Pima County's Paltry New Housing Impact Fee Won't Begin To Cover Growth Costs. By Jim Nintzel WHEN THE PIMA County Board of Supervisors narrowly passed a $1,550-per-house impact fee last month, it was the culmination of a long and ugly struggle between developers, county staff and politicians facing re-election. "It's been very slow because the issue is divisive," says Pima County Administrator Chuck Huckelberry. "We've had a lot of discussion with the industry--more than we would normally have with the industry--and so that process...has kind of been drawn out." The $1,550 figure, significantly lower than the various amounts county staff recommended for different areas of town, has drawn mixed reviews: Some say it's a start, some say it's a joke, some say it's a disaster. The idea seems simple enough: Since new growth forces the county to build and widen roads, current taxpayers are seeing their taxes rise to foot the bill for the new residents who are moving into newly built luxurious master-planned communities. Today, the county is looking at about $485 million in transportation needs. Why not force developers to pay a portion of that burden with an added fee on each new home? Impact fees are hardly revolutionary. They've been used around the country in places like Atlanta, San Diego and Boulder, Colorado. But here in Arizona, enacting impact fees is no easy task. To begin with, the state law which allows communities to impose impact fees is horribly limited; the fee can only be used for widening or building new roads. Recently, three Maricopa County mayors, including Phoenix Mayor Skip Rimsza, called on the Arizona Legislature to give them the power to impose impact fees to help build schools. Actually imposing impact fees involves a methodology employing abstract concepts such as "equivalent dwelling units" (EDUs, in county staff lingo) and multipliers and formulas and average costs, resulting in equations that are only slightly less complex than quantum physics. That's one reason it's taken so long for Pima County staff to complete the process, says Huckelberry, who remembers local bureaucrats first began talking about impact fees four years ago. "We had consultants approved in October of '92, an election occurred and then in '93 we had consultants unapproved," Huckelberry recalls. At least one source on the Board of Supervisors says the consultant money was "eaten up" to delay the impact fee process. In the last two years, however, staff has managed to put together a formula for determining impact fees in different "benefit zones" around Pima County. The recommended impact fees, which must be spent in the zone in which they were collected, ranged from $1,824 in the Catalina foothills to $3,876 in Silverbell Tortolitas. Not surprisingly, the Southern Arizona Home Builders Association had problems with the high figures. In his correspondence with the county, SAHBA president Alan Lurie quibbled over methodology and griped about impact fees driving the cost of affordable housing through the roof--even though market forces themselves have driven the cost of an average home from $81,760 in January 1989 to $120,438 in November 1995. The process has crawled through a long series of rancorous public hearings, some of which drew hundreds of people. "If you want to fully and fairly and openly and at great length debate the issue, it can take a while," Huckelberry says. When it came down to the wire on August 19, the impact fee ordinance almost died again, when District 3 Supervisor Ed Moore made a motion to scrap the whole process. That motion failed. The supervisors finally passed a $1,550 impact fee, with Moore encouraging Lurie to sue to the county. But Huckelberry isn't worried. "We're real comfortable with it withstanding any legal challenge," says Huckelberry, who estimates impact fees will bring in $40 million over the next 10 years--less than 10 percent of the latest transportation plan. Whether impact fees climb will now depend on the make-up of the board after the November election (see the accompanying box for candidates' positions on impact fees). They could climb higher or be scrapped altogether. Whatever happens, Huckelberry says impact fees aren't going to solve our transportation problems. "Transportation impact fees at the rate they're set aren't by themselves going to solve any significant portion of our transportation problem," Huckelberry says. "That problem is one that we've been growing into for the last 20 years. What impact fees are is a proportional determination of equity, meaning that new folks who cause the demand for new and wider roads are paying some portion of their cost over and above what they would pay in taxes. It's kind of an equity issue as opposed to direct proportionality."

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