LOVELAND — The Loveland City Council has voted on first reading of an ordinance to increase capital expansion fees charged to new development in the city. Second and final vote is scheduled for Dec. 19
Capital expansion fees provide money for new city infrastructure required by growth, according to a story in the Reporter-Herald. Loveland’s 10 types of CEFs, also known as impact fees, help fund roads, community parks, libraries, emergency medical services, fire and police.
While owning a building seems like something every successful business should do, that’s not always the case. For many companies, it makes more sense to continue leasing space, freeing up time and capital that can be better utilized in other ways.
The city justified increases because current fees are 75 to 80 percent of what is needed to keep up with costs of service, a council memo said. If fees had been unadjusted, capital projects could be delayed, the memo said.
“The downside to not linking the fee adjustments to the appropriate level of cost inflation means that the City is under investing in the capital projects and equipment needed to serve the growing community,” the memo said. “Service levels have been slipping. Projects are shifting further out into the future.”
Capital expansion fees must be updated each year, per city code. The current yearly increase is 3.66 percent per year, while sources show that construction prices rise between 4 and 5 percent per year, the memo said.
Councilors directed staff to investigate if there are communities that lower impact fees when a development uses a metro district to fund their own internal parks and recreation facilities.