Fayetteville : Fee idea pushes planners’ buttons
Posted on Sunday, April 1, 2007
URL: http://www.nwanews.com/adg/News/186156/
FAYETTEVILLE — The biggest street projects in Fayetteville have long been supported by sales taxes.
The city historically has earmarked $ 2 million to $ 2. 5 million a year from its general sales tax to build and widen streets, and voters last year approved a sales tax to provide an additional $ 66 million over the next eight years for streets.
The $ 66 million will upgrade Crossover Road, Garland Avenue, Zion Road and other major streets.
Now, Fayetteville voters will decide if road-impact fees should provide another revenue stream for street money. Tim Conklin, the city’s planning and development director, estimates the fees will provide $ 3. 4 million a year if voters approve them in an April 10 special election.
Fayetteville would become the second Arkansas city with road-impact fees. Conway is the other.
“As far as I’m concerned, the people who live here have paid their part,” said Lioneld Jordan, a Fayetteville alderman and chairman of the street committee. “New development needs to pay for the impact they cause.”
Mayor Dan Coody, home builders and Fayetteville Chamber of Commerce officials, however, oppose roadimpact fees. They say the fees will keep businesses from locating in Fayetteville.
“We have an active transportation committee, but even they are saying this would be just a killer for economic development and new business opportunities,” said Bill Ramsey, the chamber of commerce president. “This would be a killer. That’s what it is. It’s not the answer.”
Six Arkansas cities use impact fees to support such things as parks, sewer and water projects, libraries, fire service and police protection.
“Growing cities find impact fees attractive, because wherever there’s growth, infrastructure lags,” said Kathy Deck, director of the Center of Business and Economic Research at the University of Arkansas at Fayetteville. “You want to get the infrastructure to get where it should be so growth continues.”
GROWING CITIES Arkansas’ fastest-growing cities have implemented development impact fees, and most cities charge higher fees for commercial and industrial projects such as strip malls, factories and restaurants. Fayetteville voters, for instance, will decide if singlefamily houses will be assessed a $ 2, 363 fee. The fee for a 100-room hotel would be $ 131, 900 if voters approve the fees. Cities with impact fees are Bentonville, Lowell, Hot Springs, Cabot, Conway and Fayetteville, which already charge the fees to support fire and police protection, water and sewer upgrades, and park development.
Rogers describes its onetime, $ 2, 900 fee to start water and sewer service as a hook-up fee. The money is used for capital projects, said Tom McAlister, superintendent of Rogers Water Utilities.
The Rogers Water and Sewer Commission has been criticized by state Sen. Dave Bisbee, R-Rogers, who says the fee is a disguised impact fee.
Rogers Mayor Steve Womack said he doesn’t know if the city should have impact fees for such things as parks, roads and other capital improvements.
“In principle, I agree that growth should pay for itself,” Womack stated in an e-mail. “I remain concerned about the ever-increasing costs of home ownership, and impact fees will simply be passed on to the home buyer.”
The state’s highest impact fees are in Bentonville, where a person building a single-family house pays $ 4, 750, Bentonville Utilities Director Britt Vance said.
Conway has received $ 2. 9 million for roads and $ 1. 4 million for parks since it established impact fees in 2003, said Conway City Engineer Ronnie Hall.
There was a surge in the number of building permits issued as developers rushed to start their projects before the fees took effect, Hall said, but the city continues to see new homes and businesses go up.
“It’s a challenge for cities to come up with the money to improve the roads that we annex from the county,” Hall said. “We annex narrow, unimproved roads, and there’s an immediate desire to make those major thoroughfares.”
The $ 500 sewer impact fee charged for a single-family home in Hot Springs and the $ 504 charged by Lowell for fire protection are the state’s lowest fees.
Lowell will use the money to build a fire station west of Interstate 540, where large residential subdivisions are sprouting, Fire Chief LeRoy Barker said.
If Fayetteville voters approve the road impact fee of $ 2, 363 on a single family house, the city’s $ 4, 897 in total impact fees would exceed Bentonville’s.
Springdale, which grew from 45, 798 residents in 2000 to 62, 459 in 2005 according to a special census, has no plans for impact fees, Mayor Jerre Van Hoose said. City voters had approved a 1 percent sales tax in 2003 for road projects and extended the tax last year to pay for a minor league baseball stadium. “We have sort of assessed an impact fee on every new home in Springdale already,” Van Hoose said. “The people who pay for lumber to buy a home must pay the sales tax for the lumber. “ I don’t think impact fees are an appropriate vehicle to finance infrastructure.”
SLOW TO FEES Kevin Santos, a UA planner who once served on the Fayetteville City Council, talked about impact fees for the city in 1999, and officials in Lowell, Bentonville and Conway were discussing them in 2000.
In 2002, Bentonville became the first city in Arkansas to charge them.
“I just think impact fees are an alternative financing tool that cities turn to when the problems get great,” said Jim Duncan, president of Duncan Associates, an Austin, Texas, firm paid to evaluate impact fees for Cabot, Rogers, Bentonville and Conway. “Arkansas was a late bloomer when it comes to impact fees.”
Florida cities established impact fees in the 1970 s. A study last year by Duncan Associates showed 39 states had cities or counties with impact fees. The highest fees for a single-family home were charged in Livermore, Calif., a city of 78, 000 that’s on the outskirts of the San Francisco metropolitan area. Livermore’s fees total $ 65, 736 on single-family homes.
FAYETTEVILLE’S DECISION Fayetteville aldermen strongly supported the salestax measure placed on the ballot last year to support roads, Coody said. There’s been less agreement on the road-impact fee. “I cannot bring myself to cheerlead for something I do not completely support,” Coody stated in an e-mail. Those favoring road-impact fees contend they won’t harm Fayetteville. The Dickson Street entertainment district, a quaint downtown and UA make Fayetteville desirable to home buyers, said Linda Ralston, a real estate agent who’s joined Vote For Fayetteville, a group established to encourage voters to approve the fees.
“Fayetteville is a special place that draws people,” Ralston said. “There’s something about the feel and charm.”
Jim Bemis, a Fayetteville resident who also supports impact fees, said voters who support charging a road-impact fee believe they’ve already paid for their share of city infrastructure. Extensions of roads into new areas should cost those who cause the city to sprawl.
“If they don’t pay for it, we do,” Bemis said.
Those against the fees contend they already pay the sales tax passed last year to support roads, and they shouldn’t have to pay the impact fees. It’s double taxation, said Paul Pinneo, a vice president of Marshalltown Co., a tool manufacturer with a factory in Fayetteville.
“We know of people who go to Johnson or Springdale, because it’s easier to do business in those communities,” Pinneo said. “In the ideal world, you’d have more people moving to Fayetteville and sharing in the sales tax.”
Opponents of road-impact fees held a news conference last week where they said the fee would encourage businesses considering new locations to pick other cities. Those who spoke mentioned the “cities to the north” several times, refusing to mention Bentonville and Rogers by name. Those are cities with growing commercial areas and increasing sales-tax revenues.
“Don’t be confused,” said Pam Jones, chairman of Citizens 4 Fayetteville, a group opposed to road-impact fees. “These are not fees; it’s a bad tax.
“ If road-impact fees pass, it’s going to drive business out.”
Nancy Allen, a Fayetteville alderman in favor of the road-impact fee, said that’s not true.
“I’m always looking at the regular guy, the Joe citizens, and it’s the fairest way to pay for the infrastructure,” she said. “The people who cause the growth should have the onetime fee.”