By Cecilia Chan, GSN Managing Editor
Gilbert is looking to raise fees on builders to help pay for the cost of providing public services to their developments.
One proposed fee in particular has drawn major pushback from developers: a $3,722-per-house fee for road improvements.
“We have been building homes in Gilbert for decades,” said Miles Pinter, land acquisition specialist for Maracay Homes, at a recent council meeting. “Most of the homes built in Gilbert were built by Maracay.”
The company in 2017 spent $56 million on two projects in Gilbert, he added.
Pinter pointed out one road project in particular – the Ocotillo Road wash crossing from Greenfield Road to Higley Road, which is estimated to cost $62 million. Of that, 96 percent, or $60 million, would be borne by the developer, according to a draft Land Use Assumptions and Infrastructure Improvement Plan by the consultant group Raftelis.
In all, $165 million in road and intersection projects are included in the report with $82 million of it proposed to be covered by new development.
Town Council is expected to adopt the final version of the plan on Jan. 22. A public hearing on the proposed fees is scheduled on March 7 with adoption tentatively set for April 18.
Pinter questioned the burden on developers, saying roughly 85 percent of Gilbert is already built-out.
This new fee would impact the company’s bottom line as well as other developers by several million dollars, said Pinter, who noted that some municipalities such as Chandler were lowering its fees.
Mayor Jenn Daniels asked Pinter to work with town staff on the numbers, stating Gilbert is not at 85-percent build out as he contended.
Raftelis’ roads fee calculation includes costs associated with arterial and collector improvements as well as intersection expansions.
Gilbert staff has identified 13 projects that include intersection improvements and lane widening projects for arterials and collectors that are primarily driven by the growth, according to the report.
Jackson Moll, municipal affairs vice president for the Homebuilders Association of Central Arizona, said he’s worked with town staff to address some of the lobbying group’s concerns and for now opposed the fees.
He said he will continue to work with staff on the remaining issues and was optimistic they will reach a mutually beneficial compromise.
Other proposed development fee changes include those for fire, police, traffic signals, parks and recreation, water, wastewater and general government. The fees apply to residential, office, commercial and industrial developments.
While home builders could be asked to pay higher fees for fire and parks and recreation, decreases are proposed for police and general government fees.
For example, the current fee for police per housing unit is $1,720, which is proposed to drop down to $435, according to the report. The police fee for non-residential developers, however, would see an increase.
Councilman Victor Petersen asked staff how Gilbert’s fees compared with other Valley communities.
“My biggest concern with this overall increase is that we are at the top of the market in terms of cost,” he said.
Kelly Pfost, management and budget director, said other municipalities also were updating their fees as well. She said staff can look at the fees of other communities before the proposed changes for a comparison.
But, the comparison dollar to dollar is hard because the other cities are built out and have fewer infrastructure needs, she said.
“Look at the lifecycle of the city and where we are,” Daniels said. “The numbers are high right now.”
She added that the town needs to keep an eye on the cost of homes as development impact fees are passed onto homebuyers.
Under Arizona law, cities can assess development fees to offset infrastructure costs, but the fees must be based on an infrastructure improvements plan and land use assumptions.
The fee represents future development’s proportionate share of infrastructure costs. The fees may be used for infrastructure improvements and/or debt service for growth-related infrastructure and can’t be used for operations, maintenance, replacement or correcting existing deficiencies.