Council examines impact fees

BELLA VISTA — The City Council took a look at some prospective impact fee calculations during a special work session March 25.

Impact fees are one-time fees applied to new construction to help pay for municipal system improvements needed to accommodate new and future development, according to a presentation prepared by TischlerBise, a Maryland-based consulting firm the city hired to help calculate potential fees.

Ben Griffin with TischlerBise said the process looks to justify fees based on the past, present and future — designated as cost recovery, incremental expansion and plan-based, respectively.

“We basically look at methodologies for three points in time,” he said.

The firm looked at police, the public library, and fire and emergency medical service as potential targets for impact fee funding.

Residential streets are not typically something for which a city wants to apply these fees, though it could make sense to incorporate a fee to expand larger streets, he said.

“You want to make sure that if someone is paying a fee, they see a benefit,” he said.

While developments can receive some credit based on anticipated contributions to the municipal budget, which are calculated and integrated into the fee, it is important to ensure all types of developments pay an impact fee if the city is to implement one, he explained.

“If there is demand for a service, then you need to charge all development types for that service,” he said. “It’s a way to ensure that everyone pays their proportionate share.”

Proposed impact fees in the firm’s report were $1,028 for a single-family home, $532 for multifamily housing, $2,311 for commercial developments, $577 for industrial developments, and $1,109 for office or institutional developments.

Griffin said that, after this meeting, his firm will go back and revise the current draft of its analysis and consider some additional options, like size thresholds for fees.

City staff attorney Jason Kelley said that, if the city chooses to adopt these fees, they will typically be collected on the issuance of a certificate of occupancy and the city will create a special restricted fund for these fees.

“You’re going to be creating a special bucket that this money goes in,” he said.

The fees can’t be expected to cover the entirety of city development, he explained, and funds need to be spent within seven years of receipt.

“If you don’t spend it in seven years, you’re going to have to start refunding,” he told the council.

Council member Steve Bourke said he doesn’t believe the city should make a determination right now, but this meeting was important to better understand this process.

The intent is to serve residents and avoid placing the costs of the city’s growth on people who are already in the city, he said.

“It seems to me all of the city’s infrastructure … that needs to be built out is to the burden of existing residents,” he said.

While the city has seen a massive increase in housing development — with more than 400 homes built last year — Bourke said he’s not sure how long that will continue.

Mayor Peter Christie said that, if approved, the city will also need to revisit and re-analyze the fee structure every three years.

While lengthy, he said, this was a very important chance for officials to get a close look at this process.

“This has been a really good discussion,” he said. “This is complicated; it isn’t easy.”