With the economy down, the Vancouver City Council is considering putting a major development fee on timeout.
City staff asked Monday to repeal the Traffic Impact Fee Program — charged on new development based on the number of new trips it’s expected to generate — for 18 months, in order to completely redesign the 20-year-old system.
The plan is a bit of a gamble: Though development has slowed, drastically lowering the amount of impact fees collected, the hiatus could incite a big developer to move on a big project, and the city would lose out on hundreds of thousands of dollars it would have otherwise collected.
Still, Transportation Planning Manager Matt Ransom said now is the ideal time for the repeal. Traffic impact fee collection has dropped from $2.7 million citywide in 2007 to just $361,720 in 2011.
“If you need to retool the assembly line, you want to retool when the number of orders is low,” Ransom said.
He said that going by the revenue from traffic impact fees in the past few years, he expects the loss to the city to be less than $500,000. Any lost money would not be taken from the city’s struggling general fund; rather, the infrastructure improvements a new development may require will be added to the city’s $430 million list of infrastructure improvements it wishes to do by 2030.
Traffic impact fees are assessed when a developer gets a building per
mit, and the money can only be used for transportation improvements in the area in which the development occurs.
Ransom said the plan is “completely agnostic” toward whether it spurs development during the fee’s repeal. Rather, staff needs time to rework the impact fee, first developed in 1991.
Despite that, Councilor Jeanne Stewart mentioned the potential benefits to growth from the fee’s repeal, and she added that new sales tax revenue could help offset the lost traffic impact fees.
“All councilors hear about this — the impact fees make development difficult,” said Stewart.
Councilor Jack Burkman echoed Stewart’s views.
“There is great benefit in this as economic stimulus,” he said. “Let’s be honest about this and say we’re doing this because we think it’s going to help business.”
The Clark County Board of Commissioners is set to examine a similar repeal of traffic impact fees as the city and county work together on the program’s redesign, Ransom said. The matter is set to go before the city council in hearings June 11 and 18.