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Agenda_HAB_08.20.2015
Notice of Meeting for the Housing Advisory Board of the City of Georgetown August 20, 2015 at 3:30 PM at Williamson Room, Georgetown Municipal Complex, 300-1 Industrial Ave., Georgetown, Texas 78626 The City of Georgetown is committed to compliance with the Americans with Disabilities Act (ADA). If you require assistance in participating at a public meeting due to a disability, as defined under the ADA, reasonable assistance, adaptations, or accommodations will be provided upon request. Please contact the City at least four (4) days prior to the scheduled meeting date, at (512) 930-3652 or City Hall at 113 East 8th Street for additional information; TTY users route through Relay Texas at 711. Public Wishing to Address the Board On a subject that is posted on this agenda: Please fill out a speaker registration form which can be found at the Board meeting. Clearly print your name, the letter of the item on which you wish to speak, and present it to the Staff Liaison, preferably prior to the start of the meeting. You will be called forward to speak when the Board considers that item. On a subject not posted on the agenda: Persons may add an item to a future Board agenda by filing a written request with the Staff Liaison no later than one week prior to the Board meeting. The request must include the speaker's name and the specific topic to be addressed with sufficient information to inform the board and the public. For Board Liaison contact information, please logon to http://government.georgetown.org/category/boards-commissions/. A Welcome to guests. Legislative Regular Agenda B Consideration and possible action to approve the minutes from the July 9, 2015 regular meeting. C Updates:--Jennifer C. Bills,Housing Coordinator Multifamily rental statistics for Austin and Georgetown. Number of people moving to Georgetown per day. Proposed increase in impact fees. New Planning Director, Sofia Nelson. Key takeaways from the Urban Land Institute: Housing Opportunity 2015 conference in Minneapolis. D Mini-series Presentation: Local Housing Trust Fund. --Jim Mann, Board Member. E Discussion and possible action on tasks of teams for crafting key substantive recommendations for integration into the strategic plan.--Walt Doering, Board Chair F Discussion and possible action on recommendations for Membership on Teams plus other Helpers. --Walt Doering G Discussion and clarification of requirements and regulations for teams and team members.-- Jennifer C. Bills, Housing Coordinator 1. Formation of teams; Page 1 of 88 2. Residency requirements for team members; 3. Application and resumes required for team members; 4. Location of team meetings. H Discussion and possible action on the FY 2015-16 Budget process regarding no funding for the Housing Strategic Plan.--Jennifer C. Bills, Housing Coordinator I Reminder that the next regular meeting will be on September 17, 2015. Upcoming topics: Mini-Information Session on Low-Income Housing Tax Credits (LIHTC). Criteria for bidding work for consulting firm. Crafting presentation for City Council on November 10th. Adjournment CERTIFICATE OF POSTING I, Jessica Brettle, City Secretary for the City of Georgetown, Texas, do hereby certify that this Notice of Meeting was posted at City Hall, 113 E. 8th Street, a place readily accessible to the general public at all times, on the ______ day of __________________, 2015, at __________, and remained so posted for at least 72 continuous hours preceding the scheduled time of said meeting. ____________________________________ Jessica Brettle, City Secretary Page 2 of 88 City of Georgetown, Texas Housing Advisory Board August 20, 2015 SUBJECT: Consideration and possible action to approve the minutes from the July 9, 2015 regular meeting. ITEM SUMMARY: FINANCIAL IMPACT: None. SUBMITTED BY: ATTACHMENTS: Description Type Draft Housing Advisory Board Minutes_July 9, 2015 Cover Memo Page 3 of 88 Housing Advisory Board Minutes, July 9, 2015 Page 1 of 3 City of Georgetown Housing Advisory Board Minutes July 9, 2015, at 3:30 p.m. Williamson Room—Georgetown Municipal Complex 300-1 Industrial Ave., Georgetown, Texas 78626 Members present: Brenda Baxter, Walt Doering; Chair, Richard Glasco, Jim Mann, Monica Martin; Secretary Members absent: Larry Raper and Joe Ruiz Staff present: Jennifer Bills, Housing Coordinator; Tammy Glanville, Recording Secretary This is a regular meeting of the Housing Advisory Board of the City of Georgetown. The Board, appointed by the Mayor and the City Council, makes recommendations to the City Council on affordable housing matters. Regular Session - To begin no earlier than 3:30 p.m. Meeting called to order at 3:30 p.m. A. Welcome to guests. a. Ron Swain and Ilka Vega B. Consideration and possible action to approve the minutes from the June 9, 2015 regular meeting. Motion by Mann to approve the minutes from the June 9, 2015 Housing Advisory Board meeting. Second by Baxter. Approved 5-0. C. Updates: • Supreme Court's decision on disparate impact. o Bills gave a brief update on Supreme Court’s ruling on the Texas Department of Housing Community Affairs v Inclusive Community Project. The Supreme Court ruled that activities that unintentionally lead to discrimination can still be considered a violation of the Fair Housing Act. • Status of the implementation of workforce housing development incentives and workforce housing locations map. o Bills stated workforce housing incentives are going to the Unified Development Code Advisory Committee on August 4th for public hearing. Then on August 18th a public hearing will be held by the Page 4 of 88 Housing Advisory Board Minutes, July 9, 2015 Page 2 of 3 Planning & Zoning Commission, which will then forward the recommendation to City Council. D. Mini-Series Presentation: Community Land Trusts.--Joel Russeau, guest presenter Joel Russeau gave a brief presentation on Community Land Trust. Russeau explained a community land trust is a private, non-profit corporation, created to acquire and hold Real Estate for the benefit of a community preserving long-term attainability for current and future residents. Russeau and board discussed the funding sources, functions, and economic benefits of a community land trust. Doering suggested the board look into the websites Russeau provided for further research. E. Brief Presentation on the Georgetown Housing Authority. --Larry Raper, Board member and GHA Board Chair Nikki Brennan gave a brief presentation on behalf of Larry Raper. Brennan explained the Georgetown Housing Authority is a public, not-for-profit corporation, established under state law to administer housing programs for low-income families. Brennan, board and staff discussed several different programs: • Public Housing - developments are properties that the Housing Authority owns and manages. • Section 8 New Construction –residential units are subsidized by HUD under the Section 8 New Construction program and all assistance is “project-based”. • Housing Choice Voucher (HCV) enables very low-income families to afford decent, safe, and sanitary housing in the private market. • Family Self-Sufficiency – provides opportunities to residents of the Public Housing, Section 8 and Housing Choice Voucher Programs to become financially independent. • ROSS Programs – The Resident Opportunities for Self-Sufficiency program is designed to help adults and youth living in public housing set and achieve goals related to economic self-sufficiency. F. Suggestion: Members informally tour the Georgetown apartment inventory. --Walt Doering, Board Chair Doering stated everyone benefited and profited from the experience with the Austin Housing development tour. Doering encouraged everyone to take time and become familiar with our own apartment inventory in Georgetown in order to help board’s decision making process in the future. Page 5 of 88 Housing Advisory Board Minutes, July 9, 2015 Page 3 of 3 G. Presentation, discussion and possible action to approve three proposals relative to crafting a strategic plan.--Walt Doering, Board Chair • Process for Crafting a Strategic Plan. • Structure for Crafting the Strategic Plan. • Guidelines: Selection and Behaviors. Doering gave a presentation on crafting a strategic plan to help resolve the housing deficit for our workforce, including millennials and seniors changing lifestyles with incomes from $30,000-$60,000. Doering and board discussed the processes, structure and guidelines for a strategic plan, and welcomed questions, comments and responses to his plan. Doering explained to the board that the amount of funding approved by City Council will determine the selection of a consulting firm and the framework of the plan may require modifications. Bills stated City Council will be holding budget work sessions to review budget priorities on July 17th and 18th. Motion by Glasco to adopt crafting of the process, structure and the guidelines selection and behaviors. Second by Mann Approved 5-0. H. Reminder that the next regular meeting will be on August 20, 2015. Upcoming topics: a. Mini-Information Session on local Housing Trust Funds. b. Proposals: (1) Tasks of teams, and (2) Team Membership. Doering would like to know where board stands on team membership along with recommending a list of names for each team by the next meeting. Motion by Glasco to adjourn, second by Mann. Board adjourned at 5:00 p.m. __________________________________ _______________________________________ Approved, Walt Doering, Chair Attest, Monica Martin, Secretary Page 6 of 88 City of Georgetown, Texas Housing Advisory Board August 20, 2015 SUBJECT: Updates:--Jennifer C. Bills,Housing Coordinator Multifamily rental statistics for Austin and Georgetown. Number of people moving to Georgetown per day. Proposed increase in impact fees. New Planning Director, Sofia Nelson. Key takeaways from the Urban Land Institute: Housing Opportunity 2015 conference in Minneapolis. ITEM SUMMARY: Multifamily rental statistics for Austin and Georgetown. According to the 2nd Quarter Austin Multi-Family Trend Report, the average rent for the Austin MSA was $1,122 for a 855 sf apartment, while Georgetown was $1,061 for 913 sf. These totals do not include affordable units in the averages. Georgetown Market Comparison The average occupancy is down from the end of 2014's average of 97.16%. This is due to the the influx of newly constructed units that have been coming online over the last six months. The Trend Report and Market Comparison for Georgetown area attached. Number of people moving to Georgetown per day. Recent publications by city officials have stated that 11 people move to Georgetown every day.This comes from the 2014 Census estimates. A comparison of the Census estimates and those of city staff are attached. Proposed increase in impact fees. This item went to City Council on August 11 for Public Hearing and First Reading of the ordinance to adopt increased impact fees. The approved impact fees will go from $5,205 combined to $8,136 (10/1/15), $9,136 (10/1/16), and $10,036 (10/1/17). Their goal here was to phase in an increase to maximum fees to allow the development community to slowly step in a fairly large increase. Area # of Properties # of Units Average Occupancy Average Size Average Rent per Month Georgetown 20 2,976 85.6% 867 $947 Austin MSA 863 190,609 94.1% 860 $1,143 Page 7 of 88 Also, there is already a component of affordable housing in the impact fee calculation. If a home is under 1,200 SF and has no irrigation system, they can get a 5/8” meter and the resulting impact feewill “only” be 67% of the total impact fee. Attached is the presentation made to council and the impact fee report. Key Takeways from the Urban Land Institute Housing Opportunity 2015 conference in Minneapolis, MN July 13-15. See the attached report. FINANCIAL IMPACT: None. SUBMITTED BY: Jennifer C. Bills, Housing Coordinator ATTACHMENTS: Description Type 2nd Quarter Austin Multi-Family Trend Report Backup Material Market Comparison Report for Georgetown Backup Material People Moving to Georgetown Per Day Backup Material 2015 Impact Fee Report Backup Material August 11 Impact Fee Presentation Backup Material Housing Opportunities 2015 ULI conference Backup Material Page 8 of 88 (877) APT-DATA www.apartmenttrends.com The Austin Multi-Family TTRREENNDD RREEPPOORRTT Just the Facts... Average Occupancy: 93.6% Average Rent: $1,122 Average Square Feet: 855 Average $/SF: $1.31 New Units Added (conventional):2,618 Average Sales Price/Unit:$116,292 Did you know? The statistics in this report are based on conventional properties -unless otherwise noted. For further information, all of our data can be searched on the website. 2Q15 Affordable Housing Stats: 17,465 Units – 98% - $.96 psf 2Q15 Student Housing Stats: 11,563 Units – 95.5% - $1.61 psf We appreciate the cooperation and support that we received from all property managers, assistants and owners. Inside... Occupancy Page 2 Rental Rates Page 2 Absorption Page 3 Unit Mix Averages Page 3 New Construction Page 4 Construction Comparison Page 5 Sales Page 6 Population/Job Growth Page 7 Borders & Parameters Website Published By: The information contained herein was obtained from our industry sources and other third parties, and we have used commercially reasonable efforts to gather, verify, analyze and report such information. NONETHELESS, WE MAKE NO REPRESENTATIONS OR WARRANTIES OF ANY KIND, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, WITH RESPECT TO THE INFORMATION CONTAINED HEREIN. All information should be independently verified by the user of this report. Reproduction of this report in whole or in part is prohibited without the prior written consent of Austin Investor Interests, LLC. New Construction Hits Central Core Although new unit completions have kept occupancy rates stagnant for the past 24 months, the overall market is performing well. During that time, there were approximately 16,300 units added to the market, while absorption figures show 13,169 more occupied units. Occupancy rests at a very respectable 93.6%, while rental rates have continued to rise each quarter during this timeframe, averaging an increase almost 6% per year. Nearly half of this increase is attributable to true rent increases, as opposed to higher priced new supply. While overall averages remain impressive, the Class A inventory has a bigger story to tell. Over 37% of this class’s product entered the market over the last two years, with 21% of these units added in the last 12 months – a total of 9,366 units. Over 25% of these are located within a four mile radius of the inner city core, and there are ~5,800 more units in this area currently under construction. The bulk of these units are found in nine high-rise buildings, which range from 11 to 39 floors, and 14 mid-rise projects, all of which average anywhere from $1.73 to $3.16 psf. This unit type has not previously been a major player in the market. Currently the inner city area has an average occupancy of 82% – a victim of the latest quarter’s arrivals that pushed rates down 8%. This begs the question, how will the impact of another 5,800 units affect this downtown area? For now it seems the true demand is in the more affordably priced Class B and C units that are averaging around $1.23 psf. Occupancy in these units is hovering near 96%. However, these prices are steadily increasing, as over a third of the market has or is upgrading to at least faux wood floors, 2" blinds, brushed nickel hardware, new appliances, ceiling fans, granite counters, cabinets, paint, hardware and lights. The expense seems to be paying off. On the upside, stabilized Class A product currently reflects an occupancy rate near 95%, while Classes B and C are close to 96%. The wildcard is the new product with the excessive price point that has recently entered the market, and those like it that are expected to enter the market over the next 12 months. These units will exceed over 12,000, and nearly half has rent expectations above $1.60 psf. In an effort to provide the most accurate reflection of the new Austin area geographic boundaries that have significantly changed in our 20+ years covering the market, our submarket distribution maps are in process of changing and will be effective next quarter. If you would like to review this map with us and provide your feedback, please reference the attached map at the back of the report. Austin San Antonio (877) APT-DATA or (877) 278-3282 E-mail: customerservice@apartmenttrends.com $500/year 2ND Quarter 2015 COPYRIGHTED REPORT TC 324315 Page 9 of 88 Multi-Family Market OCCUPANCY & RENTAL RATES CLASS A STAB CLASS A CLASS B CLASS C TOTALS QTR CHANGE ANN CHANGE2Q15OCCRENTOCCRENTOCCRENTOCCRENTOCCRENTOCCRENT %OCC RENT % BAS 93.9% $1.13 93.9%$1.13 100.0% $1.14 98.9% $0.76 97.1% $1.00 -0.5%1.3%-0.3%9.0% C 80.9% $1.94 93.1%$1.89 92.5% $1.81 94.1% $1.60 88.1% $1.80 -1.2%0.4%0.6%4.3% CBD 81.4% $2.58 93.7%$2.42 94.2% $2.22 95.2% $1.54 83.2% $2.52 -5.9%-0.2%0.5%2.2% CP/L 96.7% $1.26 96.9%$1.23 97.4% $1.10 100.0% $1.09 97.1% $1.17 1.2%2.9%3.5%4.8% FN 88.6% $1.37 96.9%$1.29 95.8% $1.17 96.6% $1.24 93.6% $1.25 -1.1%3.1%-1.5%7.2% FNW 74.7% $1.15 94.6%$0.96 94.2% $1.08 - - 91.5% $1.09 0.4%2.2%-2.0%5.8% N 95.0% $1.50 95.0%$1.50 - - 97.0% $1.15 96.9% $1.18 0.3%2.6%0.6%5.1% NE 84.7% $1.73 95.9%$1.62 93.6% $1.18 95.9% $1.11 93.0% $1.29 -1.6%4.2%0.0%8.2% NW 91.7% $1.25 96.7%$1.25 96.0% $1.18 96.2% $1.15 95.1% $1.19 0.8%3.0%-0.6%5.2% NWH 80.9% $1.38 94.7%$1.30 95.8% $1.36 96.4% $1.28 94.8% $1.32 1.1%3.9%-0.7%5.7% RR 95.0% $1.17 96.0%$1.16 97.4% $1.12 97.8% $1.11 96.6% $1.14 2.2%3.8%0.4%5.2% S 91.5% $1.41 95.4%$1.35 96.8% $1.20 96.5% $1.39 94.8% $1.37 0.0%3.0%0.5%6.7% SE 88.9% $1.56 89.2%$1.54 95.9% $1.19 94.9% $1.22 94.1% $1.28 -0.3%1.8%1.1%4.6% SM 94.0% $1.25 94.6%$1.26 95.0% $1.22 94.8% $1.08 94.5% $1.17 -1.1%0.7%0.9%4.2% SW 77.7% $1.40 91.5%$1.37 94.8% $1.34 97.2% $1.53 91.2% $1.37 0.7%0.7%-3.1%2.2% WMS 78.6% $1.17 95.6%$1.16 97.8% $1.11 97.1% $1.24 86.5% $1.16 -5.2%2.9%-10.8%4.2% TRAVIS 85.6% $1.62 94.5%$1.54 95.4% $1.27 96.0% $1.26 93.2% $1.36 -0.3%2.5%-0.6%6.1% AUSMSA 87.5% $1.50 94.9%$1.43 95.7% $1.23 96.1% $1.24 93.6% $1.31 -0.2%2.6%-0.6%5.9% % of Total 177 props (25%) 45,144 uts (28%) 121 props (17%) 33,719 uts (21%) 176 props (25%) 53,486 uts (33%) 353 props (50%) 62,824 uts (39%) 706 props 161,454 units HISTORICAL OCCUPANCY By Class HISTORICAL RENTAL RATES By Class Austin Investor Interests, LLC (877) APT-DATA Copyright ©2015Page 2 80.0% 82.5% 85.0% 87.5% 90.0% 92.5% 95.0% 97.5% 100.0% 19 9 8 20 0 0 20 0 2 20 0 4 20 0 6 20 0 8 20 1 0 2Q 1 1 4Q 1 1 2Q 1 2 4Q 1 2 2Q 1 3 4Q 1 3 2Q 1 4 4Q 1 4 2Q 1 5 Class A Class B Class C $0.75 $0.85 $0.95 $1.05 $1.15 $1.25 $1.35 $1.45 $1.55 19 9 8 20 0 0 20 0 2 20 0 4 20 0 6 20 0 8 20 1 0 2Q 1 1 4Q 1 1 2Q 1 2 4Q 1 2 2Q 1 3 4Q 1 3 2Q 1 4 4Q 1 4 2Q 1 5 Class A Class B Class C Occupancy fell slightly during the second quarter, down .2%, to rest at 93.6%. Annually, the decrease was .6%. Effective rental rates, rose 2.6% to reach $1.31 psf – an annual increase of 5.9%. Over 3.5% of this annual increase was attributable to the year’s new higher priced additions that average $1.71 psf. However, this new inventory was also accountable for a 1.5% holdback in occupancy. The effects of new unit additions vs. stabilized Class A units is represented in the chart above. Quarterly, rents were up ~3% to reach $1.50 psf for all Class A product. However, new inventory caused a .7% dip in occupancy, dropping the overall rate to 87.5%. Stabilized Class A units, on the other hand, held an impressive and stable occupancy at 94.9% with an average effective rent of $1.43 psf. Much of the new construction and future additions are located within a four-mile radius of the CBD. Currently, this area averages $2.02 psf, with occupancy at 82%. While most of the common central core saw occupancy drop 4-8% over the quarter, some areas fared better than others. Among the CDB high-rises, three new ones have opened over the last 180 days, causing an 8% decline in this unit type, along with a 4% price drop to $2.56 psf. The 78704 area posted a 76% occupancy rate with rents at $1.70 psf, while the central core’s east side stood at 82% and $2.04 psf. The Mueller area reported 85%, with rents at $1.69 psf, while the South Lamar area held the lowest occupancy at 68% and $1.92 psf. The only occupancy gain in the radius of the central core was Class A in the Riverside area at 90%/$1.75. Rates include properties under construction with rentable units. Please refer to www.apartmenttrends.com for property specific information. Stabilized Class A statistics have been broken out and include properties that are less than 12 months old. Totals include all Class A properties. Page 10 of 88 Multi-Family Market UNIT MIX AVERAGES Efficiency 1 Bedroom 2 Bedroom 3 Bedroom 4+ Bedroom Overall Concess #2Q15 SF RENT SF RENT SF RENT SF RENT SF Rent SF Rent Adjust Props. BAS - - 684 $792 956 $901 1,224 $1,204 - -883 $880 0.0%7 C 482 $1,079 707 $1,298 1,035 $1,749 1,296 $2,431 1,490 $2,938 812 $1,458 -3.0%72 CBD 565 $1,675 820 $2,067 1,299 $3,228 2,063 $4,946 - -986 $2,481 -1.8%16 CP/L 529 $831 747 $935 1,070 $1,189 1,279 $1,395 1,395 $1,180 924 $1,077 -0.1%17 FN 550 $1,000 713 $955 1,062 $1,216 1,329 $1,497 1,910 $2,024 853 $1,068 -0.3%67 FNW 507 $876 805 $938 1,131 $1,171 1,427 $1,579 2,146 $2,033 1,034 $1,126 -0.4%14 N 411 $616 638 $791 920 $994 1,089 $1,129 - -725 $853 -1.3%57 NE 431 $814 674 $949 981 $1,132 1,299 $1,439 1,500 $1,025 791 $1,022 -1.3%53 NW 447 $672 733 $941 1,065 $1,192 1,429 $1,516 1,910 $2,495 897 $1,068 -0.2%62 NWH 431 $795 713 $994 1,042 $1,293 1,410 $1,880 1,800 $2,267 852 $1,128 -0.5%52 RR 586 $750 743 $906 1,025 $1,102 1,279 $1,410 1,691 $1,713 911 $1,036 -0.5%43 S 449 $897 690 $1,019 1,005 $1,258 1,273 $1,474 1,417 $1,687 820 $1,121 -1.0%74 SE 470 $891 668 $924 991 $1,148 1,278 $1,386 1,266 $1,510 795 $1,018 -1.6%64 SM 428 $678 661 $844 921 $996 1,201 $1,352 1,870 $2,529 816 $955 -1.0%43 SW 438 $871 767 $1,104 1,100 $1,429 1,338 $1,787 - -921 $1,262 -1.4%48 WMS 447 $629 721 $934 1,033 $1,133 1,370 $1,402 1,707 $1,744 913 $1,061 -1.5%17 TRAVIS 457 $886 709 $1,029 1,038 $1,307 1,336 $1,676 1,786 $2,050 844 $1,150 -1.2%538 AUSMSA 467 $873 711 $1,003 1,033 $1,256 1,331 $1,581 1,754 $1,981 855 $1,122 -1.1%706 % of TTL 5,102 Units 3% 88,599 Units 54.9% 60,005 Units 37.3% 7,165 Units 4.4% 583 Units .4%Please refer to Apartmenttrends.com for property specifics. 60% 65% 70% 75% 80% 85% 90% 95% 100% $0.55 $0.65 $0.75 $0.85 $0.95 $1.05 $1.15 $1.25 $1.35 $1.45 Occup 94% 93% 96% 96% 97% 96% 92% 89% 88% 90% 92% 93% 93% 91% 88% 92% 95% 95% 95% 94% 94% 95% 94% 94% 94% Rents $0.77 $0.78 $0.80 $0.85 $0.89 $0.97 $0.98 $0.88 $0.84 $0.81 $0.83 $0.89 $0.94 $0.97 $0.93 $0.96 $1.03 $1.09 $1.16 $1.20 $1.24 $1.26 $1.25 $1.28 $1.31 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 Austin Investor Interests, LLC (877) APT-DATA Copyright ©2015Page 3 HISTORICAL RENT & OCCUPANCY Over 60% of Class A properties offered move-in specials, the majority in unstabilized units which gave away an average of 4-6 weeks free. While Class B properties performed well over the quarter with a 2.2% increase in rents and an impressive 95.7% occupancy, market share was still to be maintained. Concessions rose in this class, from 30% to 50% of the market. While all sectors reported rent gains, lower occupancies were found in areas competing with new units and/or student migration in the C, CBD and SM sectors. Concessions in Class C projects were barely existent as this class is currently outperforming even the newer counterparts of the market. Though occupancy hasn’t budged in the last six months, holding at 96.1%, rents are now exceeding their Class B counterparts due to renovations. Quarterly rents were up 2.7% to reach $1.24 psf. Overall, concessions were offered in 31% of properties despite an effective monthly rent increase of 2.7% during the quarter. At $1,122/mo, this represents an annual increase of $69/mo, or 6% over this time last year. All bedroom types reflected the quarterly increase, however there was a noticeable trend of demand moving toward the more affordable suburbs in both efficiencies and four- bedroom units. Both saw an increase of 4% in effective rents. There is an assumption that new development is tapering square footage for the millennial population that is seeking location and social convenience over size. However, the numbers within the Central zone reflect an increased size and price in comparison to the averages seen above. Within the aforementioned four mile radius of the CBD, efficiencies average 559 sf ($2.49), one-beds were 777 sf ($2.10), twos were 1,203 sf ($1.89) and threes ran 1,635 sf ($1.85). Page 11 of 88 Multi-Family Construction Gauging development over the last two years has become somewhat precarious. Just as entry filings for permits and starts begin to slow, the next quarter reaches historical heights The second quarter did reflect the lowest number of new submittals in the last five quarters, as only seven projects, totaling 1,781 units, entered the pipeline. This brings the total of units awaiting permits to 10,435. In lieu of apartments, an extensive rise in filings for condominium development has been seen The second quarter, also reflected the lowest number of starts in the last 2 ½ years, with only nine properties, a total of 1,424 units, breaking ground. These units, coupled with those already in process, total 66 projects, with 18,307 units. Of these conventional units, 2,946 have already completed and have been added to the rentable inventory leaving 15,361 units to come. In addition to the projects listed on the left, there are 11 affordable housing projects, with 1,921 units, and three student housing projects, totaling 554 units, currently under construction. Austin Investor Interests, LLC (877) APT-DATA Copyright ©2015Page 4 Conventional New Construction: Submarket 1,424 units 1 – Affinity Wells Branch (Senior) FN 154 units 2 – AMLI Covered Bridge Ph. II SW 130 units 3 – Ledge Stone Senior SW 180 units 4 – Oaks at Kyle SM 204 units 5 – Standard at Leander Station CP/L 225 units 6 – Thornton Apartments S 104 units 7 – Townes on 10th FN 93 units 8 – Trillium Terrace S 168 units 9 – View at Cedar Town Center CP/L 166 units Continued Conventional Construction: Submarket 16,883 units 1 – 300 Riverside C 264 units 2 – 422 at the Lake C 207 units 3– 7 East NE 186 units 4 – Addison at Kramer Station FN 388 units 5 – Altis at Lakeline CP/L 354 units 6 – AMLI Covered Bridge Ph. 1 SW 230 units 7 – Aria Steiner Ranch FNW 302 units 8 – Arnold, The NE 346 units 9 – Arrington Ridge RR 312 units 10 – Aspen Heights Downtown CBD 200 units 11 – Aspen Heights South Austin SE 346 units 12 – Aura 33Hundred FN 348 units 13 – Belterra Springs SW 152 units 14 – Broadstone 8 One Hundred NW 376 units 15 – Broadstone Arboretum NWH 330 units 16 – Burnet Market Place N 343 units 17 – Carrington Oaks SM 303 units 18 – Catherine C 300 units 19 – Cielo South Lamar S 357 units 20 – Eastside Station NE 332 units 21 – Gallery at Domain FN 316 units 22 – Green at Plum Creek Ph. I SM 246 units 23 – Green Spring SM 100 units 24 – Highline NW 256 units 25– IMT RIATA Ph. IX NW 307 units 26 – IO-Austin FN 351 units 27 – Lakeline West CP/L 344 units 28 – Lakeshore Azul SE 295 units 29 – Lamar Union C 442 units 30 – Landmark Double Creek Ph. II S 276 units 31– Landmark Southpark Ph. II S 285 units 32 – Lantana Pearl SW 444 units 33 – Legacy at Southpark S 250 units 34 – Mansions at Lakeline NW 400 units 35 – Mansions Serene Hills SW 350 units 36 – Michael, The NW 415 units 37 – Millenium Rainey CBD 325 units 38 – MLK & Alexander Multifamily NE 355 units 39 – North Shore CBD 439 units 40 – Post South Lamar Ph. II C 344 units 41 – Republic Square CBD 216 units 42 – Rise SE 338 units 43 – Riverhorse Ranch Ph. II FN 278 units 44 –Rivery Park WMS 228 units 45 – Seven CBD 220 units 46 – Standard at Domain, The (Blk. W & Z) FN 346 units 47 – Still Waters Ph. I SE 256 units 48 – Strand, The SM 160 units 49 – Sur 512 S 352 units 50 – Tecoma Ph. I SW 236 units 51 – UPTown C 269 units 52 – Urban North NW 179 units 53 – Vantage at Georgetown WMS 288 units 54 – Villas at Spring Trails Ph. I FN 270 units 55 – Vista at Plum Creek Ph. II SM 181 units 56 – West Koenig Flats C 210 units 57 – Whitestone NW 340 units For specific developments details please reference the Construction Report on our website CURRENT NEW CONSTRUCTION Per Submarket Units Under Construction, Submitted, Approved and in Pre-Development 0 1000 2000 3000 4000 5000 6000 C CBD CP/L FN FNW N NE NW NWH RR S SE SW WMS SM Ttl. Construction - 15,361 Remaining Approved - 2,341 Submitted - 10,435 Pre-Dev./Proposed - 5,338 Page 12 of 88 -2,000 -1,000 0 1,000 2,000 3,000 4,000 5,000 3Q 0 4 3Q 0 5 3Q 0 6 3Q 0 7 3Q 0 8 3Q 0 9 3Q 1 0 3Q 1 1 3Q 1 2 3Q 1 3 3Q 1 4 Units Absorbed Net Units Added Multi-Family Construction 2Q15 CNV: New Development Summary CNV HSG: Absorption & Units Added Last 12 Months Next 12 Months2Q15Rentable Units New Uts Added* Net Unit Change* Absrbd Units New Units Added Occ in New Units Est Starts Est Complete BAS 734 - - -4 - - - - C 10,351 388 429 257 2,023 65.2% 408 1,332 CBD 3,436 303 303 68 704 45.8% - 856 CP/L 4,951 - - 60 299 96.2% 981 950 FN 20,814 514 514 251 1,042 65.0% 2,350 1,732 FNW 5,215 17 17 36 275 57.6% 246 251 N 10,760 - -10 21 - - 310 343 NE 10,262 435 431 243 736 60.1% 526 718 NW 17,587 185 206 327 561 61.0% 290 993 NWH 13,566 5 5 149 274 31.8% - 56 RR 10,752 - 0 239 720 91.7% 238 312 S 14,615 149 235 228 567 71.9% 160 1,453 SE 14,885 - 53 2 381 88.1% 1,021 911 SM 6,355 128 -14 -83 368 90.3% 207 822 SW 13,949 160 129 212 941 45.1% 497 1,052 WMS 3,222 334 334 138 475 37.3% 256 279 TRAVIS 124,739 2,156 2,131 1,636 7,504 62.8% 5,624 9,697 TOTAL 161,454 2,618 2,632 2,142 9,366 65.7% 7,490 12,060 Austin Investor Interests, LLC (877) APT-DATA Copyright ©2015Page 5 HISTORICAL CONSTRUCTION ACTIVITY Quarter-by-Quarter Comparisons Activity 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 Starts (TTL)2,616 2,659 4,965 1,445 2,170 3,175 1,364 2,140 3,480 2,963 2,639 3,947 1,424 Submittals (TTL)2,883 2,628 5,837 2,441 3,281 2,301 3,061 1,049 798 1,835 2,575 3,766 1,781 New Units Added (CNV)421 1,128 961 1,101 1,645 1,338 1,794 2,081 2,134 2,066 2,507 2,175 2,618 Net Unit Change (CNV)685 1,121 908 823 1,817 1,128 1,727 2,399 2,269 1,504 2,522 2,264 2,632 Absorption (CNV)666 1,901 -345 1,093 1,696 2,028 296 996 2,356 2,431 1,243 1,677 2,142 Occupancy (CNV)95.2 95.8 94.9 95.1 95.1 95.8 94.8 94.0 94.1 94.7 94.0 93.8 93.6 Projected new starts for the next 12 months total 7,490 units in 27 properties. As seen in the chart below, distribution is narrowing. The FN/Domain area and SE will remain hot spots for new product, with CP/L seeing many as well. If delays are not an issue, over 4,700 of these should start within 90 days. Despite the delays due to weather and permitting timelines, 2,618 units were delivered during the second quarter, bringing the 12-month total to 9,366 new units. If completions stay on target, the next year will see over 12,000 new units added. This number may increase considering the plethora of proposed projects gearing up to break ground in the near term. The C, FN/Domain, S (78704/Lamar) and NW areas will receive the bulk of the new supply in the coming year. In addition to conventional units, ~1,723 affordable and ~291 student units expect to complete in the last half of the year. OVERALL ABSORPTION Annually, conventional completions were up 22% over the prior year with 9,366 new units coming online. Absorption was strong, with over 7,493 more units occupied during the same time period. As reflected in the summary chart on page 7, many areas with heightened construction over the last 12-24 months have performed extremely well, with absorption rates nearly equal to, or exceeding, the level of new development. These areas include the CP/L, NE, NW, RR, SE and S submarkets. Conversely, the SW, FN, WMS, C and CBD continued to lag behind, with absorption totals that were quite a bit lower because of recent new additions. The last of true student migration trends is shown with the negative absorption in the SM sector this quarter. *Only conventional numbers are reflected in the charts of this report. New units added reflects only those units that have been added from new construction during the quarter. Net unit change includes new units added and existing units that have been added or deleted from inventory. Completions and starts are rough estimates of developer expectations. Occupancy may include units completed prior to the 12 months shown. Please refer to www.apartmenttrends.com for property specific information. Page 13 of 88 Multi-Family Sales $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 $80,000 $90,000 $100,000 $110,000 $120,000 2004 2006 2008 2010 2012 1Q14 3Q14 1Q15 During the second quarter, sales remained quite active from investors throughout. While there were a few locals, the majority of buyers were large, institutional investors. Overall, the second quarter included 21 sales, totaling 4,398 units. Of the sales prices obtained, the average price per unit was $116,292 or $151 psf. Close to 50% of these latest sales were Class C assets that averaged over $81,000 per unit. Classes A and B were fairly evenly divided among the remainder, with averages of $218,766 and $115,000 per unit, respectively. Contrary to the prior quarter’s heightened Class A sales, Class C activity picked up the pace again with value-added deals. However, condo and building conversion are picking up speed among this product type as well. At quarter’s end, there were 26 properties actively listed for sale and nearly a third of these were already under contract. Austin Investor Interests, LLC (877) APT-DATA Copyright ©2015Page 6 2nd QUARTER SALES Project Submarket Units 1 – Bexley at Anderson Mill NW 396 2 – Burnet Flats C 179 3 – Crest at Pearl (SH) CBD 141 4 – Elysian at Mueller (Elements) NE 301 5 – Griffis Lakeline Station NW 232 6 – Kenzie at the Domain FN 279 7 – Landmark at Saratoga Ridge SE 229 8 – Lantana Trace I N 56 9 – Lantana Trace II N 56 10 – Lindys Landing (AHS) S 52 11 – Mission Grace Woods SE 430 12 – Mission James Place S 283 13 – Park at Walnut Creek FN 460 14 – Parkview Place (AH-S) WMS 176 15 – Rustic Creek NE 54 16 – Terrain, The S 100 17 – Terrazzo Apartment Homes NWH 224 18 – Trifecta Square N 52 19 – Uptown Crossing C 88 20 – Villages of Sage Creek FN 450 21 – Violet, The S 160 Due to sales confirmation delays, some sales may not be reported. Access all sales back to the 1990’s at www.apartmenttrends.com through your subscription or on a pay-per-report basis. HISTORICAL SALES PRICE/UNIT ANNUAL SALES PRICE PER UNIT BY SUBMARKET $0 $25,000 $50,000 $75,000 $100,000 $125,000 $150,000 $175,000 $200,000 CBD FN FNW N NE NW NWH RR S SE SM SW Class A Class B Class C Page 14 of 88 Market Snapshot CURRENT CONSTRUCTION CNV COMPLETIONS ABSORPTION OCCUPANCY RENTAL RATES 2Q15 Rentable Units CNV Const Remaining 12 MOS 24 MOS 12 MOS 24 MOS 2Q15 Annual Change 2Q15 Annual Change ANNUAL SALES $ Per Unit BAS 734 - 0 0 -2 -7 97.1% -0.3% $1.00 9.0% - C 10,351 1,604 2,023 2,712 1,804 1,786 88.1% 0.6% $1.80 4.3% - CBD 3,436 1,222 704 1,214 486 807 83.2% 0.5% $2.52 2.2% $240,417 CP/L 4,951 1,089 299 1,108 457 1,271 97.1% 3.5% $1.17 4.8% - FN 20,814 1,796 1,042 2,096 675 1,417 93.6% -1.5% $1.25 7.2% $101,657 FNW 5,215 253 275 393 152 131 91.5% -2.0% $1.09 5.8% $116,554 N 10,760 343 0 246 66 328 96.9% 0.6% $1.18 5.1% $159,742 NE 10,262 1,219 736 1,344 719 1,070 93.0% 0.0% $1.29 8.2% $65,842 NW 17,587 1,712 561 1,347 462 1,268 95.1% -0.6% $1.19 5.2% $106,481 NWH 13,566 56 274 274 -214 -330 94.8% -0.7% $1.32 5.7% 140,795 RR 10,752 312 720 884 738 902 96.6% 0.4% $1.14 5.2% $125,000 S 14,615 1,453 567 1,395 751 1,711 94.8% 0.5% $1.37 6.7% $125,062 SE 14,885 1,235 381 1,178 634 1,306 94.1% 1.1% $1.28 4.6% $119,045 SM 6,355 966 368 780 154 657 94.5% 0.9% $1.17 4.2% $107,452 SW 13,949 1,722 941 1,267 421 554 91.2% -3.1% $1.37 2.2% $137,677 WMS 3,222 279 475 475 191 301 86.5% -10.8% $1.16 4.2% - TRAVIS 124,739 11,957 7,504 13,466 4,599 8,683 93.2% -0.6% $1.36 6.1% $117.714 AUSMSA 161,454 15,261 9,366 16,713 7,492 13,169 93.6% -0.6% $1.31 5.9% $117.714 Austin Investor Interests, LLC (877) APT-DATA Copyright ©2015Page 7 PRODUCTS, SERVICES and PRICING Apartment DataOnline “Our Database at your Fingertips” Annual Subscription $750/Quarter or $1600/year Includes full access to complete apartment information including ▪ comprehensive property details ▪ complete market analysis ▪ historical data ▪ contacts ▪ construction ▪ expansive search and reporting capability on the entire market or specifically chosen criteria. Multi-Family Trend Report Quarterly Publication $200/single issue or $500/year This is a comprehensive and concise view of market conditions. Includes vital market/submarket trend information on occupancy, rental rates, new construction, absorption and sales. Sales Comparables Updated Quarterly $15/Comp or unlimited access $700/year Includes the essentials for both current and historical sales transactions with the ability to define your own search criteria. Property details are integrated and sales specifics include grantee, grantor, total consideration, price per unit and terms (when available). New Construction Updated Quarterly $600/year or $250/Qtr. The all-inclusive and in-depth reporting of properties in the development pipeline. Each property’s known status is reported in quarterly detail with contact information and pertinent dates for the development process. Management or Ownership Data Updated Quarterly $350/Qtr. or $650/year Includes detailed contact information for each management company and owner, the majority include the applicable contact name (Supervisor/Owner/Acq. Dir), address, phone, fax, email and associated property(s). Apartment Map Annual Publication Available with Apartment Data Online Subscription Wall map measures approximately 3’ x 4’ and reflects submarket boundaries and each apartment’s location. Each property is color- coded by class and indexed. Properties within the construction process are also shown on the map. The new web-based Apartment Program will enable users to search by the key code provided per apartment. For additional information, call us or visit our website at www.apartmenttrends.com or (877) APT-DATA Page 15 of 88 Austin - Round Rock MSA (Bastrop, Caldwell, Hays, Travis, Williamson) Employment by Industry Industry Size Class Size Employees Number Employment % Total May-15 Apr-15 May-14 Actual % Actual % Class per firm of Firms in Size Class Employment Total Nonfarm 947,400 940,600 915,200 6,800 0.7% 32,200 3.5% 9 1000+ 92 267,840 29.7% Mining, Logging, and Construction 51,500 51,500 50,000 0 0.0% 1,500 3.0% 8 500-999 114 79,051 8.8% Manufacturing 58,000 58,300 57,700 -300 -0.5% 300 0.5% 7 250-499 267 91,739 10.2% Trade, Transportation, and Utilities 161,300 160,500 156,000 800 0.5% 5,300 3.4% 6 100-249 826 125,436 13.9% Information 25,800 25,900 24,200 -100 -0.4% 1,600 6.6% 5 50-99 1,297 90,507 10.0% Financial Activities 53,600 52,900 52,100 700 1.3% 1,500 2.9% 4 20-49 3,409 104,509 11.6% Professional and Business Services 155,000 154,100 149,400 900 0.6% 5,600 3.8% 3 10-19 4,485 60,836 6.7% Education and Health Services 111,700 110,900 106,700 800 0.7% 5,000 4.7% 2 5-9 6,341 41,997 4.7% Leisure and Hospitality 116,000 111,700 107,500 4,300 3.9% 8,500 7.9% 1 1-4 21,425 40,287 4.5% Other Services 40,900 40,700 39,600 200 0.5% 1,300 3.3% 0 0 4,496 0 0.0% Government 173,600 174,100 172,000 -500 -0.3% 1,600 0.9% Total 42,752 902,202 100.0% Unemployment Information (all estimates in thousands) Austin - Round Rock MSA C.L.F. Emp. Unemp. Rate C.L.F. Emp.Unemp. Rate C.L.F. Emp. Unemp. Rate May-15 1,060.3 1,027.3 33.0 3.1 13,114.0 12,575.3 538.7 4.1 157,719.0 149,349.0 8,370.0 5.3 Apr-15 1,056.0 1,024.4 31.6 3.0 13,094.5 12,573.1 521.4 4.0 156,554.0 148,587.0 7,966.0 5.1 May-14 1,049.0 1,006.0 43.0 4.1 13,094.8 12,436.9 657.9 5.0 155,841.0 146,398.0 9,443.0 6.1 Annual Growth Rate for Total Nonagricultural Employment Texas (Actual) United States (Actual) Historical Unemployment Rates Available at http://www.tracer2.com May 2015 December 2014 Monthly Change Annual Change 6% 6% 17% 3% 6% 16% 12% 12% 4% 18% Industry Composition $847.2 $1,246.7 $1,885.2 $552.2 $1,086.2 $2,716.3 $1,349.2 $610.1 $362.7 $2,136.7 Wages by Industry (in millions) 4th Quarter 2014 Mining, Logging, and Construction Manufacturing Trade, Transportation, and Utilities Information Financial Activities Professional and Business Services Education and Health Services Leisure and Hospitality Other Services Government -4.0% -3.0% -2.0% -1.0% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% Ma y - 0 5 Au g - 0 5 No v - 0 5 Fe b - 0 6 Ma y - 0 6 Au g - 0 6 No v - 0 6 Fe b - 0 7 Ma y - 0 7 Au g - 0 7 No v - 0 7 Fe b - 0 8 Ma y - 0 8 Au g - 0 8 No v - 0 8 Fe b - 0 9 Ma y - 0 9 Au g - 0 9 No v - 0 9 Fe b - 1 0 Ma y - 1 0 Au g - 1 0 No v - 1 0 Fe b - 1 1 Ma y - 1 1 Au g - 1 1 No v - 1 1 Fe b - 1 2 Ma y - 1 2 Au g - 1 2 No v - 1 2 Fe b - 1 3 Ma y - 1 3 Au g - 1 3 No v - 1 3 Fe b - 1 4 Ma y - 1 4 Au g - 1 4 No v - 1 4 Fe b - 1 5 Ma y - 1 5 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% Ma y - 0 5 Au g - 0 5 No v - 0 5 Fe b - 0 6 Ma y - 0 6 Au g - 0 6 No v - 0 6 Fe b - 0 7 Ma y - 0 7 Au g - 0 7 No v - 0 7 Fe b - 0 8 Ma y - 0 8 Au g - 0 8 No v - 0 8 Fe b - 0 9 Ma y - 0 9 Au g - 0 9 No v - 0 9 Fe b - 1 0 Ma y - 1 0 Au g - 1 0 No v - 1 0 Fe b - 1 1 Ma y - 1 1 Au g - 1 1 No v - 1 1 Fe b - 1 2 Ma y - 1 2 Au g - 1 2 No v - 1 2 Fe b - 1 3 Ma y - 1 3 Au g - 1 3 No v - 1 3 Fe b - 1 4 Ma y - 1 4 Au g - 1 4 No v - 1 4 Fe b - 1 5 Ma y - 1 5 Austin - Round Rock MSA Texas U.S. Page 16 of 88 Page 17 of 88 MC RARKET OMPARISON EPORT Target Area Parameters City = Georgetown and Includes: Conventional Housing and Affordable Housing Reports Included Overview - Target Area At-A-Glance Comparable Property Summary Historical Rent & Occupancy - Datasheet & Graph Unit Mix Comparison Amenity Summary Amenity Comparison Construction Activity Summary Historical Absorption Historical Sales Analysis Date Produced August 10, 2015 This information was gathered and produced by Austin Investor Interests, LLC, and contains information current for the period of second quarter2015. The information herein was gathered from 992 surveyed properties, totaling 228,569 units, of which 97.38% were successfully updated. Reproduction of this report in whole or part is prohibited without prior written consent of Austin Investor Interests, LLC Page 18 of 88 Overview This report provides a statistical analysis of the specified target area. Included is information on current and historical rent and occupancy rates, unit mix and amenity information per property, current and future construction for the specified area, historical absorption figures and a sales analysis for the past 12 months. Below, you will find highlights of the following reports. If you need further information, please feel free to call us at 877-APTDATA or visit our web site at www.apartmenttrends.com. Target Area Market At-A-Glance # OF # OF AVG AVG AVG AVG % ANNUAL CHANGECLASSPROPS UNITS $/SF OCC % SIZE $/MO CONCESS $/PSF OCC % A 6 906 $1.13 58.1% 947 $1,053 17% - - B 9 1,524 $1.04 97.7% 920 $953 11% - - C 5 546 $1.17 97.4% 676 $757 20% - - Target Mkt Total 20 2,976 $1.09 85.6% 867 $947 15% Overall Mkt Total 863 190,609 $1.30 94.1% 860 $1,143 18% Unit Mix Summary ANNUAL CHANGE FLOORPLAN % TARGET MKT QUANTITY AVG $/MO AVG $/SF AVG SIZE $/MO SIZE Efficiency 2% 47 $629 $1.41 447 1 Bedroom 40% 1,205 $874 $1.28 681 2 Bedroom 45% 1,340 $992 $1.02 969 3 Bedroom 12% 364 $1,054 $0.89 1,180 4 Bedroom 1% 20 $1,172 $0.96 1,222 Amenity Comparison AMENITY % TARGET MKT AMENITY % TARGET MKT AMENITY % TARGET MKT Pool 85% Business Center 45% Microwave 60% Hot Tub 20% Access Gates 15% Fireplace 5% Fitness Center 75% Garage 5% Washer/Dryer 15% Sports Court 25% Intrusion Alarms 0% Washer/Dryer Conn. 70% *A complete list of amenities is included within this report. Area Construction STATUS # UNITS Submitted 256 Approved 0 Under Construction 399 Net Unit Change ( past 12 mo )552 Units Absorbed ( past 12 mo )164 Area Sales # PROJECTS # UNITS AVG $/UNIT AVG $/SF # LISTED FOR SALE 0 $0 0 *Sales figures are reported for the previous 12 months. The information contained herein was obtained from our industry sources and other third parties, and we have used commercially reasonable efforts to gather, verify, analyze and report such information. NONETHELESS, WE MAKE NO REPRESENTATIONS OR WARRANTIES OF ANY KIND, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, WITH RESPECT TO THE INFORMATION CONTAINED HEREIN. All information should be independently verified by the user of this report. Reproduction of this report in whole or in part is prohibited without the prior written consent of Austin Investor Interests, LLC Austin Investor Interests, LLC (877) APT-DATA Copyright ©2015 Page 19 of 88 Property Summary Austin MSA(Criteria: City = Georgetown and Includes: Conventional Housing and Affordable Housing) 2nd Quarter2015 PROPERTY NAME SUBMKT MAP/GRID CLASS YR BLT % OCC # UNITS AVG RENT AVG SF AVG $/SF Anatole at Westinghouse WMS A 2015 43% 250 $1,045 879 $1.19600Westinghouse Rd. Georgetown ,TX 78626 Apple Creek (Georgetown)WMS 256Z C 1987 99% 175 $757 674 $1.12302Apple Creek Dr. Georgetown ,TX 78626 Cypress Creek at Riverbend (AH)WMS 256Q A 2008 99% 180 $878 1,046 $0.84120River Bend Georgetown ,TX 78628 Gateway Northwest (AH)WMS A 2015 4% 60 $911 932 $0.981617Northwest Blvd. Georgetown ,TX 78628 Georgetown Park WMS 286X C 1984 93% 160 $796 629 $1.27209Luther Dr. Georgetown ,TX 78628 Georgetown Place (AH)WMS 287S B 2001 99% 176 $871 1,020 $0.85805Quail Valley Dr. Georgetown ,TX 78626 Georgetown Square WMS 256V C 1979 100% 53 $898 798 $1.13206Royal Dr. Georgetown ,TX 78628 Indian Creek (Gtown)WMS 316B B 1995 98% 240 $916 875 $1.05600Luther Dr. Georgetown ,TX 78628 Mariposa at Riverbend (AH-Senior)WMS 256Q B 2007 100% 201 $886 876 $1.01121Riverbend Dr. Georgetown ,TX 78628 Oaks at Georgetown (AH)WMS 286U B 1997 93% 192 $850 896 $0.9555022nd St. W. Georgetown ,TX 78626 Parkview Place (AH-S)WMS 257N B 1999 95% 176 $993 890 $1.122111Austin Ave. N. Georgetown ,TX 78626 Rivery Park (Summit)WMS A 2015 18% 45 $1,331 999 $1.331400Rivery Blvd. Georgetown ,TX 78628 San Gabriel Senior Village (AH-Senior)WMS 286U B 2007 100% 100 $853 802 $1.062101Railroad St. Georgetown ,TX 78626 Shady Oaks Gtown (AH)WMS 256U C 1968 100% 60 $692 880 $0.79501Janis Dr. Georgetown ,TX 78626 Two Rivers WMS 286C A 2013 99% 179 $1,317 985 $1.34105North Austin Ave. Georgetown ,TX 78626 Vantage at Georgetown WMS A 2015 27% 192 $960 844 $1.142000FM 1460 Georgetown ,TX 78626 Victorian Villages WMS 286Q C 1983 100% 98 $660 400 $1.6570815th St. W. Georgetown ,TX 78628 Waters Edge WMS 286G B 2000 98% 180 $1,113 880 $1.2725Waters Edge Circle Georgetown ,TX 78626 Waters Edge Ph. II WMS 286F B 2002 99% 149 $1,101 922 $1.19200River Oaks Cove Georgetown ,TX 78626 Westwood Townhomes WMS 256J B 1997 100% 110 $1,028 1,119 $0.92200Riverbend Dr. Georgetown ,TX 78628 Total Properties:20 Totals/Averages: 83% 2,976 $943 867 $1.11 The information contained herein was obtained from our industry sources and other third parties, and we have used commercially reasonable efforts to gather, verify, analyze and report such information. NONETHELESS, WE MAKE NO REPRESENTATIONS OR WARRANTIES OF ANY KIND, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, WITH RESPECT TO THE INFORMATION CONTAINED HEREIN. All information should be independently verified by the user of this report. Reproduction of this report in whole or in part is prohibited without the prior written consent of Austin Investor Interests, LLC Austin Investor Interests, LLC (877) APT-DATA Copyright ©2015 Page 20 of 88 Historical Averages Austin MSA(Criteria: City = Georgetown and Includes: Conventional Housing and Affordable Housing) 2nd Quarter2015 QTR/YEAR AVG RENT AVG SF AVG $/SF AVG OCC TARGET AREA OVERALL TARGET AREA OVERALL TARGET AREA OVERALL TARGET AREA OVERALL 1/2003 $655 $699 835 834 $0.78 $0.84 85.27% 87.12% 2/2003 $624 $688 835 837 $0.75 $0.82 86.05% 85.81% 3/2003 $635 $687 835 838 $0.76 $0.82 87.08% 88.54% 4/2003 $640 $681 835 840 $0.77 $0.81 86.41% 88.07% 1/2004 $612 $673 833 841 $0.73 $0.80 87.98% 87.94% 2/2004 $625 $677 833 842 $0.75 $0.80 85.75% 87.72% 3/2004 $655 $681 872 843 $0.75 $0.81 87.43% 90.09% 4/2004 $627 $676 838 843 $0.75 $0.80 87.83% 89.91% 1/2005 $641 $680 844 844 $0.76 $0.81 89.72% 90.19% 2/2005 $639 $691 841 845 $0.76 $0.82 87.73% 90.21% 3/2005 $660 $708 847 845 $0.78 $0.84 89.99% 93.55% 4/2005 $658 $713 841 846 $0.78 $0.84 89.24% 93.26% 1/2006 $683 $734 841 847 $0.81 $0.87 90.82% 93.02% 2/2006 $675 $743 839 848 $0.80 $0.88 90.21% 91.98% 3/2006 $688 $763 840 851 $0.82 $0.90 90.63% 93.57% 4/2006 $676 $770 841 852 $0.80 $0.90 90.21% 93.54% 1/2007 $674 $779 840 852 $0.80 $0.92 90.85% 93.30% 2/2007 $693 $793 840 853 $0.83 $0.93 88.13% 92.15% 3/2007 $704 $810 849 854 $0.83 $0.95 91.03% 94.00% 4/2007 $699 $818 856 855 $0.82 $0.96 86.45% 93.33% 1/2008 $696 $823 858 856 $0.81 $0.96 89.42% 92.72% 2/2008 $693 $832 858 858 $0.81 $0.97 89.91% 91.44% 3/2008 $698 $840 858 860 $0.81 $0.98 94.11% 91.30% 4/2008 $691 $831 858 862 $0.81 $0.96 90.70% 89.43% 1/2009 $702 $819 860 863 $0.82 $0.95 92.62% 87.89% 2/2009 $694 $808 860 864 $0.81 $0.94 90.92% 87.55% 3/2009 $690 $814 860 865 $0.80 $0.94 90.74% 89.21% 4/2009 $688 $803 860 866 $0.80 $0.93 87.72% 89.13% 1/2010 $684 $811 860 867 $0.80 $0.94 90.18% 89.95% 2/2010 $685 $824 860 867 $0.80 $0.95 93.69% 90.96% 3/2010 $694 $853 860 867 $0.81 $0.98 94.00% 93.52% 4/2010 $703 $854 860 868 $0.82 $0.98 93.60% 93.61% 1/2011 $712 $870 860 866 $0.83 $1.00 94.89% 94.02% 2/2011 $720 $897 860 868 $0.84 $1.03 96.04% 94.42% 3/2011 $740 $913 860 870 $0.86 $1.05 97.07% 95.62% 4/2011 $728 $915 860 870 $0.85 $1.05 96.80% 94.90% 1/2012 $722 $918 860 871 $0.84 $1.05 96.18% 95.11% 2/2012 $749 $941 860 871 $0.87 $1.08 97.11% 95.09% 3/2012 $757 $964 860 872 $0.88 $1.11 97.33% 95.79% 4/2012 $772 $961 860 871 $0.90 $1.10 97.07% 94.97% 1/2013 $802 $981 867 873 $0.93 $1.12 94.68% 95.29% 2/2013 $823 $1,004 869 871 $0.95 $1.15 94.20% 95.16% 3/2013 $830 $1,027 869 875 $0.96 $1.17 97.78% 95.73% 4/2013 $839 $1,037 869 875 $0.97 $1.18 98.48% 94.99% 1/2014 $874 $1,052 869 875 $1.01 $1.20 97.32% 94.25% 2/2014 $913 $1,074 870 874 $1.05 $1.23 98.76% 94.52% 3/2014 $958 $1,093 870 876 $1.10 $1.25 98.31% 95.12% 4/2014 $924 $1,092 869 876 $1.06 $1.25 97.16% 94.50% 1/2015 $933 $1,112 871 877 $1.07 $1.27 92.98% 94.25% 2/2015 $947 $1,142 871 877 $1.09 $1.30 85.58% 94.08% The information contained herein was obtained from our industry sources and other third parties, and we have used commercially reasonable efforts to gather, verify, analyze and report such information. NONETHELESS, WE MAKE NO REPRESENTATIONS OR WARRANTIES OF ANY KIND, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, WITH RESPECT TO THE INFORMATION CONTAINED HEREIN. All information should be independently verified by the user of this report. Reproduction of this report in whole or in part is prohibited without the prior written consent of Austin Investor Interests, LLC Austin Investor Interests, LLC (877) APT-DATA Copyright ©2015 Page 21 of 88 Historical Averages Austin MSA(Criteria: City = Georgetown and Includes: Conventional Housing and Affordable Housing) 2nd Quarter2015 The information contained herein was obtained from our industry sources and other third parties, and we have used commercially reasonable efforts to gather, verify, analyze and report such information. NONETHELESS, WE MAKE NO REPRESENTATIONS OR WARRANTIES OF ANY KIND, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, WITH RESPECT TO THE INFORMATION CONTAINED HEREIN. All information should be independently verified by the user of this report. Reproduction of this report in whole or in part is prohibited without the prior written consent of Austin Investor Interests, LLC Austin Investor Interests, LLC (877) APT-DATA Copyright ©2015 Page 22 of 88 Search ARCHIVED (HTTPS://GEORGETOWN.ORG/CATEGORY/ARCHIVED/) · CITY HALL (HTTPS://GEORGETOWN.ORG/CATEGORY/CITY-HALL/) · ECONOMIC DEVELOPMENT (HTTPS://GEORGETOWN.ORG/CATEGORY/ECONOMIC-DEVELOPMENT/) ·MAY 22, 2015 (HTTPS://GEORGETOWN.ORG/2015/05/22/CENSUS-GEORGETOWN- IS-SECOND-FASTEST-GROWING-CITY-IN-U-S/) ♥0 5 G 0 (https://georgetown.org/files/2015/05 /Nero-5k-start-600.jpg)Georgetown is the second-fastest growing city in the U.S., according to data released by the U.S. Census Bureau on Wednesday. For cities of 50,000 residents or greater, Georgetown had the second- highest rate of population growth in the country. The Census estimates that Georgetown grew from 54,934 to 59,102 in the period from July 1, 2013 to July 1, 2014. That’s an increase of 4,168 residents and a growth rate of 7.6 percent for that year. The Census estimates are based on sampling data. The Census city growth rankings for 2013 to 2014 can be seen at http://www.census.gov/popest /data/cities/totals/2014/index.html (http://www.census.gov/popest/data/cities/totals /2014/index.html). Georgetown’s population growth shows no signs of slowing down. According to the City’s Planning Department, another 1,214 single-family homes have been platted in the city limits and another 1,116 apartment units have been recently completed or are near completion. Another 7,855 single-family homes in the city limits are in the planning stages, with an expected build out period of five to 20 years. All of those residences currently in the development pipeline total 10,185 homes or apartments. With an average household size of 2.46 according to the Census, Georgetown can expect another 25,055 residents in the next decade or two. Georgetown’s growth in recent years also is evident in key economic indicators. Since 2010, the total assessed value of property in the city has grown by more than 25 percent to exceed $5.2 billion in 2015. City sales tax revenue has increased by more than 55 percent since 2010. Yet the city’s property tax rate at 43.4 cents per $100 valuation remains one of the lowest in the region. RELATED POSTS ARCHIVED ARCHIVED ARCHIVED CITY OF GEORGETOWN, TEXAS (HTTPS://GEORGETOWN.ORG/) City News (https://georgetown.org /category/city-hall/) City Jobs / Employment (http://georgetown.org/jobs) City Reporter (https://georgetown.org /city-reporter/) Contact Us (https://georgetown.org /contact-us/) Demographics & Statistics (https://georgetown.org/demographics- statistics/) Department Listing (https://georgetown.org/department- listing/) Local & Government Links (https://georgetown.org/local- organization-government-links/) Open Records (https://georgetown.org /open-records/) Public Communications Department (https://georgetown.org/public- communications-department/) Search Georgetown.org (https://georgetown.org/search/) Awards & Recognition (https://georgetown.org/awards- recognition/) Residents Business Culture & Recreation Government Census: Georgetown is Second-Fastest Growing City in U.S. | City of Geo... https://georgetown.org/2015/05/22/census-georgetown-is-second-fastest-... 1 of 3 8/11/2015 3:22 PM Page 23 of 88 2015 Update of Water and Wastewater Impact Fees Prepared for the City of Georgetown Prepared by: Georgetown Utility Services and Chisholm Trail Special Utility District Capital Improvements Advisory Committees And HDR and CDM August 11, 2015 Page 24 of 88 UPDATED LAND USE ASSUMPTIONS AND CAPITAL IMPROVEMENT PLANS FOR WATER AND WASTEWATER IMPACT FEES FOR THE CITY OF GEORGETOWN, TEXAS AND THE CHISHOLM TRAIL SPECIAL UTILITY DISTRICT Table of Contents Section Page 1.0 INTRODUCTION AND SUMMARY 1 2.0 SERVICE AREA 2 3.0 LAND USE ASSUMPTIONS 4 4.0 CURRENT AND PROJECTED UTILITY DEMAND AND SUPPLY 5 5.0 IDENTIFIED MAJOR CAPITAL IMPROVEMENT NEEDS AND COSTS 8 6.0 CONSIDERATION OF OTHER METHODS OF CAPITAL PAYMENT 12 7.0 ALTERNATIVE MAXIMUM IMPACT FEE CALCULATIONS 14 8.0 COMPARABLES 14 9.0 ADVISORY COMMITTEE ACTIONS AND RECOMMENDATIONS 15 Page 25 of 88 City of Georgetown, Texas and Chisholm Trail Special Utility District | 2015 Water and Wastewater Impact Fee hdrinc.com 4401 West Gate Blvd., Suite 400, Austin, TX 78745-1469 (512) 912-5100 1 2015 UPDATE OF WATER AND WASTEWATER IMPACT FEES FOR THE CITY OF GEORGETOWN, TEXAS AND THE CHISHOLM TRAIL SPECIAL UTILITY DISTRICT 1.0 INTRODUCTION AND SUMMARY This report constitutes an update of the land use assumptions and capital improvements plan for the City of Georgetown (the “City”) and the Chisholm Trail Special Utility District (“CTSUD”). The City is a home rule city organized and operating in accordance with its charter and the laws of the State of Texas and providing retail water and wastewater service to customers in its service areas. CTSUD is a conservation and reclamation district operating under chapters 49 and 65 of the Texas Water Code and providing retail water service under Certificate of Necessity No. 11590 (“CTSUD’s CCN”) in portions of Williamson, Bell and Burnet Counties. The City and CTSUD entered into that certain Asset Transfer and Utility System Consolidation Agreement dated October 15, 2013, as amended by a First Amendment to Asset Transfer and Utility System Consolidation Agreement effective as of September 12, 2014, whereby the City will acquire from CTSUD all of its water system assets. The City and CTSUD have also applied to the Texas Commission on Environmental Quality and its successor agency the Public Utility Commission of Texas for approval of the transfer and cancellation of the CTSUD CCN, and a hearing at the State Office of Administrative Hearings is now pending regarding that application. The City and CTSUD have also entered into that certain Service Area Operations and Management Agreement effective as of September 12, 2014 pursuant to which, among other things, the City agreed to operate and maintain CTSUD’s water utility system. In accordance with the Asset Transfer and Utility System Consolidation Agreement, as amended and the Service Area Operations and Management Agreement, the City’s and CTSUD’s water utility systems have been physically integrated and the City is currently operating and maintaining CTSUD’s water utility system in conjunction with the City’s water utility system. Under the Service Area Operations and Management Agreement, the CTSUD Board of Directors (the “Board”) retains responsibility for adopting impact fees under Chapter 395 of the Texas Local Government Code applicable to the area within CTSUD’s CCN area, and the City is responsible for collecting CTSUD’s impact fees from customers in the CTSUD service area. The City Council of the City retains responsibility for adopting impact fees applicable to areas The City and CTSUD are required by Chapter 395 of the Texas Local Government Code to review their respective impact fees and update their respective land use assumptions and capital improvements plans at least every five years. The City’s impact fees were last updated in 2010 and CTSUD’s impact fees were last updated in 2013. For this update, in light of the above-described City-CTSUD system consolidation project, HDR and CDM were retained to prepare the land use assumption and capital improvements plan for both the City and CTSUD in Page 26 of 88 City of Georgetown, Texas and Chisholm Trail Special Utility District | 2015 Water and Wastewater Impact Fee hdrinc.com 4401 West Gate Blvd., Suite 400, Austin, TX 78745-1469 (512) 912-5100 2 accordance with Subchapter B of Chapter 395 of the Texas Local Government Code. Therefore, this report includes land use assumptions and capital improvements plans for both the City and CTSUD. Maximum amounts mean that the determined fee amounts were calculated as the highest that can be lawfully levied by the City, given the prospective capital improvements plan, the cost of existing and new utility capacity, and consideration of a credit to new customers for net capital contributions made through rate payments. Consistent with state law, this report also calculates a maximum impact fee per service unit. Any impact fee adopted by the CTSUD Board or the City Council cannot exceed the maximum fee. However, the City Council and the Board can decide to adopt impact fees that are less than the maximum amounts shown in this report. This report addresses the overall water and wastewater maximum fees in component pieces. For instance, the overall water maximum fee is comprised of separate amounts for water supply, treatment, pumping, storage and transmission. The overall wastewater maximum fee is similarly comprised of wastewater treatment, pumping, and interceptor components. This will facilitate the consideration of offsets or credits from the applicable fee if, for example, a developer builds and dedicates eligible facilities to the City or the City provides wholesale service to a neighboring utility and wishes to calculate a contractual impact fee specific to the wholesale service being provided. The maximum fee amounts set forth in this report do not include any capital costs for local (neighborhood) water distribution or wastewater collection systems as these facilities are, by City policy, provided by developers at their own expense, or if funded by the City, are typically used to provide service to existing development. In either case, these local facilities would not be applicable for the impact fee charge. Planning, service demand, and design factor assumptions used in the facility sizing and costing as well as data on current utility demand, outstanding utility debt and prospective cash versus debt financing were obtained from or coordinated with the City of Georgetown staff. HDR combined these elements into the maximum impact fee calculations presented in this report. 2.0 SERVICE AREA For the purposes of this report, the term “Service Area” means and includes the entire area shown on Figure 1. The following terms are sometimes used to describe distinct portions of the Service Area: • The “City Area”, consisting of: o the area within the corporate boundaries of the City; and o the area within the City’s extraterritorial jurisdiction (“ETJ”), including a subsection thereof described herein as the South Fork Wastewater Service Area o the area within the City’s water CCN o the area within the City’s wastewater CCN • The “Western District” consisting of the CTSUD CCN area • The “Potential Impact Fee Application Area” consisting of approximately 0.5 miles outside the perimeter of the above-described areas Page 27 of 88 City of Georgetown, Texas and Chisholm Trail Special Utility District | 2015 Water and Wastewater Impact Fee hdrinc.com 4401 West Gate Blvd., Suite 400, Austin, TX 78745-1469 (512) 912-5100 3 These subsections of the Service Area are also shown on “Figure 1.” This report assumes that water service is available throughout the Service Area, but that wastewater service is only available in the City Area. Figure 1 Page 28 of 88 City of Georgetown, Texas and Chisholm Trail Special Utility District | 2015 Water and Wastewater Impact Fee hdrinc.com 4401 West Gate Blvd., Suite 400, Austin, TX 78745-1469 (512) 912-5100 4 3.0 LAND USE ASSUMPTIONS Table 1 provides an estimate of the current and future land use patterns of the Service Area. The overall acreage shown in Table 1 is reflective of the City Service Area. This portion of the Service Area encompasses over 45,452 acres with about 21% of that currently developed and served. This portion of the sewer Service Area extends over 54,537 acres with about 17% currently developed and served. Table 2 provides an estimate of the current and future land use patterns of the Western District Service Area. The overall acreage shown in Table 2 is reflective of the entire Western District Service Area. This portion of the Service Area encompasses over 287,500 acres with about 13% of that currently developed and served. Over time developed land in the Service Area will increase and become a higher percentage of overall land uses. For example, in the City Service Area, about 30% of the developed water service area and 26% of the wastewater service area is expected to be served at the end of the 10-year planning period. Similarly, in the Western District Service Area, about 20% of the developed water service area is expected to be served at the end of the 10-year planning period. TABLE 1 CURRENT AND PROJECTED LAND USE GEORGETOWN UTILITY SYSTEMS ITEM Acres %Acres*% Water Service Area Residential 7,191 15.8%10,159 22.4% Non-Residential 2,209 4.9%3,650 8.0% Undeveloped/Open Space/Unserved 36,052 79.3%31,643 69.6% Total Land Use Acreage 45,452 100.0%45,452 100.0% Wastewater Service Area Residential 7,252 13.3%10,536 19.3% Non-Residential 2,209 4.1%3,843 7.0% Undeveloped/Open Space/Unserved 45,076 82.7%40,158 73.6% Total Land Use Acreage 54,537 100.0%54,537 100.0% Current 2025 TABLE 2 CURRENT AND PROJECTED LAND USE GEORGETOWN UTILITY SYSTEMS - WESTERN DISTRICT ITEM Acres %Acres*% Water Service Area Residential 37,000 12.9%62,150 21.6% Non-Residential 500 0.2%628 0.2% Undeveloped/Open Space/Unserved 250,000 87.0%224,722 78.2% Total Land Use Acreage 287,500 100.0%287,500 100.0% Current 2025 Page 29 of 88 City of Georgetown, Texas and Chisholm Trail Special Utility District | 2015 Water and Wastewater Impact Fee hdrinc.com 4401 West Gate Blvd., Suite 400, Austin, TX 78745-1469 (512) 912-5100 5 4.0 CURRENT AND PROJECTED UTILITY DEMAND AND SUPPLY Table 3 indicates the number of water and wastewater utility connections by water meter size for the Service Area in standard Service Units (SUs). For purposes of this report, one SU is equivalent to a ¾” water meter. In accordance with the standards promulgated by the American Water Works Association, the SUs for meters smaller or larger than ¾” area are scaled to the flow capacity of the ¾” meter. Table 4 provides the growth projections for the water system that are used throughout the impact fee model for the 10-year period. The growth assumptions for the City Service Area are based on 900 additional service connections per year for the first 5 years and 1,000 additional service connections for the next five years. For the Western District Service Area, the model assumes 600 additional service connections per year for the next 10 years. TABLE 3 SERVICE UNIT CONVERSION FACTORS GEORGETOWN UTILITY SYSTEMS Service Units Number of Number of (SUs)Meters SUs Meter Size per Meter (a) in 2014 (b) in 2014 WATER 3/4"1.0 29,960 29,960 1"1.7 1,228 2,047 1.5"3.3 275 917 2"5.3 349 1,861 3"10.7 122 1,301 4"16.7 34 567 6"33.3 12 400 8"106.7 4 427 10"166.7 - - Total Water 31,984 37,479 WASTEWATER 3/4"1.0 20,313 20,313 1"1.7 698 1,163 1.5"3.3 189 630 2"5.3 226 1,205 3"10.7 42 448 4"16.7 27 450 6"33.3 6 200 8"106.7 2 213 10"166.7 - - Total Wastewater 21,503 24,623 (a) Derived from AWWA C700-C703 standards for continuous rated flow performance scaled to 3/4" meter. (b) Source: City of Georgetown, December, 2014. Page 30 of 88 City of Georgetown, Texas and Chisholm Trail Special Utility District | 2015 Water and Wastewater Impact Fee hdrinc.com 4401 West Gate Blvd., Suite 400, Austin, TX 78745-1469 (512) 912-5100 6 Table 5 provides the growth projections for the wastewater system that are used throughout the impact fee model for the 10-year period. The model assumes an additional 1,000 service connections per year throughout the Service Area. Table 6 summarizes the projected water service demands and existing supply (service) capability by facility in the Service Area. Table 7 summarizes the current and projected wastewater service demands in the City Area. The number of existing SUs in these tables are reflective of the system’s actual level of water and wastewater service demand, whereas the meter inventory in Table 3 reflects the number of SUs embodied in each customer’s ultimate meter capacity. This information indicates that the customers are, on the average, using less than the maximum rated flow capacity of the meters. Year Service Connections Service Units (SU) Avg. Day Demand (mgd) Peak Day Demand (mgd) Peak Hour Demand (mgd) Ground Storage Rqmts (mg) Elevated Storage Rqmts (mg) Annual Growth Rate 2014 31,984 37,479 16.245 32.490 58.482 9.240 5.172 2015 33,484 39,237 17.007 34.014 61.225 9.674 5.415 4.69% 2016 34,984 40,995 17.769 35.538 63.968 10.107 5.657 4.48% 2017 36,484 42,753 18.531 37.062 66.711 10.540 5.900 4.29% 2018 37,984 44,511 19.293 38.585 69.454 10.974 6.142 4.11% 2019 39,484 46,268 20.055 40.109 72.196 11.407 6.385 3.95% 2020 41,084 48,143 20.867 41.734 75.122 11.869 6.644 4.05% 2021 42,684 50,018 21.680 43.360 78.047 12.331 6.902 3.89% 2022 44,284 51,893 22.493 44.985 80.973 12.794 7.161 3.75% 2023 45,884 53,768 23.305 46.610 83.899 13.256 7.420 3.61% 2024 47,484 55,643 24.118 48.236 86.824 13.718 7.679 3.49% 2025 48,784 57,166 24.778 49.556 89.201 14.094 7.889 2.74% TABLE 4 FORECAST OF WATER CUSTOMER BASED AND UTILITY DEMAND CITY OF GEORGETOWN Year Service Connections Service Units (SU) Avg. Day Demand (mgd) Peak Hour Demand (mgd) Annual Growth Rate 2014 21,503 24,623 5.688 20.476 4.65% 2015 22,503 25,768 5.952 21.429 4.44% 2016 23,503 26,913 6.217 22.381 4.25% 2017 24,503 28,058 6.481 23.333 4.08% 2018 25,503 29,203 6.746 24.286 3.92% 2019 26,503 30,348 7.010 25.238 3.77% 2020 27,503 31,494 7.275 26.190 3.64% 2021 28,503 32,639 7.540 27.142 3.51% 2022 29,503 33,784 7.804 28.095 3.39% 2023 30,503 34,929 8.069 29.047 3.28% 2024 31,503 36,074 8.333 29.999 3.17% 2025 32,503 37,219 8.598 30.951 3.08% CITY OF GEORGETOWN TABLE 5 FORECAST OF WASTEWATER CUSTOMER BASED AND UTILITY DEMAND Page 31 of 88 City of Georgetown, Texas and Chisholm Trail Special Utility District | 2015 Water and Wastewater Impact Fee hdrinc.com 4401 West Gate Blvd., Suite 400, Austin, TX 78745-1469 (512) 912-5100 7 TABLE 6 EST. WATER SERVICE DEMAND & AVAILABLE CAPACITY GEORGETOWN UTILITY SYSTEMS Facilty Type 2015 2025 Supply Existing 2015 Capacity (mgd)46.6 46.6 Est. Service Demand 17.0 24.8 Excess (Deficiency)29.6 21.8 Existing 2015 Capacity (SUs) *107,511 107,511 Est. Service Demand 39,237 57,166 Excess (Deficiency)68,273 50,344 Treatment Existing 2015 Capacity (mgd)38.1 38.1 Est. Service Demand 34.0 49.6 Excess (Deficiency)4.0 (11.5) Existing 2015 Capacity (SUs) *43,895 43,895 Est. Service Demand 39,237 57,166 Excess (Deficiency)4,658 (13,271) Pumping Existing 2015 Capacity (mgd)72.2 72.2 Est. Service Demand 61.2 89.2 Excess (Deficiency)11.0 (17.0) Existing 2015 Capacity (SUs) *46,264 46,264 Est. Service Demand 39,237 57,166 Excess (Deficiency)7,027 (10,902) Ground Storage Existing 2015 Capacity (mgd)14.4 14.4 Est. Service Demand 9.7 14.1 Excess (Deficiency)4.7 0.3 Existing 2015 Capacity (SUs) *58,408 58,408 Est. Service Demand 39,237 57,166 Excess (Deficiency)19,171 1,242 Elevated Storage Existing 2015 Capacity (mgd)8.4 8.4 Est. Service Demand 5.4 7.9 Excess (Deficiency)3.0 0.5 Existing 2015 Capacity (SUs) *60,870 60,870 Est. Service Demand 39,237 57,166 Excess (Deficiency)21,632 3,703 Transmission Existing 2015 Capacity (mgd)52.5 52.5 Est. Service Demand 61.2 89.2 Excess (Deficiency)(8.7) (36.7) Existing 2015 Capacity (SUs) *33,646 33,646 Est. Service Demand 39,237 57,166 Excess (Deficiency)(5,592) (23,521) * Assume SU conversion factor of :433 433 gpd/SU for water supply 867 867 gpd/SU for treatment 1,560 1,560 gpm/SU for pumping 247 247 gals/SU for ground storage 138 138 gals/SU for elevated storage 1,560 1,560 gpd/SU for transmission Page 32 of 88 City of Georgetown, Texas and Chisholm Trail Special Utility District | 2015 Water and Wastewater Impact Fee hdrinc.com 4401 West Gate Blvd., Suite 400, Austin, TX 78745-1469 (512) 912-5100 8 Analysis indicates there will be an average of 1,500 new SUs added each year. As indicated in Table 3, the level of current and future utility demand varies by whether water and/or wastewater service is provided. For instance, some developments in the City use municipal water supplies and infrastructure, but not wastewater or vice-versa. Wastewater service is not typically provided in the Western District area. Current and future service demands are also compared with the existing service capacity of the utility systems. As can be seen, with the realized and anticipated rapid growth of the Service Area, service demand is expected to exceed the available capacity of most of the current facilities by the year 2025, such that infrastructure improvements are needed in most of the various facility components that provide utility service. 5.0 IDENTIFIED MAJOR CAPITAL IMPROVEMENT NEEDS AND COSTS Given the considerable growth expected in the Service Area in the next ten years, improvements are needed in all other components of water utility infrastructure, including water treatment, pumping, ground and elevated storage, and transmission pipelines. Significant improvements to the wastewater system in the City Area will be needed, including two wastewater treatment plant expansions and the construction of a new treatment facility. TABLE 7 EST. WASTEWATER SERVICE DEMAND & AVAILABLE CAPACITY GEORGETOWN UTILITY SYSTEMS Facilty Type 2015 2025 Treatment Existing 2014 Capacity (mgd)7.0 7.0 Est. Service Demand 6.0 8.6 Excess (Deficiency)1.0 (1.6) Existing 2014 Capacity (SUs) *30,303 30,303 Est. Service Demand 25,768 37,219 Excess (Deficiency)4,535 (6,916) Pumping Existing 2014 Capacity (mgd)30.7 30.7 Est. Service Demand 21.4 31.0 Excess (Deficiency)9.3 (0.2) Existing 2014 Capacity (SUs) *36,953 36,953 Est. Service Demand 25,768 37,219 Excess (Deficiency)11,185 (266) Interceptors Existing 2014 Capacity (mgd)77.8 77.8 Est. Service Demand 21.4 31.0 Excess (Deficiency)56.3 46.8 Existing 2014 Capacity (SUs) *93,506 93,506 Est. Service Demand 25,768 37,219 Excess (Deficiency)67,738 56,287 * Assume SU conversion factor of :231 231 gpd/SU for wastewater treatment 832 832 gpd/SU for wastewater pumping 832 832 gpd/SU for interceptors Page 33 of 88 City of Georgetown, Texas and Chisholm Trail Special Utility District | 2015 Water and Wastewater Impact Fee hdrinc.com 4401 West Gate Blvd., Suite 400, Austin, TX 78745-1469 (512) 912-5100 9 Improvements are also identified for wastewater pumping (lift stations) and interceptor pipelines that would serve future growth. Specific projects that accomplish these service capacity goals are identified in Table 8 and Table 9a along with their costs, capacity, unit cost, and allocation of existing and projected demand to these facilities. Project costs were projected to the anticipated date of construction using an inflation rate scaled over time using an index from the Association of General Contractors. A weighted unit cost of service ($ per SU) is then calculated by facility type, based on the proportionate share of use of existing versus new facility capacity by the growth anticipated over the next ten years. For water transmission mains, the modeled system capacity at current and 2025 conditions were used to calculate the unit costs. For wastewater pumping and interceptors, each project was separately examined as to whether it added to overall system capacity. Page 34 of 88 City of Georgetown, Texas and Chisholm Trail Special Utility District | 2015 Water and Wastewater Impact Fee hdrinc.com 4401 West Gate Blvd., Suite 400, Austin, TX 78745-1469 (512) 912-5100 10 TABLE 8 WATER CAPITAL IMPROVEMENTS PLAN INVENTORY AND COSTING GEORGETOWN UTILITY SYSTEMS Construction Construction Cost Existing Growth Use in Excess Capacity Total Facility Name Cost Total SUs per SU Customers Next 10 Years after 10 Years Capacity WATER SUPPLY EXISTING FACILITIES mgd Existing Supply 2,392,433$ 27.274 62,925 39,237 8,964 14,723 62,925 Lake Stillhouse Hollow 21,308,434$ 19.325 44,586 8,964 35,621 44,586 Subtotal Existing Facilities 23,700,867$ 46.599 107,511 220$ 39,237 17,929 50,344 107,511 FUTURE FACILITIES -$ - - - Subtotal Future Facilities -$ - - -$ - - - TOTAL WATER SUPPLY 23,700,867$ 46.599 107,511 39,237 17,929 50,344 107,511 AVERAGE CAPITAL COST PER NEW SU =220$ WATER TREATMENT EXISTING FACILITIES mgd Existing WTPs 52,613,537$ 38.052 43,895 39,237 3,586 1,072 43,895 Subtotal Existing Facilities 52,613,537$ 38.052 43,895 1,199$ 39,237 3,586 1,072 43,895 FUTURE FACILITIES New Treatment - Plant Expansion 50,000,000$ 12.500 14,420 3,468$ - -$ - - -$ - Subtotal Future Facilities 50,000,000$ 12.500 14,420 3,468$ - 14,343 77 14,420 TOTAL WATER TREATMENT 102,613,537$ 50.552 58,315 39,237 17,929 1,149 58,315 AVERAGE CAPITAL COST PER NEW SU =3,014$ WATER PUMPING EXISTING FACILITIES mgd Booster Pump Stations 16,831,824$ 72.190 46,264 39,237 7,027 - 46,264 Subtotal Existing Facilities 16,831,824$ 72.190 46,264 364$ 39,237 7,027 - 46,264 FUTURE FACILITIES Pastor Pump Station 5,200,000$ 11.400 7,306 712$ Central 7,383,000$ 12.600 8,075 914$ High PS 8,725,000$ 2.700 1,730 5,042$ Sun City PS 1,168,000$ - - West PS 5,948,000$ 11.400 7,306 814$ Subtotal Future Facilities 28,424,000$ 38.100 24,417 1,164$ - 10,902 13,515 24,417 TOTAL WATER PUMPING 45,255,824$ 110.290 70,681 39,237 17,929 13,515 70,681 AVERAGE CAPITAL COST PER NEW SU =850$ GROUND STORAGE EXISTING FACILITIES mg GS Tanks 1,040,564$ 14.400 58,408 39,237 11,833 7,338 58,408 Subtotal Existing Facilities 1,040,564$ 14.400 58,408 18$ 39,237 11,833 7,338 58,408 FUTURE FACILITIES Lake GST 3,763,000$ 2.000 8,112 Park GST 7,173,000$ 3.000 12,168 Subtotal Future Facilities 10,936,000$ 5.000 20,281 539$ 6,096 14,185 20,281 TOTAL GROUND STORAGE 11,976,564$ 19.400 78,689 39,237 17,929 21,523 78,689 AVERAGE CAPITAL COST PER NEW SU =195$ ELEVATED STORAGE EXISTING FACILITIES mg ES Tanks 6,445,296$ 8.400 60,870 39,237 11,833 9,799 60,870 Subtotal Existing Facilities 6,445,296$ 8.400 60,870 106$ 39,237 11,833 9,799 60,870 FUTURE FACILITIES Central EST 4,762,000$ 1.500 10,870 High EST 5,106,000$ 1.500 10,870 Rabbit Hill EST 1,765,000$ 1.250 9,058 Braun EST - West Service Area 7,434,000$ 1.250 9,058 Subtotal Future Facilities 19,067,000$ 5.500 39,855 478$ - 6,096 33,759 39,855 TOTAL ELEVATED STORAGE 25,512,296$ 13.900 100,725 39,237 17,929 43,558 100,725 AVERAGE CAPITAL COST PER NEW SU =233$ TRANSMISSION EXISTING FACILITIES mgd Existing Transmission 35,361,940$ 52.500 33,646 33,646 - - 33,646 Subtotal Existing Facilities 35,361,940$ 52.500 33,646 1,051$ 33,646 - - 33,646 FUTURE FACILITIES* Major Lines - Stillhouse 15,000,000$ Major Lines - Central 1,968,000$ Major Lines - High 24,329,000$ Major Lines - Rabbit Hill 3,039,000$ Major Lines - Sun City 1,487,000$ Major Lines - West 23,312,000$ Subtotal Future Facilities 69,135,000$ 37.000 23,712 2,916$ 5,650 17,929 133 23,712 TOTAL TRANSMISSION 104,496,940$ 89.500 57,358 39,296 17,929 133 57,358 AVERAGE COST PER NEW SU 2,916$ WATER TOTAL 313,556,028$ AVERAGE CAPITAL COST PER NEW SU =7,428$ Facility Capacity Allocations (SUs) Capacity Page 35 of 88 City of Georgetown, Texas and Chisholm Trail Special Utility District | 2015 Water and Wastewater Impact Fee hdrinc.com 4401 West Gate Blvd., Suite 400, Austin, TX 78745-1469 (512) 912-5100 11 Table 9b identifies the expected average costs for the new South Fork Wastewater Service Area. Due to the noticeably higher costs of installing collection systems in this area, capital costs for wastewater improvements for the South Fork Wastewater Service Area were separately calculated. The South Fork Wastewater Service Areafeeds into the City’s existing TABLE 9a WASTEWATER CIP INVENTORY AND COSTING GEORGETOWN UTILITY SYSTEMS Construction Construction Cost Existing Growth Use in Excess Capacity Total Facility Name Cost Total SUs per SU Customers Next 10 Years after 10 Years Capacity TREATMENT EXISTING FACILITIES mgd Existing WWTPs 13,193,352$ 7.000 30,303 25,768 3,435 1,100 30,303 Subtotal Existing Facilities 13,193,352$ 7.000 30,303 435$ 25,768 3,435 1,100 30,303 FUTURE FACILITIES Northlands WWTP 12,000,000$ 1.500 6,494 Pecan Branch WWTP Expansion 1 9,000,000$ 1.500 6,494 Berry Creek WWTP Expansion 1,000,000$ 0.200 866 Subtotal Future Facilities 22,000,000$ 3.200 13,853 1,588$ 8,016 5,837 13,853 TOTAL WASTEWATER TREATMENT 35,193,352$ 10.200 44,156 25,768 11,451 6,937 44,156 AVERAGE CAPITAL COST PER NEW SU =1,242$ PUMPING EXISTING FACILITIES mgd Existing Lift Stations 4,352,198$ 30.730 36,953 25,768 3,691 7,494 36,953 Subtotal Existing Facilities 4,352,198$ 30.730 36,953 118$ 25,768 3,691 7,494 36,953 FUTURE FACILITIES Berry Creek Interim LS/FM 7,700,000$ 7.500 9,019 Cowan Creek LS/FM 4,830,000$ 5.000 6,013 Dove Springs WWTP LS 4,354,000$ 6.500 7,816 McNutt LS/FM*4,335,000$ - - San Gabriel Interim LS/FM*7,514,000$ - - Stonehedge FM Re-Route 147,000$ 0.260 313 South Regional LS/FM*2,778,000$ - - Park LS Expansion 5,076,000$ - Subtotal Future Facilities 36,734,000$ 19.260 23,160 1,586$ - 7,760 15,400 23,160 TOTAL PUMPING 41,086,198$ 49.990 60,113 25,768 11,451 22,894 60,113 AVERAGE CAPITAL COST PER NEW SU =1,113$ INTERCEPTORS EXISTING FACILITIES mgd Existing Interceptors 29,669,269$ 77.760 93,506 25,768 8,588 59,150 93,506 Subtotal Existing Facilities 29,669,269$ 77.760 93,506 317$ 25,768 8,588 59,150 93,506 FUTURE FACILITIES Berry Creek Interceptors*29,115,000$ - Cowan Creek Interceptors 9,164,000$ 8.060 Mankins Basin Interceptors 7,089,000$ 9.750 McNutt Basin Interceptors*1,618,000$ - San Gabriel (South) Interceptors*8,383,000$ - San Gabriel (Lower) Interceptors 9,052,000$ - Subtotal Future Facilities 64,421,000$ 17.810 21,416.55 3,008$ - 2,863 18,554 21,417 TOTAL INTERCEPTORS 94,090,269$ 95.570 114,923 25,768 11,451 77,704 114,923 AVERAGE COST PER NEW SU 990$ WASTEWATER TOTAL 170,369,818$ AVERAGE CAPITAL COST PER NEW SU =3,345$ * Does not add to system capacity. Facility Capacity Allocations (SUs) Capacity Page 36 of 88 City of Georgetown, Texas and Chisholm Trail Special Utility District | 2015 Water and Wastewater Impact Fee hdrinc.com 4401 West Gate Blvd., Suite 400, Austin, TX 78745-1469 (512) 912-5100 12 sewer interceptor network, so a small allowable cost was also included for use of the existing wastewater system. 6.0 CONSIDERATION OF OTHER METHODS OF CAPITAL PAYMENT For Utilities that charge an impact fee for new or expended service, the new customer generally pays for capital in two ways: 1. The up-front impact fee that gains the new customer an “equity buy-in” to the system, and 2. Monthly utility rate payments, where a portion of rate payments are for debt service. The recent 77th Texas Legislature amended Chapter 395 of the Local Government Code to require that either: 1) consideration of a calculated credit for rate payments to be reflected in the fee amount, or 2) a credit equal to 50 percent of the total projected cost of the capital improvements plan be given in calculating the maximum fee amount. Table 10 characterizes the present value of existing and prospective utility capital costs per SU that is projected to be supported by the utility rates and attributable to the new customers. This analysis considers the full term of existing or future bonds and is calculated using the number of SUs that would be present in the year 2020 mid-way through the 10-year planning period. The South Fork interceptor is expected to be developer-funded with reimbursements made to those participating developers periodically through collections of the special impact fee for the watershed’s interceptor system. Thus, the City will incur no debt for this project, but residents connecting to this line will pay for capital through their utility rates. Thus, a rate credit calculated for use of the City’s interceptor system would be applicable to the South Fork interceptor impact fee calculation. TABLE 9b WASTEWATER CIP INVENTORY AND COSTING SOUTH AND MIDDLE FORK SAN GABRIEL WASTEWATER SERVICE AREA Construction Construction Cost Existing Growth Use in Excess Capacity Total Facility Name Cost Total SUs per SU Customers Next 10 Years after 10 Years Capacity INTERCEPTORS mgd Existing Interceptor System 17,994,506$ 24.000 28,860 Future Facilities South Fork Interceptor Expansion 1 2,940,000$ - South Fork Interceptor Expansion 2 6,157,000$ - Interceptors LS Remove & Replace 7,271,000$ - Wolf Ranch LS/FM Expansion 3,566,000$ - - Total Interceptors 37,928,506$ 24.000 28,860 1,314$ 1,500 27,360 28,860 AVERAGE CAPITAL COST PER NEW SU =1,314$ Capacity Facility Capacity Allocations (SUs) Page 37 of 88 City of Georgetown, Texas and Chisholm Trail Special Utility District | 2015 Water and Wastewater Impact Fee hdrinc.com 4401 West Gate Blvd., Suite 400, Austin, TX 78745-1469 (512) 912-5100 13 TABLE 10 EXISTING OR ANTICIPATED DEBT TO BE PAID THROUGH UTILITY RATES GEORGETOWN UTILITY SYSTEMS Net Present Value Mid-point of Debt Payments 2019 Debt Payments Facility Type In Rates SUs per SU WATER UTILITY Supply Existing Debt 654,720$ 48,202 14$ Series 2014-2023 -$ 48,202 -$ Subtotal Water Supply 654,720$ 48,202 14$ Treatment Existing Debt 303,811$ 48,202 6$ Series 2014-2023 7,676,433$ 48,202 159$ Subtotal Water Treatment 7,980,244$ 48,202 166$ Pumping Existing Debt 97,193$ 48,202 2$ Series 2014-2023 2,181,949$ 48,202 45$ Subtotal Pumping 2,279,143$ 48,202 47$ Ground Storage Existing Debt 6,009$ 48,202 0$ Series 2014-2023 839,495$ 48,202 17$ Subtotal Water Storage 845,503$ 48,202 18$ Elevated Storage Existing Debt 37,218$ 48,202 1$ Series 2014-2023 1,463,666$ 48,202 30$ Subtotal Water Storage 1,500,883$ 48,202 31$ Transmission Existing Debt 345,209$ 48,202 7$ Series 2014-2023 5,307,102$ 48,202 110$ Subtotal Transmission Lines 5,652,311$ 48,202 117$ Total Water *392$ WASTEWATER UTILITY Treatment Existing Debt 217,063$ 31,494 7$ Series 2014-2023 3,028,263$ 31,494 96$ Subtotal WWTP 3,245,326$ 31,494 103$ Pumping Existing Debt 71,604$ 31,494 2$ Series 2014-2023 2,528,187$ 31,494 80$ Subtotal WWTP 2,599,791$ 31,494 83$ Interceptors (not including South/Middle Fork System) Existing Debt 784,187$ 31,494 25$ Series 2014-2023 4,433,721$ 31,494 141$ Subtotal Interceptors 5,217,908$ 31,494 166$ Total Wastewater 351$ Total Water and Wastewater 744$ Page 38 of 88 City of Georgetown, Texas and Chisholm Trail Special Utility District | 2015 Water and Wastewater Impact Fee hdrinc.com 4401 West Gate Blvd., Suite 400, Austin, TX 78745-1469 (512) 912-5100 14 7.0 ALTERNATIVE MAXIMUM IMPACT FEE CALCULATIONS Table 11 summarizes the unit capital cost of providing new service, the two alternative credit calculations for new customers, and the maximum fee calculation for each of the rate credit options. Separately calculated maximum fees are shown for the South Fork Wastewater Service Area and the remainder of the Service Area. They differ only with respect to the wastewater fee amounts. 8.0 COMPARABLES For comparison purposes, the current impact fees for other area political subdivisions are as follows for a new standard residential connection (1 SU): TABLE 11 DERIVATION OF ALTERNATIVE MAXIMUM WATER AND WASTEWATER IMPACT FEE AMOUNTS GEORGETOWN UTILITY SYSTEMS Weighted Capital Cost of - Option A -- Option B - New Service Rate Less 50% Capital Highest of ITEM per SU Credit Cost Adjustment - Option A -- Option B -Option A or B WATER Supply 220$ 14$ 110$ 207$ 110$ Treatment 3,014$ 166$ 1,507$ 2,848$ 1,507$ Pumping 850$ 47$ 425$ 803$ 425$ Ground Storage 195$ 18$ 98$ 178$ 98$ Elevated Storage 233$ 31$ 116$ 201$ 116$ Transmission 2,916$ 117$ 1,458$ 2,798$ 1,458$ Allocated Impact Fee Study Cost 4$ -$ 4$ 4$ Total Water 7,431$ 392$ 3,714$ 7,039$ 3,718$ 7,039$ WASTEWATER (outside of South/Middle Fork Service Area) Treatment 1,242$ 103$ 621$ 1,139$ 621$ Pumping 1,113$ 83$ 556$ 1,030$ 556$ Interceptors 990$ 166$ 495$ 824$ 495$ Allocated Impact Fee Study Cost 4$ -$ 4$ 4$ Total Wastewater 3,349$ 351$ 1,673$ 2,997$ 1,676$ 2,997$ WASTEWATER (South/Middle Fork Service Area) Treatment 1,242$ 103$ 621$ 1,139$ 621$ Pumping 1,113$ 83$ 556$ 1,030$ 556$ Interceptors 2,304$ 25$ 1,152$ 2,279$ 1,152$ Allocated Impact Fee Study Cost 4$ -$ -$ 4$ 4$ Total Wastewater 4,663$ 210$ 2,330$ 4,452$ 2,333$ 4,452$ TOTAL WATER/WASTEWATER Outside of South/Middle Fork Service Area 10,780$ 744$ 5,386$ 10,036$ 5,394$ 10,036$ South/Middle Fork Service Area 12,094$ 603$ 6,044$ 11,491$ 6,051$ 11,491$ Optional Adjustments Optional Max. Fee Amounts Page 39 of 88 City of Georgetown, Texas and Chisholm Trail Special Utility District | 2015 Water and Wastewater Impact Fee hdrinc.com 4401 West Gate Blvd., Suite 400, Austin, TX 78745-1469 (512) 912-5100 15 9.0 ADVISORY COMMITTEE ACTIONS AND RECOMMENDATIONS The following summarizes the both the City and Chisholm Trail Advisory Committees’ activities during the impact fee updating process: • May 13, 2015 Committee Meeting – Presented draft report for the impact fee model where we reviewed the following: o Chapter 395 Impact Fee process and requirements o Land Use and CIP information o Unit Cost Calculations o Maximum Fee Calculation o Draft Report Based on comments from the committee, the growth projections were modified slightly. These changes reduced the impact fee a small amount. • May 27, 2013 Committee Meeting – Presented updated numbers based on growth modifications. Committee requested more information regarding maximum impact fees versus adopted impact fees. That information is reflected in this report. The committee discussed various fee strategies. The Advisory Committees each make the following findings and recommendations: • The land use assumptions and Capital Improvement Plans underlying the maximum fee calculations are consistent with State Law and good engineering practices. • The Advisory Committee finds that the data and methodology underlying the maximum impact fee calculation are reasonable and useful. • By a unanimous vote, the Advisory Committee concurs with the methodology used in the calculation of the following maximum fee amounts: City/Utility Last Updated Water Wastewater Total Water Wastewater Total Water Wastewater Total Manville WSC 2008 2,800$ n/a 2,800$ Brushy Creek MUD*2008 2,095$ 1,804$ 3,899$ 2,095$ 1,804$ 3,899$ 100%100%100% Austin Desired Development Zone**2014 700$ 400$ 1,100$ ************ Desired Development Zone - Outside ETJ 2014 2,500$ 1,400$ 3,900$ ************ Lots platted on or after January 1, 2014 2014 5,400$ 2,200$ 7,600$ 5,415$ 2,284$ 7,699$ 100%96%99% Cedar Park 2007 2,250$ 2,000$ 4,250$ Leander***2012 3,880$ 1,615$ 5,495$ 4,154$ 1,648$ 5,802$ 93%98%95% Hutto 2013 3,625$ 2,128$ 5,753$ 3,625$ 2,128$ 5,753$ 100%100%100% San Marcos 2014 2,285$ 3,506$ 5,791$ 2,285$ 3,506$ 5,791$ 100%100%100% Round Rock 2012 3,889$ 2,073$ 5,962$ 3,889$ 2,073$ 5,962$ 100%100%100% Pflugerville 2014 4,241$ 2,725$ 6,966$ 4,241$ 2,725$ 6,966$ 100%100%100% Current Georgetown 2010 3,511$ 1,694$ 5,205$ 4,714$ 1,694$ 6,408$ 74%100%81% Current Georgetown - South Fork Basin 2010 3,511$ 2,927$ 6,438$ 4,714$ 5,240$ 9,954$ 74%56%65% Current CTSUD 2013 4,700$ n/a 4,700$ 7,954$ n/a 7,954$ 59%n/a 59% New Max Georgetown 2015 TBD TBD -$ 7,039$ 2,997$ 10,036$ 0% New Max Georgetown - South Fork Basin 2015 TBD TBD -$ 7,039$ 4,452$ 11,491$ 0% West Travis County PUA - Hwy 71 Service Area 2014 7,476$ 11,644$ 19,120$ 9,968$ 15,525$ 25,493$ 75%75%75% **Includes Central Urban Redevelopment Combining District & the area bounded by Lady Bird Lake, Lamar Blvd, 15th Street and IH 35 ***Currently being updated ****Maximum Fee is determined and then fees to be charged are determined for these zones. Maximum Impact FeeAdopted Impact Fee *Impact Fee has not changed since the study done in 2003. The 2003 study was done through a TCEQ process that applies to Districts and that does not require a rate credit, so it is somewhat different than this process. INFO NOT REC'D Adopted Impact Fee as % of Max INFO NOT REC'D Page 40 of 88 City of Georgetown, Texas and Chisholm Trail Special Utility District | 2015 Water and Wastewater Impact Fee hdrinc.com 4401 West Gate Blvd., Suite 400, Austin, TX 78745-1469 (512) 912-5100 16 MAXIMUM FEE CALCULATIONS Citywide & Western District Fees (outside of South/Middle Fork San Gabriel Service Area) Water Impact Fee per SU $7,039 Wastewater Impact Fee per SU $2,997 Total Combined Fee per SU $10,036 South/Middle Fork San Gabriel Service Area Water Impact Fee per SU $7,039 Wastewater Impact Fee per SU $4,452 Total Combined Fee per SU $11,491 • Consistent with State Law and by a unanimous vote, the Committees recommend that the City Council and the Chisholm Trail Special Utility District Board adopt the water and wastewater impact fees in the amount of the maximum fee per SU. Page 41 of 88 1 1 IMPACT FEES Updated Land Use Assumptions and Capital Improvement Plans for Water and Wastewater Impact Fees August 11, 2015 Page 42 of 88 2 What are Impact Fees One-time, up-front payment by new development to fund the capital cost of providing utility service Intended to mitigate rate impacts to existing customers and help growth pay for itself Assessed at Preliminary Plat Collected at Permit Out of city MUDs – Collected at Final Plat Authorized by Chapter 395 of Local Government Code Every 5 years Max Page 43 of 88 3 Impact Fee Components Water Supply (raw water) Treatment (plants) Pumping Storage (ground and elevated) Transmission (large diameter lines) Wastewater Treatment Pumping (lift stations) Interceptors (large diameter lines) Page 44 of 88 4 Maximum Impact Fee Calculation Define Impact Fee Area Water – Georgetown CCN Western District – CTSUD CCN (Separate Process) Wastewater – WW Service Area (ETJ) Note the South Fork Sewer Service Area Page 45 of 88 5 Maximum Impact Fee Calculation Project Growth and Utility Demands 2012 – 768(W) / 789(WW) 2013 – 750(W) / 1013(WW) 2014 – 876(W) / 740(WW) 900 units (2015-2019) 1,000 units (2019-2024) Page 46 of 88 6 Maximum Impact Fee Calculation Identify Capital Improvements Necessary to Serve Water Supply - $23MM Lake Belton/Stillhouse, Brazos River Authority Treatment - $102MM Lake, Park, Southside Pumping - $45MM Sun City, Central, West, High, Pastor, Storage - $37MM Rabbit Hill, Braun, Central, Sun City Transmission - $104MM Stillhouse, Central, West, Sun City, Rabbit Hill, High Page 47 of 88 7 Maximum Impact Fee Calculation Identify Capital Improvements Necessary to Serve Wastewater Treatment - $35MM Pecan Branch, Northlands, Berry Creek Pumping - $41MM Berry Creek, Cowan Creek, Dove Springs, McNutt, San Gabriel, Stonehedge, Westinghouse, Park Interceptors - $94MM Berry Creek, Cowan Creek, Mankins, McNutt, San Gabriel Page 48 of 88 8 Maximum Impact Fee Water Current Calculated Max - $4,714 Current Assessed Fee - $3,511 (74.5% of calculated max) New Calculated Max - $7,039 New Assessed Fee - TBD Wastewater Current Calculated Max - $1,694 ($5,240 South Fork) Current Assessed Fee - $1,694 (100% of calculated max) New Calculated Max - $2,997 ($4,452 South Fork) New Assessed Fee - TBD Combined Current Assessed Fee - $5,205 ($6,438 South Fork) 2015 Max Calculated - $10,036 ($11,491 South Fork) Page 49 of 88 9 Assessed Impact Fee Council may choose to assess any fee between $0 and maximum calculated ($10,036 / $11,491 South Fork). Impact Fee Committee unanimously recommended adopting the maximum fees. Factors to consider Competitiveness – lot cost Current customers – utility rates Maximum calculated rate results in 36.6 percent of capital costs supported by existing rate payers FY 15/16 Budget includes $7,900 combined fee with no impact to rates. Page 50 of 88 10 Assessed Impact Fee Fee Component Breakdown Recommend adopting maximum Wastewater Fee $2,997 outside South Fork $4,452 inside South Fork Major projects early in 10 year horizon Flat rate – no peak/high use variable rate charges Recommend any adjustment be to the Water Fee $7,900 - $2,997 = $4,903 Water (all areas) Higher tiered variable rates help offset expenses Chisholm Trail SUD Same Study, Combined Master Plan Same Maximum Calculated Fee (Water Only) Separate Process Independently Adopted Fee August 20th Page 51 of 88 11 Next Steps Notice Published in Wilco Sun July 8, 2015 Public Hearing, Decide on Assessed Fee, & Ordinance First Reading 6pm tonight (August 11, 2015) Second Reading & Adoption August 25, 2015 Fee effective October 1, 2015 Preliminary plat vests for City service area Revisit fees every 3-5 years (2018-2020) Page 52 of 88 12 12 IMPACT FEES Updated Land Use Assumptions and Capital Improvement Plans for Water and Wastewater Impact Fees August 11, 2015 Page 53 of 88 1 Housing Opportunity 2015 Urban Land Institute Conference Jennifer C. Bills, Housing Coordinator Page 54 of 88 2 A-Mill Artist Lofts Page 55 of 88 A-Mill Artist Lofts Reuse of the Pillsbury Mill Location: 301 Main St. S.E., Minneapolis Groundbreaking: Nov. 1, 2013 Expected completion: Oct. 1, 2015 Size: 400,000 square feet (buildings), 3.341 acres (land) Value: $156 million Number of rental units: 251 Average unit size: 1,000 square feet Average rent: $973 (less than $1 per square foot) http://www.a-millartistlofts.com/ 3 Page 56 of 88 4 Page 57 of 88 5 Creating Mixed Income Communities in Minneapolis area Increase the production of affordable housing Resources: Voter approved levies, Multifamily Tax Exemption for AH, City Growth Fund, Flexible Low-cost loans. Zoning and Land Use: Mandatory inclusionary zoning, reduced parking around transit, use public property for AH, increase density in Urban Villages, remove barriers to ADU. Preserve Existing Affordable Housing Resources: establish HTF, acquire existing AH stock, preservation property tax exemption. Zoning and Land Use: Provide flexibility in requirements for adaptive reuse of existing buildings. Page 58 of 88 6 Creating Mixed Income Communities The biggest hurdle Most affordable development is funded with LIHTC. Conventional lending does not want to lend to projects partially funded with tax credits. The private market and LIHTC developers do not intersect and are not experienced with working together. Page 59 of 88 7 Lowering the Cost of Housing Common Cost drivers for affordable housing: Inability to develop at scale Barriers to cost effective project design & construction techniques Challenges in finance and underwriting Program and investor requirements State and local regulations and fees. Page 60 of 88 8 Lowering the Cost of Housing What can be done to bend the cost curve? Promote cost-effectiveness through consolidation, coordination and simplification Remove barriers to reducing construction costs and delays Facilitate a more efficient deal assembly and development timeline Improve and align incentives Improve the flexibility of existing sources of financing and create new financial products to better meet needs. Support the development and dissemination of information and best practices. Page 61 of 88 9 Resources http://HowHousingMatters.org http://www.mnchallenge.com/ http://uli.org/wp-content/uploads/ULI- Documents/America-in-2015.pdf http://www.MakeRoomUSA.org http://uli.org/wp-content/uploads/ULI- Documents/Bending-the-Cost-Curve-on- Affordable-Rental-Development.pdf Page 62 of 88 City of Georgetown, Texas Housing Advisory Board August 20, 2015 SUBJECT: Mini-series Presentation: Local Housing Trust Fund. --Jim Mann, Board Member. ITEM SUMMARY: See attached report. FINANCIAL IMPACT: None. SUBMITTED BY: Jennifer C. Bills, Housing Coordinator ATTACHMENTS: Description Type Housing Trust Fund Presentation Cover Memo Page 63 of 88 Housing Trust Funds What Are Housing Trust Funds (HFT)? Housing trust funds are distinct funds established by city, county or state governments that receive ongoing dedicated sources of public funding to support the preservation and production of affordable housing and increase opportunities for families and individuals to access decent affordable homes. Housing trust funds systemically shift affordable housing funding from annual budget allocations to the commitment of dedicated public revenue. The housing trust fund model is just that—a model that defines a new objective for funding affordable housing, enabling the support of needed housing to be a fundamental part of what government does. While housing trust funds can also be a repository for private donations, they are not public/private partnerships, nor are they endowed funds operating from interest and other earnings. Click here to learn more. How HTFs Work The popularity of housing trust funds is attributable in large part to their inherent flexibility. They can be designed to serve the most critical housing needs in each community, whatever those may be. Defining the key elements of a housing trust fund proposal is a critical first step toward establishing a housing trust fund that will be efficient, effective, and responsive to a community’s needs. To learn more, click here. National Housing Trust Fund (NHTF) NHTF is a new affordable housing production program to complement existing Federal, State and Local efforts to increase and preserve the supply of decent, safe, and sanitary affordable housing for extremely low-income (ELI) households <=30% Area Medium Income (AMI) and very low-income (VLI) households (<+50% AMI) households, including homeless families. It is a permanent program, and will have dedicated sources of funding not subject to the annual appropriations process. State and state designated entities are eligible grantees. The proposed rule set maximum tenant rent plus utility payments at the greater of 30% of federal poverty level or 30% of a hypothetical family whose annual income equals 30% of AMI. How is NHTF funded? NHTF is to be funded with dedicated sources of revenue. Housing and Economic Recovery Act (HERA) requires an annual assessment of 4.2 basis points of the volume of business of Freddie Mac and Fannie Mae, 65% of which is to go to the NHTF. When Fannie and Freddie were taken into conservatorship by the Federal Housing Finance Administration (FHFA) in September 2008, their obligation to fund the NHTF was suspended. Fortunately, Page 64 of 88 FHFA Director Mel Watt announced he was lifting the suspension on December 11, 2014 and directed Fannie and Freddie to begin setting aside funds in 2015 and make them available by March 1, 2016. Program Schedule During 2015, States will begin developing their HTF Allocation Plans and solicit input from their constituents and submit these plans to HUD along with their 2016 Annual Acton Plans. HUD anticipates that grantees will receive their HTF allocations by summer 2016. HUD uses HOME Investment Partnerships Program regulations as a model for NHTF regulations. Key differences between NHTF and HOME Investment Partners Program Income Targeting: NHTF is more deeply targeted than HOME when it comes to rental housing. Under the NHTF, 80% of funds for rental housing must benefit ELI households (those earning less than 30% of AMI), while under the HOME program, 90% of rental units must benefit households with incomes at or below 60% of AMI. Eligible Activities: NHTF is primarily a rental housing program. At least 80% of the funds must go towards rental housing. Up to 10% can be used for a range of home ownership activities. HOME has a wider range of uses and there are no limits on how much can be used for homeownership or rental housing. If a state or local government uses all of its HOME money for homeownership, it could devote 100% of its HOME resources toward households with income at 80% AMI. Funding: The funding for NHTF is a dedicated source of revenue on the mandatory side of the federal budget, and as such, is not subject to annual appropriations. HOME receives funding through annual appropriations. Texas Department of Housing & Community Affairs (TDHCA) The Housing Trust Fund provides loans and grants to finance, acquire, rehabilitate, and develop decent and safe affordable housing. The Housing Trust Fund currently administers the single family programs described below. All Housing Trust Fund Programs are implemented only through eligible nonprofits, for-profits, public housing authorities and local governments that have executed a Housing Trust Fund reservation agreement. Texas Bootstrap Program Amy Young Barrier Removal Program Contract for Deed Conversion Program Assistance Grants Websites for further research: HUD Exchange: https://www.hudexchange.info/htf Center for Community Change: http://housingtrustfundproject.org/ National Low Income Housing Coalition: http://nlihc.org/issues/nhtf Texas Department of Housing & Community Affairs HTF: http://www.tdhca.state.tx.us/htf/ Page 65 of 88 City of Georgetown, Texas Housing Advisory Board August 20, 2015 SUBJECT: Discussion and possible action on tasks of teams for crafting key substantive recommendations for integration into the strategic plan.--Walt Doering, Board Chair ITEM SUMMARY: FINANCIAL IMPACT: None. SUBMITTED BY: Jennifer C. Bills, Housing Coordinator ATTACHMENTS: Description Type Design and Construction Team Backup Material Finance Team Backup Material Sustainability Team Backup Material Communication Team Backup Material Research Team Backup Material Page 66 of 88 Page 67 of 88 Page 68 of 88 Page 69 of 88 Page 70 of 88 Page 71 of 88 Page 72 of 88 Page 73 of 88 Page 74 of 88 Page 75 of 88 City of Georgetown, Texas Housing Advisory Board August 20, 2015 SUBJECT: Discussion and possible action on recommendations for Membership on Teams plus other Helpers. --Walt Doering ITEM SUMMARY: See attached recommendations. FINANCIAL IMPACT: None. SUBMITTED BY: Jennifer C. Bills, Housing Coordinator ATTACHMENTS: Description Type Recommendations for Team Membership Cover Memo Page 76 of 88 Recommendations for Team Membership Crafting of the Strategic Plan Below are the persons we recommend for team membership. Their task is to develop key recommendations for the strategic plan to reduce our housing affordable deficit in Georgetown. Along with team members, persons listed include those who will serve “as needed,” and others, vital for crafting a substantive plan. This group is diverse. It includes both specialists and non-specialists. All are highly competent, including the non-specialists. The latter may appear ordinary. But they, too, are extraordinary. All seek the good and best for Georgetown. Design/Construction Finance Richard Glasco, Leader Jim Mann, Leader Bob Horick Edward Hanna Davin Hoyt Ray Husser Lauren Lansford Kirby Maggard Isaac Lopez Joel Russeau Bill Stump Sustainability Communication Ron Trimmer, Leader Reginald Bessmer, Leader Brenda Baxter Stephanie Blanck Nathaniel Bonner Georgianne Hewett Supt. Fred Brent Monica Martin Katie Burke Jen Mauldin Capt. Evelyn McLean Tom Swift Chief of Police, Wayne Nero Rita Turner Nick Ramos Karen Sheldon Research Barbara Brightwell, Leader Dan Hilliard Joe Ruiz Carl Westerfield Rick Williamson Page 77 of 88 Page 2 Alternate Resource Person Larry Raper Pro Bono Consultants – As Needed Jim Wayland, Ph.D. (Process) Paul Newton (Process/Planning) Walt Henderson (Process/Planning) Clay Woodard (Design/Construction and Finance) Phase 2: Crafting of the Strategic Plan Bob Novello, Facilitator Tom Swift, Writer Note! Staff persons for teams will be appointed by the appropriate city manager. +++++++++++++++++++++++++++++++ “It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly...who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly.” --Theodore Roosevelt --8/12/15 Page 78 of 88 City of Georgetown, Texas Housing Advisory Board August 20, 2015 SUBJECT: Discussion and clarification of requirements and regulations for teams and team members.-- Jennifer C. Bills, Housing Coordinator 1. Formation of teams; 2. Residency requirements for team members; 3. Application and resumes required for team members; 4. Location of team meetings. ITEM SUMMARY: As the teams will be making recommendations to the Housing Advisory Board, they function as subcommittees of the HAB. All subcommittees that include non-board members have to be allowed by City Council and the members appointed by the Mayor. Subcommittee members must meet all of the membership requirements of the HAB bylaws, which includes being a resident of the city or the extra-territorial jurisdiction (ETJ). City staff cannot be a voting member of a subcommittee, but may be assigned to work with the teams to provide information. As all non-HAB members have to be appointed by the Mayor, team members will have to apply through the same board and commission process with the City Secretary's office to serve on the subcommittee. Regular Housing Advisory Board meeting and Subcommittee meetings must be held in publicly accessible city facilities. This is a requirement of all city boards and commissions, as regular meetings that discuss city business need to be in locations to which the staff has regular access and are open to the public. Special public meetings that are held to reach out to specific groups or areas of town can be held offsite to provide better access to that population. FINANCIAL IMPACT: None. SUBMITTED BY: Jennifer C. Bills, Housing Coordinator ATTACHMENTS: Description Type Housing Advisory Board bylaws Backup Material Page 79 of 88 Page 80 of 88 Page 81 of 88 Page 82 of 88 Page 83 of 88 Page 84 of 88 Page 85 of 88 Page 86 of 88 City of Georgetown, Texas Housing Advisory Board August 20, 2015 SUBJECT: Discussion and possible action on the FY 2015-16 Budget process regarding no funding for the Housing Strategic Plan.--Jennifer C. Bills, Housing Coordinator ITEM SUMMARY: The 2015-16 draft budget was presented to City Council on July 28th. (http://records.georgetown.org/weblink8/0/fol/443949/Row1.aspx) Funds for the Housing Strategic Plan were not budgeted. The public hearings to set the tax rate were August 11th and August 18th. The Public Hearing to adopt the budget will be held on August 18th. The first reading of the ordinance to adopt the budget and tax rate will be on August 25th, with the second reading on September 8th. After the budget process is done, City Council will review any additional revenue and remaining funds from the 2014-15 budget and determine allocations for these funds at a future date. FINANCIAL IMPACT: None. SUBMITTED BY: Jennifer C. Bills, Housing Coordinator Page 87 of 88 City of Georgetown, Texas Housing Advisory Board August 20, 2015 SUBJECT: Reminder that the next regular meeting will be on September 17, 2015. Upcoming topics: Mini-Information Session on Low-Income Housing Tax Credits (LIHTC). Criteria for bidding work for consulting firm. Crafting presentation for City Council on November 10th. ITEM SUMMARY: FINANCIAL IMPACT: None. SUBMITTED BY: Jennifer C. Bills, Housing Coordinator Page 88 of 88