In 2018, the city’s auditor’s office warned that the police and fire fees paid by Colorado Springs developers are not enough to fund construction and outfit police and fire stations as the city ââis developing.
The office came to this conclusion when asked to verify the results of a study commissioned by the city by tax impact analysis firm TischlerBise on the financial impacts of amending the annexation agreement. for the 24,000 acre Banning Lewis Ranch (BLR). The original annexation agreement, signed in 1988, was amended in spring 2018 to ease requirements on developers to spur development there.
Yet, 3 and a half years after city council approved the amendment to this annexation agreement, the city still has not proposed to change the police and fire impact fees – meaning the same Fees are in place today than they were four years ago, and the city has since annexed hundreds of acres with the inadequate fees in place.
This raises questions as to whether the city will accumulate enough money to ensure public safety in the new eastern and northeastern parts of the city where most of the new annexations are taking place.
While the city’s chief financial officer, Charae McDaniel, admitted the current fees are not adequate, she said her department is preparing a proposal that would change these fees, which will be presented to city council in the first quarter of 2022.
She said the delay was caused by the COVID-19 pandemic, as well as the complex nature of developing a new pricing structure.
But once in place, she said, the new fees should cover the necessary public safety capital projects stemming from the development.
Mayor John Suthers called for changes in 2018 to the Banning Lewis Ranch annexation agreement to encourage development. The original 1988 deal required developers to build most of the infrastructure, a hurdle so high that many simply ignored ownership and developed land just outside the city limits.
But these dormitory communities still placed demands on the city’s infrastructure, while leaving the city with no income to cope with these pressures.
TischlerBise’s $ 92,000 study found that the development of the BLR would provide 24,000 homes and a population of 61,770 over 30 years. The development would also see the construction of 9.6 million square feet of commercial and industrial space over three decades.
Providing services to this growth is expected to cost $ 403 million in municipal spending, but generate $ 451 million in revenue – a net gain of $ 49 million over 30 years.
The first 10 years, the city would receive only $ 130,000 per year in revenue, according to the study. This is because several capital improvements would be triggered early on. After the first decade, net surpluses were expected to stabilize between $ 1 million and $ 1.5 million per year.
The auditor’s office analyzed the TischlerBise study in March 2018 and found that âthe current fees imposed through annexation agreements do not cover the full cost of land acquisition, construction and the initial equipment required for police and fire stations â.
Further, the audit found “no supporting data or basis” for the police impact charge per acre of $ 677 and the fire impact charge of $ 1,631 – amounts as well. applied in other annexation agreements.
âCodifying police and fire charges would ensure consistency between agreements and allow the City to make changes as needed in the future without changing individual agreements,â the auditors said.
One of the auditor’s recommendations in 2018 – to update the city’s Parks Planning Ordinance (PLDO) – came earlier this year when the amount of park land to be set aside increased from 7.5 acres per 1,000 people to 5.5 acres.
But the issue of police and fire fees languished as the city turned its attention to the coronavirus.
âWe had a lot of other things to deal with that we had to deal with at the time. [of the pandemic]so we put that on the back burner, âMcDaniel said. These tasks included managing economic impacts, transitioning to remote working, and playing a role in the public health response, such as creating a shelter in the city auditorium for affected homeless people. by the virus.
In addition, rewriting police and fire charges proved to be complex, she notes.
The city performed a comparison with other cities, such as Boulder, Fort Collins, and Loveland, and found that they reported fees differently, making it a challenge to analyze.
âIt’s pretty highly variable along the Front Range and nationally,â McDaniel said. “Not everyone has impact fees that are similar enough to be comparable.”
The city has also adopted the strategy of finding a way to charge fees based on the increased need for public safety resources.
“We are changing the method to be based on the use of the property, because different uses create different demands on the public safety services,” McDaniel said. The burden caused by single-family homes, for example, is different from that of large apartment complexes. Likewise, non-residential use ranges from retail stores to manufacturing, with each type utilizing police and fire departments to varying degrees.
âWe will have different levels of fees depending on the demand created by the development,â she said.
In addition, state law restricts the use of impact fees to finance only capital projects and items with a useful life of five years or more, such as appliances and buildings. fire, which includes the construction of new buildings and the renovation of existing structures. Fees cannot be imposed to pay wages, she said.
City officials worked with representatives from the Colorado Springs Housing & Building Association, she said, briefing them on the methodology to ensure the new regulations accommodate all situations.
Marla Novak, vice president of government affairs for the HBA, said the HBA was “concerned” about how an impact fee increase might impact housing affordability. “Nonetheless,” she added in an email, “we understand the need for additional public safety facilities to support the city’s growth.”
McDaniel says the proposed fee schedule is not yet ready for release as it has not been finalized; given the underlying framework used, however, they will prove difficult to compare with existing fees.
“One family [development] may not see so much change, âshe said. âIt’s quite difficult to compare. “
But generally, residential subdivisions will be valued by housing unit, while non-residential properties will be valued on the basis of square footage, she said.
McDaniel said she hopes to bring the proposal to Council early next year and, if passed, the fee will apply to the whole city for all new projects. They will not be applied retroactively.
The Office of the Auditor also recommended that impact fees be collected at the stage of setting up a development, which is early, rather than at the time of issuance of building permits. “The need to build police and fire facilities may arise earlier than when future building permits are issued to developers,” the auditor’s office explained. “This delay could put a strain on City funds for capital projects.”
But the city has stood firm, arguing that the burden of public safety occurs at the time of construction, that collection upon issuance of building permits “removes the financial burden of the developer” from the outset in multi-faceted developments. phases, and charging fees at the time of the building permit will maximize fee collection as they increase over time. In other words, if a fee was paid when a multi-phase development was planned and the fee was increased multiple times over a period of years before building permits were issued, the city would miss out on the higher fees. students.
In the meantime, the needs for public safety are increasing.
The most recent Colorado Springs Fire Department station currently under construction is Station 23, located on the CSFD headquarters property east of downtown.
Station 24, in the Interquest and Voyager Parkway area, will start in 2022 and open by the end of 2023, said Fire Captain Mike Smaldino.
Station 25, in the Banning Lewis Ranch area, is expected to be built in 2023 and open in 2024, he said, noting that “several” additional stations will be needed in the BLR area in the future.
Colorado Springs Police Chief Vince Niski previously said at least one new police station would be needed in the city’s northeast in the near future.