KNAU and Arizona News
8:25 am
Mon September 8, 2008

Impact Fees

Flagstaff, AZ – (Intro) Many cities around the country -and here in northern Arizona use impact fees as a way to pay for development. But they're controversial. Flagstaff has considered implementing the fees for more than a decade now and they'll take up the issue again this week. Arizona Public Radio's Thereas Bierer reports. <

TB VO) Impact fees are based on the idea that growth should pay for itself. Flagstaff vice Mayor Al White supports them in part because he thinks they save taxpayer money.

AL WHITE the theory is this. That you utilize an impact fee and use it to get some of those things that otherwise you would have got from the general fund but then you free up money in the general fund to take care of those ongoing expenses that you wouldn't have otherwise.

TB VO) Developers in Flagstaff already pay fees called exactions. Those fees change from project to project. Now the Flagstaff city council is considering a flat fee of about 7,000 per until. And while the fees are controversial, some home builders actually want them. Consultant Jim Duncan has helped several Arizona communities implement impact fees.

IM DUNCAN phone tape) we have many many planned communities around the country where believe it or not it was the developers, the home builders who actually have supported it. In most cases it's those developers or home builders who have the largest projects because they're the ones that usually get hardest by contribution requests.

TB VO) Arizona's impact fee law is more restrictive than some other states.... The money that's raised can only go toward capitol improvements. And the funds need to be used within a specific time frame or they're returned to the developer.

JOE HAUGHEY) But the reality is we're not growing fast enough to warrant impact fees

TB VO) Flagstaff city councilman Joe Haughey is a real estate broker. He
says the city commissioned a study that suggested impact fees when population growth reached 3 percent. .but that same study showed Flagstaff's growth at just 2 point 2 percent.

Joe Haughey) for cities like Chandler, Gilbert and Phoenix and Tucson they are growing very fast and because they're growing very fast they don't have the resources to take care of that capitol outlay for police cars and fire trucks and things like that. So they have impact fees. Nothing wrong with that if you're growing that fast.

TB VO) Many northern Arizona towns including Kingman, Show Low, Camp Verde, and Payson have also grown very quickly. And they've all adopted impact fees. Prescott passed theirs in 1995. Contractor Brian Cashatt says he paid nearly 20 thousand dollars in fees for the last single family home he built in Prescott.

Brian Cashatt) I agree they are necessary just for the cities to stay afloat. They still have to do infrastructure sewer and water and update that kind of stuff, there's still a lot of fees on that side. So yeah, I am in favor to a point.

TB VO) But Cashatt's not in favor of the city's new proposal to raise the cost of impact fees by 23hundred dollars. Prescott's city council has tabled that decision at the same time that Flagstaff is revisiting the issue. The former city council proposed a 15 thousand dollar impact fee, but then cut it in half by removing funding for parks and transportation. Flagstaff Vice Mayor Al White agrees that the current method of charging exactions creates uncertainties...but SAYS the costs of parks and streets will still need to be recouped.

AL WHITE) I think that we should always work to make any development less arbitrary , too. I don't like the idea that there are unknowns and those unknowns can pose a financial burden to a person that's trying to put a project in. But that's what you have the discussion for in the first place. Impact fees will take some of that mystery out of there.

TB VO). The mystery now is what Flagstaff's city council will decide when it picks up the debate again today 8 years after first considered impact fees. IN flagstaff, for Arizona public Radio, I'm Theresa Bierer