Developers and realtors, last week, said they have no problem with paying impact fees but questioned timing, during a meeting with city authorities.
After the Sidney City Council tabled a decision to implement $6,000 impact fees, city officials met with the developing side Tuesday to gather input, most of whom objected having to pay extra fees when financing has already been acquired for projects now under way.
Developer Chris Storm, heading the Pheasant Run Subdivision, said that even though he has “no problem” paying impact fees, having been commuting to Sidney for more than a year to get the housing development going, he wonders why he must pay an additional $44,000 since his project has already begun. “When I build something, I figure out the costs and how to pay for it,” he said, suggesting the city implement a grandfathering clause for the developers whose project are already started. “I think those of us that have in good faith made this investment do not deserve to have this fee imposed upon us.”
Realtor Nick Jones echoed Storm’s sentiments, asking the council not to “change the rules after the game is started” and later questioning the city on why it hadn’t raised sewer and water rates sooner to pay to upgrade and expand existing infrastructure.
Impact fees may only be used to pay for new infrastructure, while current fees that residents pay for monthly service pay to keep up the existing sewer and water systems.
Calculated impacts to the sewer system will cost the city about $24 million, which authorities expect to pay as follows: one-third through impact fees ultimately paid by new users, one-third through grants and other sources, and one-third from existing and future users’ rates. The assumption, here, is that the city needs to find a way to pay the costs without driving development away.
Calculated impacts to the water system will cost the city about $7.6 million. Impact fees from new development are planned to cover about $6.6 million of the cost, with the remainder coming from user fees.
After gathering input, the city council is considering whether to allow developers to pay impact fees over a period of five years, or waive or reduce the fees for projects already in the pipeline. This would pass more of the costs of improvements to other sources such as existing users or possibly additional grant funding.
While the main argument circled around who should be exempt from the fees, some argued whether this was the right time at all for impact fees.
Realtor Leif Anderson argued that Sidney, unlike Watford City and Williston, has had little development and a poor track record. “For whatever reason we’ve really had a hard time attracting developers,” he said. Those projects currently being developed have lots of money put up front, and now is “an extremely delicate” time, he added, when developers will find out if their investments were good decisions. “If it is successful, we’ll probably see other developers have interest.” That’s when the city should consider implementing the fees, he said.
Still, others said the new impact fees may force developers to rethink continuing their projects. Representatives of the Mountain Plains Equity Group, the group responsible for the future affordable housing complex at the former community services building, said they may not be able to move forward because there is “no way” to adjust rents to accommodate having to pay the extra impact fees.
The council is set to hold another public hearing at its next meeting, Oct. 15, and in the meantime mull over information from Tuesday’s meeting.
“We just need to figure out what the best plan is for everybody involved in this,” Councilwoman Deb Gilbert said, noting that indeed the council knows the city service rates have been too low for too long. “Now we look like the bad council because we have to start raising them, and we understand they should’ve been raised all along, but some people didn’t feel they should be.”
The city, she said, is “hoping and praying” the 2013 Montana Legislature will redirect more oil and gas revenue back to the city.