PORTSMOUTH — Assessing impact fees to developers, to offset associated municipal costs, was debated by the Fee Committee Wednesday, after being panned by the Planning Board.
The proposal was sent to the committee by the City Council and was debated in contrast to a current process described as development mitigation negotiations.
City Councilor Esther Kennedy pitched the idea of impact fees in February saying, "We have to find ways to make sure our infrastructure supports growth." The purpose, she said, is to offset costs to taxpayers associated with development impacts to water, roads, sewer, schools, police, fire and public works.
Mayor Rick Becksted has proposed impact fees for years and, during Wednesday’s Fee Committee meeting, members and councilors Petra Huda and John Tabor both said the topic was broached while they were campaigning last fall.
The mayor previously said he suggests impact fees be waived for below-market rate housing construction to encourage that.
During Wednesday’s meeting, Planning Director Juliet Walker said the Planning Board decided not to recommend the imposition of impact fees. She said if the City Council decides to implement them, a consultant will have to be hired to ensure they are defensible in a court of law and city ordinance would have to be rewritten.
Public Works Director Peter Rice said there was a recent precedent-setting court case mandating impact fees be used for new services directly tied to specific developments, or the money has to be returned to developers.
Walker said the city’s current process includes negotiating with developers to complete related infrastructure work, which has included sidewalk and road improvements. She said there are already water and sewer fees and the city has capacity to meet continued growth.
Walker reported the city of Dover has a staff person devoting 20 hours a week tracking its impact fee program.
Dover’s website reports, "Impact fees may be assessed to new development to compensate the city and the school district for the proportional share of capital facilities generated by new development in the city of Dover." Dover’s latest advisory about impact fees shows $8,895 is assessed for a single detached home with $1,326 for recreation, $325 for police, $615 for fire and $6,629 for schools.
Tabor noted Portsmouth’s wastewater treatment plant and schools have available capacity and impact fees can only be used for future capital costs driven by development. He noted about 800 housing units were added in the city during the past decade, "Which isn’t a lot."
"One hundred units a year of housing is not going to require a new sewer plant, we’ve got a lot of sewer capacity. And it’s not going to require us to expand a school," Tabor said.
Rice added the city charges a water-sewer "capacity use surcharge," which is a fee to buy into the infrastructure program financed by existing ratepayers.
Huda said the city just purchased a new ladder track for more than $1 million and the selling point was that it could reach roofs at new downtown buildings. She asked if the city could continue to charge as currently, while also adding impact fees.
"You can do both, but the Planning Board does not believe this is the right way to go," Walker said.
The city planner said if a decision is made to proceed with impact fees, an expert should be hired "for a real analysis of benefit."
Tabor said, "I’d be concerned about spending $50,000 for a study to find out we have a pretty small opportunity."
"Money’s tight right now," Tabor said, noting he heard from residents while campaigning they were concerned about development growth not reducing property taxes.
Huda asked if city staff could gather specific data, for specific recent development projects, showing exactly how the city has benefited. Walker said she will provide a report back to illustrate how the current program has worked and that’s expected to be presented to the City Council at a future meeting.
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