A state-mandated study process could result in a decline in the development impact fees Payson has imposed for years to ensure new development pays the cost of the water, street, parks, police and other costs needed to serve new residents.
Last week, the Payson council reviewed a state-mandated consultant’s report costing roughly $200,000 that set maximum levels for impact fees the town could charge, if the council approves, after a series of public hearings.
Currently, the town charges $7,500 to hook a new home to the water system and several thousand more to help pay for the cost of new parks and recreation, police and fire and streets.
In addition, the town generally requires developers to make additional street and infrastructure improvements on the property itself.
Currently, the town charges about $10,000 in fees for a single-family house. The Northern Gila County Sanitary District charges another $4,500 per home, but the Legislature exempted sanitary districts from the new requirements.
Several years ago, the state Legislature decided to rein in how much cities could charge in impact fees. Starting later this year, the Legislature will require towns to track impact fees collected and spent for 10 years. Even if the town spends the fees immediately on infrastructure improvements like the Blue Ridge pipeline, the town must still track them as if they were not, including interest. At the end of 10 years, developers can challenge whether the town used the fees properly. If the challenge proves successful, the town will have to pay back the fees with interest.
Payson Mayor Kenny Evans said that the town council might decide to give up on some of the lower fees altogether due to the accounting cost of tracking the fees.
The town is currently reviewing its impact fees per the new state legislation. Last week, a representative from TischlerBise gave a brief overview of the changes to the council. The town hired TischlerBise because it is not allowed to figure the fees itself under the new legislation.
Not all cities collect development fees, which can give them an edge in attracting new development. However, those cities generally charge higher water rates, for instance, to raise the money to make the improvements impact fees would have covered.
State law prevents towns from using the impact fees to cover operating costs.
TischlerBise presented a report to the council that calculated the maximum development fees it could impose.
In most all categories, the report will require a 10 to 20 percent reduction in fees. For instance, the water impact fee would drop by about $1,000 to perhaps $6,500.
However, a TischlerBise representative also said the town could impose new impact fees for commercial development that it currently doesn’t charge.
The town will hold several public hearings where residents can weigh in on what impact fees the town imposes.
The town could eliminate particular fees completely, while leaving others in place. The council could also set fees below the maximums calculated by the consultants.
On Feb. 10, the council will discuss which fees to adopt. On April 3, residents can weigh in on the proposed fees and then again on May 1 and May 15. The town will adopt a new impact fee ordinance May 15, which will then go in effect Aug. 1.
In a 98-page development fee study, TischlerBise explained what the town plans to add to meet population growth. The report assumes that in the next decade the town will add 2,550 residents — a 14 percent increase.
Parks and recreation
--Lighting at the Kiwanis ball field
--Event center improvements
--New ramadas at Green Valley Park
--Restrooms, playground, ropes course and ramadas at Rumsey Park
--Expansion of Payson Area Trails System (PATS)
--New vehicles and trucks
--Expanded communication equipment
--New evidence storage facility
--Expanded police facilities
--New patrol vehicles and communications equipment
The town plans to build three new roads to improve circulation. Projects include;
• Connecting South McLane Road to Green Valley Parkway
• An intersection at Highway 260 to connect Mud Springs Road north and south of the highway
• Connecting Rumsey Drive to North McLane Road