RTC Board Meeting Regional Road

Impact Fee ProgramSeptember 21, 2012

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Scope of Work

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

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Executive Summary

Overall General Comments Program has generated substantial revenue

$81 Million – RTC Impact Fee projects with collected fees$185 Million – Developer CCFEA projects$266 Million - Total Capacity Improvements through RRIF

Changes in collections Collections: $9 million (2005) / $750,000 (2010) Credits issues: $24.5 million (2006) / $626,000 (2010)

Economic downturn has had significant impact on the program Reduced development = Reduces collections Produced changed expectations

Impact of adopting less than 100% of maximum supportable fee Credit program

Shift away from regional priorities

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RRIF Program Accomplishments

Regional Road Impact Fee Capacity Improvements

$ 81 Million RTC Impact Fee projects with collected

fees$185 Million Developer CCFEA projects$266 Million Total

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Methodological Recommendations

Refine factors used to derive vehicle miles of travel Trip rates Adjustment factors % of new trips Trip lengths Trip length weighting

Re-evaluate factors included in cost/fee development Historical versus projected costs

Consider adoption of automatic inflation adjustments in the RRIF schedules

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CIP Recommendations

Consider prioritizing 10-year CIP 125 planned improvements (4th Edition) Current CIP is not prioritized by year or importance As a result road improvements are market (developer) driven

Collectors could be eliminated from the Regional Road Network for impact fee purposes and be designated as project-level improvements Potential impact to RRIF Program would be explored in the

next update New development could be required to build first two

lanes as project-specific improvements

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Summary of Policy Recommendations

Land use projections used in the 4th Edition of the RRIF program were prepared prior to the recession and 2010 Census TischlerBise recommends more conservative land use and travel

demand assumptions for the next update of regional road impact fees Simplify land uses in fee structure (32 existing land uses)

Consolidate nonresidential land uses Consider movement to progressive residential fee structure

Reevaluate geographic areas for RRIF program A possible alternative would be the delineation of two service areas

(tiered impact fee program) Centers and corridors concept could be the starting point for delineating

an urban area more suitable for multi-modal improvements Should way credits are calculated be revised?

Existing RRIF Credit Program

Used to pay impact fees in lieu of cash Represent dollar value of developer built projects

Actual cost/impact fee rate = credits Measured in Vehicle Miles Traveled (VMT) Life span of 20 Years Can be traded on the open market Must be used in the Benefit District they were earned May be limited to 50% use on projects outside the

Original Development of Record

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Future Credit Program

Modify Future Credit Program Eliminate the use of credits outside the

development of record Value credits in dollars in lieu of VMT’s Issue credits based on a prioritized CIP, ie, less

credits for improvements projected in the outer years

Issue credits based on the impact fees due or on the value of improvements listed in the CIP

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Buy-Back Program:The Policy Issues

September 21, 2012

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Statutory Requirements

NRS 278B.240:“If an owner is required … as a condition of the approval of the development, to construct or dedicate … off-site facilities for which impact

fees … are imposed, the off-site facilities must be credited…”

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Turning Developer Improvements into Credits…?

$5,000,000 CIP road built by a developer

To determine # of credits:

$5 M divided by

Current “cost/ VMT” ($216.22/VMT)= 2,312.46 VMT’s

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Then What?

Creditholders: Build road Capacity, per CIP and CCFEA Redeem credits instead of paying Impact Fees Transfer or sell credits to others to redeem

at Market Price within 20 years

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Then What?

Washoe County RTC: Accepts Impact Fee payments or Credits

from New Growth Relieved of obligation to build the CIP roads

the creditholders have built

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Discussion Point #1

The price of a “Bought-Back” Credit is Driven by Available Funds & Demand

Not: $ cost / VMT at credit issuance; or $ cost / VMT per impact fee calculations

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Discussion Point #2

Cost of No Buy-Back = Foregone Impact Fee Revenue

<Cost of a Buy-Back

Increased impact fees

from a Buy-Back

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Discussion Point #3

Relationship of the CIP to the Credit Issue Roads built for Credit were on the CIP,

creating capacity RTC doesn’t need to fund With Buy-Back, CIP needs remain

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Discussion Point #4

What are the unknowns? Will Assumptions Hold? How many creditholders will participate? Impact on Credits that are not “Bought Back” Is there Legal Exposure? What are Staff and other Administrative

Costs?

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Implementation

Buy-Back Program: Who’s Eligible? Original Creditholder? Third-Party Creditholders? Those Expiring Sooner? Later?

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Implementation

Buy-Back: Next Steps Revise Current Program to avoid more

“excess credits” Determine:

Buy-Back Participation Funding Source

Confirm ROI Projections Execute Buy-Back

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Implementation

If No Buy-Back: Next Steps Revise Current Program to avoid more

“excess credits” Implement remaining Recommendations

Buy-Back Program:Financial Analysis

September 21, 2012

Financial AnalysisAssumptions

Analysis based on Vehicle Miles Traveled (VMT’s) Growth Rate for new development – Washoe

County Consensus Forecast (WCCF) at 1.4% annually

Percent of Growth paying Impact Fees 15% cash vs 85% credits (based on 2011 collections)

No issuance of future credits Willingness of current credit holders to sell Discount Rate to assess present dollar value

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Preliminary Results

Scenario Cost to RTC Credits Purchase

Buy Back Price Per

Credit

Recaptured Impact Fee

RevenuePresent Value ROI Last Year

of Credits

No Buy Back $0 $0 N/A $0 N/A N/A 2026

1 Buy Back 200,000 Credits $5,000,000 200,000 $25.00 $13,957,920 $5,787,552 $0.16 2024

2 200,000 Credits and 2% Growth Rate $5,000,000 200,000 $25.00 $21,017,059 $8,714,573 $0.74 2024

3 200,000 Credits and 0.75% Growth Rate $5,000,000 200,000 $25.00 $6,958,308 $2,885,213 ($0.42) 2024

4 Buy Back of 400,000 Credits $10,000,000 400,000 $25.00 $20,792,680 $8,621,536 ($0.14) 2023

5 Buy Back Program of $15 Million $15,000,000 272,727 $55.00 $13,957,920 $5,787,552 ($0.61) 2024

6 Multi-Year Buy Back Program $12,000,000 218,182 $55.00 $20,792,680 $8,621,536 ($0.28) 2023