P&Z votes to eliminate impact fee

The Plano Planning and Zoning Commission voted unanimously Monday to eliminate impact fees, hoping that the move will attract new construction to the area. The vote came at the request of the Plano City Council, which reviewed the matter last month.

The Planning and Zoning Commission also acts at the Impact Fee Advisory Committee. City council has the final say.

If the city eliminates the fee, it will be one of the first communities to do so, said Jeff Zimmerman, long range planner for the city.

How and when to implement the change questions the city would have to have,” he said. The issue is particularly thorny in subdivisions already under construction. If the city adopts a blanket end date, developers could halt planned projects, which haven’t begun. For example, developers might not apply for building permits for new homes within an emerging subdivision.

The city also could decide to continue the fee for projects already on the books.

“That could be a nightmare as far as administrating it,” Zimmerman said.

That question would have to be addressed in any ordinance the council adopts.

Plano has collected $44.86 million since the fee was initiated in 1990, he said.

Impact fees are charged to developers to help reduce the costs of building city infrastructure to meet the needs to of the new project. According to state law, impact fees only can be spent on capital improvements or facility expansions directly related to new development. The money cannot be used for repairs of existing pipes and water lines.

Every five years, the city must project how much money it expects to collect during the coming decade. Plano already has brought in 77 percent or $9 million of the $11.6 million that was forecasted for 2003-2013 timeframe, Zimmerman said.

He projected that the city would collect only $800,000 per year for the next five years.

“We will not be achieving the levels of $3 or 4 or 5 million like we did in the mid-1990s,” he said.

The impact fee has $2.5 million, $1.2 million of which is earmarked for paying off debt related to past infrastructure projects. The remainder of the fund will be spent similarly, Zimmerman told commissioners.

Zimmerman pointed out that the city is nearing the completion of its basic infrastructure system. Most development will focus on in-fill.

“Growth is slowing,” he said.

In addition, eliminating impact fees will allow Plano to compete with neighboring communities for new development. The lack of impact fees could become part of the city’s incentive package for economic development.

As it stands, communities that do not impose the Dallas Area Rapid Transit tax are able to dedicate more sales tax revenue to economic development programs, Zimmerman said. He also noted that many DART-member cities don’t have impact fees.

The downside to eliminating the program is that the city looses a revenue stream, which the city possibly could make up with new construction.

“Non-member DART cities can use more of their taxes for economic development,” he said. However, “New economic development expands the tax base.”

Many of those cities, which tend to be communities to the north, have impact fees. They’re also cities with sprawling open spaces and room for new development.

“A vast majority of the cities that are still growing have impact fees,” he said.

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