Development Excise Tax Fee Study

Status
See the 2009 Reports
Background
2008 Development Excise Tax Study

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Status:

City Council provided direction to staff on June 2, 2009, regarding the implementation of development impact fees and changes to the city's development excise taxes (DET).  In general, council consensus was to move forward with implementing impact fees (for fire, human services, library. police, municipal facilities, and parks and recreation capital improvements to serve new growth) and allocating DET capacity for transportation and park land.  Staff will confirm council direction at a July 28, 2009 study session.  The study session packet will be posted on this project Web page when it is available. 

The impact fee and excise tax implementation will be enacted as part of the official 2009 city budget process.  Any fee or tax changes would not take effect until 2010.

Additionally, council will hold a first reading and introduction of a Housing Excise Tax ballot issue on July 21, 2009.  

Council also provided direction to reduce the Education Excise Tax (EET) to zero, the current EET funds would  continue to be available and allocated in the same way they have in the past.   This reduction in EETs would help offset the increase that some will experience in DETs.

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The city's consultants, TischlerBise, have prepared revised Development Excise Tax and Impact Fee Study Reports based on council's feedback at the Oct. 14, 2008 study session . The consultant has divided the study into two separate reports. Both reports include:

• Impact fee/ excise tax rates based on square footage for residential development. This was a request from City Council and will enable the city to charge impact fees and development excise taxes on additions up to a maximum single family unit size of 3700 sq. ft. and multifamily unit size of 1600 sq. ft.
  
  
• Impact fee/ tax rates for non-residential based on type of use (currently there is a non-residential DET that applies to all non-residential development that does not distinguish among different types of non-residential uses). This was a recommendation of the consultant.

See the two reports:

Development Impact Fee Study January 2009

 Development Excise Tax Study January 2009

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Background:
Development excise taxes are collected on non-residential and residential development in the city to fund the costs of future capital improvements. The tax is a combination of three revenue sources: capital excise tax, transportation excise tax, and the park land acquisition and development fee. The combined tax continues to serve the purposes originally set forth for the three revenue sources.

The excise taxes were last evaluated in 1996. The city contracted with Tischler and Associates, Inc. ( View 1996 Tischler and Associates. Inc. Study ) to evaluate and make recommendations on how the city could bring impact fees and taxes more in line with the costs of growth. A rate structure, approved by the voters in 1998, went into effect in 1999. The approved rate structure is significantly less than that recommended by Tischler and Associates, Inc.  The development excise taxes have been adjusted by the consumer price index (CPI) since 1999.

2008 Development Excise Tax Fee Study 

The scope of the 2008 fee study encompassed the components included in the city excise tax (affordable housing, fire, human services, libraries, municipal facilities, parks, police, recreation, transportation) and a liaison committee.

At its March 18, 2008, meeting, City Council requested that staff move forward with the consulting firm of TischlerBise to prepare an updated Development Excise Tax study, with the goal of having a report in time to provide the opportunity for a potential 2008 ballot item.  As part of TischlerBise's Phase I work, Paul Tishler met with city staff and City Council on April 22 and 23.  The purpose of Phase I was to better understand city objectives regarding DET and based on analysis of existing information, recommend a Phase II work effort. 

At its May 20, 2008, meeting, City Council approved the staff recommendation to move forward with TishlerBise to prepare a Phase II Development Excise Tax Study that would include the components currently included in the city's excise taxes (affordable housing, fire, human services, libraries, municipal facilities, park, police recreation and transportation).

 Staff Memo for May 20, 2008 City Council Meeting

Development excise taxes are collected on non-residential and residential development in the city to fund the costs of future capital improvements. The tax is a combination of three revenue sources: capital excise tax, transportation excise tax, and the park land acquisition and development fee. The combined tax continues to serve the purposes originally set forth for the three revenue sources.

The excise taxes were last evaluated in 1996. The city contracted with Tischler and Associates, Inc. ( View 1996 Tischler and Associates. Inc. Study ) to evaluate and make recommendations on how the city could bring impact fees and taxes more in line with the costs of growth. A rate structure, approved by the voters in 1998, went into effect in 1999. The approved rate structure is significantly less than that recommended by Tischler and Associates, Inc.
The development excise taxes have been adjusted by the consumer price index (CPI) since 1999.

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Staff Contact: Susan Richstone, Long Range Planning Division Manger, 303- 441-3271, This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Last Updated on Thursday, 23 July 2009 01:46