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COMMENTS BY TERRY WERNER
August 23, 2002

INFRASTRUCTURE FINANCING/IMPACT FEES

An issue of great importance to our city is whether or not, and how, to implement infrastructure financing, commonly called impact fees. Impact fees would be paid by developers and builders to help with the expenses associated with expanding the city's infrastructure into new developments. Those expenses include items such as water lines, sewers, parks and streets, and services such as fire and police protection, libraries and schools. We can assume that the fees, entirely or in part, would be included in the price of construction in new developments.

There is general agreement among interested and involved parties that impact fees are necessary in order to provide the infrastructure for our expanding city. However, consensus has not been reached on what formula should be used for determining the level of those fees. A core question is how much of new infrastructure should be paid by developers/builders and how much by the city/tax payers?

The Mayor has developed a proposal which is to be considered by the Planning Commission in September. The City Council would review and vote on the ordinance in October. I think this timeline is hasty, and have grave concerns that we have not yet gathered sufficient information with which to make sound decisions. I commend Mayor Wesely for bringing the issue forth, and I support such a policy. However, I cannot commit to supporting the Mayor's current proposal. We need more fact-finding and input from the public before developing the actual ordinance for consideration by the Planning Commission and City Council.

In short, the ordinance before us for consideration, needs to be a comprehensive measure. The starting point should be twofold:

       
  1. The determination of what items needed for new development are to be paid by developers and at what rate.    
  2. The development of budget projections for the next five years and 10 years, based upon the adopted Comprehensive Plan, and the identification of revenue sources.

More specifically:

Number 1:  We should determine which items are to be subject to impact fees. That determined, what percentage of the actual costs of those items are to be borne by developers? This cannot be an arbitrary number that simply sounds fair. It must be based upon concrete information from which we can determine a rational portion.

After determining the percentage to be paid by developers, we need to consider and decide how, and by whom, the remaining costs of expanded infrastructure are to be paid. For this, I think we look at all of the costs associated with growth. For example, we can make better decisions if we have the current and projected figures regarding the costs of, and costs related to, the following:

 
  Cost to the New Homeowner Cost to the Existing/Current Homeowner or Developer
Arterial Streets    
Water Capacity    
Neighborhood, Community, & Regional Parks as Outlined in the Comprehensive Plan    
Fire Protection - At Current Level    
Police Protection - At Acceptable Level    
Schools - At Current Capacity    
Libraries - Same Ratio of Current Population    
Mass Transportation - The Future    
Totals    

Number 2:  Without information on budget and revenue projections, and how they fit with impact fees, I cannot make reasoned decisions regarding other questions related to infrastructure (i.e. raising water rates and issuing bonds to build new fire stations). We would be remiss if we don't consider the "big picture" and how all the pieces fit together. I am confident that a business plan can be developed with the talent available in our city within a matter of two or three months. I would welcome the opportunity to serve on such a committee with a charge of putting a plan together by December 31st. With such a document in hand, we could pass the necessary changes for implementation by June 1, 2003.

Additional suggestions include:

      * A guarantee that the process would expedite the development process and be predictable.

      * A reduction in the size of "service areas" so as to ensure that the fees paid directly impact the area of development (e.g. under the Mayor's proposal, the city would be divided into quadrants or "service areas." Fees paid in a quadrant would be used for infrastructure in that quadrant only).

      * A plan for catching up on repairs to our current infrastructure.

      * The inclusion of impact fees for future mass transit needs. It is short-sighted to continue to spend millions of dollars on more and wider roads with no consideration of the inevitable future transit needs of Lincoln.

      * A six-year plan for Stevens Creek.

      * Consideration to "smart growth," an issue in which the community expressed interest during development of the Comprehensive Plan.

      * Not losing sight of numerous other critical issues, such as downtown development and maintenance, and low-income housing.

The implementation of impact fees is a major change in city policy. As one of those to cast a vote, I cannot in good conscience support what is currently on the table. A policy that is crafted carefully, methodically, and with due deliberation, will well serve -- and is essential to -- our community. A policy that is hastily and arbitrarily imposed with no consideration of the broader picture, would be a disservice to every citizen and our city's future. In short, we need to slow down the process, gather our facts, listen to the public, and ensure that we can justify our actions.

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