel should be used to ensure that any statutory services and responsibilities are being met. The majority of public fire departments are established under the charter provisions of their governing body or through the adoption of statutes. These acts define the le- gal basis for operating a fire department, the mission of the organization, the duties that are authorized and expected to be performed, and the authority and responsibilities that are assigned to certain individuals to direct the operations of the fire department. The documents that officially establish the fire department as an identifiable organization are necessary to determine spe- cific responsibilities and to determine the parties responsible for compliance with the provisions of this standard. In many cases, these documents can be part of state laws, a municipal charter, or an annual budget. In such cases, it would be appropriate to make these existing documents part of the organizational statement, if applicable. A.4.1.2 There can be incidents or areas where the response criteria are impacted by circumstances such as response per- sonnel who are not on duty, nonstaffed fire station facilities, natural barriers, traffic congestion, insufficient water supply, and density of population or property. The reduced level of service should be documented in the written organizational statement by the percentage of incidents and geographical areas for which the response time criteria are achieved. A.4.1.2.1.1(2)This service delivery requirement is intended to have a fire department plan and situate its resources to consistently meet a 4-minute initial company fire suppression response and an 8-minute full alarm fire response assignment. However, it is recognized that while on some occasions (for example, a company is out of service for training) the initial company response may not be met in the 4-minute require- ment, the 8-minute criterion must always be met. A.4.4.2 Occupational Safety and Health Administration (OSHA) regulations require that all fire departments be trained to respond to hazardous materials incidents at the first responder operations level. Title III of the Superfund Amendments and Reauthoriza- tion Act of 1986 (SARA), known as the Emergency Planning and Right-to-Know Act, established requirements for federal, state, and local governments and industrial facilities regarding emergency planning for spills or other releases, and commu- nity right-to-know reporting of hazardous and toxic chemicals. The Emergency Planning and Right-to-KnowAct of 1986 cov- ersthefollowingfourmajorareasthatwillprovidethefireservice and communities with a broad perspective on the chemical haz- ards within the local area and those at individual facilities: (1) Sections 301 through 303 —emergency planning (2) Section 304 —emergency release notification (3) Sections 311 and 312 —community right-to-know report- ing requirements (4) Section 313 —toxic chemical release inventory 1710–14 ORGANIZATION AND DEPLOYMENT OF FIRE SUPPRESSION OPERATIONS BY CAREER FIRE DEPARTMENTS 2001 Edition A.4.8.1 Where appropriate, the mutual aid agreement shouldincludeautomaticresponsesonfirstalarms(automatic aid). This concept contemplates joint response of designated apparatus and personnel on a predetermined running assign- ment basis. Mutual aid concepts should be considered on a regional basis. In an effective mutual aid arrangement, each fire de- partment should retain reserves of personnel and apparatus. Traditionally and legally, overall command of the incident is vested with the senior officer of the jurisdiction experiencing the emergency. Some areas use consolidated dispatching to coordinate the response of fire companies to assist an outside fire department. The management of responses can be made easier by utilizing computerization,“running cards,”and other advance planning. A.5.2 Suppression capability is an expression of how much fire-fighting power can be put into action when there is a fire. It includes the amount of apparatus, equipment, and person- nel available; the time needed to respond and place equip- ment in action; the water supply; the application of strategy and tactics; the level of training; and all of the components that add up to effective fireground operations. A.5.2.1.1 For more information, see NFPA1250,Recommended Practice in Emergency Service Organization Risk Management; FEMA, National Fire Academy,“Fire Risk Analysis: A Systems Approach”; Phoenix, AZ Fire Department,“Fire Department Evaluation System (FIREDAP).” A.5.2.1.2 For further information on companies, see 3.3.8 and A.3.3.8. A.5.2.1.2.1 An early aggressive and offensive primary interior attack on a working fire, where feasible, is usually the most effective strategy to reduce loss of lives and property damage. In FigureA.5.2.1.2.1 the line represents a rate of fire propaga- tion, which combines temperature rise and time. It roughly corresponds to the percentage of property destruction. At ap- proximately 10 minutes into the fire sequence, the hypotheti- cal room of origin flashes over. Extension outside the room begins at this point. Consequently,giventhattheprogressionofastructuralfireto the point of flashover (i.e., the very rapid spreading of the fire due to superheating of room contents and other combustibles) generally occurs in less than 10 minutes, two of the most impor- tant elements in limiting fire spread are the quick arrival of suffi- cient numbers of personnel and equipment to attack and extin- guish the fire as close to the point of its origin as possible. For more information, refer to Fire Service Today,“Reduced Staffing: At What Cost,”and NIST,“Hazard I Fire Hazard Assessment Method.”Also, refer to National Fire Academy,“Fire Risk Analy- sis:ASystemsApproach,”and Office of the Ontario Fire Marshal, ShapingtheFutureofFireGroundStaffingandDeliverySystemswithina Comprehensive Fire Safety Effectiveness Model. The ability of adequate fire suppression forces to greatly influence the outcome of a structural fire is undeniable and predictable. Data generated by NFPA provides empirical data that rapid and aggressive interior attack can substantially re- duce the human and property losses associated with structural fires (see Table A.5.2.1.2.1). A.5.2.1.2.3 The assignment of specific response districts to command officers should be based on the number of compa- nies, workload, and response distances. Department adminis- trative procedures should indicate clearly the jurisdiction of command officers. A.5.2.1.2.5 For further information on staff aides, see 3.3.37. A.5.2.3.1.2 NFPA 1500,Standard on Fire Department Occupa- tional Safety and Health Program;29 CFR 1910.134; and U.S. Department of Labor, Occupational Safety & HealthAdminis- tration,Memorandum for RegionalAdministration and State Desig- nees; Response to IDLH or Potential IDLH Atmospheres. The initial rapid intervention crew (IRIC) and the rapid intervention crew (RIC) members are equipped with the fire fighters’protective ensemble, including protective clothing and equipment as required by NFPA 1500. A.5.2.3.2.1 For the purposes of this standard, the initial full alarm assignment capability is for a response to a structural fire in a typical 264 m 2 (2000 ft 2), two-story, single-family occu- pancy without a basement and with no exposures (detached home). All communities respond to fire incidents in this type 0 13 14 15 16121110987654321 Room of origin Beyond room of origin Minutes 0 10 20 30 40 50 60 70 80 90 100 Percent of property destructionFIGURE A.5.2.1.2.1 Fire propagation curve. Table A.5.2.1.2.1 Fire Extension in Residential Structures 1994–1998 Rate per 1000 Fires Extension Civilian Deaths Civilian Injuries Dollar Loss per Fire Confined to the room of origin 2.32 35.19 3,185 Beyond the room but confined to the floor of origin 19.68 96.86 22,720 Beyond the floor of origin 26.54 63.48 31,912 Note: Residential structures include dwellings, duplexes, manufac- tured homes (also called mobile homes), apartments, row houses, townhouses, hotels and motels, dormitories, and barracks. Source:NFPA Annual Fire Experience Survey and National Fire Incident Reporting System. 1710–15ANNEX A 2001 Edition of structure on a regular basis and therefore the hazards pre- sented by this scenario are not unusual. Other occupancies and structures in the community that present greater hazards should be addressed by additional fire fighter functions and additional responding personnel on the initial full alarm assignment. For further information on the classification of hazards, see NFPA Fire Protection Handbook, 18th edition. A.5.3 An EMS is defined as a comprehensive, coordinated arrangement of resources and functions that are organized to respond in a timely, staged manner to medical emergencies, regardless of their cause. The term system can be applied lo- cally, at the state, province, or national level.The fundamental functions of an EMS system are the following: (1) System organization and management (2) Medical direction (3) Human resources and training (4) Communications (5) Emergency response (6) Transportation (7) Care facilities (8) Quality assurance (9) Public information and education (10) Disaster medical services (11) Research (12) Special populations A.5.3.2 The following four functions do not necessarily exist as separate elements in a particular system: (1) The first responding unit can be anALS ambulance that can provideALS treatment and ambulance transportation. (2) The first responding unit can be a fire suppression unit that can provide both initial and advanced level medical care. (3) ALS can be provided by the ambulance or by an addi- tional fire suppression unit or a unit that is dedicated to ALS response only. (4) The system may not haveALS treatment capability—only a fire apparatus with fire fighters trained as first re- sponder AED can respond. A.5.3.3.4.3 The American Heart Association recommends the minimum required personnel for an emergency cardiac care response. In those systems that have attained survival rates higher than 20 percent for patients with ventricular fibrillation, response teams include, as a minimum, twoALS providers and two BLS providers. See “Guidelines 2000 for Cardiopulmonary Resuscitation and Emergency Cardiac Care,”JAMA;“Basic Trauma Life Support for Paramedics and Other Providers,”ACEP;“Pre-Hospital Trauma Life Support,”ACS;“Pediatric Advanced Life Support,”AHA; and “Emergency Care and Transportation of the Sick and Injured,”AAOS. A.5.5.6.2 The U.S.Air Force has defined the areas involved in the emergency within 240 m (75 ft) of the aircraft as immedi- ately dangerous to life and health (IDLH). A.5.6 For additional information on marine fire fighting, see NFPA 1405,Guide for Land-Based Fire Fighters Who Respond to Marine Vessel Fires. A.5.6.5.1 For additional information on marine rescue and fire-fighting vessels, see NFPA 1925,Standard on Marine Fire- Fighting Vessels. A.5.7.6.1.1 A system developed by Chief Paul Gleason of the United States Forest Service addresses specific mandatory fire orders in a system termed LCES, which stands for lookout(s), communication(s), escape route(s), and safety zone(s).These four items are to be implemented as an integrated system by a single resource unit, a strike team, or a full assignment. The implementation of LCES is a minimum safety requirement prior to the initiation of any wildland fire-fighting operations. A.6.2 Emergency incidents can involve operations that vary considerably in their complexity and scale. The control of these incidents depends on the planned, systematic imple- mentation of an effective fireground organization to accom- plish identified objectives. Every fire department, regardless of size, needs a proper system to regulate and direct emer- gency forces and equipment at both routine and major inci- dents.The incident management system forms the basic struc- ture of operations, regardless of scale. An effective system is designed to manage incidents of different types, including structure fires, wildland fires, hazardous materials incidents, and medical and other emergencies. A.6.2.2 Unlike fire incidents where command is normally predicated by rank structure, EMS patient care is based upon statutory recognition of the individual with the highest level of medical certification. It is recommended that departments adopt protocols that define the degree of both member and nonmember involvement in direct patient care based upon local standards, medical control, and statutory requirements. A.6.5 For additional information, see NFPA 1620,Recom- mended Practice for Pre-Incident Planning. Annex B Informational References B.1 Referenced Publications.The following documents or portions thereof are referenced within this standard for infor- mational purposes only and are thus not part of the require- ments of this document unless also listed in Chapter 2. B.1.1 NFPA Publications.National Fire Protection Associa- tion, 1 Batterymarch Park, P.O. Box 9101, Quincy, MA 02269- 9101. NFPA1221,StandardfortheInstallation,Maintenance,andUse of Emergency Services Communications Systems, 1999 edition. NFPA1250,Recommended Practice in Emergency Service Organi- zation Risk Management, 2000 edition. NFPA 1405,Guide for Land-Based Fire Fighters Who Respond to Marine Vessel Fires, 2001 edition. NFPA 1500,Standard on Fire Department Occupational Safety and Health Program, 1997 edition. NFPA 1620,Recommended Practice for Pre-Incident Planning, 1998 edition. NFPA1925,Standard on Marine Fire-Fighting Vessels, 1998 edi- tion. NFPAAnnual Fire Experience Survey and National Fire Incident Reporting System. Fire Protection Handbook, 18th edition, 1997. Fire Service Today, Gerard, J.C. and A.T. Jacobsen,“Reduced Staffing: At What Cost,”September 1981. B.1.2 Other Publications. B.1.2.1 AMA Publication.American Medical Association, 515 North State Street, Chicago, IL 60610. 1710–16 ORGANIZATION AND DEPLOYMENT OF FIRE SUPPRESSION OPERATIONS BY CAREER FIRE DEPARTMENTS 2001 Edition “Guidelines 2000 for Cardiopulmonary Resuscitation and Emergency Cardiac Care.”1992.Journal of theAmerican Medical Association,268(16) (October 28). B.1.2.2 CFAI Publication.Commission on Fire Accreditation International, 4500 Southgate Place, Suite 100, Chantilly, VA 20151. Fire and Emergency Service Self Assessment Manuals,National Fire Service Accreditation Program. B.1.2.3 FEMA Publication.Federal Emergency Management Agency, Washington, DC 20002. “Fire Risk Analysis: A Systems Approach,”NFA-SM-FRAS, National Emergency Training Center, National FireAcademy, July 20, 1984. B.1.2.4 NISTPublication.National Institute of Standards and Technology, Bldg. 820, Rm. 164, Gaithersburg, MD 20899. “Hazard I Fire Hazard Assessment Method,”U.S. Depart- ment of Commerce, June 1991. B.1.2.5 U.S. Government Publications.U.S. Government Printing Office, Washington, DC 20402. Memorandum forRegionalAdministration and State Designs; Re- sponse to IDLH or Potential IDLH Atmospheres, Department of Labor, Occupational Safety & Health Administration. Title 29,Code of Federal Regulations, Part 1910.134,“Respira- tory Protection,”1998. B.1.2.6 Other Publications. “Guidelines 2000 for Cardiopulmonary Resuscitation and Emergency Cardiac Care,”JAMA, August 2000. “BasicTrauma Life Support for Paramedics and Other Pro- viders,”American College of Emergency Physicians; John Campbell (ed); 1997. Office of the Ontario Fire Marshal,Shaping the Future of Fire Ground Staffing and Delivery Systems within a Comprehensive Fire Safety Effectiveness Model, 1993. “Pre-Hospital Trauma Life Support,”American College of Surgeons; Paturaas, Wertz and McSwain (eds); 1999. “Pediatric Advanced Life Support,”American Heart Asso- ciation; Besson (ed); 1997. Phoenix, AZ Fire Department,“Fire Department Evalua- tion System (FIREDAP),”December 1991. “Emergency Care and Transportation of the Sick and In- jured,”American Association of Orthopedic Surgeons; Browner (ed); 1999. B.2 Informational References.The following documents or portions thereof are listed here as informational resources only. They are not a part of the requirements of this document. B.2.1 IAFF Publications.International Association of Fire Fighters, 1750 New York Avenue, NW, Washington, DC 20006. Department of Research and LaborIssues,“Effectiveness of Fire- Based EMS,”1995. Department of Research and Labor Issues,“Safe Fire Fighting Staffing,”1993. B.2.2 U.S. Government Publications.U.S. Government Print- ing Office, Washington, D.C. 20402. Title 29,Code of Federal Regulations, Part 1910.120,“Hazard- ous Waste Operations and Emergency Response,”1986. Title 29,Code of Federal Regulations (OSHA), Part 1910.156, “Fire Protection; Means of Egress; Hazardous Materials.” B.3 References for Extracts.The following documents are listed here to provide reference information, including title and edition, for extracts given throughout this standard as indicated by a reference in brackets [ ] following a section or paragraph. These documents are not a part of the require- ments of this document unless also listed in Chapter 2 for other reasons. B.3.1 NFPA Publications.National Fire Protection Associa- tion, 1 Batterymarch Park, P.O. Box 9101, Quincy, MA02269– 9101. NFPA 295,Standard for Wildfire Control, 1998 edition. NFPA 402,Guide for Aircraft Rescue and Fire Fighting Opera- tions, 1996 edition. NFPA 403,Standard for Aircraft Rescue and Fire-Fighting Ser- vices at Airports, 1998 edition. NFPA 801,Standard for Fire Protection for Facilities Handling Radioactive Materials, 1998 edition. NFPA1002,Standard for FireApparatus Driver/Operator Profes- sional Qualifications, 1998 edition. NFPA1021,Standard forFire OfficerProfessional Qualifications, 1997 edition. NFPA1142,Standard onWaterSupplies forSuburban and Rural Fire Fighting, 2001 edition. NFPA 1201,Standard for Developing Fire Protection Services for the Public, 2000 edition. NFPA1221,StandardfortheInstallation,Maintenance,andUse of Emergency Services Communications Systems, 1999 edition. NFPA 1404,Standard for a Fire Department Self-Contained Breathing Apparatus Program, 1996 edition. NFPA 1410,Standard on Training for Initial Emergency Scene Operations, 2000 edition. NFPA 1500,Standard on Fire Department Occupational Safety and Health Program, 1997 edition. NFPA 1561,Standard on Emergency Services Incident Manage- ment System, 2000 edition. NFPA 1581,Standard on Fire Department Infection Control Pro- gram, 2000 edition. 1710–17ANNEX B 2001 Edition Index © 2001 National Fire Protection Association. All Rights Reserved. The copyright in this index is separate and distinct from the copyright in the document that it indexes.The licensing provisions set forth for the document are not applicable to this index. This index may not be reproduced in whole or in part by any means without the express written permission of NFPA. -A- Advanced life support (ALS) (definition).....................3.3.27.1 Aid Automatic Definition .........................................3.3.1.1, A.3.3.1.1 Intercommunity organization ..............................A.4.8.1 Definition ..........................................................3.3.1 Mutual Definition .........................................3.3.1.2, A.3.3.1.2 Intercommunity organization .......................4.8.1, A.4.8.1 Aircraft rescue and fire fighting (definition)............3.3.2, A.3.3.2 Aircraft rescue and fire-fighting vehicle (ARFF) (definition).........................3.3.3, A.3.3.3 Airport fire department personnel (definition).........3.3.4, A.3.3.4 Airport rescue and fire-fighting services Deployment .......................................................5.5.4 Organization ........................................................4.5 Response .............................................................5.5 Staffing .............................................................5.5.5 Alarm (definition)..........................................3.3.5, A.3.3.5 Alarm time (definition)..........................................3.3.42.1 Apparatus Definition ................................................3.3.6, A.3.3.6 Fire (definition)................................................3.3.6.1 Quint (definition)..............................................3.3.6.2 Specialized (definition)........................................3.3.6.3 Approved (definition)......................................3.2.1, A.3.2.1 Attack Definition ..........................................................3.3.7 Initial (definition)..............................................3.3.7.1 Sustained (definition)..........................................3.3.7.2 Authority having jurisdiction Definition ................................................3.2.2, A.3.2.2 Organizational statement ......................................A.4.1.1 Automatic aid Definition ............................................3.3.1.1, A.3.3.1.1 Intercommunity organization .................................A.4.8.1 Automatic external defibrillators (AED).................4.3.2, 4.3.2.1 -B- Basic life support (definition)......................3.3.27.2, A.3.3.27.2 -C- Call processing time (definition)...............................3.3.42.2 Communications systems .............................................6.4 Company (definition)......................................3.3.8, A.3.3.8 Company officer Definition ..........................................3.3.30.1, A.3.3.30.1 Staffing .........................................................5.2.1.2.2 -D- Definitions ........................................................Chap. 3 Deployment Airport rescue and fire-fighting services ........................5.5.4 Emergency medical services (EMS).............5.3.3.4, A.5.3.3.4.3 Fire department services .........................................5.2.3 Initial arriving company ..........................5.2.3.1, A.5.2.3.1.2 Initial full alarm assignment capability .........5.2.3.2, A.5.2.3.2.1 Dispatch time (definition)..........................3.3.42.3, A.3.3.42.3 -E- Emergency incident (definition)...................................3.3.9 Emergency medical care (definition).............................3.3.10 Emergency medical services (EMS)...........................5.3, A.5.3 Organization ........................................................4.3 Purpose ............................................................5.3.1 Quality management .............................................5.3.4 Service delivery deployment .....................5.3.3.4, A.5.3.3.4.3 System components .....................................5.3.2, A.5.3.2 System functions ..................................................5.3.3 System staffing ..................................................5.3.3.3 Emergency operations ...................................5.5.6, A.5.5.6.2 Definition ........................................................3.3.11 Engine companies .................................................5.2.2.1 -F- Fire apparatus (definition)........................................3.3.6.1 Fire chief (definition)..............................................3.3.12 Fire department Organization Airport rescue and fire-fighting services .......................4.5 Emergency medical services ....................................4.3 Fire suppression services ........................................4.2 Intercommunity ........................................4.8, A.4.8.1 Marine rescue and fire-fighting services .......................4.6 Special operations ......................................4.4, A.4.4.2 Wildland fire suppression services .............................4.7 Organizational statement ........................4.1, A.4.1.1, A.4.1.2 Services .........................................................Chap. 5 Deployment ....................................................5.2.3 Additional alarm assignment ............................5.2.3.3 Initial arriving company ....................5.2.3.1, A.5.2.3.1.2 Initial full alarm assignment capability .................5.2.3.2, A.5.2.3.2.1 Fire suppression ..........................................5.2, A.5.2 Operating units ................................................5.2.2 Purpose ...........................................................5.1 Staffing ..........................................................5.2.1 Staffing .................................................5.2.1, A.5.2.1.1 Fire department member (definition)............................3.3.13 Fire department vehicle (definition).............................3.3.14 Fire fighting Airport rescue .......................................................4.5 Definition ................................................3.3.2, A.3.3.2 Marine rescue .......................................................4.6 Wildland fire suppression ..........................................4.7 Fire protection (definition)........................................3.3.15 Fire suppression Definition ..............................................3.3.16, A.3.3.16 Services Deployment ....................................................5.2.3 Operating units ................................................5.2.2 Organization .....................................................4.2 Purpose ....................................................5.2, A.5.2 Staffing ................................5.2.1, 5.2.2, 5.2.3, A.5.2.1.2 Wildland fire .........................................................4.7 First responder (EMS) Definition ..............................................3.3.17, A.3.3.17 Organizational statement ...............................4.3.2, 4.3.2.1 Forcible entry (definition).........................................3.3.18 1710–18 ORGANIZATION AND DEPLOYMENT OF FIRE SUPPRESSION OPERATIONS BY CAREER FIRE DEPARTMENTS 2001 Edition -G- General terms (definition)............................................3.1 -H- Hazard (definition)......................................3.3.19, A.3.3.19 Hazardous materials Definition ........................................................3.3.20 Special operations requirements .............................A.4.4.2 High hazard occupancy (definition)...................3.3.21, A.3.3.21 -I- Incident commander (definition).................................3.3.22 Incident management systems .................................6.2, A.6.2 Definition ..............................................3.3.23, A.3.3.23 Incident safety officer Definition ........................................................3.3.24 Deployment ...................................................5.2.3.3.3 Initial attack (definition)..........................................3.3.7.1 Initial full alarm assignment Definition ........................................................3.3.25 Deployment ........................................5.2.3.2, A.5.2.3.2.1 Initial rapid intervention crew (IRIC) Definition ........................................................3.3.26 Deployment ...........................5.2.3.1.2, 5.2.3.3.2, A.5.2.3.1.2 Intercommunity organization ................................4.8, A.4.8.1 -L- Life support Advanced (definition)........................................3.3.27.1 Basic (definition).................................3.3.27.2, A.3.3.27.2 Definition ........................................................3.3.27 -M- Marine rescue and fire fighting (MRFF).....................5.6, A.5.6 Definition ..............................................3.3.28, A.3.3.28 Operating units ........................................5.6.5, A.5.6.5.1 Organization ........................................................4.6 Staffing .............................................................5.6.4 Member (definition)....................................3.3.29, A.3.3.29 Mutual aid Definition ............................................3.3.1.2, A.3.3.1.2 Intercommunity organization ..........................4.8.1, A.4.8.1 -O- Officers Company (definition)............................3.3.30.1, A.3.3.30.1 Definition ........................................................3.3.30 Staffing .....................5.2.1.2.2, 5.2.1.2.4, 5.2.1.2.5, A.5.2.1.2.5 Supervisory chief (definition)...................3.3.30.2, A.3.3.30.2 Organization ......................................................Chap. 4 Airport rescue and fire-fighting services ..........................4.5 Emergency medical services .......................................4.3 Fire department .....................................................4.1 Fire suppression services ...........................................4.2 Intercommunity ...........................................4.8, A.4.8.1 Marine rescue and fire-fighting services ..........................4.6 Special operations .........................................4.4, A.4.4.2 Wildland fire suppression services ................................4.7 -P- Pre-incident planning systems .................................6.5, A.6.5 Public fire department (definition)....................3.3.31, A.3.3.31 Public safety answering point (PSAP) (definition)..............3.3.32 Purpose of the standard .....................................1.2, A.1.2.1 -Q- Quint apparatus Definition ........................................................3.3.6.2 Staffing ...........................................................5.2.2.4 -R- Rapid intervention crew (RIC) Definition ..............................................3.3.33, A.3.3.33 Deployment ...................................................5.2.3.3.2 Referenced publications .............................Chap. 2, Annex B Related activities (definition).....................................3.3.34 Rescue (definition).................................................3.3.35 Response time Definition ......................................................3.3.42.4 Organizational statement ......................................4.1.2.1 Special operations ..................................................5.4 -S- Safety and health systems .............................................6.1 Scope of the standard ..........................................1.1, A.1.1 Shall (definition).....................................................3.2.3 Should (definition)..................................................3.2.4 Specialized apparatus (definition)...............................3.3.6.3 Special operations Definition ..............................................3.3.36, A.3.3.36 Organization ...............................................4.4, A.4.4.2 Response .............................................................5.4 Staff aide (definition)...................................3.3.37, A.3.3.37 Standard operating procedure (definition)......................3.3.38 Structural fire fighting (definition)...............................3.3.39 Supervisory chief officers Definition ..........................................3.3.30.2, A.3.3.30.2 Staffing .....................5.2.1.2.2, 5.2.1.2.4, 5.2.1.2.5, A.5.2.1.2.5 Sustained attack (definition).....................................3.3.7.2 Systems ............................................................Chap. 6 Communications ....................................................6.4 Incident management .............................6.2, A.6.2, A.6.2.2 Pre-incident planning .......................................6.5, A.6.5 Safety and health ....................................................6.1 Training ..............................................................6.3 -T- Tactical considerations (definition)..............................3.3.40 Team (definition)...................................................3.3.41 Time Alarm (definition)............................................3.3.42.1 Call processing (definition)..................................3.3.42.2 Definition ........................................................3.3.42 Dispatch (definition).............................3.3.42.3, A.3.3.42.3 Response Definition ...................................................3.3.42.4 Organizational statement ...................................4.1.2.1 Turnout Definition ...................................................3.3.42.5 Organizational statement ................4.1.2.1.1, A.4.1.2.1.1(2) Training systems .......................................................6.3 Turnout time Definition ......................................................3.3.42.5 Organizational statement ...................4.1.2.1.1, A.4.1.2.1.1(2) -V- Vehicles Aircraft rescue and fire-fighting (ARFF)..............3.3.3, A.3.3.3 Fire department (definition)...................................3.3.14 Wildland fire suppression services ............................5.7.6.1 -W- Wildland fire suppression Deployment ..........................................5.7.6, A.5.7.6.1.1 Direct attack .....................................................5.7.6.2 Indirect attack ...................................................5.7.6.3 Nonwildland emergencies .......................................5.7.7 Operating units ...................................................5.7.5 Organization ........................................................4.7 Services ...............................................................5.7 Staffing .............................................................5.7.4 1710–19INDEX 2001 EditionCou-W Exhibit 2 Incident Distribution by Occupancy Residential vs. Commercial (2004-2006) City of BozemanFire and EMS Impact FeesExhibit 2A - Incident Distribution By OccupancyBuilding FiresOther FiresOverpressure RuptureMedical Rescue Hazard CondService CallsGood IntentFalse CallsSub Total Residential Commercial UncategorizedDay care, in commercial propertyC111Eating, drinking places C 111Graded and cared-for plots of land C 111Health care, detention, & correction, other C 111Laboratory or science lababoratoryC111Mental retardation/development disability facilityC111Outbuilding or shedC111Outbuilding, protective shelter C 111Outside material storage area C111Pipeline, power line or other utility right of wayC111Preschool C111Amusement center: indoor/outdoorC1122Bowling alleyC222Bus stationC222Clubhouse C 1 122Clubs, other C 1 122Gas distribution, pipeline, gas distribution C 1 122Laundry, dry cleaningC222Movie theater C222Office: veterinary or researchC1122Personal service, including barber & beauty shopsC 222PlaygroundC222Professional supplies, services C 1 122Public or government, other C 1 122Railroad right of wayC1 122Storage, other C222BankC333Warehouse C333Household goods, sales, repairs C 2 1 144Outside or special property, other C 1 344Recreational, hobby, home repair sales, pet store C 2 244Service station, gas station C 2 244Variable use amusement, recreation places C 3 144Museum C 2 1 255Sports field ( Soccer, football etc. )C1 3 155Ballroom, gymnasiumC31266Church, mosque, synagogue, temple, chapel C 3 1 266Manufacturing, processingC1 1 2266Stadium, arena C 666Athletic/health club C 4 377Convenience store C 6 177Motor vehicle or boat sales, services, repair C 3 1 377Textile, wearing apparel sales C 3 1 377Clinics, Doctors offices, hemodialysis centers C 6 1 1 199Construction site C 2 2 3 299General retail, other C 6 1 299Mercantile, business, other C 2 1 699Specialty shopC311499Elementary school, including kindergarten C 5 1 41010Date Range: From 1/1/2004 To 12/31/2004Occupancy TypeOccupancy CategoryIncident Type Incident Distribution1 City of BozemanFire and EMS Impact FeesExhibit 2A - Incident Distribution By OccupancyBuilding FiresOther FiresOverpressure RuptureMedical Rescue Hazard CondService CallsGood IntentFalse CallsSub Total Residential Commercial UncategorizedDate Range: From 1/1/2004 To 12/31/2004Occupancy TypeOccupancy CategoryIncident Type Incident DistributionDoctor, dentist or oral surgeon's office C 10 1 1 31515Department or discount store C 11 2 2 11616AlleyC 4 741111818Street or road in commercial area C 212121Business office C 1 1 10 2 2 72323Hospital - medical or psychiatric C 2 1 202323Adult education center, college classroom C 23 3 12727Bar or nightclub C 24 1 1 22828Barracks, dormitoryC2712828Jail, prison (not juvenile)C2823030Restaurant or cafeteria C 1 1 1 20 2 5303024-hour care Nursing homes, 4 or more persons C 27 43131Food and beverage sales, grocery storeC281213232Vehicle parking area C 5 31 5 3 14545Hotel/motel, commercial C 47 1 2 1 146565Highway or divided highwayC11915 3101101High school/junior high school/middle school C 10 11111Residential or self storage unitsR111Sorority house, fraternity houseR111Dormitory type residence, otherR888Independant adult retirement no nursing staffR33 13434Assisted living, part time nursing staffR40 5 24747Multifamily dwellingsR1 8 137 3 9 9 17184184Residential street, road or residential drivewayR7 160 20 1 8 11971971 or 2 family dwellingR2 19 302 29 10 22 19403403Vacant lot UCE 5 4 1 1 21313Sidewalk UCE 22 1 12424Open land or field UCE 6 8 1 2 9 22828Street, other UCE 2 44 1 24949Totals: 5 68 2 1,265 87 54 80 156 1,717 875 728 1142 City of BozemanFire and EMS Impact FeesExhibit 2B- Incident Distribution By OccupancyDate Range: From 1/1/2005 To 12/31/2005Building FiresOther FiresOverpressure RuptureMedical Rescue Hazard CondService CallsGood IntentFalse Calls Sub Total Residential Commercial UncategorizedAlcohol or substance abuse recovery centerC1 11Bus stationC1 11Clubs, otherC1 11Day care, in residence, licensedC11 1Eating, drinking places C 1 1 1Educational, otherC11 1Gas distribution, pipeline, gas distributionC1 11Health care, detention, & correction, otherC1 11Laundry, dry cleaningC1 11Outside storage tankC111Personal service, including barber & beauty shopsC 1 1 1Places of worship, funeral parlorsC11 1Railroad right of wayC1 11Storage, otherC11 1Swimming facility: indoor or outdoorC1 11Textile, wearing apparel salesC111Utility or Distribution system, otherC111Variable use amusement, recreation places C 1 1 1Water utilityC111Amusement center: indoor/outdoorC2 22Athletic/health clubC2 22Fixed use recreation places, otherC2 22Household goods, sales, repairsC2 22Museum C 1 1 2 2Outbuilding, protective shelterC112 2PreschoolC1122Professional supplies, servicesC1122Assembly, otherC 1113 3Casino, gambling clubs C 2 1 3 3Clinic, clinic-type infirmaryC3 33Day care, in commercial propertyC123 3Outbuilding or shed C 2 133Outside material storage areaC2 1 3 3Police stationC2133Public or government, otherC2133Recreational, hobby, home repair sales, pet storeC1233Stadium, arena C 3 3 3Courthouse C 1 2 1 4 4Graded and cared-for plots of landC1 124 4Outside or special property, otherC 2 114 4Ballroom, gymnasiumC5 55Convenience store C 4 1 5 5LibraryC4155Manufacturing, processingC 1 135 5Motor vehicle or boat sales, services, repairC1 2 25 5Sports field ( Soccer, football etc. )C4155Warehouse C 2 1 1 1 5 5Clinics, Doctors offices, hemodialysis centersC5166Movie theaterC 4116 6Bank C 1 1 1 4 7 7Elementary school, including kindergartenC6288Incident DistributionIncident TypeOccupancy CategoryOccupancy Type1 City of BozemanFire and EMS Impact FeesExhibit 2B- Incident Distribution By OccupancyDate Range: From 1/1/2005 To 12/31/2005Building FiresOther FiresOverpressure RuptureMedical Rescue Hazard CondService CallsGood IntentFalse Calls Sub Total Residential Commercial UncategorizedIncident DistributionIncident TypeOccupancy CategoryOccupancy TypeChurch, mosque, synagogue, temple, chapel C 7 1 1 9 9Construction site C 8 2 10 10General retail, otherC52121010Service station, gas stationC 1 7 3 11 11High school/junior high school/middle schoolC 912 315 15Specialty shopC72441717Mercantile, business, otherC 9111618 18Jail, prison (not juvenile)C16121919Adult education center, college classroomC1621112121Department or discount store C 15 1 1 2 2 21 21Doctor, dentist or oral surgeon's officeC 19 1 1 2 23 23Street or road in commercial area C 22 1 23 23AlleyC 6 16 5 27 27Business officeC 81351330 30Restaurant or cafeteriaC 2 22 2 1 3 30 30Hospital - medical or psychiatricC 93141633 33Food and beverage sales, grocery storeC 29 1 2 2 34 34Bar or nightclub C 38 1 2 41 41Vehicle parking areaC 6 29 3 2 7 1 48 48Assisted living, part time nursing staffC4015214949Hotel/motel, commercialC 35 2 11 23 71 7124-hour care Nursing homes, 4 or more persons C 67 3 3 4 77 77Highway or divided highwayC 2 112 10 2 4 130 130Residential board and care R 1 1 1Residential or self storage unitsR111Residential, otherR111Boarding/rooming house, residential hotelsR1122PlaygroundR2133Sorority house, fraternity houseR1 1 1 33Dormitory type residence, otherR11111313Barracks, dormitoryR19222323Independant adult retirement no nursing staff R 32 3 5 40 40Residential street, road or residential drivewayR 10 128 22 2 10 3 175 175Multifamily dwellingsR 5 1 135 6 11 3 22 183 1831 or 2 family dwelling R 5 28 2 335 19 31 17 17 454 454Open land or fieldUCE 9 8 3 20 20Vacant lotUCE 12 7 4 6 29 29Street, otherUCE 1 45 5 1 2 54 54SidewalkUCE 4 67 3 1 2 77 77Totals: 10 102 3 1,405 111 86 107 161 1,985 899 906 1802 City of BozemanFire and EMS Impact FeesExhibit 2C - Incident Distribution By OccupancyDate Range: From 1/1/2006 To 12/31/2006Building FiresOther FiresOverpressure RuptureMedical Rescue Hazard CondService CallsGood IntentFalse CallsSub Total Residential Commercial UncategorizedBowling alleyC111Campsite with utilitiesC111Casino, gambling clubsC111Clubs, otherC111Convention center, exhibition hallC111Day care, in commercial propertyC111Eating, drinking placesC111Graded and cared-for plots of landC111Grain elevator, siloC11 1Health care, detention, & correction, otherC111Hemodialysis unitC111Laboratory or science lababoratoryC111Laundry, dry cleaningC111Movie theaterC111Outbuilding or shedC111Personal service, including barber & beauty shopsC111Recreational, hobby, home repair sales, pet storeC111Reformatory, juvenile detention centerC111Roller rink: indoor or outdoorC111Sanitation utilityC111Storage, otherC111Vehicle storage, otherC1 1 1Warehouse C 1 1 1Alcohol or substance abuse recovery centerC222Assembly, otherC222ClubhouseC222CourthouseC1122Educational, otherC222Flammable liquid distribution, pipeline, flammableC222Mental retardation/development disability facilityC222Outside or special property, otherC1 1 2 2Police stationC1122Public or government, otherC1 1 2 2Railroad right of wayC1 1 2 2Stadium, arena C 2 2 2Swimming facility: indoor or outdoorC1122Variable use amusement, recreation placesC222Boarding/rooming house, residential hotelsC333Bus stationC333LibraryC2133Office: veterinary or researchC11133Outbuilding, protective shelterC1 1 13 3Sports field ( Soccer, football etc. )C2133Fixed use recreation places, otherC444Museum C 1 3 4 4Incident DistributionOccupancy TypeOccupancy CategoryIncident Type1 City of BozemanFire and EMS Impact FeesExhibit 2C - Incident Distribution By OccupancyDate Range: From 1/1/2006 To 12/31/2006Building FiresOther FiresOverpressure RuptureMedical Rescue Hazard CondService CallsGood IntentFalse CallsSub Total Residential Commercial UncategorizedIncident DistributionOccupancy TypeOccupancy CategoryIncident TypePlaygroundC1 2 14 4Household goods, sales, repairsC31155Professional supplies, servicesC22155Ballroom, gymnasiumC4266BankC311166Convenience storeC41166Construction siteC2 21117 7General retail, otherC1 6 7 7Athletic/health clubC888Motor vehicle or boat sales, services, repairC212388Church, mosque, synagogue, temple, chapelC999Service station, gas stationC611199Elementary school, including kindergartenC1 31 510 10High school/junior high school/middle schoolC2 61110 10Clinics, Doctors offices, hemodialysis centersC111111Textile, wearing apparel salesC41241111Adult education center, college classroomC11111313Manufacturing, processingC22 12 1513 13Specialty shopC 1 4 2 3 4 14 14Jail, prison (not juvenile)C 14 1 15 15Mercantile, business, otherC1 5 2715 15Hospital - medical or psychiatricC3132101919Doctor, dentist or oral surgeon's officeC 14 1 1 4 20 20Street or road in commercial areaC 1 19 1 21 21AlleyC 5 13 4 22 22Department or discount storeC 1 19 2 22 22Barracks, dormitoryC 2 21 2 1 26 26Bar or nightclubC 1 24 2 1 2 30 30Business office C 1 6 1 1 5 16 30 30Food and beverage sales, grocery storeC 27 2 1 1 31 31Restaurant or cafeteriaC 2 26 1 2 4 6 41 41Vehicle parking areaC17 27214354 5424-hour care Nursing homes, 4 or more persons C 55 2 6 63 63Hotel/motel, commercialC 1 54 1 2 1 7 66 66Highway or divided highwayC 4 108 10 1 7 1 131 131Residential board and careR11 1Residential or self storage unitsR111Residential, otherR1122Sorority house, fraternity houseR1122Dormitory type residence, otherR 1 9 1 11 11Independant adult retirement no nursing staffR 24 5 2 2 33 33Assisted living, part time nursing staffR 45 4 1 2 52 52Residential street, road or residential drivewayR 1 1 113 17 11 11 6 160 160Multifamily dwellingsR 2 4 126 4 15 6 13 170 1701 or 2 family dwellingR 7 36 353 24 45 30 24 519 5192 City of BozemanFire and EMS Impact FeesExhibit 2C - Incident Distribution By OccupancyDate Range: From 1/1/2006 To 12/31/2006Building FiresOther FiresOverpressure RuptureMedical Rescue Hazard CondService CallsGood IntentFalse CallsSub Total Residential Commercial UncategorizedIncident DistributionOccupancy TypeOccupancy CategoryIncident TypeLake, river, streamUCE 1 1 1Vacant lotUCE 8 3 1 12 12Open land or fieldUCE 13 7 2 7 29 29Street, otherUCE 1 1 51 3 2 58 58SidewalkUCE 1 57 1 1 1 61 61Totals: 15 112 2 1,367 93 108 105 155 1,957 951 845 1613 Exhibit 3 Fire Suppression Asset Costs City of BozemanFire and EMS Impact FeesFire Suppresion Asset CostsExhibit 3Land TotalCost 2Cost Total Residential CommercialFire Station 3 4Building 3,208,532$ 150,000$ 3,358,532$ 28% 929,860$ 477,505$ 452,355$ Fire Station 4Building 2,814,280 300,000 3,114,280 48% 1,350,854 693,695 657,160 Fire Station 5Building 2,814,280 300,000 3,114,280 48% 1,350,854 693,695 657,160 Fire Station 6Building 2,814,280 300,000 3,114,280 48% 1,350,854 693,695 657,160 Fire Station 7Building 2,814,280 300,000 3,114,280 48% 1,350,854 693,695 657,160 Replacement Fire Station 2 5Building 2,814,280 300,000 3,114,280 0% - - - Apparatus Acquisitions 65 New Engines 1,900,000 - 1,900,000 58% 1,109,600 569,805 539,795 Total Cost 19,179,932$ 1,650,000$ 20,829,932$ 7,442,878$ 3,822,089$ 3,620,788$ Notes:(2) Land costs assume 2 acres at $150,00 per acre(3) Based on the number of calls (see Exhibit A-2)(4) Percent Impact Fee-Related Percentage is reduced by the amount of funds already allocated toward Fire Station 3 due to previous collection of impact fees(5) Impact Fee is not imposed as the result of the replacement of Fire Station 2 as it is not associated with development(6) Impact Fee allocation is based on 100% for Fire Station 3 and 48% for Fire Stations 4, 5, 6 and 7.(1) Fire Station 3 based on bid cost. Other capital costs are based on 20-year projections in 2006 Bozeman Fire Protection Master Plan (p148, Figure 74). Costs were used from Master Plan due to the joint constuction of a 911 center with Fire Station 3.Impact Fee Cost 3Station Description Cost1Percent Impact Fee Related Exhibit 4 Present and Future Land Use Classifications City of Bozeman Fire and EMS Impact Fees Exhibit 4: Present and Future Land Use Classifications Existing and 2020 Land Use Designations 2000 1 2020 2 Industrial 992 1132 Commercial 1579 3277 Neighborhood Commercial 178 Community Commercial 965 Regional Commercial 564 Business Park 532 Public Institutions 1038 Residential 4405 18546 Residential 7497 Future Urban 7770 Suburban Residential 3279 Public Lands 1318 1557 Parks and Open Space 586 Other Public Lands 608 Golf Courses 363 Total 8294 24512 Summary of Land Development: 2007 to 2020 Land Use Category 2000 2020 20073 (Interpolation of 2000-2020) Change 2020- 2007 Commercial 1579 3277 2173 1104 Industrial 992 1132 1041 91 Total Commercial and Industrial 2571 4409 3214 1195 Residential 4405 18546 9354 9192 Notes: (1) Bozeman 2020 Community Plan, p. 6-14 (2) Bozeman 2020 Community Plan, p. 6-20 (3) Interpolation based on straight-line growth between 2000 and 2020 Total Acres Land Use Category Exhibit 5 Allowable Residential Impact Fees City of Bozeman Fire and EMS Impact Fees Allowable Residential Impact Fees Exhibit 5 Detached Residential Unit Density: 1 2.26 persons per unit Attached Residential Unit Density: 1 1.90 persons per unit Residential Impact Fee Costs 2 3,822,089$ Residential Population Served 3 11,625 (new population) Cost per Person 328.78$ Detached Residential Unit 743.05$ Administration Fee 37.15 Net Detached Residential Unit Impact Fee 780.20$ Attached Residential Unit 624.69$ Administration Fee 31.23 Net Attached Residential Unit Impact Fee 655.92$ Notes: (1) 2000 Census (2) From Exhibit 3. (3) See 2006 Fire Master Plan Exhibit 6 Allowable Commercial and Industrial Impact Fees City of Bozeman Fire and EMS Impact Fees Allowable Commercial and Industrial Impact Fees Exhibit 6 Commercial/Industrial Impact Fee Costs1 3,620,788$ Commercial Acres Designated for Development (2007 - 2020) 2 530 Industrial Acres Designated for Development (2007 - 2020) 2 44 1,000 sq ft of Gross Commercial Building Area per Acre 3 37.07 1,000 sq ft of Gross Industrial Building Area per Acre 4 37.07 Total Gross Commercial Building Area (1,000 sq ft) 19,639 Total Gross Industrial Building Area (1,000 sq ft) 1,619 Total Gross Building Area (1,000 sq ft) 21,258 Impact Fee per 1,000 sq ft of Gross Building Area 170.33$ Administration Fee 8.52$ Net Commercial Impact Fee 5 178.84$ (1) From Exhibit 3. (2) From Exhibit 4. Repesents only 48% based on assumed development (3) Based on historical City development records (4) Based on historical City development records (5) Per 1,000 sq. ft. of gross building area. Exhibit 7 Compliance with MCA Requirements 1 Exhibit 7 City of Bozeman, Montana Fire and EMS Impact Fees Compliance with MCA Requirements Section 7-6-1602 MCA establishes the requirements in state law for documentation for the development of an impact fee. The statute leaves to the judgment of each community where each piece of information is organized. The table below lists each element and shows where in the City of Bozeman documentation of facility planning and fee calculation the required item is provided. The listed section is a primary, but not exclusive, location where the subject is discussed. Collectively the Fire Master Plan, fee study, capital improvement program, and impact fee ordinance satisfy the required documentation. All referenced documents are available at the City offices. Documentation Item Document(s) Page or Section describes existing conditions of the facility Fire Master Plan Objective 7 establishes level of service standards Fire Master Plan and Fire and EMS Impact Fee Study Appendix A: Section 3 and Exhibit 1 forecasts future additional needs for service for a defined period of time Fire Master Plan Sections II identifies capital improvements necessary to meet future needs for service Fire Master Plan and Fire and EMS Impact Fee Study Section II ; Appendix identifies those capital improvements needed for continued operation and maintenance of the facility Fire Master Plan Objective 7 makes a determination as to whether one service area or more than one service area is necessary to establish a correlation between impact fees and benefits Fire and EMS Impact Fee Study Section 3.3 makes a determination as to whether one service area or more than one service area for transportation facilities is needed to establish a correlation between impact fees and benefits Not applicable to Fire and EMS Service NA establishes the methodology and time period over which the governmental entity will assign the proportionate share of capital costs for expansion of the facility to provide service to new development within each service area Fire and EMS Impact Fee Study Sections 3 and Appendix 2 Documentation Item Document(s) Page or Section establishes the methodology that the governmental entity will use to exclude operations and maintenance costs and correction of existing deficiencies from the impact fee Fire and EMS Impact Fee Study, Fire Section 3 and Appendix; establishes the amount of the impact fee that will be imposed for each unit of increased service demand Fire and EMS Impact Fee Study Section 3 and Appendix has a component of the budget of the governmental entity that: (i) schedules construction of public facility capital improvements to serve projected growth; (ii) projects costs of the capital improvements; (iii) allocates collected impact fees for construction of the capital improvements; and (iv) covers at least a 5-year period and is reviewed and updated at least every 2 years Capital Improvements Program for Fire and EMS Services and Fire and EMS Capital Improvement Plan Entire Section for each fund The data sources and methodology supporting adoption and calculation of an impact fee must be available to the public upon request Fire Master Plan, Fire and EMS Impact Fee Study, Capital Improvements Program, impact fee ordinance Documents available on-line and in hard copy at City offices The ordinance or resolution adopting the impact fee must include a time schedule for periodically updating the documentation required under subsection (1) Chapter 3.24, BMC Section 3.24.110, additional specificity to be provided