Impact Fee Delay: Friendly Or Foolish?

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Despite citizen and council objections, the Payson Town Council will give the water department the ability to stretch impact fees out over 10 years.

The ability to lure new commercial projects and low-cost apartment complexes settled the debate last week about the town’s $7,500-per-unit fee on each new residential unit for water infrastructure.

Public Works Director Buzz Walker said the town will probably not actually use the ability to stretch payments out over 10 years, but could keep it as an option.

In addition, the town continues to review whether to give apartment builders more of a break on their water impact fees, based on a study of use of water by apartments.

Jim Hippel, a member of the town’s traffic advisory committee and also of Payson Concerned Citizens, objected to any loosening of the rules on impact fees.

He said with the average cost of a new home in Payson near $300,000, the $7,500 water development fee hardly mattered. “Do you believe it would really stimulate demand on a $300,000 sale” to stretch out the payment period on a $7,500 fee? he asked.

Hippel said any development that was so marginal that it would be affected by the fee probably shouldn’t be built in the first place. Without the fee, existing residents would have to shoulder the cost of providing the infrastructure for new homes.

Walker hastened to assure him that any ability to stretch out or reduce fees would be used sparingly — mostly to encourage low-cost housing projects. Currently, the average working person in Payson cannot afford to buy the average new home here. The town remains afflicted by a serious shortage of so-called work force housing and most apartments have waiting lists for vacancies.

“I appreciate the thoughtful comments,” said Walker. He noted that the ordinance already lets the town spread out payments over five years. “I cannot recollect we’ve done it once in the whole time (the five-year payment schedule) has been available..”

Councilor Richard Croy said such incentives can be crucial for affordable housing projects.

Councilor Ed Blair suggested the proposed ordinance spell out the kinds of projects eligible for the break on upfront payment of fees, to guide future councils.

“We’ll just assume they’re as smart as we are,” quipped Councilor John Wilson.

Councilor Mike Vogel said business owners and developers had called him after reading a previous story about the change in rules on impact fees. “They said ‘at least Payson is not trying to stop everything that comes to town.’ We have such a reputation for being anti-business, anti-growth, that I’m for anything” that changes that perception. “If Target said ‘I want to stretch out our water payments,’ I’m all for it.”

But Councilor Blair said, “I hate to disagree, but this is not a perception problem — it’s a business problem. I don’t want the town to be a bank” by essentially “loaning” a developer the money to delay payments.

While building permits normally run at about 250 annually, the town only issued 100 permits last year and only 60 so far this year. “Our numbers are all way down. This is a point in time where we need this flexibility,” said Vogel.

Whereupon, the council voted 6-1 with Blair in opposition to give town staff the ability to further stretch out payments of impact fees.

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