Colorado Springs, Colorado

Impact Fee Feasibility Study 
   

For the City of Colorado Springs, Duncan Associates evaluated the feasibility of utilizing impact fees and/or development excise taxes as a means of funding capital facility needs caused by recent rapid growth. Questions addressed by the feasibility study were 1) whether or not the City should use an impact fee or development excise tax, and 2) if so, what types of facilities should be funded by impact fees or excise taxes. The firm was subsequently hired to prepare a citywide impact fee study for roads. The feasibility study reviewed current City developer

exactions and fees, and determined that its drainage basin fees and water and wastewater connection charges clearly met the definition of impact fees. Other exactions that were examined included park and school land dedication and fee-in-lieu requirements and road exactions. The City also makes extensive use of special districts, and several of these have been used to fund major improvements to the arterial street system. The study developed three tiers of recommendations. It concluded that, if the City were going to make any single change in its development exaction policy, it should develop a road impact fee to fund city-wide arterial street improvements. The study indicated that a system of arterial street impact fees that provided credit to developers who were required to make arterial improvements as a condition of development approval would do much to "level the playing field" among developers, streamline the development review process, strengthen the legal defensibility of the City's road exaction policy, avoid the complexities inherent in establishing special districts to fund limited sets of improvements, and provide a major additional source of funding for growth-related road improvements. The study also noted that a development excise tax for arterial streets that provided credits would function so much like an impact fee that there would be no advantage in calling it a tax.