City to study new growth fees

Lawrence city commissioners want the city to more strongly guide growth. But doing so will take cash.

Commissioners on Wednesday indicated they would support a study to determine how to pay for new roads, utilities and other systems in areas where they want development to follow.

“I don’t think you should look at any one type of financing until you’ve heard the range of options,” said Eric Damian Kelly, a consultant with Duncan Associates.

Kelly is preparing an “adequate public facilities” report to help city officials decide how to build infrastructure where they want development to happen instead of letting developers decide where the city should provide new services.

A traditional method to pay for infrastructure is a “benefit district” in which a short-term tax is levied on properties served by the new infrastructure. In that way, payment is made at roughly the same time as the improvement.

But Commissioner David Dunfield noted the technique was impractical when the improvements were made ahead of development  no one would be occupying the properties to benefit from or pay for the services.

An alternative would be for the city to issue bonds to pay for a project, then charge those costs (in addition to building permit fees and other licenses) when a developer prepares to build. The developer would pass those costs onto the eventual property owners.

The method has not been used in Lawrence.

“We could go ahead and invest the taxpayers’ money,” Dunfield said. “But we need to determine a method to recoup the costs.”

The cost of a study to determine which fees would be appropriate could range up to $25,000, Kelly said after the meeting. The adequate public facilities study is already costing $22,000, a third of which is being paid by the county.

Commissioners said financial determinations were critical to deciding how firm a hand they would use to guide growth.

“That’s something we need to get started on,” Mayor Sue Hack said.

Business leaders will be watching the process closely.

“It’s good to see we’re taking a proactive approach,” said Tim Holverson, vice president of public policy for the Lawrence Chamber of Commerce. “I hope that as we go through the process, commissioners will solicit a lot of input from the public and business community.”

Commissioners said they would take such input. Kelly said the finance study would take 90 days to complete; other workshops and meetings for the facilities report will take place in the next six months, although no schedule has been unveiled.