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Archive for Monday, September 6, 1999

IMPACT FEES ON CITY AGENDA

September 6, 1999

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City officials and developers have different views on whether new growth pays for itself.

The cost of developing new property in Lawrence would increase under a plan Lawrence city commissioners will consider Tuesday night.

The plan would raise the cost of hooking up water and sewer service to newly-developed property.

Under the plan, hookup fees for a typical home would increase 41 percent over the next five years, from the current $315 for a 5/8-inch water line to $405 next year and $445 by 2004.

The cost of a new sewer hookup for the same house would go up nearly 80 percent, from $410 currently to $605 next year and $735 by 2004.

City officials refer to the charges as "system development fees" because they are intended to reimburse the city for the cost of building and maintaining larger water and sewer systems to serve the newly developing areas of town.

Developers commonly call them "impact fees" -- assessments for the impact of their developments -- and are generally opposed to any increases.

The proposed increases are part of a package of rate and fee adjustments recommended last month by Black and Veatch, an engineering firm hired to study Lawrence's utility system financing, a package that also included general rate increases for water and sewer usage.

Those rate hikes were given first-round approval two weeks ago and will be considered for final reading Tuesday night, but commissioners delayed voting on the system development charges so they could have more time to hear from developers.

The debate over "impact fees" centers on the question of whether new development pays for itself.

The city contends that while new development adds to the city's property tax base, it also adds to the cost of operating the utility system, which is not supported by property taxes.

Developers, on the other hand, argue that the benefits of growth outweigh the additional costs. The jobs associated with construction and the new wealth brought into the city from new residents add to Lawrence's overall economy, they argue.

City officials point out that the system-development charges they are proposing are substantially less than those charged in other growing communities.

In Overland Park, for instance, developers not only pay hookup fees to the county for water and sewer service, they also pay an excise tax of 14.5 cents per square foot to the city. That fee is aimed at recovering a multitude of costs associated with growth, such as the cost of additional police and fire protection, building new parks and maintaining a larger network of roads and thoroughfares.

For a modest 1,800-square-foot home, that would translate to an impact fee of $261 on top of the cost of new water and sewer hookup. But for a retail store with 100,000 square feet of shopping space, it would mean an impact fee of $14,500.

The Lawrence City Commission meets at 6:35 p.m. Tuesday at city hall, Sixth and Massachusetts.

-- Peter Hancock's phone message number is 832-7144. His e-mail address is phancock@ljworld.com.

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