HomeMy WebLinkAboutLetter to Impact Fee Review Committee.pdf
January 30, 2017
Impact Fee and Capacity Fee Review Committee
RE: Annual Update of Fees
Dear Committee Members:
Just in review, the purpose of Impact and Capacity Fees is to have new construction, as much as possible,
pay for the impact it has on city infrastructure, i.e. water, sewer, parks, police, fire, and streets. This helps
minimize the burden of growth on current residents and maintain existing service levels. Since the City of
Rexburg tax revenues have been severely limited by state law and are very low as compared to other
similar cities, the City Council has implemented these fees.
As you may recall, in 2014, this committee requested to review the Impact and Capacity Fees annually,
instead of every 5 years. This was so that the necessary increases in these fees would not be so large due
to waiting 5 years to update them. This committee also requested that any increase of the total of these
fees for any category of construction (ie. Single-family dwelling, multi-family dwelling, or non-residential)
be limited to 5% per year, even though the update of some categories might otherwise require a larger
increase to “catch up” to actual cost.
It was also decided that, if possible, the committee would review the annual update of fees by email. The
suggestion was also made to use the construction cost index in helping assess for inflation until a full
comprehensive study of impact fees may take place (we estimate a cost to do this of $60,000 to $100,000).
The building cost index increased 2.09% over the last year, while the construction cost index increased
3.36% over the last year (September to September). The recommended increase to single-family dwellings
was 2.03%. The recommendations for the other categories were higher due to larger gaps between actual
and recommended. We are still under the full cost in all categories, with the largest gap being in Single
Student Apartments.
Given the above, we have thoroughly reviewed the costs related to these fees and offer the attached
schedule of fee updates as you requested.
Please let us know whether you think these updates are appropriate no later than Monday, February 6th.
If you wish, we could schedule a meeting to go over this information the following Monday or Tuesday. We
are advertising these fees this week, which means they cannot be increased above the advertised amounts
and are hoping to review these fees (with no decision made) with the City Council this Wednesday,
February 1st, and hold a public hearing to finalize them on March 1st.
Also, beginning in 2018, we plan to recommend a new committee member each year to replace one of the
members, starting with Troy Kartchner, who we believe has been on the committee the longest. This will
create a 5 year term going forward for each member, which may still be too much to ask for.
We greatly appreciate your service on this committee,
Matt Nielson, City of Rexburg CFO
Richard Horner, Consultant