The City of Lubbock is set to host a public hearing on Tuesday, July 8, to consider the “imposition of an impact fee.”
According to the city, the Land Use Assumptions & Capital Improvements Plan public hearing will be held at Citizens Tower during the Lubbock City Council’s regularly scheduled meeting Tuesday afternoon.
However, before heading to the public hearing — which the council won’t be taking any action on the proposed Impact Fees — here’s what you need to know.
What is an Impact Fee?
“By state law, you can have impact fees that cover roadway, water, sewer or drainage,” said Bailey Ratcliffe. “In Lubbock, we only charge roadway impact fees.”
Ratcliffe, assistant city engineer of Lubbock, said impact fees can only help expand roadways, such as increasing road capacity by building new lanes or adding two lanes to an existing dirt road.
“You can’t use impact fee dollars to maintain existing infrastructures,” Ratcliffe said. “You can only use impact fee dollars to increase capacity.”
There is a further stipulation that stems from the city being divided into eight service areas where impact fees are collected. Ratcliffe said impact fees collected in a service area can only be used within that service area within 10 years; otherwise, the funds are refunded to developers.
The state further stipulates that the maximum allowable impact fee is calculated based on a land-use assumption study of the service areas, looking at road expansion projects over the next 10 years. The state then states that the city is only allowed to pass half of the cost onto developers for new developments being constructed.
“The current adopted impact fees give another 50% discount on top of that,” Ratcliffe said. “So developers right now are paying about 25% of the cost, and then the city is responsible for the other 75%.”
Who pays an Impact Fee in Lubbock?
Anyone building a new building, whether commercial or residential, with some exceptions.
“You pay an impact fee when you pull a building permit,” Ratcliffe said. “For instance, if you’re building a new home, that home would be assessed an impact fee. If you are buying onto an existing home, there’s not an Impact Fee for that.”
Ratcliffe said the purpose of an impact fee is to offset the cost of needed roadway expansions due to the traffic the new building is expected to generate.
What are the proposed changes to Lubbock’s Impact Fee?
The changes are set to increase the roadway impact fees.
“If we keep the rates where they are today, if we don’t increase them, then developers are really only covering about 12.5% of the cost over road because of inflation,” Ratcliffe said.
The current recommendation is to adjust from 12.5% back to 25%. Ratcliffe said the reason for the difference is that the current impact fees were calculated using a 2019 land use assumption study.
“The price of concrete and asphalt went up,” Ratcliffe said. “The price of labor went up. All of the line items when we bid out a roadway basically went up.”
Also, there is no set standard rate for Impact Fees in Lubbock. Depending on where developers want to build, there are different impact fees due to their calculation method and how developed the area’s road infrastructure already is.
However, areas G and H are set at $0. Ratcliffe said it was done so by the council to encourage redevelopment in the area.
Who is proposing the changes?
The changes come from the Capital Improvements Advisory Committee (CIAC) as recommendations and the Lubbock City Council reviews and approves or denies the recommendations.
According to the city’s website, CIAC serves as an “advisory and liaison committee to the city council in the statutorily required study for the consideration and potential imposition of impact fees.”
The committee also helps establish a ten-year Capital Improvements plan to set impact fees and advises and assists the City of Lubbock in adopting land use assumptions.
The committee is comprised of six members and a chair, all of whom are citizens serving three-year terms. The current committee is comprised of three individuals representing the real estate, development, or building industries. The rest are citizens.
So what’s next?
Here’s the schedule of each public hearing and votes for adoptions:
For more information on impact fees, visit https://ci.lubbock.tx.us/departments/engineering-services/impact-fees.
Mateo Rosiles is the Government & Public Policy reporter for the Lubbock Avalanche-Journal. Got a news tip for him? Email him: mrosiles@lubbockonline.com.
This article originally appeared on Lubbock Avalanche-Journal: What are Lubbock impact fees, what are the proposed changes? Here’s what you need to know
Reporting by Mateo Rosiles, Lubbock Avalanche-Journal / Lubbock Avalanche-Journal
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