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
10:00 AM *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 C17-07, C22-15 I-70/Monaghan (Airpark) Interchange and discuss the funding of the interchange improvements. Staff is seeking 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. Staff would also invite BOCC input on implementation of this funding model for improvements to the I-70/ Monaghan (Airpark) interchange.
Public Works and Development Staff recommend that the County pursue this funding option, as discussed further in this report, 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 impacts on this interchange and will benefit from the improvements to be constructed now, as well as the future reconfiguration of the interchange.
For the Sky Ranch Development, the original Plan Development Plan (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 which is being funded by the Sky Ranch development. The 1601 Interchange Approval Process is completing the following tasks:
• Documenting existing traffic, roadway, and environmental conditions. Travel forecasts have been developed to analyze the future demand and operational needs. The work is being coordinated with CDOT and FHWA.
• Preparation of a System Level Study (SLS)
• 30% design of Phase 1 improvements with design to facilitate the potential construction of future reconfiguration of the interchange.
• Categorical Exclusion NEPA documentation will be completed concurrent with 30%
design for CDOT approval.
• ROW preservation needs determination.
• A Minor Interchange Modification Request (MIMR) will document traffic operations of the improvements and at freeway weave/merge points for FHWA approval
• Funding plan for the Phase 1 interchange improvements; and
• Identification of Traffic Demand Management (TDM) strategies per the 1601 Policy Directive
The costs of the improvements for Phase 1 improvements have been estimated to be about $40 million. Phase 1 improvements consist of moving the current interchange 600 feet to the east, construction of a new bridge, and transitions into existing ramps, US-36, and Monaghan. The County recommends that Phase 1 of the interchange improvements be constructed, however, the funding of the project 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 interchange project 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 Policy 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 interchanges study completed in 2021 considered the following options to fund the interchange 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 the use of impact fees to fund the project improvements.
As part of the current 1601 Interchange Approval Process, DEA with Felsburg, Holt, & Ullevig (FHU) performed a preliminary assessment of implementing a transportation impact fee to fund Phase 1 of the I-70 at Airpark Interchange modifications. 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 as an illustration of a potential fee structure to be used to support conversations with stakeholders.
This effort is refreshing a previous impact fee assessment by updating the traffic model and analyzing how to appropriately assign the cost burden, focusing on the current Phase 1 interchange project. PWD Staff provided an impact fee update to the BOCC on May 21, 2024. At this study session the BOCC asked Staff to revisit the level of the future development forecast by including the Planning Division’s input and to bring the issue back to the BOCC in 2025. The Project Team determined that DRCOG forecasts did not adequately account for current development plans and new forecasts would provide a sounder basis for the impact fee. The results of this change will be discussed at the study session. It was also stated that the BOCC would support the implementation of the impact fee by discussing it with Aurora and Adams County officials as the opportunities presented themselves.
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 fee is $3,594 on a 2,000 square foot home (fees updated in 2024). 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. In addition, both the City of Aurora and Adams County collect impact fees to fund transportation related projects within their jurisdictions.
Methodology
The initial interchange study, completed in 2021, established a likely range of impact fees necessary to fund the Phase 1 interchange improvements. The current impact fee study utilized the updated Phase 1 interchange cost estimate and a traffic model that utilized independent forecasts based on actual planned development south of the interchange with refinements
Several potential options were assessed at a high level to calculate the impact fees to fund the Phase 1 interchange project, including evaluating different areas surrounding the interchange and the Phase 1 versus including the future potential ultimate interchange construction.
The recommended approach focuses on funding/constructing the current $40M Phase 1 interchange project which will account for the intermediate traffic demand. The Phase 1 interchange project also utilizes reasonable development forecasts in the independent model south of the interchange, while the development forecasts to the north are uncertain and debatable by the jurisdictions to the north. The existing railroad serves as a barrier for development to the north of the interchange, which also limits the benefit this area realizes with the construction of the Phase 1 improvements. Therefore, utilizing the independent traffic model as well as estimates of development timing, a six-square mile impact fee area south of the interchange was established as the area with the most benefit from the Phase 1 interchange improvements.
The cost that will be used in the impact fee calculation will include the cost of the current Phase 1 of the interchange project ($40M) and the cost to finance the project which is estimated to be an additional $28M. The CRS allow for this to be included and is a cost of building the project.
The approach used a tiered method to create 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, and a second tier of TAZs with less but still substantial use of the interchange. 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 tiered method was applied to the I-70/Airpark interchange Phase 1 project and the projected contributions from each TAZ will be discussed in the study session.
After the analysis is completed, the impact fees will fall within a reasonable range for each land use type. The fees were calculated and communicated to the BOCC in May 2024. After receiving input from the BOCC in the study session, the project team updated the traffic forecast to be based on more certain development level. These fees will be presented in the study session.
The funding of the project using impacts fees has several challenges. The first challenge is that the Project cannot be funded by existing development which by existing traffic volumes. The model was used to calculate the background traffic that and how it impacts the volumes at the year 2050. The impact fee calculation considered this legal requirement.
Another challenge of the impact fee is that the collection of the impact fee might not be collected in the City of Aurora. If this is the case, there will be a short fall in impact fee revenue amount which cannot be charged to the areas that implement the impact fee. Only 52% of the impact fee area is in unincorporated Arapahoe County, with the remaining 48% in City of Aurora. The proposed impact fee would be ideally implemented uniformly in both jurisdictions. It is unclear if the City of Aurora will adopt the impact fees. Past conversation with Aurora staff and management indicate that Aurora is reluctant to implement an impact fee for this improvement. If Aurora doesn’t adopt the impact fee or contribute in some other way, there will be a shortfall in the full funding of the Phase 1 interchange improvements. Both of these challenges will be discussed in further detail in the study session.
The impact fees will used to partially fund the Phase 1 project with new development for the reasons mentioned above, but the fee has been calculated to fund the interchange assuming all the forecasted area development contributes its fair share. If Aurora were to not implement the fee for its development or if the implementation is in the future, a significant funding shortfall would be expected. The project team will discuss the impact fees shortfall amounts if Aurora does not implement the impact fee.
Discussions have occurred with developer of the Sky Ranch development and associated Sky Ranch Community Authority Board (CAB) whereby they would “up-front” the funding for the improvements, and the impact fee would be used to reimburse the Developer’s costs more than 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, resulting in less impact fee being collected, the full reimbursement would not be provided back to the CAB. This becomes a business decision of the developer and CAB and is the reason concurrence on the approach to the impact fees and handling of adjacent jurisdictions is important for a uniform and effective implementation.
The future phases of the interchange have been identified but will only be required when development in Aurora and to the north in Adams County. The County views these future improvements benefit those areas and should be funded from those developments and managed by those jurisdictions.
Fiscal Impact: The County has signed a funding agreement with the Sky Ranch Developer, which the Developer is obligated for $854,905 cost to complete the CDOT 1601 Interchange Approval Process. In August 2024, $68,860 was added to the contract via an addendum to update the traffic model using actual planned development to compare to the 2050 DRCOG model and to support the creation of the impact fee. Because the 1601 process must be initiated and completed by a local jurisdiction, the work is being managed by the Public Works and Development Department, however, the County will see no fiscal impact.
There is no funding action required with this study session agenda. However, the County will likely have some type of funding responsibility of the new interchange to cover existing background traffic along with Aurora. This funding gap depends on the final fee that is adopted and whether or not Aurora participates in the impact fee.,
Alternatives: The County has several other 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.
There are other funding alternatives that 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: N/A