The elimination of traffic impact and permit fees on nonresidential development will prove difficult to overcome for Clark County in 2014, according to projections from the county’s community development department.
The county’s projections show a deficit of roughly $379,000 between the amount of waived fees and the potential of future revenue.
The top reason for that deficit is because of traffic impact fees, $1.26 million of which have been eliminated since June. Another $366,925 of permit fees have been, or will be, scuttled during the same time period.
The two figures combined equal $1.62 million in eliminated fees. Meanwhile, the county anticipates receiving just $1.25 million in extra revenue from the building projects.
The county’s projections are based on new construction and tenant improvement projects that are planned to take shape across the county.
Marty Snell, the county’s community development director, said waived traffic impact fees, in particular, exceeded what the county projected to receive from revenue sources, such as retail sales and property taxes.
“We have to look very carefully at the traffic impact fees,” Snell said.
He also cautioned that there was no evidence of a causal relationship between the fee holidays and new development.
But that hasn’t stopped proponents from touting the waivers’ ability to create jobs.
“The great news is that business development in Clark County is outstanding and people are finding jobs right here at home,” Commissioner David Madore said. “That is exactly what we are all working so hard to encourage.”
The move to eliminate fees, which businesses pay to accommodate future growth, was a cornerstone of Madore’s successful bid for election in 2012. Once elected, he followed through with that campaign promise.
Last year, with a 2-1 vote, commissioners approved eliminating the fees. Commissioners Madore and Tom Mielke, both Republicans, voted in favor of the waivers, while Commissioner Steve Stuart, a Democrat, voted against the resolution.
Stuart pointed to the financial impacts of the waivers as the reason for his opposition.
While Madore agrees that the county can’t claim that removing “barriers” to development was the primary reason new businesses decided to build, he said he welcomed the new jobs. The county expects to gain 359 jobs from the new growth.
If there’s another bright side, the county doesn’t expect the waivers to take as big a dip into the county’s general fund as originally anticipated, Snell said.
Last year, commissioners approved setting aside $1 million from the general fund to accommodate losses resulting from the permit fee waivers. With the amount of waived permit fees well below that mark, the county may not have to use all of what it set aside.
The most significant losses come from the traffic impact fees, Snell said.
“These fees are significant,” Snell said, “and they impact our return on investment.”