Leader Blues

Wednesday, November 21, 2007

TOP STORY >>Council freezes fees on builders

By JOAN MCCOY
Leader staff writer

The Cabot City Council voted Monday night to stop collecting the impact fee on new construction for up to six months while a committee determines how much the fee has contributed to the slowdown in home construction.

Since the impact fee began a year ago, the number of building permits has dropped significantly from as many as 45 a month in years past to an average of 25 for most of 2007 but down to 11 in September and eight in October.

Council members and developers acknowledged that the economy could be partly to blame. But they said building is booming in Ward and Austin, which don’t have an impact fee but are in the Cabot School District which draws most new residents to the area.

With the return of Alderman Virgil Teague, absent due to illness for many months, all eight council members were present for the meeting. All except Ken Williams, a developer, voted for the moratorium, including Eddie Cook and Teri Miessner, who spoke against that action during committee meetings and the Monday night council meeting. Williams asked that the record show that he abstained.

If the council hadn’t called for the moratorium or a freeze on the amount collected, the impact fee would have doubled this month from $1,272 to $2,196 on a 3,000 – 3,900 square-foot house. The fee is also scheduled to increase in 2008 and 2009. By the third increase, the impact fee on a 3,000 – 3,900 square-foot house would be $4,037.

Cook, one of two aldermen who were on the council when the impact fee was passed, said he was fearful of a moratorium with no solid plan for beginning collections again.

Miessner, who has never favored a moratorium, said she was disappointed with the council for waiting until the fee was about to double before investigating the cause of the decline in new home construction.

“There’d better by gosh be some study done on it (now)” Miessner said.

Alderman Becky Lemaster called the impact fee a tax.

“It’s a tax on and industry that’s having a hard time already,” she said.

Alderman Tom Armstrong, who was on the council last year and was the only member to vote against the fee, still doesn’t want it.

“If we don’t abolish this, we’re cutting our nose off to spite our face,” he said.

About 10 representatives from the building industry attended the meeting to see how the council would vote on the issue.
Developer Jack King told the council that doubling the fees as scheduled would “break an already broken industry.

Bill O’Brian, a Realtor and developer, said houses were still selling, but no one is building more. He told the council that he was half owner in 80 lots that no one wants to build on.

When the council members discussed the fee last week during a budget meeting, no one was willing to chair a committee to determine whether it is responsible for the building slowdown.

But Miessner said Monday night that she had changed her mind. She would chair the committee if the builders and developers in the audience would serve on it. Most said they would.

If the fee is reinstated sometime in the next six months, it will almost certainly not include wastewater, which has collected about $35,000 in the past year. Council members say that since city voters passed a one-cent sales tax to pay for a new wastewater treatment plant, that department no longer needs the money to pay growth related expenses. And the commission that now runs water and wastewater has agreed to let it go.