The use of impact fees has been a hotly-debated issue for the Pagosa Springs Town Council since Wal-Mart announced its intention to build a 91,000 square-foot super center here, and at the Tuesday night council meeting, there was finally a first reading of an ordinance to revise the town’s Land Use and Development Code.
As it stands now, according to the Town of Pagosa Springs Municipal Code, which was adopted in 2005, and the Per Diem and Fee Schedule, which was updated in 2009, impact fees that would go towards regional recreation facilities, schools, parks and trails are only charged for residential buildings; fees for public buildings and emergency services are assessed on both residential and non-residential buildings, at slightly different rates; and only road impact fees are assessed on buildings at a variety of rates depending on whether they are used for retail, office/industrial, single-family residences, multi-family residences or lodges.
According to this code, the developer of a residential building pays $859 per dwelling unit for a “regional recreation facilities impact fee,” $368 per dwelling unit for a “park impact fee,” and $464 per dwelling unit for a “trail impact fee.” The developer of a non-residential building doesn’t pay any of these fees.
They do, however, have to pay $741 for every 1,000 square feet of building size as an, “emergency service provider impact fee” (while residential building owners pay $574 per dwelling unit), $564 per 1,000 square feet as a “regional public building impact fee” (residential building owners pay $450 per dwelling unit), and a “road impact fee” that varies depending on what type of building it is. A retail business, for example, pays the largest “road impact fee” at $3,669 for every 1,000 square feet of building size.
According to the original Joint Impact Fee Analysis published by Economic Planning Systems in 2006, before it was updated in 2010, “The impact fee program includes two general public facilities: A county administration building and a recreational center.”
The problem is, at this point, the town has no plan to build a new recreation center, and the county has no plan to construct a new county administration building, so any fees that have been collected up to this point will have to be refunded to those developers who have paid for those facilities.
“Because it has absolutely no bearing on if we are going to collect impact fees or not,” council member Kathie Lattin said at Tuesday night’s meeting, “but where we’re going to spend them once we’ve got them, Mr. Mayor, I make a motion to approve the first reading of Ordinance 782, an ordinance of the Town of Pagosa Springs revising article 10 of the Land Use and Development Code regarding impact fees.”
Lattin’s motion was seconded by council member David Schanzenbaker, and everyone except council member Darrel Cotton voted “yes.”
The ordinance proposed adding section 10.2.6 (when Schanzenbaker pointed out that section 10.2.6 already exists in the LUDC, town planner James Dickhoff quickly suggested changing the ordinance to read “section 10.2.7”), which states:
“An impact fee may be used for the costs of any capital facilities within the same specific fee type or category for which the impact fee was originally collected, so long as the demand for such facilities is apportioned to the development activity in the same proportion as the original facility.”
This new section is designed to give the town more flexibility in how it uses impact fees so, for example, instead of collecting money for a county administrative building, it can now collect fees to build a new town street department shop, and instead of a recreation center, it can collect fees for improvements on Reservoir Hill and other amenities.
Section 10.4.1 of the LUDC already states, “Where development activities may result in multiple levels of development approvals, such as annexation, zoning, subdivision and building permit approval, impact fees shall be paid upon the earliest development activity to occur for which amount of impact fees can be reasonably calculated.”
Ordinance 782 will add the following onto the end of that section: “A development application shall not be considered a complete application for purposes of determining impact fees if the specific impact fee amount is unable to be calculated for any reason. In such event, the impact fees may be imposed on any level of development approval that enables calculation of the impact fees.”
The worry all along has been that Wal-Mart will apply for its building permit before these changes to the impact fee schedule can be made, thereby causing it to be grandfathered under the old code, which would mean, in 10 years, the company would get a refund of the fees.
Cotton’s “no” vote came after nearly 30 minutes of debate, and reflected his strong opposition to impact fees on the grounds of general principal.
“I still have a problem with impact fees,” he said. “I don’t know how much didn’t happen over the last six or seven years because of impact fees. I’m not sure that the impact fees weren’t the final straw that stopped things. They used to be ugly when there was a water resource fee. A guy that wanted to build a simple house had to cough up twenty or thirty grand in fees.
“They are dangerous. Growth is good. If somebody builds something, then that means there are more people and these things take care of themselves. I just don’t know how we administer something like this. We ought to consider not doing them. They had an affect on things that went south.”
“For the record, I just want to say I share trustee Cotton’s sentiment,” Mayor Ross Aragon added. “I’m just not sure.”
This statement by the mayor seemed to contradict a sentiment he expressed earlier, at a Nov. 29 work session, when Dickhoff and Town Manager David Mitchem explained that the town stands to lose a portion of Wal-Mart’s impact fees.
“Well, why can’t we amend that?” Aragon had asked. Mitchem and Dickhoff explained their proposal was an attempt to do just that.
Later in Tuesday night’s debate, Mitchem said, “As we’ve said multiple times, with aging infrastructure you need maintenance. Just to be blunt about it — with the advent of a proposed big box — that development will contribute mightily to our infrastructure through these impact fees. That’s one of the reasons we have proposed modifications to the wording of the current statute. Ten years from now, we don’t want to be giving a bunch of money back to a big box store that we could have been applying to infrastructure.”
“If I can offer just a small counter,” Cotton argued. “The sales tax that the big box potentially will bring is huge money, and in my mind it’s money that is going to be spent on the town. I think their taxes will take care of their impact. For this one particularly, their impact is almost zip for the town — a half of mile of road. That’s it, and the state is going to pony up most of it.
“Growth should pay for growth. I agree. But it kinda does. When you build something, the jobs, the materials that are purchased here, the sales taxes, everything. I don’t think they are getting a free ride.
“For Wal-Mart, what impact will they have? The people who used to go someplace else to shop will now stay here, so I don’t know what the impact is, except that we get some nice sales tax. I’m all for getting as much as we can get for the town, but I think we have to be fair about it.”