Following months of meetings and deliberation, the final report and recommendation from the city of Rio Rancho’s impact fee committee was approved by the governing body this week.
Mayor Gregg Hull, who was the chairman of the special committee, presented the group’s recommendation during Wednesday’s regular governing body meeting. The approved recommendation includes an increase to residential impact fees and a decrease in commercial, industrial and business impact fees. Following the governing body’s decision, city staff will present the rate changes as an ordinance at a future meeting.
Impact fees are charges developers pay to the city to cover the cost of major system-level improvements to handle the growth their developments will bring. Rio Rancho has seven impact fee categories: public safety, parks, bikeways and trails, drainage, water, wastewater and roadways.
Last fall, councilors voted to create a special committee to discuss and recommend new impact fee rates within 90 days. The committee included Hull, councilors Dawnn Robinson and Cheryl Everett, Anthony Caravella of the city’s development services department, and Donald Martinez of the city’s financial services department. Brian Patterson of Titan Development and David Newell of RayLee Homes served as the board’s public representatives.
If the ordinance is approved by the governing body, the changed rates would begin July 1, with noted annual changes occurring each year until July 1, 2021. The city would then conduct a five-year review of the impact fee rates in 2022.
The new rates are based on recommended impact fee increases from a 2015 consulted impact fee study. According to the rate recommendation, all but one of the city’s residential impact fees will begin at 5 percent of the study’s recommended rates. Those discounted rates will then increase by 5 percent each year until they reach 25 percent of the recommended rate by 2021. Public safety rates for commercial impact fees would similarly begin at 5 percent this year and 10 percent in 2018, but would then be 100 percent of the recommended rate in 2019.
By 2021, residential impact fees for a single-family dwelling unit will increase from its current rate of $9,882 to $10,441.
Similar to the recommended changes to residential fees, new rates for commercial, industrial and office impact fees are based on the consulted fee study. Water fees would be set at 5 percent of the recommended rate this year and would increase in annual 5 percent increments, while drainage, roads, and bikeways and trails fees would be set at 20 percent until 2021. Sewer and public safety fees would be 100 percent of the recommended rates.
Rates would decrease by 30 percent for commercial, industrial and office impact fees by 2021, with impact fees for a 10,000-square-foot building for commercial fees dropping to $47,667.50, industrial fees to $32,907.50 and office fees to $42,223.50.
Several members of the city’s development community spoke out in favor of the recommended fee changes.
Lynne Andersen, president of the New Mexico NAIOP chapter, praised the new rates, saying the committee’s decision was based off of a method of positive collaboration.
“I think what you guys did was take a data-driven study and turned it into a document that can benefit the city and be a win-win for business and developers involved and the city itself,” Andersen said. “I think it’s a good mix in terms of coming up with something that works.”
John Garcia, executive vice president of the Home Builders Association of Central New Mexico, was only one in attendance wary of the new fees. Garcia said he was concerned the raised impact fees for residential development would lose prospective homebuyers from settling in the city.
“You need rooftops for retail and other commercial developments,” Garcia said. “The homebuilding community is looking at these changes with some caution.”
In other news, the governing body:
- Approved a site plan for RAM Motors; and
- Approved a zoning designation amendment to property in the Rio Rancho Estates area.