Our view: City should reassess impact fee system
The city of Steamboat Springs’ system for charging developers for the impacts their projects have on traffic and roads is under scrutiny once again, this time by two council members who are questioning the fairness of the current process.
The question surrounding the fee centers on whether or not a developer should be charged based on the overall cost of a future road project, including state and grant funding, or only the portion the city ends up actually having to pay.
This issue was raised after developer Michael Kortas claimed the city owes him a refund because the impact fee he was assessed was based on an estimate that the Elk River Road intersection project would cost the city $3.5 million when in fact the city’s portion of the project totaled only $877,000 after the Colorado Department of Transportation contributed $3.6 million toward the construction.
The issue of impact fees is a complicated one, and we think the current discussion about the city’s method of assessing the amount developers pay is a golden opportunity to correct a less-than-perfect system.
There’s no question that developers should be required to share the cost for the increased growth that is spurred by their projects, but we think the city could benefit from taking a more consistent, equitable approach to how it assesses traffic impact fees to avoid future disputes like the one city officials are currently facing with Kortas.
Currently, developers are required to pay impact fees to the city based on a formula that takes into account the additional amount of traffic their project is expected to generate and the estimated cost of a nearby road improvement project that would help accommodate that extra traffic.
In our opinion, this system seems inconsistent and has room for improvement. The fees charged to developers are based on the projected cost of road improvements associated with various development projects, and the approach to assessing these fees needs to be based on a more comprehensive analysis of a development’s actual impact on traffic.
We encourage City Council to take a deeper look at how it assesses these fees and create a more equitable and rational system that bases fees on square footage or another factor that can be easily measured and compared to ensure each developer is assessed fairly, rather than using a system that appears to handle fees on a case-by-case basis.
The logical next step in this process would be for the city to conduct a study on traffic impact fees in anticipation of the council adopting a new system by ordinance.
If the council follows this course of action and institutes a more equitable, predictable and broadly applied approach to assessing these fees, we think the city can avoid future disputes with disgruntled developers. We also believe a new system based on specific metrics will help the city better predict the costs of growth, which in turn would give the city the flexibility it needs to better leverage the impact fees it collects to fund road improvements as needed.
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