Amid construction boom, city eyes higher development fees

During the economic downturn, Yuma dropped its development fees. Construction was significantly down and the city tried to get the fees low enough to help builders stay in business.

But now that construction has taken off again, the city is considering raising development fees to pay for that growth.

City Administrator Greg Wilkinson told the City Council during Tuesday’s work session that development fees are needed to fund future roads, bridges and fire stations in areas of growth in Yuma,

However, he worries that raising development fees will stunt the growth of the manufacturing industry in the city.

“We’ve done a tremendous job in attracting manufacturers to the community,” Wilkinson said. “There is a concern that if we raise development fees it will hurt that sector.”

Wilkinson presented some projects in the Capital Improvements Plan that are eligible for development fee funds. He said he felt he needed to clarify information and answer questions following the March 20 work session, when a representative from Tichler Bise presented the proposed development fees process, Land Use Assumptions and Infrastructure Improvements Plan.

However, Wilkinson pointed out that it’s still early in the process. “We have a long ways to go, so don’t get bent out of shape yet,” he said, noting that it could be another four to five months before staff presents the final recommendation to the council.

The last time the city updated development fees was in 2011. Wilkinson said that the initial reaction was the same. “Everybody got bent out of shape at the beginning.” But then the community acknowledged the need for updated fees and accepted them.

“It’s a little different situation now, but I still think this development fee is not necessarily a city of Yuma thing, it’s really a community thing,” Wilkinson said, noting that development fees are about growth paying for growth.

“People think it’s unfair to charge existing taxpayers who have already paid for their growth to then have to pay again for somebody else’s growth that doesn’t do anything for them. The question is, how do you do that? How do you pay for that?”

He outlined three ways, the first being development fees, which are assessed on new construction and includes both commercial

and residential.

A second way is when the first developer in an area builds the infrastructure, and when other developers come in, they pay the first developer back. A problem with this method is that developers can’t get loans for off-site improvements, such as bridges or roads coming in. They have to pay for this type of infrastructure out of their own pocket.

A third way is for the city to build the needed infrastructure and then every developer that comes into the area pays the city back. The issue with this method, especially with roads, is that the city doesn’t have the money to build them.

In the proposed plan, the city would use development fees to build bridges in the eastern part of the city, such as south of 32nd Street and east of Highway 95, where much of the grow is taking place. Eligible projects include bridges on 45th, 36th and 48th streets and Avenue 7E and 40th Street Canal Box, totaling $5.2 million.

Wilkinson said the city’s transportation network cannot support new development without these bridges.

Eligible projects also include construction of Fire Station No. 7, near the Foothills Walmart, off of Interstate 8, where the city already owns property.

Wilkinson noted the importance of maintaining a certain level of service. Residents expect “great” parks and programs and quick fire and police response. The city follows the accepted model, which calls for a new engine and a three-man crew per shift (nine total) for each 50,000 residents.

Fortunately, the city already has an engine and crew that will be available to be moved from Station 5 to 7 when it’s built.

A new fire station needs to go in the area south of 32nd Street because some of the response times “are starting to creep up,” Wilkinson said, adding that the city has pushed construction of the fire station out for several few years and he would hate to keep putting if off.

The construction industry is bouncing back, and the city officials feel the time might be right to adjust development fees.

In 2006, when construction was booming, 699 single-family homes were built in Yuma. In 2011, 124 homes were built. That number jumped to 522 in 2017.

During the recession, the city adjusted the development fees accordingly. For example, in 2005, for the parks and recreation category, the development fee for a new home was $1,217. At the height of the construction boom, the fee went up to $1,770. When the recession hit, the fees dropped to a little over $1,000.

The recommended fee is now $1,463, but Wilkinson pointed out that this is only a proposal and could change.

“My goal is to get something to council that will give us the path, the infrastructure we need,” Wilkinson said. “I’m not going to say that everyone is going to be on board, but hopefully we can get something to council that says we can live with this.”