In the wake of a slowdown that has stalled building in Payson, the Town Council wants to take a fresh look at the hefty water development fee for apartments and condos and perhaps allow developers to spread payments over 10 instead of five years.
Currently, the town imposes development fees totaling about $12,000. Of that, about $7,500 covers the cost of providing water —including the anticipated $30-million pipeline to deliver water from the Blue Ridge Reservoir.
So far in 2008, the town has issued permits for nine single-family homes, three manufactured homes and 48 multi-family homes. In addition, the town has issued two commercial permits.
The 60 permits issued so far this year compares to a long-term average of 250 permits annually.
All told, the town in 2008 has collected impact fees totaling $100,000 for streets, $80,000 for parks, $40,000 for public safety and $215,005 for water.
The dramatic drop in impact fees in the past two years has contributed to a budget crisis which resulted in the cancellation of various capital improvement projects, including some major road building projects.
The present ordinance imposes the full water fee on single-family homes, but requires a significantly lower payment for apartments and townhouses. The $7,500 fee for a detached home would cover the costs for 1.5 apartment units, on the assumption apartment dwellers without yards will use less water.
“We’ve always known that smaller apartments use less water,” said Buzz Walker, assistant public works director.
“We need to strive every once in a while to check and validate that.”
Currently, the water department often negotiates the impact fees on a case-by-case basis for townhouse and apartment projects. Walker noted the water department has wide discretion on whether to give a developer the single-family house rate or the lower apartment rate.
The proposed revision of the ordinance would put some of those criteria into writing, he said.
For instance, Walker said an apartment complex that provides a water-efficient common laundry area will use a lot less water than a complex with hook ups for every renter to put in a washer and drier.
Moreover, landscape plans for a development will have a dramatic impact on water use. The flexibility in the development fees allows the town to encourage water-conserving landscape plans — not only in the use of native, drought-tolerant plants, but in the spacing of those plants, said Walker.
“We’ve had developers come in and they just insist this is what they’re going to do. We say, ‘OK. Well. It does meet the rules. But you could save yourself money.’ They say ‘I don’t want that.’ We say,’ OK, you’re going to have to pay to do that — you’re going to have to pay a water development fee up front for the water you’re using.’ ”
The Town Council at last week’s meeting had asked for additional details and more of the fine points to be spelled out in the ordinance.
The councilors also asked the town staff to explore stretching out impact fee payment from the current limit of five years to a new limit of 10 years. That break in the upfront cost of the development fees would mostly benefit commercial projects the town hopes to lure in to generate more sales tax and projects providing housing affordable for the average working person in Payson.
Several council members pushed for additional detail.
Councilor Richard Croy, whose private job includes putting together low-cost apartment projects, said the ordinance should give apartments providing housing for working class residents a cost break.
Councilor Mike Vogel said the town should go easy on the impact fees to encourage development. Three years ago, the town imposed growth limits that restricted new permits to 250 annually. However, the building recession hit almost immediately and the town last year issued only about 100 permits. This year looks like it may come in below even that dismal figure.
“With the current problems we’ve got a zero growth rate,” said Vogel. “If (spacing out the payment schedule for the impact fees) is what it takes to produce a few more homes, we should do it.”