Fayetteville is looking at levying water and wastewater fees on new housing or business development

By Anthony Childress

FAYETTEVILLE -- Hours of debate and deliberation Monday night moved the Fayetteville City Council closer to a decision on whether to use impact fees as a future revenue source.

During the special session, the council adopted two amendments to the proposed impact-fee ordinance.

The city is looking at levying water and wastewater fees on new housing or business development, based on how such projects affect the city's existing or future infrastructure.

Last week, City Attorney Kit Williams read the eight-page ordinance at the council's regular meeting, but no action was taken then.

One of Monday's amendments to the proposed ordinance, which came at the urging of Alderman Robert Reynolds, exempts existing developments from paying a water or wastewater impact fee, or a "new connection to the system of a wholesale customer of the city's water or wastewater system, where collection of the city's impact fee is required" by contract.

The second amendment, offered by Alderwoman Brenda Thiel, would not require an impact fee for enlargement of a single-family home.

To this point, councilors have debated the merits of implementing such fees and have hired an outside consultant to study fees and deliver recommendations.

Duncan Associates of Austin, Texas, was chosen to conduct the study and suggest maximum impact fees that could be adopted to help fund growth-related infrastructure improvement for water and wastewater facilities and major roads.

The study also will update the city's existing park-land dedication and fee-in-lieu requirements.

Jim Duncan, representing Duncan Associates, attended Monday's meeting and answered lingering questions about the ordinance. The city paid $8,100 to the firm for drafting the proposal, according to city planner Tim Conklin.

During his presentation, Duncan indicated the city could net about $1 million in revenue from impact fees. He also said councilors face "policy decisions" in determining how fees will be implemented. For example, he said the city could assess fees based on dwelling size or meter size, noting that 95 percent of municipalities choose the latter.

The council discussed how fees could be administered fairly and equitably, with aldermen Tom Bechard and Bob Davis raising doubts about whether impact fees are anything more than a new tax.

At the same time, fellow councilor Don Marr said he was concerned about how a new development would stack up with an existing one in terms of fairness.

"I am not for or against impact fees in general, but I am opposed to this impact fee ordinance," Bechard said. "We have to agree on parameters of what is fair. This is a tax and as such, if it were up to me, I'd put it to the voters. Let the people vote on that."

Among the other issues raised during the special meeting were anticipated court challenges to fees, providing waivers for builders who tackle revitalization in low-income areas, adding infrastructure to impact-fee coverage and potentially raising water rates or property taxes rather than introducing fees.

Three years ago, the council approved on a five-year capital improvement program, which included funds for an initial impact-fee study.

A committee of residents representing civic and professional organizations selected Duncan Associates to undertake the study, a move cemented by councilors in October 2000.

To this point, three study phases have been completed and now city leaders are left to decide whether impact fees should be adopted.

The first phase dealt with policy directives and a 10-city development fee survey. The second focused on impact fees for roads, parks dedication, wastewater and water.

The final phase, approved by councilors in April, endorsed plans to use a sliding-fee scale, using square footage of new construction as its basis.

At a special meeting July 30 to sift through the consultant's findings, the council voiced its backing of wastewater and water fees, backing off road fees because Williams said they "probably were not legal."

The impact fees for a new single-family 1,300-square-foot home would total $848, with $619 for wastewater capacity and $229 for water service.

At the same time, a single-family 2,300-square-foot (or bigger) home would be assessed $1,367, with $784 covering wastewater and $290 for water.

Fees are steeper for larger residences because there tends to be a higher number of occupants living in them, meaning more services are used by more people.

Multifamily residences would pay $792 in fees per unit, with $578 pertaining to wastewater and $214 for water. Manufactured housing would be assessed $1,074.