Q.C. resolves to keep development fees

The Town Council unanimously approved a resolution this week allowing Queen Creek to circumnavigate a moratorium in the 2009-2010 state budget prohibiting cities from charging home builders development impact fees.

The new fees approved by the council on Wednesday are called cost of service fees. They would allow the town to continue collecting money from builders during the three-year freeze. Like impact fees, they would pay for streets, sewer, parks and other infrastructure and amenities in new neighborhoods.

“The Town Council finds that the immediate operation of this resolution is necessary for the preservation of public health and welfare,” the resolution states.

Town officials said they stand to lose an average of $4.6 million a year, or $14 million over the next three years, if they don’t take action. That would mean a 23 percent bite out of the general fund, which covers most operations including public safety.

“This is baffling to me,” said Queen Creek Mayor Art Sanders. “We’ve got basically a government bailout program for private industry balanced on the shoulders of the citizens of these communities.”

The cost of service fees, which a developer will have to pay when a building permit is issued, is also used for the interest and principal payments on bonds issued for infrastructure improvements.

Whether or not the resolution goes into effect depends on the state budget, currently caught up in legal wrangling between the governor and legislature. The moratorium on impact fees is contained in the budget.

“It’s contingent on the state budget,” said town spokesman Marnie Schubert. “So if the state budget goes as is, then this will kick in.”

Rus Brock, vice president of municipal affairs at the Home Builders Association of Central Arizona, said the group hasn’t done a legal review of the resolution and can’t make any substantive comments on it.

He said the moratorium is designed to create jobs.

“We have hundreds of thousand of construction workers who are on the sidelines now because of the housing situation,” he said

John Kross, Queen Creek’s town manager, dismissed the argument that fees are what ails the industry.

“Quite frankly, they smell blood,” he said of homebuilders.

He said builders have argued against the fees since their creation in 1982, and there’s not empirical evidence that the fees stunt growth.

“To blame it all of a sudden on these fees is absurd,” he said.

Brock countered the industry has no problem with fees paying for services, including police, fire and sewer. He said builders simply need temporary relief.

“We don’t have a neighborhood without those particular services,” he said. “They’re not our favorite thing, but they’re a necessary part of growing a community.”

Tribune writer Amanda Keim contribited to this report