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11.C.

Meeting Date:	12/06/2022
Co-Submitter:	Anja Wendel
From:	Gary Miller, Water Services Engineering Section Director

TITLE:

Consideration and Adoption of Ordinance No. 2022-33: an Ordinance of the City Council of the City of Flagstaff, amending the Flagstaff City Code Title 7, Health and Sanitation, Chapter 7-08, Extension and Reimbursement Agreements for the Construction of Water and Sewer Line, and Title 13, Engineering Design Standards and Specification for New Infrastructure, Chapter 13-09 Water, Sewer, and Other Underground Utilities, by amending the Reimbursement Agreement provisions to allow a longer maximum payback period; repeal of conflicting ordinances, severability, authority for clerical corrections, and establishing an effective date.

STAFF RECOMMENDED ACTION:

At the December 6, 2022 Council Meeting:
1) Read Ordinance No. 2022-33 by title only for the first time
2) City Clerk reads Ordinance No. 2022-33 by title only (if approved above)
At the December 20, 2022 Council Meeting:
3) Read Ordinance No. 2022-33 by title only for the final time
4) City Clerk reads Ordinance No. 2022-33 by title only (if approved above)
5) Adopt Ordinance No. 2022-33

Executive Summary:

This ordinance, to revise city code, is proposed with the intent to improve the existing policies on reimbursement agreements, sometimes referred to as recapture agreements. Reimbursement agreements are a tool primarily utilized by developers to share the financial cost of extending water and sewer mains to areas of town that are not currently served by this infrastructure.

In 1994 the City adopted a recapture ordinance to provide a process whereby developer can recover a portion of the infrastructure costs from property owners or future developments that will benefit from the new infrastructure. Any property owner applying for a connection to a water or sewer main, who did not share in the original cost of installation, will be assessed a proportionate share of the cost, that will then be refunded to the developer who paid the initial capital cost. If adjacent landowners choose not to develop or connect to the utility line, they are not assessed a charge.

In 2007 a revision to this code was adopted simplifying the process by which reimbursement agreements processed and administered. Since this last revision very few, if any, reimbursement agreements have been done. The proposed revision would extend the maximum payback period from ten (10) years to twenty (20) years. This change may encourage investment in water and sewer infrastructure and development. Most cities in Arizona have recapture ordinances, some allow for a ten-year reimbursement period, and some allow for a twenty-year reimbursement period.

Financial Impact:

When a reimbursement agreement is established the beneficiary is responsible to pay an established fee, which is a percentage of the total reimbursement, not to exceed $10,000. This fee is intended to cover the City's cost to administer the agreement. By extending the payback period the City's obligation to administer will also be extended. No direct budget impact is expected from this change.

Policy Impact:

The intended and expected policy impact would be in the support of development in areas of the City that are not currently served by water and sewer. Reimbursement agreements would be a better and more beneficial tool for developers when considering development in these areas.

Connection to PBB Priorities/Objectives, Carbon Neutrality Plan & Regional Plan:

Priority Based Budget Key Community Priorities and Objectives

Sustainable, Innovative Infrastructure

Deliver Outstanding services to residents through a healthy, well maintained infrastructure system
Utilize existing long-range plan(s) that identify the community's future infrastructure needs and all associated costs

Livable Community

Support the development of attainable and accessible housing

Carbon Neutrality Plan

CR-1: Ensure all mitigation actions improve Flagstaff's ability to adapt to the future.

Regional Plan

WR.2.2. Maintain and develop facilities to provide reliable, safe, and cost-effective water, wastewater, and reclaimed water services.

Has There Been Previous Council Decision on This:

In March of 2020 the City of Flagstaff entered into an agreement with Coconino County entitled "AMENDED AND RESTATED PERMANENT EASEMENT FOR WELLS, DRAINAGE, SEWER, AND WATER PIPELINES (Fort Tuthill)". Within this agreement the City agreed that "The City Council at a public meeting will consider amending the code to allow a recapture period of up to 20 years." The County has since completed the sewer main extension contemplated in this agreement and is currently working with staff to establish their reimbursement agreement. At this time Coconino County is intending to take advantage of the extended payback period proposed in this ordinance.

Attachments
Ord. 2022-33