Are there any other significant municipalities in Maricopa County or in the state that have not adopted this?” she asked. “Is there any reason why we wouldn’t?”

Anna Thomasson, Paradise Valley councilwoman

By Terrance Thornton
Twitter: @ININEWSMAN

The Town of Paradise Valley has adopted formal rules of engagement for cost recovery tactics to run in tandem with development agreements as new construction projects are negotiated and ultimately built.

Primarily, the new ordinance defines the parameters to who is paying what and what properties will be impacted by public infrastructure improvements as new development comes online --- sometimes over the course of several years, even decades.

Paradise Valley Town Council by a 6 to 0 vote adopted the new ordinance at its final meeting of 2019 at Town Hall, 6401 E. Lincoln Drive. Mayor Jerry Bien-Willner was not present for the Dec. 5 vote.

Both town and private sector officials contend Arizona municipalities are adopting rules to share infrastructure costs and repayment options spanning longer than 10 years.

“The key question is does the council want to adopt a cost-recovery ordinance?” asked Paradise Valley Town Attorney Andrew Miller in a December work study session. “We had this scheduled in our last study session and had an executive session to talk about the ordinance and determine that maybe we needed to redraft some of it to be more close to current practices.”

In all, Mr. Miller outlined the new ordinance that seeks to create a legal mechanism for “conditions, terms, restrictions and requirements for public infrastructure and the financing of infrastructure and subsequent reimbursements over time including for the construction of streets and sidewalks.”

Mr. Miller explains current town rules are no longer in-tune with other Arizona municipalities.

“What we had before was more limited and this is much better, appropriate to what I would call ‘cost recovery,’” he said pointing out the provisions found in Arizona Revised Statute § 9-500.05. “That is the statutory basis for the ordinance we have drafted and that statute supports the approach many cities today take.”

--- Andrew Miller, town attorney

Primarily, the new ordinance, Mr. Miller contends, seeks to ensure a developer pays for agreed-upon shared costs of general public infrastructure improvements including but not limited to streets and sidewalks.

From a technical standpoint, the new ordinance creates the concept of:

• A special public improvement identified by a specified assessment boundary Paradise Valley Town Council has determined eligible for repayment.
• A benefited party or person or entity creating a demand for the special improvement within the assessment boundary.
• A developer or entity who will enter into a repayment agreement with the Town of Paradise Valley.

Mr. Miller outlines a scenario where following the confirmation by the town engineer, a map establishing the boundaries of the benefited parties and their subsequent shares of cost-share will be created.

The map, which will be filed with both the town clerk and Maricopa County, must contain:

1. A description of the special public improvement.
2.  A general description of the estimated total cost and cost per frontage foot or cost per-acre of the proposed special public improvement.
3. A description of the special public improvement project area and a map and list of the benefited parcels and lots.
4. A determination of that portion of the costs of the special public improvement that shall be allocated to the general public benefit, if any.
5. A preliminary estimate of the portion of the special public improvement, which will be financed with general obligation bonds, development fees, or other public funding sources and the portion, which will be financed

Mr. Miller points out provisions with the new ordinance create new ideas such as, “the general public benefit,” which will impact the share of cost recovery a parcel could carry in a development scenario.

“When we talk about, ‘of general public benefit,’ for example, if you were constructing an entirely new road through land that didn’t have any road some of that would be attributable to just pass through traffic for the general public benefit,” he said of the definition of the concept.

“The benefited parties would receive notice in writing of the proposed charges for special public improvements.”

Mr. Miller outlines, as he calls it, the “belt and suspenders” of the new municipal provisions.

“The ordinance makes it unlawful for any benefited party to extend service from a special public improvement to its property without first paying its reimbursement share and obtaining a permit issued by the engineering division or final plat approval by the town,” he said.

“The repayment obligation can start and take effect up to 20 years. The clock begins running the day of the first payment. With the town, we have some flexibility ... the development agreement can determine the timing of the share that the benefited special property may have to pay for. Cities and towns do this because they can’t wait for the last leg of development to happen to get that sidewalk or street improved.”

The road less traveled?

Paradise Valley Councilwoman Anna Thomasson asked if what Town Council has considered is a typical municipal measure.

“Are there any other significant municipalities in Maricopa County or in the state that have not adopted this?” she asked. “Is there any reason why we wouldn’t?”

Jeff Blilie of Phoenix-based Beus Gilbert PLLC offered an expert opinion to both Mr. Miller and Paradise Valley Town Council.

“A comprehensive ordinance that addresses the development agreement parameters I don’t see that in a lot of cities,” he said of his experience working throughout the Valley of the Sun on various commercial development endeavors.

“A lot of the ordinances adopted by cities are of the shorter parameter 10 years is quite common. But the development agreement statutes don’t have a time limit baked into it. It really runs the gamut with the cities. It depends on the municipality, it is not universal to answer your question.”

Paradise Valley Mayor Jerry Bien-Willner lauded the efforts of Vice Mayor Scott Moore on bringing the matter forward for council consideration.

“Thank you to Vice Mayor Moore for being a lead on this,” he said. “I think he rolled up his sleeves on this and it is something that has the chance to save the town significant amounts of money and encourage the right kind of development.”