Administrative Policy #7.05 - Pre-Payment for Public Street Improvements
Purpose
To provide for the orderly and efficient extension of public street improvements.
The Land Development Code (LDC) requires all new developments to construct, at a minimum, all interior streets, frontage streets, and alleys to current City standards. It is not unusual that these street improvements, especially frontage improvements, do not abut or connect to existing City standard streets. As a result, improvements to a public street can occur in a fragmented and inefficient manner.
The City may accept prepayment of public street improvements, in lieu of constructing them, when it is in the community’s interest to do so. The purpose of this Procedure is to describe the mechanism for that prepayment.
Scope
Applies to all development required to make street improvements according to provisions of LDC 4.1.40 b., which provides for the use of pre-payment when certain development actions occur as in-fill on an existing sub-standard public street. For other development, it is recognized that constructing public street improvements is preferred to payments in lieu of construction. However, in certain instances, it may be in the best interest of the community to accept payments in lieu of construction in order to provide for improvements which are logical and economically efficient extensions of existing City standard streets.
Definition
Public Street Improvements. Include associated sidewalks and planting strips, as well as storm collection, detention, and treatment facilities necessary to serve a City standard street.
Procedures
Payment in Lieu of construction
- a. In deciding to recommend or allow payment in lieu of construction of City standard street improvements, consideration will be given to the safety and welfare of the public, proximity of existing City-standard street improvements, as well as the timing of future street improvements which may provide connectivity.
- b. For development proposals requiring a public hearing, the decision to allow payment in lieu of construction will be made by the Planning Commission and/or City Council.
- c. For development projects which are permitted uses, the decision to allow payment in lieu of construction will be made by the Community Development Director in consultation with the City Engineer.
- d. All proposed street improvements contained entirely within the boundaries of the parcel(s) proposed for development will be constructed with development.
- c. Any frontage improvement which could directly connect to a City standard street will be constructed with development.
Guidelines
Determination of Prepayment Fee
If payment in lieu of construction is determined to be in the best interest of the community, the developer will be required to submit a detailed estimate of construction quantities based on a half-street improvement in a format acceptable to the City Engineer, as well as any other information necessary for the development of a cost distribution to the affected property. Estimates of construction quantities will be based on full-width street improvements if it is determined that the potential for additional development to complete the street improvement does not exist. The City Engineer will apply unit costs typically experienced by City projects to determine the total pre-payment fee for the property. In addition, the pre-payment fee will include the following elements applied as a percentage of construction costs:
- Engineering and Construction Management: 15%
- Contingency: 10%
- Administrative: 3%
Fee Collection
- a. The pre-payment fee will be collected by the appropriate City department, prior to the issuance of any building permits or permits for public improvements by private contract (PIPC).
Accounting
- a. Pre-payment fees and all the interest earnings on those fees will be placed in an account specific to that street. These accounts will be co-managed by the Public Works and Finance Departments. The City will maintain a record of all properties that have met their financial obligation to make street improvements by pre-paying for them.
Project Implementation
- a. Projects for which pre-payments have been made may be implemented either through the City's Capital Improvement Program or by disbursing funds to a developer constructing the improvements.
- b. Planning for street capital improvement projects funded by pre-payment fees will be initiated at the discretion of the City Manager, contingent upon budget approval by the City Council. It should be recognized that in order to provide for a logical and cost-effective extension of street improvements, projects funded by pre-payment fees may be phased and may construct segments of infrastructure which do not front the parcels from which the fee was collected.
- c. In the event that actual costs incurred are less than collected for a particular project, excess funds will be made available for streetscape, traffic calming or transit improvements along the improved section of street. In the absence of streetscape improvements, traffic calming, or transit needs, excess pre-payment fees will be placed into the City's Street Fund, which will then be used to offset future operating and maintenance costs of the system.
Review/Update
The Public Works Director will prepare this Administrative Procedure for review as needed for City Manager approval.
Last reviewed: 07-2021
