This week’s city of College Station City Council meeting has an interesting agenda. There will be a vote not to raise taxes and a different vote aimed at raising water rates. On the surface this is an amazingly transparent move on the part of City Council. So much so that I am surprised that they have put these two votes on the same agenda. I guess they figured that the smart folks of College Station were capable of recognizing an increase in water rates as a de facto tax increase so they might as well not try to hide it.
Is it sinister to vote not to raise tax rates on one agenda item and then vote to raise wastewater rates on the very next item? I don’t know, but like I say, at least it is very transparent… in a back door kind of way. But really there is a lot more to this than a less than direct method of raising taxes. For this tax (water rate) increase is going directly to subsidize a very small group of citizens at the expense of the rest of us. These subsidized citizens can hardly be categorized as the needy. We are having our taxes (water rates) increased because the last City Council failed to implement impact fees and took away our ability to do so for several years thus necessitating tax (water rate) increases.
Impact fees assess the full cost of infrastructure for development and pass that cost, or a portion of it, to the developer. When a new development goes in, the developer pays for the infrastructure at the development, but there are a lot more costs that are incurred because of the development. Many infrastructure costs such as water wells, towers and treatment plants are large and centralized. There may not be an immediate need to put in a new treatment plant because of any single development, but as more developments go in eventually there will be a need to expand. It is the job of impact fees to assess the cost of centralized infrastructure so that cost can be passed on to those who are responsible for it. Without impact fees those cost have to be passed on to everyone through increased taxes (water rates,) even though the rest of us have already paid the cost of expansion for where we live. Once a development has paid the impact fee, they should not have to pay for the further expansion of other developments.
City Council is going to raise your taxes (water rates) on Thursday in order to provide what amounts to welfare for wealthy developers. Developers will argue that without impact fees they would have to increase the cost of development. That is true, it does not explain why we should subsidize them. If I could get the city to foot part of the bill on remodeling projects, I could lower the cost of remodeling. Why do this for one set of businesses and not for the rest of us?
So why are we subsidizing developers? That is simple; follow the money. Developers contribute huge sums of money to some City Council candidates. Campaign finance reports for our City Council members are available on the city’s website.
The state tightly controls the ways that impact fees are assessed. The fact is that at a maximum assessment the full cost of development is still not collected. The City of College Station paid a consultant several thousand dollars to calculate what our maximum impact fees could be. This issue came before the Planning and Zoning commission while I served. The P&Z’s role was only to provide a recommendation to City Council. There are two parts to this. The first is to except the consultant’s assessment of the fees. This simply recognizes that the consultants did their job and provided a fair assessment of the fees. If you do not accept the work of the consultant, you have in affect thrown away the consulting fee. An assessment cannot be done a gain for a period of time and you cannot assess a fee before then. The next part is to assess the fees that the city will charge. That can be from zero dollars to the maximum amount calculated by the consultant. I moved to recommend assessing the maximum impact fee because for the life of me I cannot figure why developers need welfare and because there are several other benefits that can come from impact fees, some of which also help keep our taxes lower. Unfortunately, my motion died for the lack of a second. The next motion was to accept the consultant’s calculations but to recommend that the rate be set at zero. Keep in mid that on this body was a developer whose business was directly impacted by this decision but who did not recuse himself. This motion passed including the vote of the developer.
But City Council did not take this advice. Instead they voted not to accept the consultant’s recommendation, which, in effect, killed any possibility of impact fees for at least three years. What was the motivation for this? What would have it hurt to do as the developer on P&Z recommended and accept the findings and set the rate at zero? Were they protecting the interests of their constituents or that of their donors?
Impact fees can help keep your taxes low in more ways than simply having development pay its fair share. Impact fees can be set based on the distance that infrastructure has to be extended. This encourages development not to leap frog over undeveloped land. Without this sort of structure many businesses are encouraged to build further out where land is less expensive but where they can still get city services. To keep up with this, the city keeps moving the city limits further out. It cost more in infrastructure and services such as fire, police and ambulance to serve a larger, less dense area. We also more quickly spread into traditionally rural areas such as what recently happened with Wellborn. We can keep taxes lower if we use impact fees to encourage development to happen close in. Also impact fees can be waived or lowered in redevelopment zones where the city wants to encourage new investment and redevelopment.
Impact fees are a great tool to insure that taxpayers are not paying to subsidize bad development. They are also a tool to encourage well-planned, cost effective, infill development.Read more!