Framing Fee Increases

Success in having fee recommendations adopted will often be dependent on how well you can “frame” the issues in a way that “speaks” to your audience. The goal of this article is to assist you in framing your FEE recommendations in a manner that speaks to both the individual members of the legislative body and their “influencers.” We’ll define influencers as constituents and/or financial contributors to specific members of the legislative body who are responsible for the members’ election.

Your starting point should be a technically competent study that identifies your various fees and compares the fees with the costs for each service/impact.  You now have information that defines the influence that the current/impact fees have on the influencers.

Regarding User Fees:

• If the user is currently paying the full cost of the service, then there is no issue.

• If the general taxpayer is subsidizing the service, is there a social or quality-of-life reason for subsidizing the user group? If there is, then the questions become:

  • Is the correct group benefiting?

  • Is the subsidized program the most efficient and effective way to benefit this group?

• If the general taxpayer is subsidizing the service and the only one benefiting is the service recipient, then the questions become:

  • Is there a less expensive way to provide the service that would be just as satisfying to the user and would eliminate the general taxpayer subsidy?

  • Would it be “better” to eliminate the service rather than charge the full cost?

• If taxpayers are subsidizing the service as well as receiving the service, then the questions become:

  • Can the legislative members justify to their influencers that their tax dollars are going to subsidize the service in question?

• If the general tax subsidies were eliminated, would the agency use the taxes to hire more police, improve the streets or some other purpose that benefits the general community?

Ultimately user fees address the issue of equity between taxpayers and service users.

Regarding Impact Fees:

• For impact fees, the “cost” of non-existent or inadequate fees results in deteriorating quality of life measures. Several examples of the impact of new development without adequate impact fees might be:

  • increased street congestion and longer commute times,

  • street flooding during storms due to undersized storm drains,

  • inadequate numbers of library books,

  • shortage of ballfields and tennis courts, and

  • increased police and fire response times.

• To the extent that your agency uses general tax monies to finance the missing infrastructure, the taxpayer-influencer is paying tax dollars for something that should have been paid for by a developer. If the developer is also an influencer, a conflict of interest will occur.

• Often developers will claim:

  • “The impact fee makes the project unprofitable.” The solution is that your agency can wait for another developer or subsidize this developer if it makes “sense.”

  • “The home buyer will end up paying the higher cost which will make homes in that development less affordable.” Actually, home prices are determined by the marketplace. If the home is priced higher than the market, buyers will go elsewhere. Most studies have shown that the cost of impact fees falls on the developer’s profit not the homebuyer’s pocket which is why developers are willing to fight against new or increased impact fees.

• Even if homebuyers pay part of the impact cost, remember that current residents paid taxes for many years to develop the current infrastructure. Imagine a community that pitches in year-after-year to build a community pool with the understanding that it would be free to residents. After the pool is operating, a new tract is built and the new residents come to use the pool for free. Imagine there are so many new residents that the original community barely gets to use the pool.

Ultimately, impact fees address the issue of equity between existing and new residents.