Longmont City Council Endorses Idea of Deferring Residential Construction Fees

February 20, 2019
Dean Oswald works out Tuesday at the Longmont Recreation Center. City council at its study session Tuesday advanced a measure to defer when the city collects certain fees charged to builders of new residential construction. The recreation buildings impact fee is among the fees for which payment could be deferred if the measure is approved.

Longmont City Council members voted 6-1 Tuesday in support of deferring when the city collects some of the fees it charges builders of new residentialprojects.

Those development impact fees now have to be paid at the time Longmont issues a building permit for construction.

A draft ordinance up for review at council’s Tuesday night study session would give home builders the option of paying several of the fees at the time they seek a final certificate of occupancy for a unit.

The ordinance is expected to be up for a formal council vote on Feb. 26 and — if it passes that night — up for a final vote on March 5.

Councilman Aren Rodriguez said the financing a builder or developer gets at an early stage of a project, such as when applying for the building permit, is commonly more expensive than the financing needed to actually build the residence.

Those “soft costs” at the start of the project, including payment of whatever fees the city requires for getting a building permit, are expenses the builder or developer has to pass on to the buyer, Rodriguez said.

Councilman Tim Waters said the fee-deferral idea is a way to keep housing costs down, especially at a time the city is promoting efforts and passing ordinances to increase Longmont’s stock of affordable housing.

Mayor Brian Bagley and Councilwomen Bonnie Finley, Marcia Martin and Joan Peck joined Waters and Rodriguez in voting to direct staff to place the proposed fee-deferral ordinance on next week’s regular session agenda.

Councilwoman Polly Christensen dissented.

Christensen said that while she was “all for” giving homebuilders some flexibility in paying some of their fees, she thought Longmont should not wait for more than six months to collect them, regardless of whether residential construction has passed inspections and is ready for a certificate of occupancy.

Construction could take longer than the six to nine months from the time a building permit is issued, Christensen said, or the builder could encounter financial difficulties.

“We don’t want to be on the hook, and we don’t want the taxpayers to be on the hook,” she said.

Christensen’s council colleagues disagreed, however, with setting a deadline for paying the impact fees — although they would have to be paid in full before a certificate of occupancy is issued and people are allowed to live in a residence.

Finley said the home’s impacts on the city infrastructure, which are the subject of impact fees “don’t occur until there’s actual occupancy,” so taxpayers “are not on the hook.”

Waters suggested, and council unanimously supported, requiring the fee deferral program be reviewed annually by council, which could then decide to revise or end it.

Under the proposed program, deferred collections of impact fees associated with new residential construction would include water and sewer system development fees; an electric community investment fee; a park improvement fee; a recreation buildings impact fee; a transportation impact fee; a solid waste and recycling containers fee; a storm drainage system capital improvement fee and a Windy Gap water supply system surcharge.

Longmont would continue to collect some fees at the time it issues a building permit, including plan-review fees and inspection fees related to construction, such as an electrical permit fee, an electrical connection fee, a plumbing permit fee, a mechanical permit fee and a sewer inspection fee.

John Fryar: 303-684-5211, jfryar@times-call.com or twitter.com/jfryartc