Steamboat City Council debates fairness of traffic impact fees
August 15, 2017
During a debate that included some raised voices and a hypothetical situation involving billionaire Bill Gates, the Steamboat Springs City Council decided the city is being fair to developers in how it charges them for their traffic impacts.
But the decision to maintain the status quo wasn't unanimous, and two council members sided with developers who think the system needs to be changed.
The central question in the debate was whether the city should charge a developer a fee based on the overall cost of a future road project near their development, including state and grant funding, or only for the portion the city ends up actually having to pay for it.
Council members Heather Sloop and Scott Ford think the city's current process of collecting fees from developers to help mitigate their traffic impacts isn't fair and should be changed.
They specifically take issue with the current system not taking into account any money the city might get from an outside entity, such as the Colorado Department of Transportation.
Sloop equated the system to "double dipping."
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Ford used what he called an "extreme" hypothetical situation to help illustrate his thinking.
He asked whether it would be fair if the city charged a developer an impact fee for an intersection improvement, but then Bill Gates decided to open his checkbook and pay for the improvement himself.
"Would we still think collecting this money (from the developer) was fair?" Ford asked.
The city had an actual case study to frame its debate.
The city charged Michael Kortas, who developed the Captain Jack subdivision, a traffic-related fee for Elk River Road intersection improvements based on an estimate that the project would cost $3.5 million.
The city actually paid $877,000 to reconstruct the intersection, while CDOT pitched in $3.6 million.
Kortas demanded a refund, claiming the city had greatly overcharged him.
Ford and Sloop favored changing the city policy to allow for a refund in a situation like this.
Sloop said developers are already paying state and federal taxes and questioned why should they have to pay a larger impact fee if those entities help bring down the city's cost of a project.
A majority of the council disagreed.
Lisel Petis said the city's exaction process has been challenged in other communities around Colorado, and courts have upheld them.
Councilman Jason Lacy said he thinks under the current system, the city has actually been subsidizing the traffic-related projects with its general fund.
"If you looked at these projects as a whole, developers have probably had a break," Lacy said.
City staff also recommended the city not modify the exaction system to allow for refunds.
The council did come to a consensus that it would look into the prospect of switching to an impact fee system.
But first, the city will have to conduct a study.