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Department of Community Development
Reference: Development Impact Fees
To: Mayor Richard N. McLean and Members of City Council
Through: Marv Falconburg, AICP, Assistant City Manager of Development; Clint Blackhurst, Interim City Manager
Prepared By: Holly Prather, AICP, Community Development Director
Date Prepared: June 20, 2017
PURPOSE
The purpose of this study session item is to discuss the rationale for development impact fees, along with giving an overview of the city's impact fees.
RATIONALE
New development typically creates a need for roads, schools, parks, open space, fire and police protection, sewer, water treatment and drainage facilities. In Colorado, the situation is particularly acute because various constitutional and statutory restrictions limit the flexibility of municipalities to increase revenue from taxes, and to spend revenue that has already been collected. Along with this, levels of federal funding for infrastructure have gradually declined over time. Municipalities have various methods of financing the costs of growth, including various types of taxes, exactions and dedication requirements, and negotiated terms via development and annexation agreements.
Generally, an impact fee is defined as a one-time charge assessed against new development that attempts to recover the cost incurred by local government in providing the public facilities required to serve the new development. Impact fees have also been described as a cost-shifting device that contributes to the efforts of local governments to cope with the economic burdens of population growth.
Colorado municipalities have a long history of using development fees. As early as the 1920s, cities in Colorado charged developers for the water rights needed to serve their development. Today, usage of impact fees in the state has expanded to finance not only water and sewer facilities, but also roads, drainage facilities, and parks an...
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