Greeley task force discusses new fees

GREELEY – Development impact fees on new construction throughout Greeley are going up this year, but exactly which ones and how much – and when – is still under discussion.

An 18-member task force studying the proposed fee increases is scheduled to report its findings to a Greeley City Council work session on June 12. The ad hoc task force, which includes real estate agents, builders, architects, bankers, water and sewer experts, chamber of commerce executives and city staff, was formed after opposition to the proposal surfaced at a public hearing in February.

Eric Umholtz, director of business development at Roche Constructors in Greeley, said he led the rally against the new fee schedule. If implemented, the increases could raise the current fees for some categories of commercial development as much as 69 percent this year and more than double them by 2011. Residential permits would see even greater increases sooner, depending on location of the development.

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“Greeley is having a tougher and tougher time attracting new business, and construction in particular is struggling right now,” he said.

Umholtz is now part of the task force, which he said is evaluating other sources for funding infrastructure such as roads, trails and storm drainage.

“We’re looking at diversifying the funding, taking a little bit from a lot of pots rather than everything from just one pot,” he said. “Because the pot they want to take it from is struggling.”

John DeWitt, president of the Greeley Area Realtors Association, spoke at the hearing and is also part of the task force.

“We don’t want to see the budget balanced on the backs of the builders and developers, especially now, when the housing market has slowed down so much,” DeWitt explained.

Both agree with Director of Finance Tim Nash that the city needs more revenue to build infrastructure to serve new developments.

“We’ve got $14 million worth of road projects in our five-year plan that we can’t fund,” Nash said. “No one is saying there isn’t a need. The question is where the money comes from.”

This task force is not dealing with funds needed for road repairs or maintenance, which come from sales taxes. At issue are fees imposed on developers and builders when they pull permits for new projects on raw land.

Scientific analysis

Some of the concerns over the proposed increases include raising fees during a down economy; using fees to encourage development in west Greeley at the expense of infill sites in areas already developed; imposing residential fees per unit rather than per square foot; and the possibility that higher fees in Greeley will drive development to other cities or out of the region entirely.

The finance department compiled data comparing Greeley’s existing and proposed development impact fees with similar fees in other Northern Colorado cities. Nash said the comparison cities were chosen geographically, but Umholtz felt that Greeley should not be compared with Fort Collins and Loveland.

“Cities that front on I-25 have higher real estate values, and development fees are a smaller piece of the total value,” he said, adding that a better comparison would be with communities such as Brighton and Fort Lupton.

Nash said gathering the data for the comparison was difficult, because “different communities have different philosophies on what fees you try to recoup.” His analysis focused just on permit fees to make the comparisons as fair as possible.

Greeley raised development impact fees just three years ago, but not enough, Nash admits, given that Greeley/Weld County has been among the fastest-growing metro areas in the nation over the past five years.

He defends the methodology used to create the new fees, which is based in part on data collected by the state Department of Transportation. The formula takes into account the amount and type of traffic and other needs generated by each type of land use, then allocates the cost of the infrastructure needed to accommodate that level on a per unit basis.

“No one is questioning the methodology,” Nash said. “With the residential fees, especially, the objections are almost purely economic.”

In fact, taking a hard look at all the fees resulted in a recommendation that retail projects in west Greeley get an immediate reduction of 10 percent, or 25 percent under the phase-in alternative.

Eye-opening process

The task force has met twice so far, once to hear Nash’s explanation of how the city’s budgeting process works and once to throw out alternative ideas for raising the needed revenue.

“The ideas fall into two categories: where to find more money, and changing our standards to make (permits) cheaper,” Nash said.

At the next meeting, April 27, Nash will present an analysis of the impact of implementing the various ideas that have been proposed.

He expects the task force to meet three or four more times before the final report is ready.

DeWitt is pleased with the process so far, and said learning how the city budget is created was “an eye-opener.”

“Sometimes business has no idea how many things have to be included, and how they are all connected,” he said. “And sometimes government doesn’t realize how some changes can affect business.”

Umholtz also praised the work of the task force.

“This is one of the most progressive things we’ve done in Greeley, as far as I can recall,” he said.

Business Report correspondent Luanne Kadlub contributed to this article.