In the Daily Times Call Saturday Erie Mayor Andrew Moore defends the higher impact fees in his town with his assertion the revenues collected go to valuable, quality of life improvements that lead to high quality developments. “Quality has a price. We are not trying to be Lafayette,” he says in the article.
Well.
Out of context? Harmless factual reference? Outright dis on a neighbor's development philosophy?
The fact is the fee schedule goes back before Moore's time and he is now having to defend the anti-growth policies of a previous Board. The fact also is that every community is in competition with their neighbor for businesses, and smaller businesses are especially unlikely to have the deep pockets or dramatic projected financial impact necessary to negotiate more favorable deals, or otherwise simply pay the fees as a part of the game. They will go 5 or 15 miles in another direction, out of Erie, and locate elsewhere. (See Jennifer McCallums' situation in this previous post.)
A great anti-commercial growth policy, and in the long run only defensible in a vacuum, which doesn't truly exist in the competitive marketplace of contiguous growing communities. Erie may not be trying to "be" Lafayette, but they also cannot dismiss what Lafayette offers as an alternative to Erie's current and future businesses by way of costs.
From Erie's Growth Management Policy Statement: "It is the intent of this growth management policy that development shall "pay its own way." Stated another way, growth shall be self sufficient, and shall not cost existing Erie residents."
Looks good on paper - and yet is irresponsibly, self-delusionally simplistic.
Thank the 2002 Board for the idea; watch the current Board to see if it will change.
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19 comments:
I don't think it is possible to make a definitive comment on this without some idea what the impact fees in Erie versus Lafayette are paying for.
The "competitive marketplace" is one consideration for jurisdictions seeking to set appropriate fees, but let's not pretend that development is happening in Lafayette just because its impact fees are apparently less than half Erie's. It's that plus Lafayette being more central (for the moment) to the hubs of economic activity, and I suspect that high impact fees are not going to deter development in the more exposed parts of Erie (e.g., grocery stores near Hwy. 7 and County Line).
I'm really puzzled by the attitude on display here recently, which is that the City of Lafayette has enough money. Okay, I'm ready to hear that, if it's true. But this is just a short couple months after we were told this would be one of the toughest budgets to reconcile in recent years, Lowe's is a mistake because now voters won't go for a public safety tax, the City budget is based on speculation about Target, an unfavorable deal with WalMart, etc., etc. Do we have the luxury of arguing theory in Lafayette or not, what is the real story?
And, just for the sake of argument, what is so wrong about making development pay its own way? I understand competition and long-term need for commercial development, but let's not forget that the alternative to development paying its own way is a taxpayer subsidy. Or reducing the level of services across the board.
Oh, Andrew, I hope you're a regular reader of this blog. Why would you make such an inflammatory comment about your neighbors? It serves no useful purpose and will be used against you in any future cooperative efforts with Lafayette. Please blame it on the journalist - "I was misquoted...."
Now, let's look beyond the words, and look at the context of this message. Erie can't be like Lafayette. No two towns are alike.
Erie has had it's own set of issues. Start with the fact that until 10 years ago, Erie was one of the poorest towns in the County. Few streets in Old Town Erie were paved. The water and sewer systems were antiquated and failing. The roof in City Hall was falling in.
But new developments were coming. Erie was so far behind on infrastructure, the high impact fees made sense.
Now, they may be onerous. Particularly for certain small businesses.
Review the fees, and update them. Structure the fees so they attract the kinds of businesses you want. But, also make businesses pay their fair share of the cost of the impact of their business.
Small businesses, like an attorney's office, should not be hit with the same structure as a Safeway store.
But, please Mr. Mayor, if you're going to blast the neighbors, make fun of Kansas, no one would have issue with that.
From what I'm told, Erie financially is highly dependent on building and use taxes. Their retail sales tax is relatively low.
They are also caught between Lafayette and Thornton with more retail opportunities sprouting up faster on both their borders. Their "leakage" has to be extremely high.
They are funding their new Rec Center and Library by raising property taxes as they have no sales tax base.
So to me the response should be "Thank the stars Lafayette is not like Erie".
As for the "real" story regarding the city budget, the city has put its projections on the table. Akey part of budget making is the assumptions. I have mine. Others have theirs. The only thing for certain is that the city can't print money. There will be four budget workshops.
In late 2005, the city council approved the 2006 budget with verbal warnings saying to be careful. Six weeks into 2006, the Finance Director put $850,000 of cuts in place. So what does that say? At his going away party, he tells me that he was really worried about 2006 (didn't say that at budget time) but he felt good about 2007. Of course, for 2007 there was no money budgeted for road repair and minimal compensation increases.
As for the public safety tax, someone must have told you it wasn't going to be considered because of the Lowes vote. Where did you hear that, Alex? Not from me. I wouldn't even rate that as the No. 1 reason if you heard that.
Funny story (maybe): the Fire Chief first raised his proposal for a the public safety tax during his presentation on the ambulance service. During the Lowes situation, the family business provided a lot of services free of charge to the pro Lowes folks. My guess is somehow he missed the connection.
P.S. Add Broomfield to the list.
Kerry, just FYI, the following is a quote of yours from June 4th:
Lowes was "sold" using misinformation. Because of that, the city can't move forward on a public safety tax which is the only way to deal with the cost of police, fire, and ambulance for years.
P.S.S.
By the way, I heard Lui's is moving from Erie to Public Road soon.
I'm told it is a great Chinese restaurant. Looks like "quality" is coming to the right place.
You are correct, sir. Thanks.
But it isn't the number 1 reason. I should have stated that.
Alex - this may need to be its own post. What does "make development pay its own way" mean? It is a sentiment indulged in by people unclear - by indifference or denial - on how services in their community are funded. If growth was really meant to pay its own way, when you bought a home you would be hit up with either a bill or some kind of payment plan for your presumed household's size for the years of police, fire, roads, library, etc etc you MAY use. To presume that commercial developement needs to pay for "its own way" is conceptually flawed.
Commercial development is the source of services, products and jobs desired by the residents. To treat them as some kind of mooching entity that the residents need to be protected from is so off base I don't know where to start.
If you're a poor person, or on a strict budget, or otherwise don't hardly do any shopping, you're not kicking into the genreal fund, Yet you get the same protections and opportunities re: community services as someone eating out and shopping all over the place.
That doesn't mean we can dissolve Planning Commissions and other metods to guide and standardize growth. But people looking at their community's growth with an us vs them mentality regarding commercial development miss how much of a matrix all of this really is.
So you say, Dan, "What does 'make development pay its own way' mean? It is a sentiment indulged in by people unclear - by indifference or denial - on how services in their community are funded."
I don't know who you're talking about, except to say that I may be the only example of someone who brings this up on your blog. So are you saying that I'm unclear on how services in Lafayette are funded?
Let's look at the case of the signal at Caria. It could have been paid for by impact fees, or a fair portion of it could have been specially budgeted if the incremental, if relatively small, contribution of each development along the way had been tagged with a proportionate impact fee. Now it's up to the General Fund to do the heavy lifting, and that is where we run into conflicts with one pot of money trying to maintain services while at the same time getting them up to speed with the impacts of development.
The example you've given with a real estate transaction fee is preposterously wide of the mark, first and foremost because "development paying its own way" means providing adequate public facilities and expansion of services. Once the facilities and services are in place, then the cost of maintenance should fall to the City budget.
To associate my words with some vaguely defined constituency - the same one that likes to talk about how "sprawl" is solved by having less dense development, maybe(?) - is just a way to ignore the content and get right to political posturing. I've said nothing at all about protecting the community from evil commercial development, so that ought to indicate that maybe there are more views involved than previously imagined.
Yes, Kerry did tell us the safety tax would not be possible because of the Lowe's vote. It is unfortunate when people so vocally declare that the sky is falling that other voices and messages get lost in the mix.
I don't agree that the Lowe's vote has anything to do with the need for a tax - the fact is that the FEMA grant will be up sooner than we know, and strain on the GF from that and 100 other sources will become incredible. The City of Lafayette may need to get real and slash the budget, or deal with the revenue side of the picture pretty soon. All I've been trying to accomplish is to determine the City's financial standing. It seems to me there has been some good data to that effect thrown around when you tune out all the noise.
And, in case there's still anyone that wants to look at impact fees with a reasonable eye, the question of what each jurisdiction's program goes toward funding is still out there.
I have been told for years and there are studies which show residential development doesn't pay its own way. Louisville did one for the Markel development.
I have yet to see some sort of analyis as to who pays for what and how much the "what" costs. And of course the discussion of the tradeoffs of what gets funded and what doesn't rarely occurs.
For example (which isn't politically correct), there is no statement in any of the city's budget reports or financial statements that state what the actually subsidy for the Rec Center is. I thought I had figured it out a year or so ago. But surprise, there is a major cost that was not mentioned until recently. (can't get an amount out our finance department).
So in light of the services that are provided and who pays for what, I doubt the discussion will ever be based on real numbers.
As a pundit once said, "Democracy is the form of government where every one thinks the other guy is paying for it."
Some other historian predicted the downfall of democracy if the "masses" figured out they could vote themselves all sorts of perks.
What most cities hope for is that the workbees work in town and live somewhere else. A real shell game.
Andrew Moore just sent me and the council a response to my nasty gram on the article. I could post it without his permission but out of courtesy, I've asked him for it.
Kerry, your comment about Lui's perhaps moving from Erie to Lafayette is just as inappropriate as Moore's comment.
There really is no need for this level of dialogue. It serves no purpose, but goes a long way toward proving the theory that small town politics are played by small thinking people.
D-b,
Getting a little harsh there.
First, this is about Erie so I don't know what that has to do with small town politics. Second, Moore and I talked today. Thirdly, the first duty of an elected official is to his constituents.
There is still quite a lot of competitiveness between the cities. There is certainly a historical basis for it and it used to be quite violent.
Connors is being bashed here because she was anti-growth. Her constituents voted her out of office because they thought she wasn't promoting their interests.
Moore works in private enterprise. I competed against his employer for 30 years. I know the tactics. It's interesting to see them applied to public sector.
If you want to see classic small town politics, visit the Lafayette News and read the papers before the vote for the Rec Center. A helpful hint, it wasn't a vote for the Rec Center. Classic.
I'm sure we can all agree that what is in the paper, or blogs for that matter, is not always in context or even always accurate. For the most part it all works great though.
What I said is that Erie's impact fees are set based on Erie costs as we are not trying to be Broomfield, Lafayette, Boulder, or Louisville. In other words our cost structure is based on Erie costs, not any other municipality.
As many know, by state law if fees are charged, they have to be based on a defined verifiable cost structure. If we lower fees for someone the subsidy has to be made up by someone else.
Impact Fees can not be accurately discussed without a detailed discussion. What one town charges in fees, another may charge through bonds. In the end, someone is paying for public amenities, roads, and government facilities (town hall, police stations, public works, etc.) By not looking at the larger picture the debate becomes one of apples and oranges.
Dan is correct that the fee structure was before my time, however the Erie Board of Trustees are looking at it to determine if it remains accurate today.
I'm not defending the current structure nor advocating any change until the data is in.
I do know though that the fees are only a fraction of overall development costs that also include permits, land, design, architecture, labor and materials.
Erie does have incentives to compete were significant long term tax revenue is part of the negotiation.
Erie is also financially healthy and can have patience until we reach a level of population (consumers) to support more business.
I have no reason to create an us vs them mentality with Lafayette - it is a great community where my wife works, kids go to school, and we all shop.
In fact, I'm looking for our partnership to grow with Lafayette on two strategic opportunities we are both working. More on that for a future blog.
Mayor Andrew Moore
Town of Erie
Glad the Erie Mayor posted. Good comments. In context, his views about Erie not being like any other town are spot on.
Erie, because of it's size, is more capable of building a model of financing more closely resembliing the theoretical model.
An interesting comment though was about having patience and waiting until the population base is larger to attract commercial.
Retailers don't look at just Erie's rooftops before they commit. Otherwise, the Safeway would've been built in Lafayette. Another example, Hwy 7 between 119th and I25 involves Erie, Lafayette, and Broomfield. Even if Erie's population base was zero there is enough population base in the entire market to support retailers on both sides of this road.
But here's a supposition. Rather than waiting on more population, perhaps Erie understands these things are cyclical. As long as their finances hold up (let's presume residential building doesn't slow to a crawl.), Erie can afford to wait until surrounding towns build out. Erie can then backfill remaining retail needs. And, do it without subsidizing the retailers. Those who jump first will experience a dropoff in revenue as retail moves to Erie.
D-B,
Unfortunate for Erie, retail development is moving quicker on all sides of it right now. Lafayette on the west, Broomfield on the south, and Thorton to the west. Erie is not in the center of any of the 5 mile target areas retailers use. W*M is going to build in Broomfield on I-25/7, Larkridge Mall is in Thornton, etc.
To your point, W*M is advertising its current old building with an average household income of $105,000 within 5 miles of it. One has to wonder who is going to bite based on that.
Exactly how is it unfortunate for Erie? The center of the 5 mile target area is always moving.
Certainly, at some point Erie will need to get a good sales tax revenue stream to pay for road repairs, and other infrastructure upkeep. But, most of the infrastructure is relatively new, so they have the time to be patient.
Erie is in an overlaping zone of concentric target circles already. The major big box stores and malls are building around them in other cities.
They have a shot at a new Safeway.
OK, but only unfortunate (your word) if Erie was dependent on sales tax, which they are not for now. Erie's options for retail are not limited to Hwy 7.
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