New Water Impact Fee: Is It Enough?



The Payson Town Council recently raised the water impact fee for future building in Payson from $3,785 to $7,570 per residential housing unit. The question arises, is it enough?

250 Building Permits per Year

Estimated Blue Ridge Project Cost: $25,000,000 - $25,000,000

Total Water Impact Fee Income: $17,032,500 - $25,000,000

Shortfall to pay for Blue Ridge: ($7,967,500) - -0-

Water Impact Fee per Building Permit: $7,570 - $11,111

Number of Years: 9.0 - 9.0

Number Years to pay for Project: 13.2 - 9.0

The above chart assumes the current estimated project cost of $25,000,000 for the construction needed to bring this new source of water to Payson and the annual maximum construction of 250 building units in accordance with the new Payson ordinance. It also assumes that with the future construction of 250 building units annually, the Town will require a new source of water within nine years to support this level of construction. This time frame is within the recent findings of the Mayor's Task Force on water. With these assumptions in mind, in nine years the proposed water impact fee would generate income of only $17,032,500, resulting in a shortfall of ($7,967,500). Inflation cost on the project would probably be offset, at least partially, by interest income on the building fees collected. So, where would this money come from? Bond money? Increased water rates? Federal or state grants? Bonds increase the property taxes of existing homeowners and why should they pay for water that they don't need? The findings of the Water Task Force indicate that the present water supply is adequate for the population here today, but not enough for future building and growth. The same applies for any dramatic increase in water rates that would probably be needed to help pay for such a financial shortfall. The receipt of grants in an amount of this magnitude is questionable.

To pay for Blue Ridge in the predicted nine-year timeframe, a water impact fee of approximately $11,000 is needed. The future homeowners, through developers and builders, should pay their own way to live here in Payson. There is no free lunch. Call or e-mail our Payson councilors on this topic.

Jim Hippel, Payson

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