McKibbin’s Scribblin’s: Fee reduction a worthy idea to help Rifle economy
If the local building industry is as enthusiastic about a possible 75 percent reduction in Rifle’s tap fees as many City Council members were last week, we might see something positive for the local economy.
Several council members gleefully discussed such a reduction and heard one local home building company assure them it could indeed spur what might be the first new home or commercial building activity in the city in years.
The proposal came out of budget discussions among city staff and council members, according to City Manager Matt Sturgeon. Currently, the city charges a water system improvement, or tap, fee of $5,743.27 per EQR, a residential equivalency unit based on a single-family residence with up to 4-bedrooms and 5,000 square feet of landscaping. It assumes 350 gallons-per-day of water consumption. The wastewater system improvement fee is $6,382.37 per EQR.
In a sign of how far the local economy has fallen, Sturgeon said the city received $1.4 million in water tap revenues in 2007 compared to $23,000 in 2012, and the decline in wastewater revenue has been similar.
Roger Giard of Giard Homes of Rifle said reducing those fees could certainly help stimulate the local economy. He said some clients who looked into building in Rifle were “shocked” at city fees that totaled around $30,000 for a single family home. Giard said Rifle’s preconstruction costs are “considerably higher” than surrounding communities.
So if the city did drop those fees by 75 percent, Giard predicted the response from builders who would construct new homes would more than make up for the potential lost revenue due to the lower fees.
Councilman Rich Carter suggested the 75 percent reduction, which was higher than Sturgeon’s original 50 percent reduction idea. Councilman Dirk Myers went even further, saying he would favor dropping all fees “on things we don’t need.”
Myers also pointed out the local economy is affected more directly by population loss. That leads to the continued drop in sales tax revenue we’ve seen each month for more than a year, which is exacerbated by business closures, and so on. A good point.
Reducing the tap fees won’t be a cure all, but I think it might be the first positive thing the city has done in a while to try to help dig the city out of this seemingly never-ending local recession.
But, looking at the bigger picture, won’t the demand for any new homes depend on jobs for the bread winners who want to own them? There aren’t any huge upswings in new jobs coming our way any time soon. So we’ll have to see how this fee reduction plays out.
Giard, who said his company had not built a new home in Rifle since 2006, noted small business owners would likely see a fee reduction as an effort by the city to boost population, and hence, business activity. I hope so.
Sturgeon noted the city water and wastewater systems cost around $30,000 a month to operate, so the council should know those costs will have to be covered if fees are cut.
Council directed a proposal to cut the fees by 75 percent for two years be brought to them at their next meeting, and it should be given serious consideration.
If no other concerns come forward, and the numbers continue to show the city can absorb the potential loss of revenue, the council should proceed. And then look for other ways to help move the city forward.
It’s easy to criticize any level of government for “standing in the way of free enterprise,” as critics often charge. Sometimes that criticism is justified. Giard claimed the Town of Silt’s preconstruction fees are half those of Rifle’s, and added that town had five building permits last year compared to none in Rifle.
So if an economic hurdle can be shown to have been lowered, or even removed, by reducing Rifle’s tap fees, the city should continue to look for other ways to help encourage growth and economic development. They likely won’t find a silver bullet to kill this recession beast, but that doesn’t mean they shouldn’t try.
Mike McKibbin is the editor of The Citizen Telegram.
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