When voters approved a measure for the Town of Camp Verde in 2006 allowing it to collect development impact fees from new construction, there was extensive spirited debate on both sides of the issue.
Now the debate is moot, at least for the time being. The Camp Verde Town Council voted unanimously Oct. 26 to suspend the collection of impact fees in response to new state rules the council felt would make the fees more trouble than they’re worth.
Development impact fees are charged when there’s new construction, the idea being the money will be used to offset the demands increased growth will put on local infrastructure, such as streets, parks and law enforcement protection.
The moratorium on the fees takes effect Jan. 1.
The new rules, as outlined in Arizona Senate Bill 1525, require municipalities that collect impact fees to complete a new fee study by August 2014 or else the town wouldn’t be allowed to collect fees anyway. The town would also have to replace its existing infrastructure plan to bring it in line with the new law.
That could cost the town of Camp Verde around $50,000, according to Camp Verde Community Development Director Mike Jenkins. This year, the impact fees the town has collected have been “minimal,” Jenkins said. The town collected just over $2,600 in fees since the current fiscal year began July 1. The town has a total of just over $288,000 in its funds set aside for general government, library, parks and recreation and law enforcement, according to town documents.
Additionally, the new law places restrictions on how a local government can spend the fees it collects. For instance, the town could no longer collect money for use in building a library more than 10,000 square feet or the development of parks larger than 30 acres. Money can’t be collected for general government services either or necessary services not outlined in the town’s infrastructure improvement plan.
Money collected prior to the law taking effect can still be used for its original purpose, as long as the town spends it by 2020.
To avoid the expense and time it would take to continue to collect impact fees in compliance with the new law, the Town Council decided to stop collecting them altogether.
The town did look at a proposed impact fee collection plan development by the League of Arizona Cities and Towns but ultimately rejected going that route.
“The amount of money we would have to pay for this process … could cost more,” Jenkins said.
Councilwoman Robin Whatley did express concern that by halting the collection of impact fees, which was approved in an election, the council was arguably subverting the will of the voting public.
Whatley said she felt development should help pay for the impact it creates, but added the state government was hampering how the town governs itself on the local level.
“The state, once again, is doing our job for us,” Whatley said.
Mayor Bob Burnside said another council could revisit the idea of development fees sometime in the future when the economy is improved and development starts up again.
Burnside also suggested getting rid of the fees entirely instead of just placing a moratorium on them as a way to potentially attract business and development.
Either way, the moratorium would last until August 2014 when the current system would have been discarded anyway.
