COUNTY OF ALBEMARLE

 

EXECUTIVE SUMMARY

 

 

AGENDA TITLE:

Proffers Report from the Fiscal Impact Advisory Committee

 

 

SUBJECT/PROPOSAL/REQUEST:

Approve Proffers Methodology and Dollar Amounts

 

 

STAFF CONTACT(S):

Messrs. Tucker, Foley, Davis, S. Allshouse

 

LEGAL REVIEW:   Yes

 

AGENDA DATE:

May 2, 2007

 

ACTION:     X                     INFORMATION:   

 

CONSENT AGENDA:

      ACTION:                       INFORMATION: 

 

 

ATTACHMENTS:   Yes

 

 

REVIEWED BY:

 

 

 

BACKGROUND:

The Board of Supervisors has expressed a desire to establish a proffer policy that would allow developers to address the impacts associated with new development and that would provide clear guidance to the development community about the monetary value of proffers, per dwelling unit, by type of dwelling unit, that the County would consider reasonable.  The County’s Fiscal Impact Advisory Committee was charged with deriving a methodology for estimating the gross proffer dollar amounts that the County could expect per Single Family Detached (SFD) residence, Single Family Attached/Townhouse/Condominium (SFA/TH) unit, Multifamily/Apartment (MF) dwelling, and Mobile Home (MH). 

 

As part of its preliminary work, the Committee surveyed proffer models from several Virginia counties, including Chesterfield, Greene, Hanover, Loudoun, Prince William, Spotsylvania, and Stafford.  The Committee determined that these localities expect proffers to cover development-related capital costs only, as opposed to development-related capital and operating costs.  The Committee learned, also, that the capital categories typically covered in the counties’ proffer models included transportation, schools, and parks/recreation/open space, and public safety.  The Albemarle County Attorney, and outside experts who met with the Committee, noted that a viable proffers model for Albemarle should include estimates pertaining only to capital costs.  The distinction between capital and operating expenditures is important since the County’s current Cost Revenue Impact Model (CRIM) includes estimates of operating costs along with estimates of debt service on capital costs in calculating the net fiscal impact of development.  This situation suggests that CRIM, in its present form, would not be suitable as a proffers calculation model for Albemarle. 

 

With this background information in mind, the Committee labored to establish a methodology that would estimate the capital costs that the various types of dwelling units typically would generate in Albemarle County.  Note that, of all the proffers calculation models that the Committee reviewed, the Chesterfield County model appeared especially attractive as a framework for the Committee’s efforts, since the methodology behind Chesterfield’s model appeared reasonable and this jurisdiction’s proffers regime has survived at least one legal challenge. 

 

At the Fiscal Impact Advisory Committee’s February 22, 2007 meeting the Committee adopted a methodology to estimate the proffer dollar amount per dwelling unit, by type of dwelling unit.  This adopted methodology followed substantially from the Chesterfield proffer calculation model.

 

STRATEGIC PLAN:

Goal Five – Fund the County’s Future Needs

 

DISCUSSION:

The attached memorandum outlines the methodology that the Committee adopted, and discusses in detail the proffer amounts, per dwelling unit, by type of dwelling unit, that this methodology currently would render.  The basic methodological approach that the Committee adopted involves five steps:  (1) the calculation of the County’s total budgeted
transportation capital costs; (2) the translation of these total transportation costs into costs per dwelling unit, by type of dwelling unit; (3) the calculation of the County’s total budgeted non-transportation capital costs; (4) the translation of these total non-transportation costs into costs per dwelling unit, by type of dwelling unit; and (5) the estimation of the revenues, per dwelling unit, by type of dwelling unit, that would help offset the capital costs that were estimated  in (2) and (4).  The resulting net cost figures for each category of dwelling unit represent the cash, or dollar value of the in-kind contribution, that the County would expect the developer to proffer per unit to address the impacts of the proposed development.  These dollar amounts are derived, in part, by assuming a debt service level of 10%.  The dollar figures per dwelling unit are as follows:

 

SFD -- $14,241;

 

SFA/TH -- $9,441;

 

MF -- $11,435; and

 

MH -- $17,717.

 

Please note that these numbers could be included in a proffer policy but, by themselves, these numbers do not represent a proffer policy.  A cash proffer policy establishes the guidelines for determining the maximum reasonable per-unit cash proffer that would address the impacts resulting from a particular rezoning.  The policy must be grounded in, and consistent with, the Comprehensive Plan; is typically adopted as an amendment to the Comprehensive Plan; and must be compliant with the state enabling authority.  The policy sets forth the assumptions and methodology for computing the cash proffer contributions, and declares the types of rezonings that would be subject to the policy.  Proffers typically are applicable only to residential uses, but could be applied to commercial and industrial uses as well.  The policy delineates the impacts that would be addressed by the cash proffer (e.g., capital improvements such as roads, schools, libraries, parks and fire stations, but not operational costs, since the theory is that taxes and fees will pay for such costs).  The policy, additionally, provides guidelines about (1) circumstances that would reduce or exempt the per-unit cash proffer (e.g., affordable housing units, development of exceptional design, or units allowed by-right under the pre-existing zoning); (2) off-setting contributions by the owner (e.g., the dedication of land or constructing in-kind improvements); (3) how the value of the off-sets are determined; and (4) unique circumstances that mitigate the project’s impact on public facilities (e.g., age-restricted housing projects that would have little or no impact on schools). 

 

Other issues that should be addressed by the policy include the procedure for evaluating proffers (e.g., the role of staff and the Planning Commission), how often the policy is updated with a new fiscal analysis, and how the policy or future amendments will be applied to pending applications.  In addition, the policy will need to address cash proffers for affordable housing that occur when a developer volunteers to proffer cash in lieu of providing affordable units that are consistent with the affordable housing policy in the Comprehensive Plan.  Addressing additional impacts with cash proffers may become legally more defensible if the County adopts new proffer authority available to it effective July 1st.

 

BUDGET IMPACT:

The adoption of the attached proffers methodology and numbers, along with the adoption of a formal proffer policy, would generate substantial amounts of new revenue that would help the County mitigate the fiscal impacts of new development. 

The total amount of revenue that the County could expect, in any given year, from the proffers numbers listed above would depend upon several factors, including the volume of new construction in the County in that year, and the way in which the County’s formal proffer policy would apply the per-unit dollar figures to specific residential developments.

 

RECOMMENDATIONS:

Staff recommends that the Board of Supervisors adopt the proffers methodology and the resulting proffer values that are contained in the attached memorandum and direct staff to begin the process of developing a complete proffer policy.

 

 

 

ATTACHMENTS

A – Fiscal Impact Advisory Committee Proffer Memorandum

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