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Monday Report - Utah Residential Impact Fees September 10th, 2007


Economic Notes:


 

SCORECARD

Impact Fees

What are "Impact Fees"?

  • "Impact Fees" are the charges jurisdictions make for roads, water, wastewater, schools, etc. that are charged to new developments to fund capital improvements needed to serve new growth.
  • Impact fees, where they are applied, are required to be based on the direct need, or "impact," created by a new development. Impact fees are supposed to be applied to the provision of infrastructure -- roads, schools, water and sewer, etc. - in proportion to the impact of the new homes being built.
  • As new residential construction declines, local governments will need to be careful to budget declines in capital development revenues.
  • The land use impact fees included in this national survey included, single-family detached, multi-family, retail, office and industrial developments.
  • Impact fees are often opposed by home builders because they raise the price to consumers but also because they don't think cities and school districts are accountable and responsible on how they use the fees.
  • Home builders also point out that charges for "water shares" and impact fees charged by the myriad of special districts are often not included but still must be paid.

How do your fees compare?

  • Are they too high?
  • Are they too low?
  • Has it been too long since you have reviewed them?
  • If challenged, can they be legally justified?
  • Will fee revenue declines jeopardize your capital budgets?
  • Are your fees at risk because you are using revenues for maintenance and operations?

Utah Sample City Fees - SINGLE FAMILY, 2007

CityTotal Non- UtilRoadsWater Sewer DrainParksLibrary FirePoliceGen Gov'tSchoolsOther
West Jordan$10,964$5,534 $1,891$3,266 $2,344$1,478 $1,633 $--$247$105 $--$--$--
Tooele$9,825 $3,990$1,515 $4,320 $1,515 $--$2,125 $--$--$350 $--$--$--
Draper$8,841 $7,428$1,749 $1,413$-- $1,161$3,990 $--$310$218 $--$--$--
Provo$6,413 $4,622$887$684 $1,107 $801$2,934 $--$--$-- $--$--$--
Layton$6,132 $5,532$2,399$600 $-- $759$1,873 $--$501$-- $--$--$--
Sandy$5,688 $4,159 $--$1,529 $--$905$3,018 $--$165$71 $--$--$--
West Valley$2,565$2,565 $846$-- $--$181$1,381 $--$91$66 $--$--$--
Logan$2,541 $1,258$669$258 $935$77$-- $--$118$34 $--$--$360
Utah Average$6,610$4,364 $1,245$1,509$738 $670 $2,119 $--$179$106 $--$--$--

Source: National Impact Fee Survey, August 2007

Note: Single-Family Dwelling - 3 BR, 2,000 sf on 10,000 sf lot at 4 UPA & Value of $200,000


Sample Utah Fees - MULTI - FAMILY, 2007

CityTotal Non UtilRoadsWater Sewer DrainParksLibrary FirePoliceGen Gov'tSchoolsOther
West Jordan$8,066$3,596 $1,532$2,602 $1,868$493 $1,301 $--$196$83 $--$--$--
Draper$6,085 $5,003$1,202 $1,082 $--$1,161$2,463 $--$107$70 $-- $--$--
Provo$5,006 $3,739$591$160 $1,107 $501$2,647 $--$--$-- $--$-- $--
Layton$3,895 $3,647$1,508$248 $--$367$1,381 $--$391$-- $-- $--$--
Tooele$3,361 $1,456$-- $1,523$382 $--$1,250$-- $--$206$-- $-- $--
Sandy$3,324 $2,967$--$357 $--$301$2,536 $--$92$38 $-- $--$--
West Valley$1,739$1,739 $514$-- $--$181$937 $--$62$45 $-- $--$--
Logan$1,202 $986$461$60 $156$37 $-- $--$100$28 $--$--$360
Utah Average$4,085$2,892 $967$862$878 $434 $1,788 $--$158$78 $--$--$--

Source: National Impact Fee Survey, August 2007

Note: Multi-Family Unit - 2 BR, 1,000 sq ft unit, density of 12 UPA & Value of $100,000


This Weeks Leads

  • Valvoline Instant Oil Change
  • Ashland, Inc. trades as Valvoline Instant Oil Change.
  • The 825-unit chain operates locations nationwide.
  • The automotive service centers occupy spaces of 1,900 sq.ft. to 2,500 sq.ft. in freestanding locations and mixed-use and power centers.
  • Growth opportunities are sought throughout the existing markets during the coming 18 months.
  • Typical leases run 25 years.
  • Preferred cotenants include Kroger and Target.
  • Major competitors include Jiffy Lube.
  • A land area of 30,000 sq.ft. is required for freestanding units.
  • Send site submittals to:
    • Dennis Hill, Ashland, Inc., 3499 Blazer Parkway, Lexington, KY 40509.
  • Oak Express, Denver Mattress, Sofa Mart and Bedroom Expressions
  • Furniture Row Cos. trades as Oak Express, Denver Mattress, Sofa Mart and Bedroom Expressions at 330 locations throughout AL, AR, AZ, CO, IA, ID, IL, IN, KS, KY, MI, MO, MT, NC, ND, NE, NM, NV, NY, OH, OK, OR, PA, SD, TN, TX, UT, WA, WI, WV and WY.
  • The stores, four specialty concepts at one destination, feature traditional and water beds as well as oak furniture and occupy spaces of 55,000 sq.ft. in freestanding locations.
  • Growth opportunities are sought throughout the existing markets during the coming 18 months.
  • A land area of four to five acres and a vanilla shell are required.
  • Preferred cotenants include Best Buy and Home Depot.
  • The company prefers to acquire sites.
  • For more information, contact
    • Chuck Retling,
    • Furniture Row Cos.,
    • 13333 East 37th Avenue,
    • Denver, CO 80239;
    • Web site: www.furniturerow.com.
  • Rocky Mountain Chocolate Factory
  • Rocky Mountain Chocolate Factory, Inc. trades as Rocky Mountain Chocolate Factory at 320 locations nationwide and in Canada and internationally.
  • The shops, offering chocolates, candies and nuts, occupy spaces of 600 sq.ft. to 1,000 sq.ft. in malls and entertainment, mixed-use, outlet, specialty and tourist centers.
  • Growth opportunities are sought nationwide during the coming 18 months.
  • Typical leases run five years.
  • A vanilla shell and specific improvements are required.
  • Major competitors include Godiva.
  • For more information, contact
    • Kraig Carlson or Dave Richie,
    • Rocky Mountain Chocolate Factory, Inc.,
    • 265 Turner Drive,
    • Durango, CO 81303.

Lehi Economic Development/Redevelopment Coordinator

  • CLOSING DATE: September 6, 2007
  • SALARY RANGE: $49,000-$72,000 annually, plus excellent benefits
  • STATUS: Appointed, Full Time
  • DEPARTMENT: Administration
  • JOB SUMMARY:
    • Under the general supervision of the City Administrator, performs a variety of professional, administrative and technical duties related to planning, organizing, directing and coordinating city-wide economic development.
    • Develops the city's economic base, including business retention and the building of commercial, industrial and retail sites within the community.
    • Administers the city's redevelopment programs and initiatives and coordinates the purchase of real property.
  • MINIMUM REQUIREMENTS:
    • Bachelor's degree from an accredited college or university in public management, business management, finance, planning or closely related field.
    • Five (5) years of progressively responsible experience in economic development/redevelopment or related duties.
    • Valid Utah driver's license required.
    • Must pass drug test and background check before hire.
  • NOTE: A complete list of essential functions and minimum requirements of the position may be obtained from Lehi City Human Resources. Lehi City will provide reasonable accommodations for any applicant during the examination and selection process. If you have special needs, please call 801- 768-7100, ext. 2265. For required City application, contact Lehi City Human Resources, 153 North 100 East , Lehi, UT 84043 or download application and job description at www.lehicity.com. Lehi City is an equal opportunity employer and does not discriminate on the basis of race, color, national origin, gender, religion, age or disability.

Back-to-School Jitters?

  • Looking for a sign that this year's holiday shopping season will be slow? Check the back-to- school numbers. With about two weeks to go in the eight-week long season (the second most important of the year for retailers), all indications are that sales will be down from the past two years.
  • Analysts estimate total sales growth for the 2007 back-to-school season will come in at between 3 percent or 4 percent--down from 5.9 percent in 2006 and 7.6 percent in 2005 (the highest figure in 10 years, according to ICSC).
  • That's important because the back to school shopping season, which runs from the last week of July and goes through the third week of September, accounts for as much as 15 percent of retailers' annual sales and is a bellwether for the all-important holiday sales season.
  • Source: Retail Traffic, 2007

Greetings!

  • Residential Impact Fees
    • National survey
    • Utah Sample Cities
    • How much?
    • For what?
    • How do you compare?
  • Back to School Jitters?
  • Economic notes
  • This weeks leads

Bob Springmeyer

Bonneville Research


  • Economic Notes:
  • Economic Notes:

    • Productivity & Costs
    • As expected, productivity growth for the second quarter was revised higher. Nonfarm business productivity grew 2.6% (SAAR), compared to 1.8% in the preliminary release. This revision was due to a higher estimate of output. Growth in unit labor costs saw a downward revision, from 2.1% (SAAR) to 1.4%; this was a larger downward revision than the consensus expected. The larger-than-expected downward revision to unit labor costs is good news on inflation.
    • ISM Non-Mfg.Index
    • Business activity in the non-manufacturing sectors of the economy held steady in August, remaining at 55.8%. This number was above both consensus expectations and our forecast.
    • Monster Employment Index
    • The Monster Employment Index increased by three points in August, clocking in at 186 compared to a reading of 183 in July. The tone of the report was weaker relative to previous readings for the month of August, highlighting softening demand for labor.
    • Challenger Report
    • Announced job cuts increased to 79,459 in August, their highest total since February. Financial services accounted for nearly half of the August cuts, primarily due to cutbacks at mortgage lenders, especially subprime lenders. Job cuts were 22% higher than in August 2006.
    • Jobless Claims
    • Underground storage of natural gas increased by 36 billion cubic feet during the week ending August 31. This figure came in well below expectations. Inventories currently stand 10.4% above the five-year average. This report will have a bullish effect on prices.
    • US Housing Market
    • U.S. home prices fell 3.2% in the second quarter. The sub-prime mortgage crisis and the credit crunch that has followed in its aftermath are taking their toll on the housing market. According to the National Association of Realtors, the inventory of unsold homes is at a record high.
    • Pending Home Sales
    • The National Association of Realtors reported that pending home sales fell to a six-year low in July, when market volatility was in its early stages. Economists had expected a decline of 2 per cent, but instead sales fell 12.2 per cent.
    • Housing Foreclosures
    • More than one in seven US homebuyers with subprime loans failed to keep up with their mortgage payments in the second quarter - the second consecutive quarter of record growth in the rate of foreclosures. More than 619,000 mortgagees - or 1.4 per cent of all home loans - now face the prospect of repossession, up from 1.28 per cent in the first quarter, according to estimates by the Mortgage Bankers Association. Total delinquencies rose to their highest level since 2002 to 5.12 per cent of all mortgages. The data, for the period April to June, cover the period before last month's credit squeeze raised the cost of borrowing. Most of the rise in foreclosures came from growing numbers of seriously delinquent adjustable rate subprime, and prime, mortgages. Adjustable rate mortgages are home loans with interest rates that can be changed by lenders.
    • MBA Mortgage Applications Survey
    • Mortgage demand increased 1.3% in the week ending August 31. Purchase applications increased 0.4% and refinance applications increased 2.3%. Thirty-year fixed rates are lower than ARMs indexed off of 1-year Treasury notes, providing a strong incentive for refinancing, although some may be waiting to see if the Fed takes action.
    • MBA Mortgage Delinquency Rates
    • The delinquency rate of first mortgages increased 28 basis points to 5.12% on a quarter-to-quarter basis in the second quarter of 2007, while the percentage of loan foreclosures increased 12 basis points to 1.40%. The increases in both mortgage delinquency and foreclosure rates reflect the dismal housing market, increases in mortgage payments from rising or resetting mortgage rates, and recently tightened underwriting standards.
    • Chain Store Sales
    • Chain store sales rose 2.9% in August. While modest, this was the best result since January (after adjusting for Easter distortions), and provided little evidence of spillover from financial market turmoil. The majority of retailers topped expectations, led by luxury retailers. Discounters benefited from lower energy prices.
    • Oil and Gas Inventories
    • Crude oil inventories fell by 3.9 million barrels for the week ending August 31, according to the Energy Information Administration, markedly below expectations of a 2.2 million barrel draw. Gasoline inventories dropped by 1.5 million barrels, relatively in line with expectations. Refinery activity soared, increasing to 92.1%, well above expectations. Distillate supplies rose by 2.3 million barrels, topping expectations. This report will exert slight downward pressure on prices.
    • Weekly Natural Gas Storage Report
    • Underground storage of natural gas increased by 36 billion cubic feet during the week ending August 31. This figure came in well below expectations. Inventories currently stand 10.4% above the five-year average. This report will have a bullish effect on prices.

    Source: Economy.com, Financial Times 2007

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