Council Struggles with Capital Expansion Fees

During its most recent discussion, the City Council was not able to reach consensus regarding the 2013 Capital Expansion Fee (CEF) increases proposed by staff. In total, staff is recommending that the package of residential CEFs be raised from $12,531 to $12,959.

It should be noted that CEFs are only part of the story when calculating the fees associated with building a new home. When building permit fees, utility costs and taxes are added to the CEFs, the average cost is $32,206 compared to $34,829 for Longmont, $12,603 for Greeley, $21,494 for Windsor and $26,320 for Fort Collins. The City Council had asked for this data in order to help it determine the competiveness of Loveland’s fees, but in the end this information did not drive the conversation.

Instead, Hugh McKean, John Fogle and Darryle Klassen voiced concerns about the specific methodology used, which is based on the replacement cost for infrastructure and suggested that the Council should consider using a plan-based methodology. However that decision must be delayed because the resolution to adopt the 2013 CEFs is scheduled for the November 6th City Council meeting. Some tweaking may happen,especially related to the parks CEF but any substantial discussion won’t happen until next year.

McKean also questioned the commercial and industrial CEFs which are calculated based on a fee per square foot rather than a flat fee per unit as the residential fees are calculated. Staff is suggesting that the commercial rate be increased from $1.14 per square foot to $1.95 per square foot; the recommendation for industrial projects is to raise the fee from .14 cents per square foot to 26 cents per square foot. Because the Council ran out of time, this concern was not discussed; possibly City Manager Bill Cahill will attempt to schedule a discussion on the commercial and industrial CEFs for a work session prior to Nov. 6.

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