Department of Finance
Reference: Impact Fee Study Results
To: Mayor Gregory Mills and Members of City Council
Through: Michael P. Martinez, City Manager
Prepared By: Catrina Asher, Director of Finance
Date Prepared: April 23, 2024
PURPOSE
To share with City Council the results of the City's Impact Fee Study and seek input on proposed fee changes for 2025.
BACKGROUND
What are Impact Fees and how are they used?
Impact fees are fees charged on new development to fund capital investment needed for a City to maintain a consistent level of service for the residents and businesses as the population grows. Impact fees are charged to builders and developers based on the type and size of the development (e.g. residential, retail, industrial, etc.). Fees may be charged for various service categories, including (but not limited to) parks and open space, general facilities, fleet and transportation. Only new development is subject to impact fees.
Impact fees are different than user fees or rates, such as building and inspection fees. Those user fees are designed to recover operational costs (a customer pays a fee and receives a service). Impact fees are for capital costs, not operational costs.[BD1]
The use of impact fees is governed by the Colorado Revised Statutes (C.R.S.) and fees must be used on projects that expand service capacity. This may include expanding the vehicle or equipment fleet (e.g. additional snowplows to plow the additional roads created by development) or adding square footage to City facilities (e.g. additional office space to house additional Police staff needed to manage a growing community). Impact fees may not be used for operational costs, including repairs and maintenance or personnel costs.
What is an Impact Fee Study?
An Impact Fee Study uses a variety of data to project the projects or costs needed to maintain the City's level of service (LOS) provided to residents and businesses. Using that information and applying industry standard ...
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