Top 10 Stories of the Year No. 7 Impact fees : Impact fees still an issue despite election failure
Posted on Wednesday, December 26, 2007
Road impact fees, halted by a tie vote last April, are again blips on the Fayetteville City Council's 2008 radar screen.
"I'll just stay after it until something happens. I'm a tenacious little fella, so I'll stay after it," said Ward 4 Alderman Lioneld Jordan, who chairs the city's Street Committee which is again studying how to implement road impact fees in Fayetteville.
By state code definition, a development impact fee is a fee or charge by a city or city service charged on a development to generate revenue for funding or for recouping expenditures "that are reasonably attributable to the use and occupancy of the development."
During the weeks before the April election, Tim Conklin, planning and development management director, explained that the road impact fees, if approved, would be used "to pay for the major backbone of the roadway system."
Yesterday Fayetteville voters wrestled road impact fees to a tie. Citizens groups formed to support the fees and to fight against them. Council members were split, too. A resolution stating that a majority of the council supported the fees passed, but only with a 5-3 vote. Ironically, both sides argued that if the other side won city taxes would go up. Proponents of the fees have maintained they would put some of the cost of growth on those who are causing it. Opponents argued that the fees would keep commercial ventures from entering the city. Kathy Deck, director of the Center for Business and Economic Research at the University of Arkansas, has said that impact fees affect how a community grows and what businesses locate there but "are clearly not growth paying for growth. "First count from the election, a 2, 015 to 2, 014 vote, suggested the impact fees would become reality. For 10 days, Fayetteville's road impact fee hung on that one-vote difference. Two provisional ballots were denied and the one-vote "win"stood. The final vote of 2, 015 to 2, 015, reached after overseas ballots were counted, officially settled the matter. To pass, the impact fee ordinance needed 50 percent of the vote total plus one, according to City Attorney Kit Williams. As a tie, it failed. At that time, the fees were estimated to add about $ 3. 4 million for street projects, depending on how much development occurred. Improvements paid by impact fees would be separate from those paid with the 1-cent sales tax approved by voters last year. If it had passed, the fees charged to new development would have been: • Residential - $ 2, 363 per dwelling unit • Nursing home - $ 1, 495 per 1, 000 square feet • Manufactured home park - $ 1, 779 per pad • Hotel / motel - $ 1, 319 per room • Commercial / office - $ 2, 701 per 1, 000 square feet • Industrial / warehouse - $ 1, 676 per 1, 000 square feet • Industrial / mini-warehouse - $ 587 per 1, 000 Jordan, at meeting of Council of Neighborhoods before the election, said the Fayetteville City Council was told after a 2001 study that the city was $ 44 million behind on taking care of streets. "This city was at 40, 000 (people ) in 1980, and now we're looking at 70, 000 people here," he said. "Something's got to give. Your roads are choked and you know they're choked. "He said if the vote didn't pass," We'd have to go back for more taxes. It's real simple."
Today In August, the Fayetteville City Council approved a resolution stating their intent to enact road impact fees. At a Street Committee meeting earlier this month, aldermen asked city planning staff to provide information about how fees could be determined. "Then it will come back to the committee and we'll thrash around on it awhile and then we'll decide if we want to present it as a vote of the people or a vote of the council. We'll just see what we do," said Jordan. Discussion of the philosophy of the possible fees is the next step. City Council and Street Committee members will be deciding if they should encourage some types of development, such as affordable housing, or tax-generating businesses, by charging no or reduced impact fees. Conklin offered a dozen factors for consideration: • Location / geography within the city; • House size (smaller house, less fee ?); • Sales tax generating uses, such as retail zones • Industrial and technology parks • Development that already has an active building permit • Development of "green "buildings • Energy savings buildings • Mixed land uses • Compact development with more density and intensity • Diverse housing projects that have a variety of housing types and sizes • Walkability • Infill and nearness to mass transit; and • Off-site improvements (such as bridges ) which serve the new development.
In each case, the question is whether that factor should be encouraged or promoted and how road impact fees should be measured.
But, even if priorities can be established within those factors, other concerns and issues lie ahead.
How big is a small house ? Where is the center of town ? Do impact fees discourage business ?
Is it fair for the developer to build off-site streets, then be charged a road impact fee ? In the reverse, is it fair for today's residents to pay for streets for development that doesn't exist yet or should those creating the need pay for the streets ?
City Attorney Kit Williams told the Street Committee this month that inconsistencies and exceptions would make it difficult to defend the fees if they are challenged in court.
He said the city does not take house size, for example, into account when figuring police and fire impact fees.
"What we're looking at here are major exemptions and we're looking at different methodology," he said.
Williams said it could be very difficult to prepare an ordinance relating fees to proximity to mass transit, infill or diversity of housing.
Jordan is interested in the possibility of basing the fee not only on house size, but, also, on how far it is from the center of town to encourage development more to the center of town instead of on the edges.
Developers, he said, wonder why they should have to pay impact fees downtown when the streets are already built.
Nancy Allen, Ward 2 Alderman, would like to look at the possibility of encouraging affordable housing by how fees would be set for house size and variety. She is also interested in how much less income the city would have from the fees if the industrial park and downtown were exempt.
Ward 3 's Bobby Ferrell, an outspoken opponent to road impact fees in the past, has expressed his interest in keeping the ordinance simple but omitting new industrial, retail or commercial businesses from having to pay the fees.
Tomorrow Jordan's statements this month about pursuing a road impact fee for the city appear to be at odds with his earlier remarks. While the city waited to learn the final results of the cliffhanger election, Jordan said he would abide by the final outcome, regardless of what that outcome was. "We brought this forward as a vote of the people to get direction on which way the people want to go. If that one vote is against the impact fee, I will respect the voice of the people," he said at the time. However, the fees he wants to look at next year are different from the fees on which voters cast their ballots. He is looking for a variation that would be more sensitive to the business community which opposed the earlier version. "I want (Conklin ) to look at graduated impact fees from the center of town: the further out you build, the more you pay; the closer in you build, the less you pay. That's one thing I want to see," said Jordan. He wants that compared to house size variations, and he also asked Conklin to compare the numbers generated in an impact fee study for Fayetteville with fees charged by other Northwest Arkansas cities. One issue ahead, he said, was if impact fees should be applied at 100 percent to businesses, at some reduced percentage or whether they should only be charged on residential development. The Street Committee will meet in January to learn what information planning staff has gathered after their December discussion with the committee about what committee members want.
"We're just in the planning stages of this; but, we're going to get there and I'm going to stay after it. If this don't work, I'll stay after it some more," he said.
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