City begins assessing development fees
Developers would pay slightly less in city of Glenwood Springs water system impact fees compared with what’s currently assessed, but nearly double the amount of sewer fees, based on the recommendations contained in a recent city water and wastewater system improvement fee analysis.
However, it’s still up to City Council what kind of policy to adopt in determining impact fees for water, sewer and other municipal services to make sure residential developers in particular are not paying an inordinate amount, Mayor Michael Gamba said.
“It can be a policy discussion, or it can be a mathematical decision,” Gamba said in regards to a request earlier this year by developers of the planned Lofts at Red Mountain project at Glenwood Meadows for the city to lower its impact fees.
The Lofts was approved earlier this year for up to 88 studio, one- and two-bedroom residential units and 5,808 square feet of commercial space fronting Wulfsohn Road near the Market Street intersection at the Meadows.
In seeking its approvals, developer Capital Realty asked for a reduction of more than 50 percent in fees not only for water and sewer, but for fire protection services, public school impacts and various planning department fees.
Council at the time directed city staff to begin analyzing any fees that weren’t already under review, and agreed to apply whatever new fees are in place when the Lofts applies for its final building permits.
Gamba said it makes sense to make sure future system improvements aren’t just on the backs of new developers, especially when it comes to providing incentives for new housing.
“At this point, I think we’re in a mode of needing housing in this community … especially housing that regular working people can afford,” he said. “And if that is negatively impacted by the user fees that we charge, then that needs to be addressed.”
The routine water and wastewater fee analysis was done by SGM Engineers on behalf of the city, and recommendations are now before council for consideration.
The study found that water fees should be reduced to better reflect the cost of new development on the system, from a current rate of $6,964 per residential unit, or equivalent (EQR), to $6,280 per EQR.
At the same time, though, due to costs associated with operating and maintaining the city’s 3-year-old wastewater treatment plan, those fees are proposed to be increased from $4,200 per EQR currently to more than $8,000.
“It is very common that impact fees are questioned by all new development and building permits for residential, commercial and institutional land use,” the study notes.
“It is also just as common that municipal water and wastewater providers are struggling to provide efficient and economical services in an age of new growth, changing regulatory climates, aging infrastructure and cyclical economic cycles,” it says.
And, “Existing customers are concerned that new growth and development pay their own way.”
The study recommends a series of public meetings for City Council and staff to develop “broad policy objectives” before adopting new fees. That discussion began during a Nov. 5 council work session and is expected to continue on Dec. 3.
The study also found that, compared with nearby municipalities and service districts, Glenwood Springs fell right in the middle in terms of the impact fees it assesses.
Richard Myers, managing partner for Capital Equity, said at the time the Lofts project was being reviewed that it would be difficult to proceed if the estimated $1 million in various impact fees had to be paid. He proposed cutting fees by more than half, which he said would be more in line given the smaller-size apartment units at the Lofts.
“Our feeling is that we’re fine paying fees for the correct amount of impact,” Myers said at the time. “It’s just that, in our analysis, and compared to other West Slope communities, some things are off kilter that makes it hard to develop rental housing in Glenwood Springs.”
Gamba said it can add up to about $25,000 for every unit of new development under the city’s current fee structure.
“That is adding to the cost of housing,” he said.
City fire impact fees are also in the process of being evaluated, but school impact fees are under the purview of the Roaring Fork School District.
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