SMITHFIELD IMPACT FEE UPDATE 2015 TOWN OF SMITHFIELD, RHODE ISLAND

SMITHFIELD IMPACT FEE UPDATE 2015 TOWN OF SMITHFIELD, RHODE ISLAND Submitted to: Town of Smithfield Department of Planning and Economic Development Prepared by: Mason & Associates, Inc. 771 Plainfield Pike North Scituate, RI 02857

SMITHFIELD IMPACT FEE UPDATE 2015 CONTENTS Page 1.0 Introduction... 1 2.0 Existing Impact Fees... 1 2.1 Town Ordinance... 2 2.2 Previous Report Findings & Formulas... 4 3.0 Capital Improvement Needs... 6 3.1 Capital Improvement Program Fiscal Years 2015 2020... 6 3.2 Comprehensive Community Plan 2014... 7 4.0 Updated Fee Calculations... 8 4.1 Park, Recreation & Historic Facilities... 11 4.2 Libraries... 13 4.3 Schools... 15 4.4 Roads... 16 4.5 Open Space and Conservation Areas... 19 4.6 Police Facilities... 20 4.7 Other Public Facilities... 22 5.0 Recommendations for Ordinance Revision... 22 Tables Appendices APPENDIX A 1 Existing Impact Fees 2 Potentially Eligible Capital Improvement Projects 3 Proposed Impact Fees Existing Smithfield Development Fee Ordinance Mason & Associates, Inc.

SMITHFIELD IMPACT FEE UPDATE 2015 1.0 Introduction This report updates information used to calculate development impact fees required by Smithfield ordinance for new residential development. This report has been prepared on behalf of the Town of Smithfield Department of Planning and Economic Development, in accordance with the requirements of the Town s Development Impact Fees ordinance (sections 193 8 through 193 12 of the 2014 Code of Ordinances, hereinafter referred to as the impact fee ordinance). New residential development has been found to increase demand for public services and facilities, often requiring significant financial expenditure by the municipality. Development impact fees are collected from developers of new housing to help offset municipal costs associated with new growth. Smithfield s impact fee ordinance identifies procedures for the calculation of impact fees, the collection of those fees, and the expenditure of impact fee revenue. The calculation of impact fees depends on factors that may change over time, such as the particular need for new / expanded schools, recreational facilities or road improvements for example. Other factors such as the average number of schoolchildren per household by type of housing may also change over time. Smithfield s impact fee ordinance therefore requires periodic re evaluation and update of the impact fee calculations, the input variables and resultant fees. This report provides that re evaluation and update. Smithfield s existing impact fee ordinance and fee schedule are presented in Section 2 of this report. An overview of the ordinance is provided in that section with specific attention given to the process for calculating fees. Summaries of the original 2001 calculations and the 2005 update are also provided. Section 3 of this report identifies infrastructure capital improvement projects described in the 2015 2020 Capital Improvement Program (CIP 2015 2020) or in the Comprehensive Plan (2014 Update) that are potentially eligible for partial funding with impact fees. Section 4 documents the calculation of development impact fees using previously established methods updated with new information on project costs and the allocation of a proportionate share of the eligible costs to new development. Section 5 provides recommendations for revision of Smithfield s Development Impact Fees ordinance. 2.0 Existing Impact Fees Impact fees are assessed on new residential development in accordance with the Smithfield Development Impact Fee ordinance and the Rhode Island Development Impact Fee Act (RIGL Title 45 22.4 1 et seq.). A needs assessment conducted in 2001 established level of service 1 Mason & Associates, Inc.

standards and methods for calculating impact fees for different types of public facilities in Smithfield (Louis Berger Group, 2001). Findings of the 2001 assessment were adopted as part of the Town Development Impact Fee ordinance adopted by the Smithfield Town Council in 2001. Findings of a 2005 update to the needs assessment and fee calculations were adopted along with revisions to the ordinance in 2005 (Kleinschmidt Associates and Lachowicz, 2005). The existing local ordinance is summarized below in Section 2.1. The needs assessments and associated fee calculations from 2001 and 2005 are summarized in Section 2.2. 2.1 Town Ordinance The Town of Smithfield s Development Impact Fee ordinance was adopted September 4, 2001 and amended April 26, 2005; it appears in the current municipal code as Chapter 193 Fees, Article III. Development Impact Fees (reproduced in Appendix A of this report). The ordinance identifies certain types of municipal facility improvements that are required to meet the demands created by most new residential development ( 193 8 D): 1. Park, recreation and historic facility improvements 2. Libraries 3. Schools 4. Road improvements 5. Open space and conservation areas The ordinance is intended to assist in the implementation of the Smithfield Comprehensive Community Plan and specifically: to regulate the use and development of land so as to assure that new residential development bears its proportionate share of the cost of capital expenditures necessary to provide certain facility improvements in the Town of Smithfield. ( 193 9) Adoption of Report Findings ( 193 12 B) As per the ordinance any new type of facility to be funded with impact fees must first be documented with a needs assessment that shall identify levels of service standards, projected public facilities capital improvements needs, and distinguish existing needs and deficiencies from future needs. (RIGL 45 22.4 4). The ordinance sets fees for the five types of public facilities listed above based on specific needs assessments for those types of facilities. The needs assessments and associated impact fee calculations were adopted as part of the impact fee ordinance in 2001 and again in 2005. The state enabling act and the Town ordinance also recognize other types of public facilities for which impact fees might be developed in the future, including projects related to police and fire protection facilities, water supply, wastewater treatment, flood control, and others. Water supply and sewer service facility costs are already assessed under separate programs. This 2014 update also incorporates needs 2 Mason & Associates, Inc.

assessment of an expanded police station and an associated calculation of impact fees proposed for this new category of public facility (Section 4.6, below). Calculation of Fees ( 193 12 C) Impact fees vary depending on the type of housing being constructed and the particular types of capital improvements that are needed to meet the demands created by the new development. For example, if new growth required the Town to build a new recreation facility, a portion of those new facility costs would be paid with impact fees collected by the Town from a developer of new housing; the impact fee per dwelling unit associated with new facility construction would be higher for a new single family detached home than for a new multifamily residence (apartment) because there are likely to be more residents per dwelling unit (DU) in a single family detached residence than a multi family residence. Impact fees are calculated based on the formulas in the 2001 and 2005 reports (described below in Section 2.2 and Section 4). The existing fee schedule is based on capital improvement projects described in the 2005 report: Table 1. Existing Impact Fees Type of Residential Dwelling Unit Library Schools Roads Open Space Parks and Recreation Single family $0.00 $2,578.00 $1,450.83 $3,044.00 $1,500.00 Two and three family $0.00 $1,541.00 $1,450.83 $3,044.00 $1,500.00 Condominium $0.00 $0.00 $1,450.83 $3,044.00 $1,500.00 Multi household $0.00 $754.00 $1,450.83 $1,972.00 $1,500.00 The impact fee schedule includes a credit (deduction) for future taxes paid by owners of new housing that are used to pay capital improvement bond costs (where impact fees are based on capital improvement projects funded with a new bond issue). The annual debt service for the bonds apportioned to the facilities expansion shall be subtracted from the impact fee as presented within the calculations in the report. ( 193 12 C). Certain types of new housing are exempt from impact fees ( 193 12 C). The subsidized units in a low and moderate income housing project are exempt from the requirements Payment of the School impact fee is not required for new housing restricted to persons 55 years in age or older. 3 Mason & Associates, Inc.

Administration of Fees ( 193 12 E) Impact fees are assessed at the time a building permit is issued, and collected when a certificate of occupancy is issued (or before). Development impact fees are kept in a restricted interest bearing account. Proposed expenditures of impact fees are submitted by the Town Manager to the Town Council for inclusion in the Town budget. Impact fee expenditures must be itemized and approved by specific resolution at the Financial Town Meeting. Impact fees that are collected must be used within eight years, or returned to the entity that paid the fee along with accrued interest. Under certain circumstances the Town has up to ten years to use or encumber the fees before reimbursement is made. 2.2 Previous Report Findings & Formulas Needs assessment reports were adopted as part of the impact fee ordinance in 2001 and 2005: The Louis Berger Group, Inc., Town of Smithfield, Rhode Island. Phase II Impact Fee Study, June, 2001 Kleinschmidt Associates and Anthony W. Lachowicz, Needs, Assessment and Growth Study, Town of Smithfield, Rhode Island, Final Report, February 2005. The 2001 and 2005 reports established community level of service standards for each of the five facility categories listed above, identified specific capital improvement projects needed to meet future community demands, and determined the proportionate share of costs that may fairly be allocated to new residential development. The formulas developed for each impact fee category follow certain basic rules as required by the ordinance and State enabling act. Rules for Establishing Impact Fees: Development impact fees may only be assessed to cover capital improvement costs; Capital improvement projects eligible for funding with impact fee revenues must have a useful life of at least 10 years and increase or improve the service capacity of a public facility; Only that portion of a capital improvement project needed to serve future development may be considered in establishing impact fees; the portion of a capital improvement project intended to serve existing development cannot be included; Future development needs for a class of facility must be documented in a needs assessment; Eligible project costs must be fairly apportioned to new development; Capital improvement projects and associated impact fees should be periodically reviewed and updated. 4 Mason & Associates, Inc.

Proportionate Share The calculation of development impact fees must include an estimate of the proportionate share of project costs associated with new development. Proportionate share is defined as: That portion of the cost of system improvements which reasonably relates to the service demands and needs of the project. ( 193 11) For example, construction of a new school may be needed for existing resident children as well as children expected to live in new housing; only that portion of the capital cost required to meet the needs of new residents may be included in the calculation of impact fees. Proportionate share is estimated for each specific capital improvement project based upon the specific characteristics of the project. The general approach used to estimate the proportionate share of a given project is: Determine if any portion of the project is eligible Subtract the following ineligible costs: o maintenance required regardless of new development demands o renovation of existing facilities to meet needs of existing population o in some instances maintenance or renovation costs may be eligible if shown to be caused by the increased demand of new housing or if renovations expand the capacity of a facility to meet the needs of new residents Determine the most equitable basis for apportionment of costs by expense category: o park, recreation, historic facilities population (all ages) o libraries population (all ages), housing units (all types) o schools population (schoolage) o road improvements vehicle miles travelled o open space and conservation areas population (all ages) Apportion project costs separately for each capital improvement project, documenting assumptions on eligibility and the apportionment of costs between existing community demands and the future demands posed by new residential development For projects funded through the issuance of bonds, the impact fee calculation is adjusted to provide a credit for taxes paid by future owners in the new development towards annual bond retirement The formulas adopted in the 2001 and 2005 reports follow the general format: Fee / DU = (cost / unit of capacity) x (units of capacity / DU) Credit The specific formulas used for each facility category are presented in Section 4, below. 5 Mason & Associates, Inc.

3.0 Capital Improvement Needs Capital improvement projects that are eligible for funding with impact fees, in whole or in part, must be identified in the Town s Capital Improvement Program (CIP) or the Smithfield Comprehensive Community Plan. Further, to be funded with impact fee revenues, capital improvement projects must meet the criteria set forth in the ordinance and the state enabling act as described above. The Town s current CIP (CIP 2015 2020) and the 2014 update to the Comprehensive Community Plan (Draft CCP 2014) were reviewed with Town officials to determine which projects might be eligible (i.e., meet applicable criteria for funding with impact fees) and which projects clearly are ineligible. Only projects that increase existing municipal service capacity are eligible for funding. Project review also identified certain costs within an eligible project that may or may not be included in the calculation of impact fees. 3.1 Capital Improvement Program Fiscal Years 2015 2020 The Town Charter calls for a six year Capital Improvements Program (CIP) bi annually in odd numbered years. The CIP is a multi year planning instrument used by the Town to identify needed capital projects and to coordinate financing and scheduling of major capital equipment and improvements in a way that maximizes the return to the public. Selection and scheduling is based on adherence to community goals, capital needs priorities, the Comprehensive Plan and the Town's fiscal capabilities. (Smithfield s Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2013, p. vii) Smithfield s Capital Improvement Program 2015 2020 was submitted by the Town Manager and Finance Director in September 2013 and accepted by the Town Council on December 3, 2013. Acceptance by the Council of the CIP is part of the Town s financial planning process and does not constitute project approval or allocation of any funds. The Smithfield CIP 2015 2020 defines capital improvements: In Smithfield, by ordinance, capital improvements mean improvements in excess of ten thousand dollars must be on a bid basis utilizing an RFP format which increases or improves the service capacity of a public facility through a competitive bidding process or utilizing the state bid list. The Capital Reserve Fund shall be used for funding capital improvement expenditures with a useful life of ten years or more which increases or improves the service capacity of a public facility. This policy does not preclude the funding of any additional capital assets from the general fund or other sources. (p. I 1) Review of CIP 2015 2020 identified nine projects as potentially eligible for partial funding with development impact fees (Table 2). Projects include the expansion of the Smithfield Police Department facility, a new Sub Fire Station, pavement management, a new Department of Public Works facility, various school improvements, and expansion of both the East Smithfield Library and Greenville Library. A portion of Town Administration capital improvement project 6 Mason & Associates, Inc.

no. 15 TA 1 Land Purchase is for the new Sub Fire Station project no. 15 FD 12; these two project costs are combined for the purpose of impact fee needs assessment. It is highly unlikely all of the projects identified in CIP 2015 2020 and listed in Table 2 will be approved and funded at the levels indicated or in the time frames laid out in the CIP. For the purpose of calculating impact fees, all potentially eligible projects are evaluated in anticipation that some or all may eventually go forward. In the event some projects do not go forward, associated development impact fees cannot be levied. As new projects are identified, they may be added and fees adjusted as described herein. 3.2 Comprehensive Community Plan 2014 Three Parks and Recreation projects not in the CIP have been identified in the Comprehensive Community Plan to meet future needs of the Town (Table 2). The new playing fields at Deerfield Park expand the Town s recreational playing field capacity. The artificial turf field will replace an existing natural turf field, increasing the playing field service capacity by extending the number of days per year during which the field may be used. The artificial turf field will also relieve the demand on natural turf fields, allowing them to be taken out of service, providing relief from excessive wear, or during saturated ground conditions. 7 Mason & Associates, Inc.

Table 2. Potentially Eligible Capital Improvement Projects CIP 2015 2020 Identified Projects: Type / Department Project Title Project No. CIP p. III Total (Capital) Cost Police Expansion / Renovation (Station) 15 POL 1 1 $6,400,000 Fire Sub Fire Station 15 FD 12 18 $4,000,000 Fire Training Site / Station 3 Upgrade 15 FD 14 20 $100,000 Public Works Pavement Management Program 15 DPW 1 23 $9,000,000 Public Works New DPW Facility 15 DPW 10 32 $7,000,000 School (School Summary) 15 SCH SUM 41 $7,528,172 Library E. Smithfield Library Addition 15 ESL 1 51 $508,325 Library Greenville Public Library Expansion 15 GL 1 52 $9,636,562 Town (Fire) Land Purchase 15 TA 1 53 $2,300,000 Non CIP Projects Identified in Comprehensive Community Plan: Type / Department Project Title Parks & Recreation New Little League Field Deerfield Park Parks & Recreation New Multipurpose Field Deerfield Park Parks & Recreation Artificial Turf Field Total (Capital) Cost $500,000 to $600,000 $380,000 to $450,000 $1,200,000 to $1,500,000 4.0 Updated Fee Calculations Smithfield s impact fees were last updated in 2005, and a number of factors affecting impact fee amounts have changed since then, reflecting the changing community need for certain public facility expenditures, and the fiscal constraints imposed by the economic recession. The specific capital improvement projects anticipated have changed since 2005. Certain variables used in the impact fee formulas have also changed since then such as the rate of growth, number of schoolage children, and the property tax rate, among others. Some values used in the formulas remain the same certain level of service standards for example. The formulas used to calculate impact fees in the 2001 and 2005 needs assessments are used in this report to calculate 2014 fees for the projects that fall within the five established public facility types. The approach used in 2001 and 2005 is applied to a new public facility category Police Facilities proposed as a result of the public need established by two recent space needs studies for the Smithfield Police Department Headquarters expansion (Lawrence & Associates, 2009 and Saccocio & Associates, 2012). 8 Mason & Associates, Inc.

Conservative Approach It is clearly the Town s intent to only charge fees which can reasonably and fairly be attributed to new residential development and to include in those fees only the costs of public facilities required to meet the needs of those residents. The approach used in the calculation of impact fees is therefore conservative in cases of uncertainty; that is, when a precise value is not available for use in the proscribed formula, a value is chosen which is both reasonable and which tends to lower the resulting impact fee, all else being equal. Bond Payments, Interest All of the current projects potentially eligible for funding with impact fees would be financed with general obligation bonds, at least in part. Because the Town must borrow money to pay for these projects, the actual cost of a project to the Town over time is higher than indicated in the CIP because of interest payments. The project cost to the Town for future principal and interest payments is used to calculate impact fees, consistent with the previous reports. The Smithfield Finance Director indicates that new general obligation bond issues would be repaid over a twenty year period; principal payments of equal amounts would be made annually, along with 4.5% interest payments on the balance. The taxpayer credit for annual debt service on the general obligation bond is calculated by taking the percent of property tax used for annual payment on the bond and multiplying it by the property tax payment for the different types of housing (average assessed value), consistent with the 2005 report and recommendation of the Smithfield Finance Director. Generic Impact Fee Formulas Fee / DU = (cost / unit of capacity) x (units of capacity / DU) Credit where: Fee = fee charged per DU by type of DU DU = dwelling unit of the following different types: Single family detached 2&3 family Condominium Multifamily (rental apartments) Cost = cost of public facility attributable to new growth Units of capacity = units used in adopted community service standard: Square feet (sq. ft.) of building (library, proposed for Police) Acres (ac.) of land (Open Space, Parks & Recreation) Number of pupils (Schools) 9 Mason & Associates, Inc.

Lane miles (Roads) Number of Playing Fields (proposed for Parks & Recreation playing fields) Credit = deduction of other contributions made by new development towards project costs (e.g., portion of annual property tax on new development used to pay for bonds that paid for specific improvement) To ensure impact fees are assessed fairly, the formulas all use some means of excluding project costs required to meet the needs of the Town s existing population; where possible, those costs are further allocated by type of dwelling. Almost all public facility projects are designed to address at least a portion of both the existing population s needs and the anticipated needs of new growth. Smithfield s impact fee formulas incorporate some means of calculating the portion of project costs that can reasonably be apportioned to new growth. This allocation of costs is usually done by applying a percentage factor: Cost for new growth = project cost x percent of project for new growth Where percent of project for new growth is based on a unit estimate, e.g., from the specific project needs assessment. For example: % project for new growth = square feet for new growth / total project square feet % project for new growth = (future population served existing population served) Future population served This approach is relatively simple and can be used in cases where detailed project studies provide these data or in cases where it is difficult to separate exact costs (existing or future need), but where the difference in facility capacity or pro rated share may be reasonably estimated. In some cases the type of project or specific project needs assessment will provide sufficient detail to more accurately calculate project cost for new growth / unit of capacity. For example, the police station space needs study indicates the rationale for needed renovation and expansion, the square footage of existing and proposed facilities, and estimates the cost difference between renovation and expansion. This allows a direct calculation of the portion of the project cost for expansion (square feet expansion x cost per square foot expansion). The two methods of apportioning costs can be combined to provide a more precise, or more conservative, estimate of project costs: Cost for future growth / unit of capacity = (Cost of expansion / units of expansion) x % of expansion for new growth 10 Mason & Associates, Inc.

where the costs for expansion can be differentiated from overall project costs. This approach has been used in Smithfield and other Rhode Island communities. It has the advantage of being more accurate by taking advantage of the most detailed cost data available and introducing an additional element of conservatism to ensure the calculation does not overestimate the proportionate share of costs for new development. Whatever method is used to apportion project costs to new growth, it is important to ensure units are combined properly, the rationale for apportionment is explained, and the actual calculation is presented so it may be verified. Impact fee calculations and rationale are presented below, grouped by previously established public facility type, followed by the new proposed facility type Police Facilities. 4.1 Park, Recreation & Historic Facilities The formula used to calculate impact fees for park and recreation facilities in the 2001 and 2005 reports is: Impact Fee = (Project Cost/Ac. x Ac. Land Need/Person x Max. No. DUs x Persons/DU) Credit where: Project Cost/Ac. = fair market value of land per acre + development costs per acre (eligible costs only) Ac. Land Need/Person = acres of park and recreation facilities per person, the level of service standard for this type of facility = 0.01 ac. = 10 acres / 1,000 persons Max. No. DUs = Maximum Number of Dwelling Units = 1 Persons/DU = Persons per Dwelling Unit (by type of dwelling) Credit = value of tax payment for annual debt service (capital improvement bond repayment) to be made by future owners of new housing (by type of dwelling) Note that because Max. DUs is set to = 1 this variable may be eliminated from the formula. Both the original 2001 report and 2005 update used $107,980 / acre as the project cost / acre based on a fair market value for land of $50,000 / acre and a development cost of $57,980 / acre. The 2001 report used an overall average of 2.47 persons / DU and a debt service credit of $101 per DU (regardless of housing type); the resulting impact fee calculated in 2001 was 11 Mason & Associates, Inc.

$2,567 per dwelling unit. The 2005 report used 2.67 persons per DU for all housing types except multi family where a value of 1.73 was used (reflecting the difference between owner occupied units and renter occupied units). The credit for debt service calculated in 2005 ranged from $35 / DU for multifamily housing, to $82 for condominiums and 2&3 family housing, to $123 for single family housing (reflecting the differences in the averaged assessed values for the different types of new housing). The resulting impact fees calculated in the 2005 report ranged from $1,833 for multifamily housing, $2,801 for condominium and 2&3 family housing, and $2,760 for single family dwellings. The actual impact fee adopted in 2005 for Parks and Recreation is $1,500 for all dwelling types (Table 1), reflecting a conservative approach to fee implementation. This report updates the Parks & Recreation facilities impact fee using the same formula set forth in the original needs assessment (2001 report), as required by the ordinance. The facility cost per acre value of $107,980 has been updated to reflect the current project costs for the two new playing fields and 20% of the cost of replacing an existing grassed field with an artificial turf field (20% representing the estimated increase in service capacity resulting from increased days of use with artificial turf). This results in a total cost of $1,120,000 for the three projects, or $1,649,200 if funded through a new general obligation bond issue (i.e. cumulative principal and interest payments). This equates to $749,636 per field. Using the community service standard developed in 2001 and applied in the 2005 update, the impact fees for these recreational playing field projects would yield impact fees of approximately $7,000 to $8,000 per housing unit (depending on type of unit). These fees are high compared to the fees calculated in previous years and the current Parks and Recreation fee of $1,500. In large part the high fees are the result of the 0.01 acre per person community service standard adopted for this category. While this community standard may still be appropriate for developed parks and recreation land in general, it overestimates impact fees because the cost for playing fields per acre is much higher than the average cost of parks and recreation lands per acre. A more appropriate community service standard for public recreation playing fields is therefore proposed. The total number of playing fields in Town (exclusive of basketball courts and tennis courts) is 20, and the 2010 census shows 21,430 residents; this yields an existing community level of service standard of about 1,072 persons per playing field, or 0.00093 fields per person. This is proposed as the level of service standard for recreational playing fields for future residents. Using these data and assumptions, the Parks and Recreation impact fee is calculated as follows: New Little League Field Deerfield Park: $500,000 New Multipurpose Field Deerfield Park: $380,000 Artificial Turf Field (20% of cost eligible): $240,000 Total General Obligation Bond amount: $1,120,000 Total bond cost (principal & interest): $1,649,200 12 Mason & Associates, Inc.

Number of fields (eligible): 2.2 Cost per field: $749,636 Recreational playing fields per person standard: 0.000933271 Field cost per person: $699.61 Cost per dwelling unit: Single Family: $1,832.99 based on 2012 census 2.62 persons / owner occupied unit 2&3 Family: $1,832.99 based on 2012 census 2.62 persons / owner occupied unit Condominium: $1,832.99 based on 2012 census 2.62 persons / owner occupied unit Multifamily: $1,539.15 based on 2012 census 2.2 persons / renter occupied unit Annual debt service credit per unit, based on assessed valuation, by type: Annual debt service on bond (first year FY2016): $106,400 2016 real estate tax rate: $17.87 per $1,000 assessed value 2016 net budget tax levy ($55,933,775) with bond payment: $56,040,175 % of tax levy for annual debt service on new bond: 0.1899% Single Family: $13.57 based on assessed value of $400,000 per unit 2&3 Family: $8.99 based on assessed value of $265,000 per unit Condominium: $8.99 based on assessed value of $265,000 per unit Multifamily: $3.90 based on assessed value of $115,000 per unit Impact Fee: Single Family: $1,819.42 2&3 Family: $1,824.00 Condominium: $1,824.00 Multifamily: $1,535.25 4.2 Libraries The required needs assessment for public library facilities was conducted in 2003 and presented in the 2005 report, focusing on planned expansion of the Greenville Public Library. The community level of service standard was determined to be 2.12 sq. ft. floor area of public library per housing unit (all types) for the purpose of calculating impact fees. The formula used to calculate impact fees for public library facilities is: Impact Fee = (Project Cost/sq. ft. x Library sq. ft./du) Credit where: Project Cost = net construction cost after State reimbursement, funded with long term bonds Library sq. ft./du = 2.12 square feet floor area of public library needed per housing unit (all types) 13 Mason & Associates, Inc.

Credit = value of tax payment for annual debt service (capital improvement bond repayment) to be made by future owners of new housing (by type of dwelling) The 2005 report calculated an impact fee of $530.11 per DU, before deducting the credit. After the deduction for future debt service, the 2005 calculated impact fees per DU were $473.41 for single family, $492.66 for 2&3 family and condominiums, and $513.87 for multifamily. However, the Library impact fee was set to $0 at the time the ordinance was updated in 2005, reflecting postponement of project implementation. The Greenville Public Library Expansion project proposed in the current CIP (project no. 15 GL 1) is similar to the library project analyzed in the 2005 report in terms of general scope and need. However, the current project is expected to receive less funding from other sources and so the total project cost to the Town will be greater. The current project is expected to cost $9,636,562; the CIP indicates this would be funded through a general obligation bond, and that almost half of the project costs and bond interest will be reimbursed by the State of Rhode Island over a 20 year period. The estimated state share used for these calculations is 45%. Total General Obligation Bond amount: $9,636,562 Total bond cost (principal & interest): $14,189,838 Future State reimbursements (45%): $6,385,427 Town net construction cost, long term bonds: $7,804,411 New Library area in square feet: 21,405 Cost per square foot: $364.61 Community standard for library facilities sq. ft. per dwelling unit: 2.12 Library cost per dwelling unit: $772.97 Annual debt service credit per unit, based on assessed valuation, by type: Annual debt service on bond (first year FY2016): $915,473 2016 real estate tax rate: $17.87 per $1,000 assessed value 2016 net budget tax levy ($55,933,775) with bond payment: $56,437,285 % of tax levy for annual debt service on new bond: 0.9822% Single Family: $63.78 based on assessed value of $400,000 per unit 2&3 Family: $42.25 based on assessed value of $265,000 per unit Condominium: $42.25 based on assessed value of $265,000 per unit Multifamily: $18.34 based on assessed value of $115,000 per unit Impact Fee: Single Family: $709.19 2&3 Family: $730.71 Condominium: $730.71 Multifamily: $754.63 The East Smithfield Library Addition (project 15 ESL 1 in CIP 2015 2020) also appears eligible for partial funding with impact fees. A space needs study is planned, and it is recommended that study be used in any future apportionment of costs to impact fees should the project go 14 Mason & Associates, Inc.

forward. The current CIP indicates the total project cost of $508,325 would include $254,162 in Town funds in 2016, $100,000 from Special Revenue and $154,162 from General Obligation Bond. The information provided in CIP 2015 2020 and the formula for calculating the library impact fee suggest the cost per dwelling unit would be relatively low for this project. 4.3 Schools Existing impact fees for school facilities were established in 2005 in response to the need for expanded school facilities anticipated at that time. The school space standard of 140 square feet (gross) per student was established in 2005 based on needs assessment conducted for a new middle school. The 2005 report applied the following formula to calculate school impact fees: Impact Fee =((Project Cost/Student State Aid to Construction/Student) x Pupils/Housing Unit by Type x % Cost Attributed to New Growth) Credit where: Project Cost = Total Project Cost State Aid to Construction = Estimated at 30% of Total Project Cost Pupils/Housing Unit = 0.44 for Single Family, 0.27 for 2&3 Family, 0.15 for Multifamily, and 0.04 for Condominium % Costs Attributed to Growth = expansion in enrollment capacity / maximum enrollment capacity Credit = value of tax payment for annual debt service (capital improvement bond repayment) to be made by future owners of new housing (by type of dwelling) The 2005 report calculated impact fees ranging from $2,578 for a single family home to $0 for a condominium. CIP 2015 2020 identifies $7,528,172 in school related capital improvements for FY2015, and $12,102,145 in total capital expenditures over the six year CIP period. Funding proposed for FY2015 includes a $7,151,372 general obligation bond, largely for site improvements and construction at a number of school facilities including major roof replacement projects at the Smithfield High School and Gallagher Middle School. Examination of itemized costs for these projects (p. III 49 & 50) shows few if any project components that would be eligible for funding because the costs relate to normal maintenance and refurbishment of existing facilities rather than construction of new or expanded facilities. Smithfield has experienced declining public school enrollment in recent years. RI Department of Elementary and Secondary Education 15 Mason & Associates, Inc.

projections indicate Smithfield s public school enrollment will continue to decline through the 2021 2022 school year: These projections indicate that Smithfield has sufficient school capacity to provide for future enrollment and they imply that the School Department may be able to meet future space needs for specialized programs by reallocating and reconfiguring existing space. (Draft CCP 2014, p. Services & Facilities 98). There is therefore insufficient justification for assessing school related impact fees at this time. School needs may require expanded facilities in the future, and impact fees may be appropriate at that time. An updated space needs study would need to be done for such a future project because the 2005 school space standard was developed for the specific project planned at that time. The basic approach used in 2005 should still be valid in the future, but all variables and the method of apportioning costs to new growth should be reviewed and revised as appropriate. 4.4 Roads The 2005 report included a new fee for Town road and infrastructure improvements to accommodate the additional demand for road capacity posed by new development: Road and Drainage Improvements This new fee will provide funding to reconstruct the Town s major highways and associated drainage facilities. It is based upon the estimated cost of new roadway construction on the premise that there are deficiencies in existing roadway design and construction that is insufficient to address the current level of service, and that new growth will, over time, necessitate an emphasis on major reconstruction as opposed to ongoing maintenance practices. (p. 61) The formula used in 2005 to calculate the road improvement fee is described in Appendix E of that report: Impact Fee = (Project Cost/Lane Mile x ((ADT x ATL) / (2 Lanes x 8,000 Vehicles / Lane))) Credit where: Project Cost = construction cost for roadway restoration / pavement rehabilitation and associated drainage improvements Lane Mile = one lane of roadway, one mile long 16 Mason & Associates, Inc.

ADT = average daily trips per single family household (10 used in 2005 per ITE Trip Generation rate) ATL = average trip length in miles (6 used in 2005 per Town Engineer [low end of estimate]) 2 Lanes x 8,000 Vehicles per Lane = average Town road lane capacity at roadway Level of Service D, multiplied by 2 lanes per average Town road Credit = value of annual tax payment to be made by future owners of new housing The 2005 report calculated a road impact fee of $1,450.83 based on an average road reconstruction cost of $396,000 per lane mile of road, and credit of $34.17 per dwelling unit (any type). The Department of Public Works proposed Pavement Management Program is a $9,000,000 capital improvement project to be funded by three separate $3,000,000 bond issues in 2016, 2017, and 2018 (CIP 2015 2020). The project cost, including the future bond repayment of principal and interest is $13,252,500. Divided by 210 lane miles of Town roads (105 miles of Town road x 2 lanes per road on average) this yields an average $63,107 cost per lane mile for pavement management. This cost per lane mile is deceptively low because the costs per lane mile are averaged across the entire town, while in reality a pavement management program will prioritize improvements in the areas where repairs or reconstruction are called ofr based on pavement condition indices that drive the most urgent priorities. The draft 2014 Comprehensive Community Plan indicates The last available assessment of overall roadway conditions indicated that approximately twenty (20) percent of all local roads had deteriorated to the point that they would need to be completely reconstructed, which is the most expensive method of roadway repair (averaging approximately $39/SY, or $550,000/mile of a typical (24 wide) local road in FY 2012). (Draft CCP 2014, p. 221). The Town Public Works Director and Town Engineer have estimated current road reconstruction costs total approximately $755,000 per lane mile. This estimate was developed with the same method used in the 2005 impact study but with current construction costs. When bond interest payments are considered, the proposed capital improvement project would provide for reconstruction of approximately 8% of Smithfield Town roads, assuming a reconstruction cost of $755,000 per lane mile. As shown below, this in turn yields a $2,709.51 cost per single family detached dwelling unit, about 187% the cost per DU calculated in the 2005 report. This cost difference reflects the increase in road construction costs during the period. The 2005 report used a uniform estimate of 10 trips per day for all types of housing, but indicated that more precise estimates by DU type could be made. The updated calculations therefore applied the following average weekday daily trip generation rates obtained from the Institute of Transportation Engineers (ITE) publication Trip Generation (ITE 2008): 9.57 trips for single family detached dwellings, 5.81 trips for 2&3 family DUs and condominium units, and 17 Mason & Associates, Inc.

6.65 trips for multifamily DUs. The 8,000 trips per day (per lane) capacity used for Level of Service D (service capacity standard set in 2005 report) was evaluated using the U.S. Transportation Research Board (TRB) Highway Capacity Manual 2010, assuming most Town roads are Class II and Class III two lane roadways. The 8,000 trips per day value is considered suitable for the purpose of calculating the impact fee for road reconstruction. The actual level of service experienced by motorists will vary widely depending on time of day, day of week, road conditions and local land uses. Traffic Level of Service D and below will likely be experienced at peak hours, with delays caused by traffic at intersections. Using these data and assumptions, the road impact fee is calculated as follows: Total General Obligation Bond amounts: $9,000,000 ($3,000,000 bonds in 2016, 2017, & 2018) Total bond cost (principal & interest): $13,252,500 Miles of road reconstructed: 8.8 Cost per lane mile of road reconstruction: $755,000 Average daily trips (ITE 2008): Single family: 9.57 2&3 Family: 5.81 Condominium: 5.81 Multifamily: 6.65 Average Trip Length: 6 miles Average roadway capacity at level of service D (2 lane): 16,000 Road reconstruction cost per DU: Single family: $2,709.51 = $755,000 CPLM x 9.57 ADT x 6 ATL/16,000 cap LOS D 2&3 Family: $1,644.96= $755,000 CPLM x 5.81 ADT x 6 ATL/16,000 cap LOS D Condominium: $1,644.96 = $755,000 CPLM x 5.81 ADT x 6 ATL/16,000 cap LOS D Multifamily: $1,882.78= $755,000 CPLM x 6.65 ADT x 6 ATL/16,000 cap LOS D Annual debt service credit per unit (for FY2019, the first year in which payments will be made on all three bonds), based on assessed valuation, by type: Annual debt service on bonds (FY2019): $834,750 2019 real estate tax rate: $18.41 per $1,000 assessed value 2019 net budget tax levy ($62,917,889) with bond payment: $63,752,639 % of tax levy for annual debt service on new bond: 1.3094 Single Family: $105.38 based on 2019 assessed value of $437,091 per unit 2&3 Family: $69.82 based on 2019 assessed value of $289,573 per unit Condominium: $69.82 based on 2019 assessed value of $289,573 per unit Multifamily: $30.30 based on 2019 assessed value of $125,664 per unit Impact Fee: Single Family: $2,604.12 2&3 Family: $1,575.14 Condominium: $1,575.14 Multifamily: $1,852.48 18 Mason & Associates, Inc.

4.5 Open Space and Conservation Areas The Town s open space and conservation needs were assessed in the 2005 report and a community level of service standard of 0.073 acres per person was recommended for inclusion in the Comprehensive Plan (p. 49). The impact fee formula used a more conservative standard of 0.057 acres per person. The 2005 formula for calculating open space impact fees is: Impact Fee = (Open Space Cost/Acre x 0.057 Acres/Person x Persons / DU) Credit where: Open Space Cost / Acre = average acquisition cost (price) of open space per acre 0.057 Acres / Person = community level of service standard for open space Persons / DU = persons per dwelling unit, by type of unit Credit = value of tax payment for annual debt service (capital improvement bond repayment) to be made by future owners of new housing (by type of dwelling) The 2005 report calculated an open space cost per person of $1,140 based on an estimated average price (2004) for undeveloped, buildable residentially zoned land [of] $20,000 per acre. (p. A 14). Occupancy rates of 2.67 persons per unit were used for single family, 2&3 family and condominium type units and 1.73 persons per unit for multifamily units, reflecting 2000 U.S. Census data for owner occupied and renter occupied units, respectively. These occupancy rates yielded impact fees for open space of $3,044 per unit for single family, 2&3 family and condominium units and $1,972 per unit for multifamily units. The 2005 report did not anticipate any debt service for open space acquisition and therefore no credit was included (Credit = $0). In 2004, the Town voters approved a $5 million dollar bond to protect farm, forest and open space. Several large parcels of land have been protected using these bond funds and Land Trust funds including the Judson Farm, Mowry Farm, Booker/Steere Farm West Greenville Road, Blackbird Farm, Lime Rock Road. (Draft CCP 2014 p. 177). Additional open space acquisitions were made by the Land Trust, State, and private organizations: Total protected open space increased from an estimated 1,538 acres in 2004 to 2,461 acres in 2013. Based on a current population estimate of 21,430, this represents an existing standard of approximately.114 acres of open space land per person. (Draft CCP 2014 p. 177). 19 Mason & Associates, Inc.

There are no current proposals for open space acquisition in the CIP. The Comprehensive Plan promotes continued open space preservation, largely through the application of conservation development practices, but no specific program for municipal purchase of open space is proposed. Because the existing standard of 0.114 acres per person is well above the 0.057 acres per capita standard used in the fee calculation (or the 0.073 acres per capita standard that was recommended), an impact fee for new open space acquisition is not merited at present. These data and projected population indicate the existing open space will meet the community s needs for at least ten years. An open space impact fee of $0 is recommended. 4.6 Police Facilities The Smithfield Police Department needs a new headquarters to meet existing and future public demand for police services: The Department has also embarked on an aggressive Capital Improvement Program to improve equipment and the physical plant facility. Some of the improvements include new roofing, insulation, new windows and frames, renovation of the men s and women s locker rooms, reconfiguration/paving/sealing the driveway and rear parking lot, replacement of all heating/air conditioning units, enlargement and renovation of the Detective Division, conference room, patrol room and front communication center, completion of a new police maintenance garage in the rear parking lot and renovation of the entire cellblock/holding facility area. (SmithfieldPD.com History of the SPD). Both the 2001 and 2005 reports indicated no major capital improvement projects were anticipated by the Police Department, and therefore impact fees were not calculated. Both of those reports, and the existing impact fee ordinance recognize capital improvement projects for police facilities are public facilities eligible for at least partial funding with impact fees. Space needs assessments were conducted for the Smithfield Police Department Headquarters in recent years (Lawrence & Associates, 2009 and Saccocio & Associates, 2012). The studies are detailed and provide sufficient information to: a) establish a proposed community level of service standard and, b) reasonably approximate both the amount of expansion and the relative costs of renovation compared to expansion. Further, the 2009 study provides information on new police station building area (square footage) and population served for other Rhode Island communities, demonstrating the proposed standard for Smithfield is comparable to that found in other communities. The same approach to calculating other impact fees is used to calculate impact fees for police facilities; the proposed formula is: Impact Fee = (Project Cost/sq. ft. x Police Facility sq. ft. / person x persons / DU) Credit where: 20 Mason & Associates, Inc.

Project Cost = construction cost funded with long term bonds Police Facility sq. ft./person = 1.33 square feet gross floor area of police facility (Police Station Headquarters) needed per Smithfield resident based on 2009 needs assessment Persons / DU = persons per dwelling unit, by type of unit Credit = value of tax payment for annual debt service (capital improvement bond repayment) to be made by future owners of new housing (by type of dwelling) The proposed community facility standard for Police Facilities is 1.33 gross square feet per person (resident), based on the 2009 study that determined 29,666 square feet of facility space was required to meet the community needs through 2028: 1.33 sq. ft. / person = 29,666 gross sq. ft. needed / 22,368 population in 2028 This is recommended as the community service standard for the purpose of calculating impact fees. This compares favorably with other Towns in Rhode Island, as referenced in the 2009 report (Appendix p. 7.5). New police stations in Barrington, Charlestown, East Greenwich, Middletown and South Kingstown had gross square feet of police station / population served ratios ranging from 0.86 sq. ft. / person to 1.84 sq. ft. per person, and averaged 1.32 sq. ft. per person. The renovated and expanded Smithfield Police Department Headquarters is expected to cost $6,400,000; the CIP indicates this would be funded through a general obligation bond. Calculation of the Police Facility impact fee uses the formula presented above and uses the same assumptions regarding future bond payments, and the calculation of credit for annual bond debt service as previously described: Total General Obligation Bond amount: $6,400,000 Total bond cost (principal & interest): $9,424,000 New police station net area in square feet: 24,732 Total cost per square foot (average for renovation and new construction): $381.04 Square feet of renovation (existing need): 12,366 Cost per square foot for renovation: $326.61 (assumes renovation cost/sq. ft. at 75% of new construction cost/sq. ft. for expansion per 2009 needs assessment) Square feet of expansion (future need, new growth): 12,366 Cost per square foot for expansion: $435.48 Community standard for police facilities gross sq. ft. per person: 1.33 Cost of new police facility per person: $579.19 Cost per dwelling unit: Single Family: $1,517.47 based on 2012 census 2.62 persons / owner occupied unit 21 Mason & Associates, Inc.