Leader Blues

Monday, August 07, 2006

TOP STORY >> Impact fees could fetch $2.3M a year

Leader staff writer

The implementation of building impact fees has been discussed during meetings of the Cabot City Council, Cabot Homebuilders Asso-ciation and the Stakeholders Committee.

Now, two years after a council resolution said the fees would be imposed, Cabot wants to know what the general public has to say, and a public hearing will be held at 6 p.m. Monday in the council chambers at the city annex.

A representative of Duncan Associates, the firm that compiled the impact-fee study that shows the city could collect as much as $2.3 million a year, will attend the meeting. The 2004 council resolution that said impact fees would be imposed caused a stir in the housing industry, which includes the people who develop the land and finance, build and sell the houses.

They said that if the city intended to collect money from them they should at least be included in the discussions and the Stake-holders Committee made up of several building industry representatives was created.

That committee has recommended setting the impact fees much lower than the amounts suggested by the experts who were paid $63,000 for their work.

Carol Steen, the only member of the stakeholders committee who is not part of the either the building industry or city government, has continued to push for the full amounts.

“You can whittle away at impact fees until they are just meaningless,” Steen says. “Costs are what they are and if impact fees don’t help pay them, then we have to pay them all.”

If the council approves the recommendation of the Stakeholders Committee, the fees will begin 90 days after the ordinance setting them is passed.

The fees will be based on the size of the houses built in the city and will be collected at 100 percent for fire protection and 25 percent for parks, streets and wastewater.

Since the library has now been added to the impact fee list, it also would receive 25 percent of the recommended amount.
One year after the council ordinance setting the fees is passed, another 25 percent would be added for a total of 50 percent of the recommended amounts for parks, streets and wastewater and 100 percent for fire.

The committee also recommends that the council consider annual increases of the impact fees to reach the full 100 percent recommended by the impact fee study.

Assuming the average new home in Cabot is between 1,500 and 1,999-square feet, the full fee recommended by the study performed by Duncan & Associates would be about $3,200.

If the city council accepts the committee’s recommendation, and passes an impact fee ordinance, builders would initially pay the following impact fees: fire protection, $306; streets, $386; wastewater, $151; and parks, $238; for a total of $1,081.
One year after the ordinance passes, the fees would increase to $1,856.

The committee also recommended that the fees be paid at the time the certificate of occupancy is issued, not when the building permit is purchased.

So the time between paying the fees and recouping the money from homebuyers would become shorter.

Members of the Cabot Home-builders Association say they are really opposed to the fees.

But they want them phased in because it will take at least a year before the appraised price of the houses includes the fees.
And until they are, builders will pay them with no hope of getting their money back.