Friday, April 22, 2011

Increasing fee-in-lieu school impact fee (Commerce City)

Commerce City Statement: The development of land results in new and/or increased demands on city facilities and services, including but not limited to, schools, roads, water, parks, and recreation facilities. The costs of providing such additional services and facilities should be borne by those who create the new or additional need. These required contributions, whether in the form of fees or dedicated land in the case of schools, are used to fulfill this requirement and are known as impact fees.  As part of the Long Range Financial Plan, city staff will be presenting information to the City Council about the other impact fees that are collected by the city as development occurs. It will be important for the City Council to determine appropriate development impact fees so as to balance the need to fund future capital  improvements while also creating an environment that is conducive to economic development.

How should development pay for increased usage and impacts to community services while still being competitive to surrounding communities with regards to development?

The school districts are proposing the value for the fee be based on raw land and development related costs. The specific request and analysis can be found in the attached memos from the school districts CLICK HERE...

Background Information:
The current school impact fees have been in place since 2000. At that time, the market price of an acre of land was set at $32,077/acre. According to the the school districts, the price of land has risen dramatically across the city since 2000, and is expected to continue to increase over time. The current fee structure no longer successfully accomplishes what it was first set out to do. The fee amounts are shown below:

Fee-in-Lieu Calculation
Fee imposed on construction of each new residential dwelling on an undeveloped lot
(market value of land at $32,077/acre, set by Resolution No. 2000-15):

Single-Family Home Detached Dwelling $619
Single-Family Attached Dwelling $514
Townhome/Condo $214
Apartment Unit $138 

School impact fees only apply to residential land. It does not apply to commercial or industrial land. Finally, it is important to note this fee only applies to new development within the city. All of the existing development, whether built or platted and contained within a legal developer’s agreement, would not be affected by this proposed increase.

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