To: Board of County Commissioners
Through: Bryan Weimer, PWLF, Director, Public Works & Development
Prepared By:
prepared
James Katzer, PE, Transportation Division Manager, Public Works & Development
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presenter
Presenter: James Katzer, PE, Transportation Division Manager, PWD; Bryan Weimer, PWLF, Director, Public Works & Development
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Subject:
title
1:00 PM *I70/Monaghan (Airpark) Interchange Project Update and Impact Fee Proposal
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Purpose and Request:
recommended action
Staff will be providing the Board of County Commissioners (BOCC) with a project update for the I-70/Monaghan (Airpark) Interchange (C17-07 and C22-15) and discuss the funding of the interchange improvements. Staff is seeking:
1. Support from the BOCC on pursuing this Impact Fee proposal for the construction of the Phase 1 of the ultimate improvements at the I-70/ Monaghan (Airpark) interchange.
2. BOCC coordination with elected officials within the City of Aurora and Adams County on implementation of this funding model for improvements to the I-70/ Monaghan (Airpark) interchange.
Public Works and Development staff recommends that the County pursue this funding option, as discussed further in this report, with the staff and elected officials of the City of Aurora and Adams County in an effort to develop a funding solution for the improvement at I-70 and Monaghan (Airpark) Interchange.
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Background and Discussion: In collaboration with the developers of Sky Ranch, the County is completing a CDOT 1601 interchange approval process to obtain the approvals and permits necessary to construct the improvements needed at the I-70 interchange at Monaghan (Airpark). It has been determined that the Sky Ranch Development will have traffic impacts on and will create a need for improvements to the I-70 interchange at Monaghan (Airpark), since the interchange was designed to accommodate rural levels of traffic. Future developments within the City of Aurora and Adams County will also have impact on this interchange and will benefit from the improvements to be constructed.
For the Sky Ranch Development, the original PDP and a subsequent amendment require the developer to provide the necessary interchange improvements needed for their development. The PDP and amendment allow the developer to develop up to a limited number of residential units without the interchange improvements. Sky Ranch has been developing the property in phases and is now approaching the limit of residential units that can be served by the existing interchange improvements.
The County contracted with David Evans and Associates (DEA) through the Request for Proposal (RFP) process to perform the Colorado Department of Transportation’s (CDOT) 1601 Interchange Approval Process. The 1601 Interchange Approval Process will complete the following tasks:
• Documenting existing traffic, roadway, and environmental conditions. Travel forecasts will be developed to analyze the future demand and operational needs. The work will be coordinated with CDOT and FHWA.
• Engagement of the surrounding general public through public outreach to describe the planning efforts and solicit input.
• Preparation of a System Level Study (SLS)
• 30% design of Phase 1 improvements
• Determination of the ultimate road alignment.
• Categorical Exclusion NEPA documentation will be completed concurrent with 30%
design for CDOT approval.
• ROW preservation needs determination, including any adjustments needed for the Phase 1 design to incorporate with or better facilitate ultimate construction of required interchange improvements and/or modifications.
• The ultimate conceptual design including provision for the frontage road and options to address the railroad and US 36/Smith Road proximity for the Monaghan Road Interchange.
• An Interstate Access Request (IAR) will document traffic operations of the
improvements and at freeway weave/merge points for FHWA approval
• Funding options for the ultimate improvements evaluation; and
• Identify Traffic Demand Management (TDM) strategies per the 1601 Policy Directive
The costs of Phase 1 improvements have been estimated to be $30 million. The County recommends that Phase 1 of the ultimate improvements be constructed, however, the funding of these improvements is complicated and expensive. As the project goes through Colorado Department of Transportation’s (CDOT) 1601 Interchange Approval Process, the project will undergo a technical and financial analysis to obtain approval from CDOT for the interchange proposal. Based on the proposed Phase 1 improvements to the I-70 at Airpark Interchange, the project falls under the Type 2 interchange improvement type, as a modification to an existing interchange. A Type 2 proposal includes preparation of a System Level Study (SLS) that addresses the impacts of the proposed interchange modification on the surrounding transportation system and surrounding area. Since funding for the interchange improvements are not included in the Fiscally Constrained Regional Transportation Plan, the System Level Study must include a preliminary financial plan that identifies how the improvements will be funded. This plan will be necessary for National Environmental Protection Act (NEPA) decisions documentation.
The detail of how the improvements will be made (i.e., who pays and the amount of the payment) will be further defined as the financial plan is completed. The recently completed interchanges study considered the following options to fund the ultimate improvements, forming a regional transportation authority, creating a multi-jurisdictional regional impact fee, pursuit of grant funding, and utilizing fair share reimbursement. The study recommended that the County pursue impact fees to fund the future improvements.
DEA performed a preliminary assessment of the impact fee, funded by the Sky Ranch developer, of the feasibility of implementing a transportation impact fee to fund Phase 1 of the I-70 at Airpark Interchange modifications and the extension of Monaghan to the north into Adams County. The effort evaluated the extent of traffic utilizing the interchange, the general area where travel demand was from, and determined a conceptual sub-regional fee structure intended for use as an illustration of a potential fee structure to be used to support conversations with stakeholders.
This effort is refreshing the previous impact fee by updating the traffic model and analyzing how to appropriately assign the cost burden.
Funding Plan Discussion
The collection of impact fees by cities and counties is allowed under Colorado Revised Statutes (CRS 29-20-104.5). The law allows a levy of one-time fees to be charged on new development to defray the cost of constructing infrastructure needed to serve the demands created by new development. To the extent that required improvements are needed to address both “existing deficiencies” as well as the projected impacts from growth, only the portion of the cost attributable to new development may be included. Fees can be charged on a city or countywide basis or can be applied for a particular subarea or district.
• Establishment - Impact fees can be imposed through adoption of a local enabling ordinance supported by a technical analysis showing a “nexus” between the fee and the infrastructure demands generated by new development. Fees may be charged for an individual improvement or for multiple infrastructure categories in a comprehensive program.
• Application - Impact fees must be applied to a broad range of land uses and cannot be applied to a single land use (i.e., applies to residential as well as non-residential).
• Who Pays? - Impact fees are typically collected when a building permit is pulled for qualifying construction within the established fee area. Generally, the burden incidence of impact fees is on the developers and builders who pay the fees. Fees are a cost of development and are internalized into project costs in the same manner as other development and construction related costs.
• Benefits - Impact fees provide a comprehensive and programmatic framework for identifying and allocating infrastructure costs to development based on rational nexus allocations. There is no discretion on the part of those subject to the fees nor is voter approval required for their implementation.
• Limitations - A key constraint on impact fees is that the fee levels adopted are often substantially less than the amount determined to be needed to pay for the measured impacts. This is because of concerns over the cost burden that fees place on area developers and their ability to compete in the area market. In addition to the burden limit, another limitation is related to the timing of development. Infrastructure is generally needed in advance of development, while fees are paid for as development occurs (generally at the time of building permit). This means that other funding sources or financing methods are needed to fill the funding gap. Fees are also irregular and depend on development activity, which vary with economic conditions.
Arapahoe County has a Rural Transportation Impact Fee (RUTIF) collected between Gun Club Road and the eastern Arapahoe County boundary. The RUTIF fee was approved to be increased in December 2023 and will go into effect on March 1, 2024, and will be $3,594 up from $2,531 on a 2,000 square foot home. Interchanges are not included in the eligible projects to be funded with RUTIF in Arapahoe County but projects such as paving and new road connections were included.
The City of Aurora (City) collects a road impact fee of $7,475 per single family home. Adams County had a traffic impact fee for the eastern portion of the County that ranged between $2,900-$5,000 depending on size for residential land uses ($4,665 for 2,000 sf) and $751 - $4,436 for non-residential development.
Arapahoe County and these other jurisdictions would need to determine how the proposed interchange impact fee would relate to the existing and other proposed impact fees.
Methodology
The initial interchange study, completed in 2021, established a likely range of impact fees necessary to fund the improvements and also as a high-level preliminary assessment prior to the full traffic analysis to be conducted for the 1601 Interchange Approval Process, the travel demand forecasting performed for the I-70/Monaghan (Airpark) interchange feasibility study over the past few years was used. That analysis utilized the 2040 Denver Regional Council of Governments (DRCOG) regional travel model, which was the adopted regional model during that study. The 1601 will utilize the 2050 model, which will be adopted this month.
PWD recommends that the County use a tiered method which is further explained below. This tiered method creates fee levels for two tiers of zones, with the first tier being traffic analysis zones (TAZs) that would have the highest use of the interchange or the Monaghan extension, and a second tier of TAZs with less but still substantial use of the interchange or the Monaghan extension. The method creates tiers of TAZs use rather than calculating individual fee level specific to each TAZ because the model is a high-level, regional tool. Looking at results for groups of TAZs helps to even out the inevitable unevenness in results when looking at the detailed TAZ level. This recommended Option 2 method was applied to the I-70/Airpark interchange Phase 1 project and the future Monaghan north extension project.
After the analysis was completed, the impact fees fell within a reasonable range for each land use type. For example, the Tier 1 single-family unit impact fees estimated to be $2,535 for Phase 1 improvements and $3,733 for the Monaghan extension to the north.
The proposed impact fee would be ideally implemented uniformly in each jurisdiction: City of Aurora, Arapahoe County, and potentially in Adams County. It is unclear if either of these jurisdictions will adopt the impact fees. PWD Staff is of the opinion that high level conversations within each jurisdiction is needed to obtain consensus on implementing an impact fee. An intergovernmental agreement would likely be needed to ensure that each jurisdiction adopts the same fee levels and applies the fee revenues to the defined improvements. Each jurisdiction would also need to examine how the new fee would overlap or be in addition to existing and proposed impact fee programs, such as the County’s RUTIF.
Furthermore, discussions have occurred with developer of the Sky Ranch Development and associated Rangeview Metropolitan District, whereby they would “up-front” the funding for the improvements, and the impact fee would be used to reimburse the Developer’s costs in excess of the development’s proportional share of the improvements attributed to the development’s impacts. This model would be beneficial since it would afford the ability to construct the improvements when needed as opposed to after impact was created. The risk is if development does not occur, a reimbursement would not be provided. This becomes a business decision of the metro district and is the reason concurrence on the multi-jurisdiction impact fees from the three jurisdictions is important for a uniform and effective implementation.
Fiscal Impact: Pursuant to the IGA with the Sky Ranch Developer, the Developer is obligated for $854,905 cost to complete the CDOT 1601 Interchange Approval Process. Because the 1601 process must be initiated and completed by a local jurisdiction, this work will be managed by the Arapahoe County Public Works and Development Department, however, the County will see no fiscal impact. There is no funding action required with this study session agenda.
Alternatives: The County has several other funding alternatives at this interchange as traffic demand increases due to development. Much of the development that contributes traffic to the interchange is outside the control and oversight of Arapahoe County. As discussed above the projected improvements are expensive and are not the sole responsibility of the County or the Sky Ranch Development.
The other funding alternatives could be explored to fund the construction of the interchange, however, these options are limited in their effectiveness. Funding options identified and explored in the Interchanges Study could be considered. One of the options included creating a regional transportation authority (RTA). The Interchange study showed that the RTA would not generate enough revenue due to the restrictions of the law (ex. 5 mill property tax, 1% sales tax, $10 motor vehicle registration fee, etc.), to cover the cost of the interchange improvements. The RTA would need to be voter approved which could be a challenging, as the number of lots have increased with recent developments.
The pursuit of grant funding for the interchange improvements is very competitive and this type of project does not score well in these types of grant opportunities. This is particularly true because we are trying to be pro-active on providing improvements when they are needed, as opposed to waiting until there is congestion, operational, and safety problems.
The County could pursue the no-build alternative, which would not provide any improvements at the interchange in the immediate future, but the County will continue to restrict the Sky Ranch and other developments while Aurora allows developments within their jurisdiction to continue to build. These developments would then contribute traffic to the interchange absorbing existing capacity and in a few years, the existing interchange will be at or over capacity.
Alignment with Strategic Plan:
☒Be fiscally sustainable
☒Provide essential and mandated service
☒Be community focused
Staff Recommendation: PWD Staff recommends that the County pursues the implementation of an impact fee to help fund the improvements at the I-70/Monaghan (Airpark) interchange.
Concurrence: The Arapahoe County Attorney’s Office has reviewed the board summary report.