Impact fees fair for everyone
Development fees, also called impact fees, are often misunderstood, both in their purpose and their implementation. They are simply a way for municipalities and counties to collect up front for the expenses associated with new growth.
When people move into a city, they increase the demand for police protection, libraries, parks, transportation infrastructure, water and sewer capacity, and other municipal services. Increasing each of these services costs money, and that money has to come from somewhere. There are a few ways to get it. One is to raise taxes and fees for everyone, including the current citizens. Another is to require that the new developments and residents pay the costs. Splitting the fees between new and existing residents is also an option.
Most growing cities and towns choose to charge impact fees of one sort or another, depending upon the philosophy of their citizens. Some decide that new growth should pay for itself as much as possible, and they seek to adopt fees for several different municipal expenses. Other cities feel that charging development for the cost of increased sewer capacity or water infrastructure should be born by new residents, but that the increased park space and police protection should be paid by current residents. Another philosophy is that any impact fees might hamper a city's ability to attract new businesses or increase housing costs to unacceptable levels, so they ask their current residents effectively to subsidize these costs and they forgo impact fees. In any case, the decision to be made is about who will pay the increased costs brought on by growth. Will it be the new residents who create the increased needs, or will the current residents foot the bill?
It's important to understand that the cost of growth is not normally charged 100 percent to new residents, even when impact fees are charged. Often the costs are split between new and existing people since the existing population may benefit from the increased services. Also, the amount of the impact fee cannot be based upon improving the existing infrastructure or on correcting current deficiencies. In other words, we generally can't ask new development to pay more than what's necessary to keep a city's services at its current levels. If a community now has 1 acre of park space for every 200 residents, impact fees can only be charged so as to maintain that ratio. If the citizens want to increase park space to 1 acre per 150 residents, they must all pay that extra cost. Another major point is that impact fees are collected when a building permit is issued, so only people building new homes or businesses pay the fees. Finally, impact fees, by state law, must benefit the people who pay them.
Clarkdale's proposed impact fees will help pay the increased cost of parks, police protection, civic facilities, libraries, and water and wastewater infrastructure. A detailed community study was conducted to determine exactly how much growth costs us in each of these categories, and the suggested fees will be based on the results of that study. This study is required by law, and it makes good sense. It assures that the fees we charge are fair and will pay only for those costs caused by growth and no more. The study is highly specific to each community, since no two municipalities are the same and the costs of new growth differ from place to place.
It is these differences in community standards and development that lead to differences in various communities' impact fees. Some have very high standards for libraries, for instance, so their library fee may be higher than a community whose library needs are much lower. Others may highly value park space or municipal facilities, and their fees for these will probably be higher than for a city which has lower expectations or needs.
Impact fees are one way our cities and towns can keep up with the cost of growth in a healthy, financially responsible way, with minimal impact to our current residents. The fees are not a way to stop or even limit growth; they are only a way to help pay for it. In fact, the fastest-growing cities in Arizona charge some of the highest fees. Avondale, Chandler and Goodyear all charge impact fees in the neighborhood of $18,000 per house. Prescott's fees are around $12,000. Clarkdale's currently proposed fees amount to about $10,000 per house.
Impact fees, properly studied and implemented, are fair and equitable to both current residents and those who come later, and they help our communities maintain a high quality of life, even in the face of rapid growth.
Doug Von Gausig is the mayor of Clarkdale.