Webinar: https://connectdot.connectsolutions.com/pbhiw1816s8r/
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Thank you for standing by. Welcome to the Value Capture Strategies and Capital Improvement Planning primer webinar. We will conduct a question and answer session. Construction will be given at that time. If you should require assistance during the call, please press --
Thank you. Hello, everybody. On behalf of the Federal Highway administration, I would like to welcome you to today's event on Value Capture Strategies and Capital Improvement Planning. This is based on a new primer produced by the Federal Highway administration. My name is Pepper Santalucia. I will be facilitating today's webinar and helping you address any technical problems. You may have seen this on the screen, the sled we had an earlier, we have a great set of presenters for you who will share their experience and expertise on the topic of value catheter strategies and the relationships to capital improvement plans. We will introduce those presenters to you in just a minute. I want to orient everybody to the webinar room in the top left corner of the screen, you'll find audio call-in information in case you're having issue with the audio coming to you through your computer. You can also dial in using that information. In the lower left corner, right now is the attendee list. Has a move into the presentation, you will see a window where you can put in comments and questions during the course of the presentation. With regards to the slides, they will be in the middle here where you see these poll questions which we invite you to respond to. And, you have the option of entering into a full-screen mode so the slides will be more legible on your machine. To do that, but to the upper right corner of the window that is showing the slides. You will see a button with four outward pointing arrows. That will bring you to the full-screen mode. To exit that mode, if you bring your mouse to the top of the screen, to this top of the slides, you use the button that has We're inward arrows. Licking that will bring you out of the full-screen mode. If you have terrible difficulties, you can use the chat pod were the window to you send messages. You can also send me a private message to me by find me in the list of host. Once highlighted, there will be an option to start a chat with me. This webinar will run until 3:00 PM Eastern time. Will present questions for each presenter at the end of their respective presentations. We have an extended Q&A session at the end of the presentation. In addition, as the operator said, in addition to putting the questions in the chat pod, you have the option of asking your question over the phone and we will remind folks of how to do that at the right time. The speakers will be available for download at the end of the webinar. We are recording this session so people can listen to this event at a later time. That recording will be posted shortly after today on the FHWA website. If you're interested in applying for professional development hours or credits for your participation in today's webinar, we will provide information at the end of the webinar on how to get confirmation of your participation in today's event. I would like to thank everybody for responding to the poll questions. And, while we are taking a look at those results, I will introduce our moderator for today live event. This is Mr. Terry Reagan. He has over 30 years of experience working at the regional state and federal levels on issues involving transportation, planning and finance. Terry what take -- we will get his reactions to the poll results.
Pepper, thank you. As you can see in terms of the type of organizations we have the audience, mostly local governments and EMPOs. They make up over half the audience which is great because that is who we are intending to get this information out to. State D.O.T.s make up about a quarter and we have about 10% from the federal government. In terms of knowledge, 32% say they have some knowledge. 84% has heard of it. And, 30% got no prior knowledge. Are great hope, by the end of this two hours, you know a lot more than you came in with. In terms of your experience knowing about the STIP, your somewhat knowledgeable. And, in terms of your jurisdiction has a CIP, two thirds are saying yes and a little bit more of a quarter say you don't know. So, you are the perfect audience. These polls help us give the presenters a better idea of who the audience is. Thank you very much for filling that out. Are presenters will be Mr. Rafael Auld ready. We will have presentations from Terry Quezada who is the assistant public works director for the Town of Horizon city in Texas. Ray Dovalina who is the director in the public works to murmur for the city of Phoenix. To cross was a retired from the position of principal planner at the city of Phoenix. And T Lee whose assistant public works sector the city of Hillsboro, Oregon. We will have a brief question and answer period after each speaker as well as time for's question at the end. If you have any questions during the presentation, please submit them in the chat pod and we can queue them up for the speakers. Will ask Christina, our AT&T operator to open the telephone lines if you have any questions you want to ask over the phone.
Are first speaker, Rafael, he is a senior research scientist. He has over 20 years of international experience in transportation research and management consulting he has worked at the federal national state and local level. Prior to joining TTI, he worked at Hamilton. And his infrastructure finance work is consummated on structure and fees and Valley caps for transportation funding. After Rafael, will hear from Terry Quezada. And before that, she served as an assistant director of public works and the deputy director of the Department of Transportation at the city of El Paso, Texas. Then, following that we will hear from two speakers from Phoenix. We will have Ray Dovalina. to go is the assistant director of the public works to Barb endorsing the city's floodplain management division. He brings over 30 years of experience in transportation engineering and municipal management. He is at various positions including Director, Deputy Director for traffic engineer, supervisor, free a liaison. He started out at Caltrans and has done some private sector work. Doug is, has been in infrastructure and land use planner for over 30 years in the U.S. and Canada with a focus on infrastructure finance issues. Water demand and supply planning and the division of water, wastewater and drainage infrastructure. This facilitates to develop an. He's a member of the American Institute of certified planners and holds a bachelor's degree in economics, a Masters in urban planning and NMDA with a real estate specialization. He is recently retired from the city of Phoenix where he was a principal planner. And our final presentation will be from Tina Bailey who has been 25 years at the City of Hillsboro, Oregon with various roles. Her most extensive efforts have been building and supporting the city's transportation division where she developed an up limited the city's current payment assessment program and efforts on the developments position of the city's Transportation Utility Fees program. She continues to provide direct management over the city's transportation division while providing executive leadership to other divisions. Now, I will turn it over to Rafael, our first presenter. He will outline the contents of a newly published FHWA primer on Value Capture strategies and the capital improvement planning. That primer will be able to be downloaded by you today. So, Rafael looks
Thank you, Terry. Good morning and good afternoon everyone. The presentation I will go over will provide you with an overview of the FHWA primer. This will provide practical information for local communities that are interested in and lamenting the capital improvement product and how understanding how Value Capture tech geeks can assist in this process. The primer highlights the need for local ordinances to corn at the moment of CIP. As well with other local governments. And, ensuring that the final delivery of the transportation improvements is possible. The primer concludes with four case studies that state how different committees have used Value Capture for their transportation projects including their CIP. My colleagues will provide accounts of three of these case studies I include in the paper.
So, the presentation is divided into five sections that summarize different portions of the primer. I will begin with an overview of the CIP process that is followed by a description of the process. And, I will highlight some of the opportunities and challenges that are associated with introducing a CIP. I will finalize with a review of the Value Capture techniques that are most commonly used in CIP. A case study I studied will follow.
As we start with the overview, how do we define capital improvement programming for the purpose of the primer? It is a multi-your scheduling of capital improvements using available fiscal resources in the community desire for specific improvements. The CIP is a result of completing this process. The CP entails two elements. Capitol product and capitol value. This is a planning measurement tool that provides a schedule of all the capital projects that are programmed for the next five to 10 years. The first year of the CIP becomes the recommended capital budget for the community in the next fiscal year. The RA and the CAPD element process must be submitted to the local governing body for review and adoption to develop the annual operating budget.
So, the purpose of a CIP is to connect critical temperament needs with financial resources. The CAP is a tool that committees used to achieve objectives including planning objectives, fiscal management objectives and budgeting objectives. Here are some of these objectives. However, for local ordinances located in different areas, a pattern of interpretable relationships as a significant effect on the local CIP process. This is because most metropolitan areas include many municipal governments or several countries. Also, special districts and other agencies that build critical facilities and infrastructure which includes highway transportation systems. When it comes to transportation, they have a critical draw in Corning planning and developments. So, as a result, another critical objective of the CIP process that will emphasize in the subsequent slides is to coordinate the transportation priority projects for the community with those reflected in metropolitan transportation plans and transportation improvement programs to ensure they are eligible for federal and state transportation funds in the funds are available.
What the CIP look like? The CAP has typically four elements. The first one is the CIP narrative which is, consists of the overall narrative of the CIP and it includes the purpose and objectives of the CIP. Some community information background. Priority investment areas and in summers protective expenditures and so on. It is a narrative of the CIP overall. However, in other communities you may have a separate section with a narrative for each of the planning departments of the municipality. For example, your Transportation Department in larger communities. The CIP may include a separate section with a separate narrative for the transportation department. The second element of a CIP is a prioritized list of projects and cost estimates. The CIP provides cause for other projects in the next 5-10 years. The CIP also provides the cost of having spent on a project from life to date. As well as costs that will be spent in the next fiscal year which they call the current year in the CIP. It also provides an estimate of the future cost of each project. The final elements of the funding sources which is the most important ones. Here, the CIP provides the amount of economic resources that is provided from different funding sources, for each project. The amount of resources that been provided to date for those projects as well as a mount that will be needed in the next fiscal year as well as future years. And finally, the fourth element is the project detail forms which is where you'll find detailed information about each product included in the plan. Two okay. Sorry.
This CIP has multiple uses. It is a multiuse tool. First, it is a planning tool. Comprehensive plans and transferred to -- that provided a list of projects that will be executed in a certain timeframe. However, they rely on tools for implementation. This CIP is the planning tool available to implement the comprehensive transportation plans that they may have. The CIP therefore needs to be consistent with the policies and infrastructure accommodations that are defined in the plans. Second, the CIP is a fiscal management toll. The CIP is used as a tool to identify capital needs in advance of the projects that are expected to rely on state or federal transportation funds are also reflected in metropolitan planning documents. This helps ensure that the localities are eligible for state funds. And finally, the CIP is a budget total. The first year of a CIP, as I mentioned earlier, the recommended capital budget for the next fiscal year. The CIP also provides an estimation of the impact that the execution of each capitol project will have on the Operating Budget. This information is incorporated in the process of reviewing and adopting the annual -- so, it is a budgeting tool that in addition, helps many local governments develop and keep a balanced -- that may be required by state law.
The next slides that we have here deals with the implementation of a CIP. The primer divides the CIP presentation in three major phases. The first one is that it will of the CIP. The second is the implementation and the third one is the administration of the CIP. Before we go into the CIP implementation steps, we need to talk about a set of common and local regional getting documents that help with the processing of this CIP. The consideration of the statements can ensure the CIP that includes projects that are aligned with plans and funding sources and constraints are properly identified. The picture on the screen shows these documents on transportation plans. The figure shows four levels that reflect, top-down, Pacific influence of the different guiding documents on each other. For example, the figure reflects to Pringles. The first one is a local jurisdiction and the second one is the original or metropolitan level. The figure tries to illustrate the interrelationships between the local jurisdictions guiding documents and its counterparts, regional or metropolitan transportation documents. And the combined influence of these documents into that element of a CIP. We start to notice the many parallels between the developments of a CIP for local government and that of a EMPO transportation project or a statewide transportation product. In fact, the Metropolitan are critical to the development of the CIP in the eligibility of the CIP's transportation project or the state or federal funding sources is tied to the project also being put together at the regional plan. Here, you can see, in this figure, we drew some parallels between the local jurisdiction, transportation plans, and the Metropolitan transportation plans. And between the CIP and the -- we are also highlighting the need for continuous coordination and feedback between these two processes. That is the only way to ensure that the priority projects have reflected in both documents and funding from federal and state sources will be available for the project.
So, the process developing a CIP is divided into nine sequential steps. Having a thorough understanding of the local governments is crucially needed for each of the steps. It is crucial to understand their needs and their priorities as well as their resources they may be able to contribute. Internal stakeholders include the local government, each governing body, the different department heads as well as staffing in each department. The east -- other stakeholders recall federal agencies. These agencies like the state devotees, the state environmental agencies as well as a regional planning bodies.
On this slide are just steps 6 through 9. I will go over each of the steps. The first step in the process of developing a CIP is to create a local framework for the adoption of the CIP in the case of the community where there is no station, or anything else. And, to establish the facilities for that element of a CIP. This includes local governing bodies, adopting an ordinance or a bylaw requiring the aggression of a CIP in the apartment of Anna CIP core Nader will be responsible for coordinating the developments of the CIP. The CIP coordinator position will be occupied by local government official or staff member in the municipality or county. The CIP Coordinator may also be supported by group of local government staff or maybe by consultant. The CIP Coordinator also works with a CIP planning board or a CIP advisory committee. Each year, the CIP Coordinator is responsible for establishing a schedule for specific deadlines for completing each step in the CIP development process.
The second step is preparing an inventory of assisting capitol assets. This includes fleet, buildings, equipment, roads and streets, utilities, sewers and other departments in the municipality. When the facility was built, when the asset was acquired, the cost, current conditions, you saw life et cetera. The third step is determining the status of previously approved projects. The step involves reviewing the capital projects that the local government has underway. To overweight if additional funds are needed and to determine the amount of unspent funds that may be available for use in projects or that of been discontinued for some reason. This is a very good opportunity to assess any changes on the schedule of those existing or previously approved projects.
The fourth step is assessing the physical and financial resources of the community. This includes assessing recent trends and projections of revenues and expenditures, including debt and other liabilities. This assessment helps the CIP Coordinator proposed a CIP that has a funding schedule that is aligned with the fiscal policies including tax rates and so on as well as financial constraints.
Over here, we move on to the fifth step. The fifth step is soliciting and compiling project requests which is a process where the CIP Coordinator solicits the capital improvement project request from the different departments in the community or the local agencies. And also, it includes their parties from each of these departments for the list of projects proposed. Now, we moved to the most important and the most difficult parts of developing a CIP. It is evaluating, prioritizing and selecting the projects. The objective of the step is to put together a CIP visits consistent with policies and can be submitted for approval to the local government, the governing body. The proposed transportation projects are used in terms of their consistency with comprehensive transportation plans. And with the Metropolitan transportation plans, they were referred technical feasibility, proposed cost and funding sources. And the relationship with other projects that are being proposed that may be under execution at the time. Here, the CIP Coordinator convenes several meetings that include the party leadership, they discuss and critique the first proposals received by other departments. In the step, public feedback, public input may be gathered and incorporated and projects are usually prioritized using a scoring system. Based on any scoring system does not replace professional judgment that may be required in terms of assigning parties.
Next is the development of CIP financing plans. It is here being value capture makes its appearance. The object of this step is to recommend a method to pay for each project using constraints shown in step five. There are numerous funding sources and financing mechanisms that may be used to pay for local capital projects which may be obtained from local revenue per general obligation funds. Revenue bonds. If you can state and federal grants and value capture techniques. This may include taxing and financing special districts and special assessments. However, because the growth and trepidation funding needs -- availability for state and federal funding sources that have been the primary sources for funding large-scale capital transportation projects. It often creates -- and, this has led to the adoption of innovation in funding and innovation in financing such as Value Capture. The process that is depicted here in the screen starts with identification of funding sources including federal, state, and local sources. Then, the CIP Coordinator defines the funding gap and the size of the funding gap. If there is a funding gap, it's the CIP coroner can incorporate Value Capture techniques which secures additional funding. At the funding sources, have not been posted, the initial package of funding sources per initial funding sources and value capture techniques have been identified by the CIP Coordinator. By using these different financing options, they will propose financing plan for the CIP. Okay.
Step number eight is preparing the program draft. The final CIP draft and the remake it capital budget is submitted to the governing body for review and adoption. And communities that have a CIP planning board, the CIP draft they had to be reviewed by the board before it is submitted to the local governing body for its adoption.
And, the final step in developing a CIP is to review and adopt the CIP. This is where the local government body reviews augmented projects including the CIP draft. It approves it. This is an opportunity for public sector to review the CIA he. Affect it is been reviewed and adopted, the capital budget is adopted, the CIP is adopted, the budget, the budget legislation for the next fiscal year, the local board.
So now, I will move on to the administration of a CIP. The process of administrative a CIP can be divided into two steps. The first is to execute the approved CIP and the second one is to update it. The execution of the CIP involves a set of actions that we have classified. Planning and community engagement. Environmental. Right-of-way. Design. Construction. These actions -- in the case of major transportation projects, planning and community engagement actions may require more than one year. Projects are also required to complete a set of environmental processes before the construction can begin. Acquiring land for the right away. It adds another layer of complexity. It is also something that needs be kept in check and be monitored. And finally, when designing construction, there are issues that may arise, for example related to construction zones. The CIP Coordinator these actions and minimizes risk transfer the capital improvements are executed in the proposed schedule and within budget.
Updating the CIP is critical. And, it is very important to update the CIP periodically. Most committees do every year while others do every 3 years. Updating the CIP involves repeating steps to through nine in the previous process we presented.
Now, the timing of the preparation of CIP versus developing the annual budget process for the community. It is a horrible the CIP and the annual budget are available at the same time. It is not always possible but it is desirable. The capital cost in the first year of a CIP will become the recommended capital budget. Some of the capital costs contemplated in the recommended capital body are transferred to the recommended operating value. This would be the case, for example, of capital expenditures that are funded using debt. That becomes part, that service becomes part of the operating budget. Capital expenditures may affect the operating budget. So, building New Roads, on the streets, but a new buses will entail additional maintenance costs. Also, costs of personal for maintenance and operation.
Now, I will move on to cover some of the opportunities and challenges. So, and omitting a CIP allows the community to develop an orderly planning approach for the acquisition and financing and the use of capital equipment. This approach affords the community the opportunity to ensure the product reflects their needs and it also enjoys support from elected leaders as well as from the public. A mission to the opportunities, there are also challenges. Particularly for communities who are doing it for the first time.
The most significant opportunities and challenges associated with implementing a CIP can be classified in three areas. The first one is public and political acceptance. The second one is equity and the second was cost of administration. We have the slide about public acceptance. First, the public perception of the CIP project depends on its transportation see. Fortunately, the CIP, I design, are a tool that includes multiple opportunities to get the public informed and involved. The CIP is beneficial from the standpoint of helping generate political support, political acceptance from electric officials. The CIP offers a systematic approach to identify and prioritize public improvements. That helps reduce the pressure on elected officials to implement projects that are not highly ranked in the process per however, there are potential political acceptance challenges because it is possible to find elected officials who are uncomfortable with sharing the process with the public or other levels of government.
In terms of equity. Implementing a CIP provides a mechanism to ensure that capital investment decisions are made considering fairness to all stakeholders in a community in terms of who incurs the costs and consequences of those decisions. This is because a CIP process involves ranking investments on a predetermined criteria. Ranking projects in this manner can help to ensure capital improvements are strategically located where public needs and priorities are their greatest.
In terms of costs, a CIP can offer a community with numerous benefits. Right? It may include more economic developments and supporting hidden costs and avoiding unexpected expanders and successfully competing for state or transportation funds. The cost communities may face when they implement a CIP for the first time, I just threw the life, it requires a multidisciplinary team that is skilled in financial management, project management and public transportation. And it comes with a cost per. In terms of administration, managing, maintaining, monitoring, updating a CIP also poses some challenges. Implementing a CIP, especially when it's the first time, requires a lot of time and effort from local officials as well as staff. Overtime, this improves and gets less burdensome.
Now, I will be getting to the topic of Value Capture techniques used in a CIP.
We have seen funding sources are financing mechanisms are a critical component in the CIP because they can contain the number and scale of improvements that a local government can reasonably deliver. If a specific funding sources identified, it allows the local government to leverage other funding sources for the project that they need. We have discussed before, the funding gap. And, it is really here where Value Capture tech geeks can help plug that gap to help bring those projects in a timely manner. It will not delay those projects, --.
So, now, which are the most common Value Capture tech geeks that are used in CIP? Here, we have impact fees. These are fees imposed on developers to help fund construction of facilities that are required by the new development. We have fees paid by property owners for the use of the transportation system. We also have special assessments which are fees charged on property owners of properties, within a district, maybe the primary in a fisheries of that improvement. And, taxing which captures property tax revenue resulting from Bayou of tax increases. These are the most difficult. The case studies we have followed, my colleagues have presented, we have covered impact fees, Transportation Utility Fees, and taxing and financing. These case studies are included in the primer along with four case studies which you will be able to download later today. With this, I conclude my presentation. Thank you very much. I'm looking forward to any questions or comments.
Thank you very much car a fail, for the presentation. Christina? We like to open the phone lines right now to see if there any questions that people have over the phone. Let's check and see if there are any questions from the audience. We will be having a longer Q&A period after the final presentation during which all the speakers can address questions. If you have any, please put them into the chat pod.
If you wish to ask a question or the phone, please press star one. A voice prompt on your telephone line will indicate when your line has been open. If you're using a speakerphone, please pick up the handset before pressing the corresponding edges. Once again, press star one at this time.
And for those of you who are wondering, the primer, it will be available on the federal highway Value Capture website as well as it will be available in the download slot here as soon as a presentation are over. A fail? Could you quickly talk about how you selected the case studies used in your primer?
We selected for case studies from different parts of the country where we were aware of the use of Value Capture techniques in the recent past. And we also chose those communities based on their size. For example, but we have, what will be presenting next will include case studies from smaller communities and large communities. We have rising, Texas and Phoenix Arizona. We have cases from geographically diverse places. We have case studies from or resigned and a case study in the primer that will have in the presentation from northern Virginia. The Washington D.C. area. We try to balance different location sizes. We tried to show Value Capture have been used to supplement and help come up with funded CIPs for committees of all types.
Thank you for that. I see a number of people are typing in the chat pod but I'm not seeing any questions come up. Pepper, are there any that have come into the chat pod that I'm not seeing?
Terry, there is one that just popped up., We can also -- Yep.
Could you clarify how to frame projects in a CIP that will seek or require grant funds? For example, will project that was spurred by seeking a grant to support conceptual planning. Should not be submitted to a CIP for consideration?
For conceptual planning, it would not be bad for your CIP. It is a service and Michael -- those are going to your Operating Budget. However, if subsequent, the funding of the project will come out of the conceptual planning, is going to be seeking federal grant funds, then you would bring that project up with your EMPO to basically find a way to include that project that is parked of the transportation plan based on the priority that it has from the community. I don't know that answer the question parks be in do we have any other presenters I want to weigh in on a question?
This is Ray Dovalina from the city of Phoenix. I was going to cut typically, we worked at the Metropolitan planning organization. They will have grant opportunities that appear in the Phoenix area. They do have some requirements, if you end up doing a study, using MPO funds to create -- you need to come up with -- after the study to create it. He has a timeframe typically about 10 years. As Rafael mentioned, you start looking at what are the opportunities beyond the rent opportunity? Are there other types of federal grants that you can seek? And, the MPO can help. For the implementation.
Grade. We have another question from Ben. He has asked, the eternally difficult question about how can the insanity of a Value Capture revenue stream can be reconciled with the STIP -TIP requirements of fiscal constraint in financial planning? I will give a gold star who can answer this question.
To answer the question, I think when it comes to practice, what has happened in practice, Terry will be able to emphasize this further in her presentation. When it comes to actually financing, using those Value Capture funds to finance a project. The financing mechanism is very important. Funding a financing mechanism that can, basically, all for the uncertainty that is associated with the revenue is key. Impeccable terms, that is meant, in some cases, the uncertainty associated with vacant refinancing is solved -- full faith and credit of the municipality for example. Unless, you finance funding that involves a premium in terms of the interest rate you pay for the bonds issued. Terri, we have a chance to talk about how they managed it in their case.
This is Terry. I will address some of this. It was a different type of arrangement. It was a unique agreement between the people of El Paso. The Town of Horizon city and the regional mobility authority. It took a partnership to mitigate some of that uncertainty. I would like to be really particular about how the questions are asked. I think the STIP and TIP requirements for fiscal constraint are one issue. It goes to the planning and coordination with your MPO. I don't think that is as uphill a battle as finding the financing. And Rafael made a comment to this. Financing your project entirely with incrementing financing is particularly difficult. And that's a practice of it that is when you will be on the planning, and the programming, at the MPO and trying to get the cash for it. That is when you have to have, what in the El Paso reaches called up backstop lead. The general taxing authority or some other revenue fund that are pledged to the debt that is usually issued to fund a project.
Grade. We have a couple of questions. I think they will be addressed better in some of these examples we'll here. We will keep these questions in advance for a bit and hear from a couple of other presenters and get back to them.'s we like to turn things over to Terry Quezada. As I mentioned, she has been the public works director for the Town of Horizon city, Texas. Terry, please go ahead.
Thank you. I will try to be respectful of everybody's time. If there are any questions, please do not hesitate to stop me and I will answer as best as I can.
I wanted to take from Rafael's presentation about a broad CIP and talk about Horizon City's experience specifically with transportation investment zones. These are a Value Capture tax increment financing that is available in Texas. This constraint is anything funded within the zone that is created has to be a transportation improvement. It cannot be another type of improvement. For Horizon City, they have a relatively new CIP. The first was adopted by the town Council in February 2014. The focus of that first CIP was on infrastructure. Street, drainage improvements. It was also, it was also motivated from the transportation reinvestment bill proposal that were result from brands of mobility plans that our region was developing. Texas transportation Institute developed the financial analysis for this comprehensive mobility plans. And, a series of TRZ proposals in different communities, to fund major regionally significant transportation projects that the region believe it would not otherwise be funded. Those comprehensive mobility plans included multiple mortal -- modes of transportation and they were endorsed by all parties amazing agencies. This is one of the ways that the projects, and the planning process, addressed that public and political bite in. It started as a regional concern and then was adopted by the local entities. As Rafael indicated, Horizon City is a relatively small community. The census estimate from [Captioners transitioning. Please hang up the phone line so the next captioner can call in. Thank you.] indicates where just under 20,000 people. The fiscal 2021 budget, general fund budget, is under $11 million. And, that first CIP that was adopted in 24 teen totaled 15 million for the restructure projects. While this seems a very modest amount for larger entities, it was a very big step for Horizon City. And meant they were starting to plan beyond the current budget year. They were actually implementing what the city charter required which was a three-year capital improvement program. In 2014, they started looking at these things and they started inking about the long-term of what they knew to do for their community. In 2018, another issuance of certificates of obligations was programmed and that totaled about $13 million. It was shifted to parks and recreation facilities. Most of the projects that have been adopted as part of the 2014 certificates of obligation -- the town Council understood they needed to make a change in the improvements and the investment they were making in the community. Currently, the CIP has both funded and unfunded projects. Totals about $118 million..com most of those projects are unfunded. However, what is important as this becomes a planning document. And, it also serves as a repository for the priorities for the community. Documents that have fit into the CIP include the up dated competence of plan that the town just approved a year ago, in February 2020. So, they're seeing how this fits together and how the CIP comes part of their policy document, to help guide the direction and growth for the community.
I mentioned the comprehensive plan where the model project arose in the 2013 County comprehensive plan. There were a number of projects that were distributed geographically, throughout the county. And, you will notice that we have -- one of it was a longer and new construction. And, it is a good project, right here. So, that included both reconstruction of an existing section within Horizon City. And, also new construction that opened up to sections of land within Horizon City. The portion of the project here is also East Lake but that is entirely in the county.
The 2013, parents of mobility plan included a variety of funding sources for the entire program. Texas mobility funds were available through the Department of transportation. Vehicle registration fees which are traditional feels that the county adopted when motorists go register their vehicles. They pledged, the county punch those funds to the comprehensive mobility plan. Transportation reinvestment zones from two municipalities. And, federal funds to include transportation program funding. Initially, the County of El Paso was expected to also create a transportation reinvestment zone and pledge their funds to those projects. However, the Texas state constitution prohibits the diversion of any general funds, monies, from counties to any other source. So, the counties abounding that plan and replaced their investment of transportation investment zone with vehicle registration fees. Horizon City had a rocky start to the adopted TRZ. They had to resend their initially adopted one because it had not met all the requirements for notification. And, they adopted a revised one teen where it was projected to generate about six dollars for a single project. The extension of East Lake and reconstruction in the portion that was still existing. The project was completed in April 2018. For those of you in transportation, you realize that establishing a funding source in 2014 and adopting the CIP to completing the project in 2018 is an incredibly short period of time. The community is particularly pleased with how this project work out to include the planning and the funding of it.
This is a closer view of the project. I'm getting a little bit of a leg. This portion of the roadway was reconstructed it and this portion, that loops back into a state highway on Horizon Boulevard, was the new portion of the roadway that was constructed. You will see that opened up these areas, these were vacant parcels. There is some development here, right along Horizon Boulevard. But, most of this land was vacant. And they were very large tracts of land included in the TRZ.
Some other considerations, once we have gone be at the CIP consideration of project need and utility and public involvement for the town were the size of the zones. We wanted to make sure the zone was not so large that it siphoned away general fund monies from the rest of the town. We wanted to make sure the term was something that was palatable, also, to the town leadership as well as something that could be leveraged for funding with our partners. It can be too short because otherwise it would not generate the necessary funds. But, it can be too long either because it would go back to the impact of the general fund budget. The funding mechanism was another issue that we were concerned with. Because, we understood the uncertainty of increment financing is ever present. And, that the town could not go out to issue bonds or certificates of obligation. And, pledge those funds. So, that was something we had to work on. And, the zone description, the town adopted the zone through parcel identification numbers.
As I indicated in my response to a question, the way the funding mechanism worked out for this particular project was a three-party agreement with the city, the town of Horizon City, the County of El Paso and the Camino reality regional mobility Authority. A transportation entity created by the state that has great flexibility and facilitating the development of projects. In this case, it served as a clearinghouse. They were the project manager. They developed all aspects of the project from planning through construction and closeout they were the ones who collected the funds from the various entities. They issued funds using the vehicle registration fees from the county. And now, the town is paying the regional mobility authority to reimburse him -- them for the portion of the project cost.
Initially, the project and the partners had envisioned using state infrastructure bank loans. Since we were able to finance the entire project local funds, we determined that it would be best not to use a simple phone. The project does not federalize. Where using local funds so none of the federal requirements for the environmental work, the time to complete the inventive elemental work and complete the right-of-way acquisition. All of the U locations, right away acquisitions had to be acquired by the town. That was delayed pending any environmental work.
This is the project schedule. The TRZ number two. It is really one TRZ that the town had. Because number one had to be rescinded. TRZ number two was adopted in December 2014 to capture 2014 as a base year for the value. The design contract was awarded in July 2015. Bids were opened in July 2016. You'll notice the agreement between the three parties was not signed until 2016. Everybody was working from 2014 through November 2016. Construction on the project began in January 2017. And just a little over a year after that, we had a ribbon-cutting. In about six months after that, the city accepted the project for maintenance. In May 2020, the city makes its first payment to the RMA. This was another critical aspect of the partnership with the county and the RMA. We had patient lenders who knew that the increment would not be realized until the project was completed. And so, the first payment was scheduled for 2020. And it goes for 20 years. These are some of the pictures, before the road was opened. I wanted to throw a picture in a very have rain on the pavement in West Texas with clouds in the sky. We do get it. It is just not very often.
These are the estimated financials. You will note the project was estimated just about $19 million. The county funded 77%. And the town just under 23% per the actual costs were lower. The total project was 16.7 million. The participation rates remained the same. Both entities shared in a cost savings per and, this was the savings. It was about $2.3 million.
Payment schedule began in May 2020. And, the final schedule, the final payment is scheduled for May 2020 38. And, there are graduate a payment starting with very modest payments. Is on schedule to be 29,000 in the May 2020. In the final payment is $842,000.
We don't have the final valuations for 2021. The aeration I'm presenting is based on fiscal year 2020. These were the projected tax revenues for 2021. 149 -- 149,326. That is almost $9000 more than the scheduled payment for fiscal year 2021. Again, art TRZ is performing for a well and that's without full development year. We anticipate the residential developments will occur in the next 10 years. And, so we are very pleased that this radicular roadway connected an unfinished roadway back down to a state highway. Now, the town has that connectivity back to interstate 10. It opened up all of those acres for development.
I wanted to close with some considerations. First is to identify the project need. If the project is not needed, it doesn't matter that you have a different funding mechanism. You need to consider the program of work. In this case, only had one project within the zone. But, you can have multiple projects in the zone. If you're considering that scope of work, look at how those projects serve as economic drivers. What you want those projects to do is foster development so you can realize that increase in the value. Again, without that, the feasibility of the project is not resistant. You want identify partners when you're doing Value Capture. Other taxing entities that have overlapping jurisdictions may be willing to participate. A, Treney Tweedy will reap the benefits of the increase of the value of those zones. They may be willing to partner with you even if they are not dedicating 100% of the increment stream. They still may be able to partner with you. There is no shortcuts to analysis of the Value Capture potential. So, you need to make sure you have studied the feasibility. You have realistic expectations for how quickly areas will develop or be developed if you are looking at them in blighted areas of your community. You want to monitor the zone values. Particularly when you are building infrastructure that is a new areas that they be subdivided in the future you want to make sure that your appraisal district is capturing the entire footprint. Even if you parcel identification numbers are being created. So, that the integrity of the zone is not jeopardized as land transactions occur. And, finally, I realize we don't have any economic development individuals or staff on the call. I wanted to make sure, even the public works and transportation professionals, we consider this. You can still consider augmenting other types of incentives in the zone. You want to work with your economic development agency. Because, they may be able to foster different kinds of development that increases that property tax. That property value. So again, you start augmenting your revenue stream. So, that is the Horizon City experience. I'm happy to answer any questions that you may have.
Thank you very much. We have two more presentations. I want to hold the questions right now in advance of the canned. I would like to turned over to the Phoenix case studies. Let's hear from Ray Dovalina and Doug Frost. Ray is assistant director in the Phoenix public works department. And Doug is a former principal planner for the city. Ray and I, go ahead try to be as brief as you can to allow, we have a number of questions here. I would really like to get to Q&A as soon as we can. Okay?
Okay, Terry. Thank you for the introduction. Let me start off. This case study pertains to a smaller project called the Baseline Road. In conjunction with a development of a regional freeway that was done for the city of Phoenix. The presentation outline, will talk about what instigated this project. The South Mountain Freeway, I'll talk a little bit about the South Mountain freeway. The city's budget process, which incorporates the Operating Budget. Also, the Capital Improvement Program and how that ties into the Improvement Program and how that ties into the region and ultimately to the state. And specifically talking about the Baseline Road project and what are the components And specifically talking about the Baseline Road project and what are the components that drove this project to be instigated. And finalizing to be instigated. And finalizing and talking about the actual element agreement component. And then, Doug element agreement component. And then, Doug will wrap up talking about the Impact Fee Program and how it was established and how the Impact Fee Program and how it was established and how it leads into a program developing this project.
Phoenix developing this project.
Phoenix, we are the fifth largest city in the country. The metropolitan city in the country. The metropolitan area is served by many different freeway loops. And, freeway loops. And, let me see if I can use the pointer. This can use the pointer. This is a South Mountain Freeway connection. Prior to 2019, this freeway connection. Prior to 2019, this freeway segment was not well. There was nothing there. As you can imagine, was nothing there. As you can imagine, there was a lot of interstate traffic through the area. In addition, interstate traffic through the area. In addition, this is one of the last major freeway segments that the region last major freeway segments that the region that the city were done. That prompted That prompted what will be talking about in this presentation. Here's a picture of this presentation. Here's a picture of what you see there. That is South Mountain on the left side. It is the beginnings of South is South Mountain on the left side. It is the beginnings of South Mountain. It is one of the largest --largest -- the city owns it. To the south is the river community. The south is the river community. We had to work with a lot of different entities. a lot of different entities. Let's go to the next one. This just shows sort of the segment that were worked on and highlights one. This just shows sort of the segment that were worked on and highlights the project will be talking about, the Baseline Road project about, the Baseline Road project that will go into.
Just briefly, on the city's budget process. Just briefly, on the city's budget process. As we work in the government side, our fiscal government side, our fiscal year starts on July 1 and it ends June 30. From the end of the summer through the fall it ends June 30. From the end of the summer through the fall and winter, we are setting the baseline of those revenues the baseline of those revenues are for the following year and looking at what we can budget from and looking at what we can budget from an operational standpoint as well as a Capitals improvement standpoint. That a Capitals improvement standpoint. That gets wrapped up in a preliminary component preliminary component through the city Council. The trial budget, The trial budget, the Operating Budget is then created in March. Then created in March. Then in April, as many other entities do this, we go through a series of public hearings, with the public. entities do this, we go through a series of public hearings, with the public. And, prior to COVID, we were meeting face-to-face. The last were meeting face-to-face. The last two budget cycles we've had, from last year to this year, we have had virtual meetings. We from last year to this year, we have actually had virtual meetings. We have about eight districts come. Have roughly 5 two per Have roughly 5 two per district. With that information, what we do, as a city, we take all of that input from the public. We do, as a city, we take all of that input from the public. Than the city manager's office presents that fact to the Council presents that fact to the Council and provides some modifications, potentially, what has been proposed. What has been proposed. What has been taken input from. And then the final budget gets sent from. And then the final budget gets sent to the Council for adoption and any other changes that need to happen and any other changes that need to happen for property tax rates, the lorries we have by July. This is mandated lorries we have by July. This is mandated by state law. We do have to have as what I to have as what I mentioned, we have to have the Speck constraint fiscal budget for operating the Speck constraint fiscal budget for operating and capital --
Moving on to the CIP process. on to the CIP process. We do have a rolling five-year plan for all these expenditures five-year plan for all these expenditures we have. These are coordinated, not only getting input from the community but additional staff not only getting input from the community but additional staff. Creating the CIP by April. Then close the design phase, construction, right away charities. All the different by April. Then close the design phase, construction, right away charities. All the different aspects that are required on the filament of a project for capital improvement. Back is coordinated with filament of a project for capital improvement. Back is coordinated with the regional MPO. We do have two coordinated that CIP have two coordinated that CIP. If it is not federally funded, maybe there might be some federally funded project funded, maybe there might be some federally funded project, including program plans, those need to be coordinated with the MPO. The MPO gathers all the need to be coordinated with the MPO. The MPO gathers all the different cities CIP than they coordinated with the state of Arizona and coordinated with the state of Arizona and the Department of transportation to get included into their STP process. get included into their STP process.
Going into the department funding. the department funding. The department does have well over $20 million, roughly, join $20 million, roughly, join $1 million. That is the operating cover am Herman funding. The operating cover am Herman funding. The capital improvement funding is about $150 million spent as we've seen, we million spent as we've seen, we still are growing. One of the facets of growth areas are the facets of growth areas are -- which Doug will talk about on these growth areas that the city about on these growth areas that the city has.
This one, this just shows a snapshot of adjust sows a snapshot of a page out of the Capital Improvement Program where you will see on the top, let me get Improvement Program where you will see on the top, let me get my pointer here. So, what you see here, on the top table, you see here, on the top table, you see the forecasted funding elements that we have in the program. For each of that we have in the program. For each of these forecasted, for cities program areas, what happens is areas, what happens is the associated projects, within the document of the CIP, that are backed document of the CIP, that are backed by these program areas where you have all of this funding you have all of this funding. Flood hazard. Major street. There is many assortment of different projects that a project numbers. There is many assortment of different projects that a project numbers. Design phase is. All the different phases for implementation. This also shows different phases for implementation. This also shows the operating funds of what we are using. I wanted to we are using. I wanted to take a peek on the last one here. It shows the impact fees. one here. It shows the impact fees. One of the things to notice and Doug will talk about this, we do not program and Doug will talk about this, we do not program the funds into the future. We have a lump sum type of We have a lump sum type of funding source. And, some things we do know and some things we do know and what we know about the project, we get them in the program. For 99%we get them in the program. For 99% of the time, we don't know what's going to happen. We have to be ready for the funding know what's going to happen. We have to be ready for the funding we have in place to either negotiate that year and work back. Duck will talk a little either negotiate that year and work back. Duck will talk a little about that and focus on that.
The specific
The specific projects they use impact fees like the Baseline Road. The like the Baseline Road. The scope was looking at the right away dedications. They rededicated by right away dedications. They rededicated by the developers on the adjacent landowners. And, produce landowners. And, produce and implement the roadway improvements per this is a small this is a small project compared to other projects we have seen. The presentation, with a little we have seen. The presentation, with a little lust of 50% of the, share compared to what the developers, share compared to what the developers had to put in for the project. This shows project. This shows a map of the area. You can see this is where the 202You can see this is where the 202, I'm sorry, the Prairie was going through north and south. Prairie was going through north and south. They were about six developers. One of the things that gets complexes that One of the things that gets complexes that the more entities that you add to a devoted group, the more complex it gets. So, add to a devoted group, the more complex it gets. So, the four corners. We did have in the general plan, where east-south, did have in the general plan, where east-south, the southeast corner of Baseline Road at 202 Road at 202 was an anchor, a commercial anchor. We had a motivated commercial developer that wanted to develop this in conjunction We had a motivated commercial developer that wanted to develop this in conjunction with the freeway opening. That motivated the other landholders, of the area, to come together and the other landholders, of the area, to come together and to work together with us. One thing to note, just to know here. Me One thing to note, just to know here. Me and Doug worked on this channel. Another project that was done 20 years ago, using some level of channel. Another project that was done 20 years ago, using some level of impact fees as well as regional County funds for flood control.
County funds for flood control.
A couple of things to know on the baseline project. That is a picture of know on the baseline project. That is a picture of what was before predominantly agricultural. I provided the opportunity for parties to come agricultural. I provided the opportunity for parties to come together to drive the project. Is unique have some economic driver, Is unique have some economic driver, some economic aspects of light you are going to do something. you are going to do something. Sometimes, it could be a safety issue as well. We don't safety issue as well. We don't want to have unsafe roads that connects to a major freeway. So, that connects to a major freeway. So, -- as the project gets developed and how we coordinate with different entities developed and how we coordinate with different entities. One of the things, plans for future utilities. Try plans for future utilities. Try and what utilities as well as it provided an economic scales it provided an economic scale. We have all worked on different projects. different projects. In a typical, traditional way, you would have an individual would have an individual developer developing their own off-site improvements. As we've seen in different places, when you As we've seen in different places, when you do that in a sequential, not in parallel, it is a mismatch of issues that come to bearnot in parallel, it is a mismatch of issues that come to bear. And, this provided an opportunity to come together with these developers as well as the to come together with these developers as well as the city. And note, there was a discussion about being federally funded or not. a discussion about being federally funded or not. This project does not federalize. AU city funding as well as the private funding.AU city funding as well as the private funding. It did go through a small environmental process. It and trigger anything with regards to the freeway project small environmental process. It and trigger anything with regards to the freeway project or is doing a nexus -- what else? -- what else? Again, these are just the things, this is a picture things, this is a picture what had transpired. A beautiful ride A beautiful ride up there the connection to the freeway. It has instigated the spark freeway. It has instigated the spark let me headed over to Doug. He will go into the actual aspects of Doug. He will go into the actual aspects of the city program. Thank you. You.
This is Doug Frost. The me see if I can control this. The me see if I can control this. I am not going to be speaking to everything in the slides. My role is to be a be speaking to everything in the slides. My role is to be a resource when it comes to context and nuts and bolts of the Impact Fee Program. There aren't many people and nuts and bolts of the Impact Fee Program. There aren't many people at the city who knows as much about streets and storm drains as Ray. I hope much about streets and storm drains as Ray. I hope that everybody can read through the slides as I go. If you have questions about something I the slides as I go. If you have questions about something I don't touch on, we can answer it in the question it in the question period because there's an awful lot of material associated with impact fees. I don't want to belabor. Lot of material associated with impact fees. I don't want to belabor. This slide goes over some of the history of the city of Phoenix of the history of the city of Phoenix impact fees. We're strange and that we have impact fees owing the growth areas in that we have impact fees owing the growth areas in the north and south. We've had them for many years. They started in the 80s.them for many years. They started in the 80s. They were much more complicated well we started. We had to use two processes. Specific plan and well we started. We had to use two processes. Specific plan and impact fee plan when we updated stuff. updated stuff. The long and short of it is, we've had them for many years. We are pretty close. Close to $1 billion is, we've had them for many years. We are pretty close. Close to $1 billion from impact fees. It is a long, complicated process. a long, complicated process. It has proven to be very useful. The city does have a means of supplementing useful. The city does have a means of supplementing funding for a variety -- a couple of key issues.-- a couple of key issues. It is not a tax. Impact fees are basically charged on Impact fees are basically charged on -- what we're trying to do is to get developers to play for their proportion of news do is to get developers to play for their proportion of news -- we have a lot of different categories. Were only focusing on the streets. Different categories. Were only focusing on the streets. We basically charged for streets when people when people pull their building permits. The impact fees. As I mentioned, the case law and the state statutes impact fees. As I mentioned, the case law and the state statutes are very onerous and very complicated. They can take years to put something They can take years to put something in place. A very difficult process with a whole bunch of requirements. To process with a whole bunch of requirements. To key requirements is they develop provides the facilities. We have to provide them credit for that. We reduce their fees. The facilities. We have to provide them credit for that. We reduce their fees. We have to take into account other revenue sources. We give offsets. Account other revenue sources. We give offsets. We reduce the fees if other funding sources have been provided like a pretty other funding sources have been provided like a pretty tax or sales tax. That sort of thing. This is just a map showing of thing. This is just a map showing different categories, different areas. A lot of different Impact Fee types. The program involves lot of different Impact Fee types. The program involves planning, budget and research, numerous departments. This includes streets and public works.
This includes streets and public works.
A couple of key things. This is in very general. Alike This is in very general. Alike water related impact fees, the street fees in the city of Phoenix where street fees in the city of Phoenix where cover the majority of costs. There's a number of reasons for that. Back to the law, There's a number of reasons for that. Back to the law, the case law and the state statutes. We can charge pass through state statutes. We can charge pass through traffic for arterials. That it. It takes forever to collect fees from the commercial areas. You're getting into the permit process. You are look from the commercial areas. You're getting into the permit process. You are look at entities pulling permits for even decades for a large commercial project. Even decades for a large commercial project. Another thing is politically, it depends on what you're treading for. Will only charge depend on what you're treading for. Will only charge for certain types of arterial streets. Again, it is only a supplement for us.
Again, it is only a supplement for us.
This is an example the fee schedule. I will not dwell on this. Of people questions later. We fee schedule. I will not dwell on this. Of people questions later. We basically charge, based on residential units, 4000 square feet. The case of units, 4000 square feet. The case of 2000 square feet for commercial and industrial and so on.
I'm trying to pull back to the CIP and industrial and so on.
I'm trying to pull back to the CIP. And, there was a question about this. How to reprogram it? Some question about this. How to reprogram it? Some municipalities, particularly those that are midsize and growing quickly will program their impact fees. There's such a large portion midsize and growing quickly will program their impact fees. There's such a large portion of their revenue stream. I think that is advisable, useful, good and most municipality cases. In the case of that is advisable, useful, good and most municipality cases. In the case of Phoenix, we have been very conservative. I say we, I just retired. I say we, I just retired. The city has been conservative. Budget, research and finance has wanted to collect the funds up and Budget, research and finance has wanted to collect the funds up and then program them. In many cases, we do, as the Dolan cycles are cases, we do, as the Dolan cycles are so volatile, we will just put in a revolving fund. in a revolving fund. When a woman occurs, like Baseline Road that Ray discussed, Baseline Road that Ray discussed, will do a delimited agreement or have other similar funding process. We will take money have other similar funding process. We will take money from existing accounts. We will sometimes supplement that with sometimes supplement that with future Impact Fee revenue services. Often, where this revolving account, which Often, where this revolving account, which we use in situations where we need to get a hold of funds immediately. need to get a hold of funds immediately. The developer sharpens a look, we need to build this now. In the case of this project need to build this now. In the case of this project that we discussed, it is very important. We can control the timing of the highway. It was delayed quite a very important. We can control the timing of the highway. It was delayed quite a bit. And developers showed up and said now we want to move. That is how the funds had to be said now we want to move. That is how the funds had to be collected and were used during the revolving fund and program to meet me for this development. The revolving fund and program to meet me for this development. This is just an example of some of the -- it shows of some of the -- it shows some of the arterials that were included. Again, included. Again, I won't dwell on it. You can see there are only a few majors streets which are included. Can see there are only a few majors streets which are included. This project was a segment of one of those much larger segments of one of those much larger segments. Hence, we were able to use the funding.
use the funding.
Again, I will not dwell on this. This is trying to show a link that the this. This is trying to show a link that the process, for forgetting that by putting together impact Jesus over to a CIP. putting together impact Jesus over to a CIP. The CIP and the IIP correspond and I'm just pointing out here, IIP correspond and I'm just pointing out here, you can see in red. This project is part of the -- this is just project is part of the -- this is just showing the summary. The list of street segments that go into the IIP of street segments that go into the IIP or the infrastructure improvement plan which is the foundation of the impact fees. They actually which is the foundation of the impact fees. They actually correspond to a large extent. Quick lessons learned. Street impact fees can be an excellent tool Quick lessons learned. Street impact fees can be an excellent tool for facilitating key projects for us, it has been really critical. Sometimes, us, it has been really critical. Sometimes, we've had some projects that have a go forward. have a go forward. Trying to put them in the CIP as resources. Rearranging the regular revenue sources can CIP as resources. Rearranging the regular revenue sources can be very difficult. Impact fees has provided that pillow. The sexualhas provided that pillow. The sexual reservoir of funds which can be very useful can be very useful. And that provides the flexibility to the CIP which is difficult to do.to the CIP which is difficult to do. And, finally, just from our perspective. We perspective. We always need multiple sources. I think this fits in this fits in. You need to have your core funding sources. core funding sources. Then you need other sources like impact fees. Community facilities districts. Agreements with impact fees. Community facilities districts. Agreements with other agencies. So, this is a very important element although it is not the primary funding source. I will be a very important element although it is not the primary funding source. I will leave it there. Of people of questions, I can return to that. A fairly boring subject of questions, I can return to that. A fairly boring subject of impact fees.
Great, thank you. We'll turn to you. We'll turn to Deena, Tina Bailey. She is the assistant director for public works at the City of Hillsboro. Deena, the assistant director for public works at the City of Hillsboro. Deena, if you can give your presentation. I hope you can wrap it up in about 10 minutes so I hope you can wrap it up in about 10 minutes so we can use the rest of this time. You and day. Of this time. You and day.
I don't know if that's a good thing you gave us a 10 minute that's a good thing you gave us a 10 minute timeframe for a talker. I will try to fly through this quickly. Just some history will try to fly through this quickly. Just some history about Hillsboro. We are suburb of Portland Oregon. Current population about of Portland Oregon. Current population about 104,000. Back in 1996, we were 42,000 when I started here. Not quite we were 42,000 when I started here. Not quite the growth in 25 years of being here. Radnich name The Silicon Forest. being here. Radnich name The Silicon Forest. We have a heavy tech presence. This makes our workforce very educated. And, This makes our workforce very educated. And, we are developing programs like this, makes it challenging. You have people that scrutinize things in great detail. We currently this, makes it challenging. You have people that scrutinize things in great detail. We currently manage about 246 miles of roadway. About 70 miles of that were built during roadway. About 70 miles of that were built during the 1990s. Early 1990s that is. And during that timeframe, it was 1992 where we started requiring developments. And during that timeframe, it was 1992 where we started requiring development to improve the frontage along your sites, to build sidewalks. Bicycle lanes your sites, to build sidewalks. Bicycle lanes worked as heavily prevalent. As a result, we are still missing some result, we are still missing some 90 lane miles of sidewalk in the city. And, in the city. And, 80 lane miles of bicycle lanes on her set up and delivered. We use traffic impact fees. How lanes on her set up and delivered. We use traffic impact fees. How do you get infrastructure built in areas that were already developed? Built in areas that were already developed? A little bit about our traffic impact. Our transportation traffic impact. Our transportation utility fee or Thow. You will notice we talked from the bottom of the slide, will notice we talked from the bottom of the slide, getting TUF on our streets. Transportation Utility Fees treat roadways like other utilities Transportation Utility Fees treat roadways like other utilities. Just as you pay monthly sewer, storm or water charge sewer, storm or water charge into your utility, to pay for the maintenance, you pay it Transportation for the maintenance, you pay it Transportation Utility Fees. They are generally used for maintenance of a roadway. But, used for maintenance of a roadway. But, Hillsboro uses allotment for bicycle and pedestrian improvements. We originally discussed TUF and pedestrian improvements. We originally discussed TUF in the conversation of building Capital Improvement Programs. Capital Improvement Programs. We know ours is complex. It is based on estimated trip generation. That again complex. It is based on estimated trip generation. That again was a nod to our tax base and the knowledge of the customers who really dig tax base and the knowledge of the customers who really dig into -- I've seen other agencies base it off of parking stalls, agencies base it off of parking stalls, Seroquel units, flat rate. Various things. It is really what things. It is really what your community finds acceptable for accepting the fee. We accepting the fee. We were looking at this as developing in 2002 when it developing in 2002 when it came up. We are trying to develop our first bicycle and possessing capital improvement program. We have a master to develop our first bicycle and possessing capital improvement program. We have a master plan. A presentation master plan that identified nearly that identified nearly three quarters of $1 billion worth of pedestrian improvements of transportation improvements. Worth of pedestrian improvements of transportation improvements. You'll see, we were spending this on bicycle this on bicycle pedestrian projects. We are using trips off our traffic impacting account to pay for these. Trips off of our traffic impacting account to pay for these. This is a where some of our major gaps were. And, some of our major gaps were. And, we had a very, very small planned as a result. Combined planned as a result. Combined with that, we were suffering from funding from funding on our Pavement Management Program. Transportation Utility Fees have some Transportation Utility Fees have some interest, it is really the Pavement Management Program that was a catalyst for starting the program by our city counselors. Pavement Management Program that was a catalyst for starting the program by our city counselors. We're sitting with a $10 million backlog which is the redline on this graph. Backlog which is the redline on this graph. If we continued our funding, which was the which was the blue line, without any inflation rate, we were looking at being, we were looking at being, 35 million by 2020. I'm happy to say, because of the slides, we are only looking at about $4 million happy to say, because of the slides, we are only looking at about $4 million of deferral at this point in time in 2021. That is really what had her counsel look at. They went time in 2021. That is really what had her counsel look at. They went into it with the concept we would fully fund our payment management program. We would fully fund our payment management program. Releasing our state CIP tax and vehicle registration fee dollars to fund our bike-pettax and vehicle registration fee dollars to fund our bike-pet program. It was sold as fully funding our pavement management and as fully funding our pavement management and freeing up some revenue to build build bike pad. We have decided, have decided, this is the slide showing how we allocate the cost for our Pavement Management Program. We how we allocate the cost for our Pavement Management Program. We divide our trial collectors 50-50 between the commercial and residential classes and 50-50 between the commercial and residential classes and defined local residential roads to local customers. And, local customers. And, residential comers to the commercial and industrial customers. You can do the same thing with and industrial customers. You can do the same thing with bike-PD component. I would divide up by the gap on the roadway. Up by the gap on the roadway. Get those gaps for those first roadway classifications applied the same methodology. first roadway classifications applied the same methodology. From there, we determined, we determined our cost allocation of how much revenue we need to generate for we determined our cost allocation of how much revenue we need to generate for the program. Will divide that by the cost allocation which by the cost allocation which resulted in 75% of the, share for our, share for our Pavement Management Program being formed by residential customers. 25% for nonresidential customers. They can be residential customers. 25% for nonresidential customers. They can back at the tabulation for those individual needs are. For us, our multifamily rates are 90% so far those individual needs are. For us, our multifamily rates are 90% so far. I think the residual rates, you can see the question of how we determined what those fees are.
For you can see the question of how we determined what those fees are.
For nonresidential customers, we used trip generation to assign each of our customers into seven trip generation to assign each of our customers into seven different bins. You can see that then one is anything that is that trip generation that then one is anything that is that trip generation of under seven trips per 1000 square feet. And been seven 1000 square feet. And been seven is a special category for those who aren't based off square footage which are things are who aren't based off square footage which are things are parks which are based on acreage or gas stations which are based on pumps.acreage or gas stations which are based on pumps. Those are the classes of customers that are in each of those individual pins. What we do, customers that are in each of those individual pins. What we do, we actually calculate the value of the trips the trips for all those customers in those various bin categories. And that results in the termination of how those various bin categories. And that results in the termination of how much that been should pay. If 10% of the nonresidential trips are generated by . If 10% of the nonresidential trips are generated by been one. And one should generate 10% of the revenue. Generate 10% of the revenue. Then, we can back that out into a cost per business. out into a cost per business. In the case of and seven, a cost per share trips in the bin.
We heard seven, a cost per share trips in the bin.
We heard a lot of testimony. This is generally supported by our This is generally supported by our residential community. They were getting something new. They were getting the bike-ped something new. They were getting the bike-ped come home and it. And, And, that was attractive to them. Didn't care as much about the paper management they had concerns about Didn't care as much about the paper management they had concerns about -- we were doing this in 2007. It was when the recession in 2007. It was when the recession was heading. Business lost concerns were of course it was Tay terrible time to do this for concerns were of course it was Tay terrible time to do this for they were supportive the Pavement Management Program. They were not supportive and did not they Management Program. They were not supportive and did not they believe they benefited from the bike-ped program. That is how we went up with the portions program. That is how we went up with the portions paying for the bike-ped program. It is our counsel agreed program. It is our counsel agreed, with the logic that the business community did not business community did not benefit from the bike-ped program. The residential rates were not to The residential rates were not too burdensome. They help the residential rate customers rate and reduced residential rate customers rate and reduced the commercial customer rate. And, we had to back at the revenue targets from we had to back at the revenue targets from the Pavement Management Program to make her at that allergy work. We make her at that allergy work. We had residual cash in the residential customers collection residential customers collection that we had just assigned to the bike-ped program. to the bike-ped program. If anyone has any questions, I am happy to answer them a little bit later. I am happy to answer them a little bit later. Essentially, you can see, at the time of adoption, we the time of adoption, we have put our rates. We had several rates increases since we adopted this in 2009.several rates increases since we adopted this in 2009. We also have had methodology changes with her 75-25 split between changes with her 75-25 split between residential customers and nonresidential customers. Different Different consuls had different opinions on the methodology. They wanted to generate additional revenue with a foot the methodology. They wanted to generate additional revenue with a foot. This is a static at all. We currently all. We currently generate about $3.8 million for our Pavement Management Program annually and about $1.2 million for our Pavement Management Program annually and about $1.2 million for bicycle and pedestrian improvement programs. You see how this breakup between the individual customer classes in the slide. You see how this breakup between the individual customer classes in the slide. We also, again, having a customer base that was very interested in fairness and methodology. We developed a customer base that was very interested in fairness and methodology. We developed a number of discount waivers for the program. Because it is trip generation base, the program. Because it is trip generation base, we have discounts for family residential customers. If residential customers. If they don't have motor vehicles work with Evan annual transit pass, with Evan annual transit pass, we have something similar. If they buy transit passes for their employees. Or they buy transit passes for their employees. Or have have rat production programs, that reduce traffic. that reduce traffic. We will allow for the reduction in their fees. I can say, absolutely nobody except in their fees. I can say, absolutely nobody except the city and one of our other government agencies uses the nonresidential program. Our other government agencies use the nonresidential program. We presently have one person using the motor vehicle discount. We using the motor vehicle discount. We did have a hardship waiver program we established the -- if you we established the -- if you met low income criteria, and we have a program, at the time, if you're laid off we have a program, at the time, if you're laid off and could present evidence of unemployment, we would waive the fees for six months. That we would waive the fees for six months. That has been merged with our other low income programs. Low income programs.
The results are much better. This was the bicycle and pedestrian better. This was the bicycle and pedestrian improvement programs that were presented alongside the projects. You alongside the projects. You can see we are starting to get much more substantial projects. to get much more substantial projects. We are using both the TUF bike-ped and TUF bike-ped and we are using the traffic impact fee to backfill some traffic impact fee to backfill some of these projects. These project costs were in 2007 dollars. were in 2007 dollars. .com the Jackson school Road project which is under construction project which is under construction is now a $21 million project. Million project. It was programmed originally 47, eight, nine and 10. The third phase eight, nine and 10. The third phase which is off the bike-ped CIP. We are talking about seven have million dollars. CIP. We are talking about seven have million dollars. We are now looking at your $24 million for the project. your $24 million for the project. Limiting factor in changes. We are looking at some future changes to the program. We are looking at some future changes to the program. This has happened. We residential. residential. Merge those with other low payment programs. It is easier for the customers. We requires we don't payment programs. It is easier for the customers. We require's we don't have this index. We require this to be rezoned every 5 years. this to be rezoned every 5 years. Sun setting. This fee doesn't sunset for us. There was a recognition, sunset for us. There was a recognition, by our community, was involved in the development. The state could come up with additional revenue sources involved in the development. The state could come up with additional revenue sources. We don't want to set this and forget this. this and forget this. We are required to go back every 5 years and rebalance us to make sure we demonstrate every 5 years and rebalance us to make sure we demonstrate we still need this revenue. Makes it alone but difficult when it is not adjusted for inflation. Makes it alone but difficult when it is not adjusted for inflation. If you can get that inflation index with a rebalance, I would recommend it. There inflation index with a rebalance, I would recommend it. There is also, renewed interest, from her new counselors, that they expand from her new counselors, that they expand the fee to include street maintenance and include our commercial customers in street maintenance and include our commercial customers in the bike-ped component. That is something we will be changing here in the next year.is something we will be changing here in the next year. With that, if you're looking for much more information on the development, we keep a for much more information on the development, we keep a large document of the department paperwork on the Transportation Utility Fees at paperwork on the Transportation Utility Fees at this website. I am happy to answer any questions on these fees. Amy email to answer any questions on these fees. Amy email is included.
Rate Deena. Will use the rest of our time for Will use the rest of our time for questions and answers. We have been answering some of your questions in the chat pod. Been answering some of your questions in the chat pod. Pepper, is it time for you to load up all of the presentations? you to load up all of the presentations? If so, you can add that into a pond. that into a pond. Those who have questions, why don't you take them in? In the meantime, let me ask you take them in? In the meantime, let me ask some of the ones we haven't answered yet. Haven't answered yet. Lisa wanted to know did you do anything to control for the unintended consequences of gentrification? you do anything to control for the unintended consequences of gentrification? Any community benefit agreement or anti-displacement strategies? Strategies?
I will take that question. I'm not sure if it was addressed. Horizon City did question. I'm not sure if it was addressed. Horizon City did not do any such agreement. Because, there was Because, there was minimal small displacement. The town's goal was to open that up town's goal was to open that up for development.
Great. Laura had a question. Does Laura had a question? Does transportation utility funding by private pretty errors continue indefinitely? pretty errors continue indefinitely? Or is it for a limited period of time, say 10 years? In Southeast Florida, there period of time, say 10 years? In Southeast Florida, there is resistance to any kind of long-term or perpetual funding by the property owners. How do you sell these two of long-term or perpetual funding by the property owners? How do you sell these two developers and a very predevelopment city?
For us,
For us, that is why we set in the five-year -- we are doing, in the five-year -- we are doing, we have a local service fee for Our storm and sanitary to get caught up on some backlogged maintenance. As fee for Our storm and sanitary to get caught up on some backlogged maintenance. As a five-year revisit before can renew. Those are the ways we are doing that. Renew. Those are the ways we are doing that. We are building into the methodology and the program promise that we will read visit it and methodology and the program promise that we will read visit it and go back to the community for public testimony during that point in time. Public testimony during that point in time.
Great. Another question that we have. That we have. What if CIP funds were approved without citizen were approved without citizen comment or a CIP board?
It is best practice to have, to require public input. Is one of the reasons why the CIP have, to require public input. Is one of the reasons why the CIP is a very good tool. It doesn't mean that not having it It doesn't mean that not having it is, it all depends on what is required by the Law. On what is required by the Law.
Okay. Are the designs and construction of the projects delivered by the agency themselves mostly using designs and construction of the projects delivered by the agency themselves mostly using consultants and contractors?
I will answer for Horizon City. I will answer for Horizon City. Horizon City use the RMA as their project manager.as their project manager. But the Army uses consultants. They do not have any in-house. They do not have any in-house. Neither with the town.
I was going to mention, the city, as we mentioned, the city, as we mentioned, we actually had the developer do the procurement do the procurement process. The other engineers, the consulting engineers for the development, I'm consulting engineers for the development, I'm sorry the developers had to do it. Because of the federal 34 in Arizona it. Because of the federal 34 in Arizona for usable infrastructure, there using a dollar or penny from the city, from there using a dollar or penny from the city, from the agencies, we need to follow the city engineer's facts follow the city engineer's facts that would not be done if the developers were doing their own work. If the developers were doing their own work. There are some requirements that happened. We do have a combination of in-house happened. We do have a combination of in-house. The majority is done by -- design and construction. -- design and construction.
Great. I think now is a good time. Let's open the phone lines to see if anybody has a is a good time. Let's open the phone lines to see if anybody has a telephone question. Christine, Christina, can you do that?
If you lung test question, you do that?
If you lung test question, please press star one. That is * 1.* 1.
And, pepper just noted, you can download noted, you can download all the sides. Just simply highlight the file you want and click on the download files. Highlight the file you want and click on the download files. A new browser window will open. In addition, you can find open. In addition, you can find the primer on the fertile highway highway Value Capture website as well as his presentation along with a transcript as his presentation along with a transcript will be posted in federal highway's website for mallfederal highway's website for mall -- if anyone else has any questions, please put it into the chat pod. Has any questions, please put it into the chat pod. We have a couple of minutes left. I wanted to let minutes left. I wanted to let you know that before you leave, we are very interested in your evaluation of this event we are very interested in your evaluation of this event. And a couple of minutes, will put up an evaluation that we would love for you to will put up an evaluation that we would love for you to fill out. Do any of the presenters have any kind of highlights the presenters have any kind of highlights or takeaways that they heard from others about today? From others about today?
This is Terry Quezada. The biggest take away is Quezada. The biggest take away is the CIP is a living, breathing process. And it is also breathing process. And it is also a policy document where your city Council your city Council or other policymakers will determine what is the priority for the community. what is the priority for the community. So, I think the plan is just that it is a plan. Issue is just that it is a plan. Issue go through some rigorous steps. But, it should be flexible But, it should be flexible and adaptable to whatever your community needs and goals are. Community needs and goals are.
I assume all of your CIPs are on your website. For the audience members, your CIPs are on your website. For the audience members, you can go to the locale and find the CIP. locale and find the CIP.
Yes.
Yes.
Terry,
Terry, another important take away is -- is -- coordination with quality and transportation plans transportation plans at the metropolitan level. Often, communities of all sizes, it happens Often, communities of all sizes, it happens that some of the projects find out they were not part of the CIP find out they were not part of the CIP to late. That happens with projects.
I know projects.
I know that is news to the years about 20% of the audience today are from MPO. I'm sure they will years about 20% of the audience today are from MPO. I'm sure they will be glad to hear you are promoting the fact that needs to be coordination at are promoting the fact that needs to be coordination at the region and local level. I think we have gotten through all of the questions I think we have gotten through all of the questions that we got through the chat pod. I pod. I would really like to thank all of our speakers for today. And, pepper, can you put the evaluation of our speakers for today. And, pepper, can you put the evaluation up now?
Sure, I just want to take a minute to just want to take a minute to pluck our, the rest of our webinar series for 2021. We stillour webinar series for 2021. We still have seven webinars scheduled for the remainder of the calendar scheduled for the remainder of the calendar year. Our next one is coming up on June 9. It will be coming up on June 9. It will explore the relationship between Value Capture strategies and public-private Capture strategies and public-private partnerships. So, the link you see on the slide is you see on the slide is, it will take you to a page where you can see all of these webinars. There a page where you can see all of these webinars. There will be separate registration links for each of these. There is also access for each of these. There is also access to transcripts and recordings of webinars we've been holding since webinars we've been holding since mid-March of this year. Now, we will we will pull up the evaluation tools that we use. We would love it if that we use. We would love it if you would try to hit the play button, next to the play button, next to one of these evaluation widgets, I called them. And, I called them. And, give us some feedback on today's event. As Terry mentioned, and I put into today's event. As Terry mentioned, and I put into the chat hot, there are there are files are there are files of the CIP primer and compilations of our slides are in the file and compilations of our slides are in the file share pod. All you need to do. When you click ondo. When you click on one of those slides, highlight it and we should see a button to download the file.it and we should see a button to download the file. It should open up and your browser, a new window in your browser, a new window in your browser that will let you pull it down. Pull it down. We invite you to take advantage of that. If you're interested in applying for a professional advantage of that. If you're interested in applying for a professional development hours, or some other confirmation of your attendance today, you can request confirmation confirmation of your attendance today, you can request confirmation by sending an email to Value Capture at D.O.T.gov.to Value Capture at D.O.T.gov. That is Value Capture call all one word with nothing in between. Put that into the chat all one word with nothing in between. Put that into the chat as well. We invite you, if you need or want invite you, if you need or want those credits, to send us that request. that request. And finally, we would like to thank the presenters for to thank the presenters for their participation today. We had some great information from all around the country some great information from all around the country. With the communities of different sizes. Especially thank Rafael sizes. Especially thank Rafael and his colleague David. We would like to acknowledge the ongoing support We would like to acknowledge the ongoing support of the FHWA wedding conference. With that, wedding conference. With that, that concludes our webinar. Thank you all for attending. [Event Concluded] you all for attending. [Event Concluded] This message is intended only for the use of the Addressee and may contain information that is PRIVILEGED and CONFIDENTIAL. If you are not the intended recipient, you are hereby notified that any dissemination of this communication is strictly prohibited. If you have received this communication in error, please erase all copies of the message and its attachments and notify us immediately.
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