Aurora – A city councilman says he is frustrated that a tax he supported 20 years ago to help the city pay for new growth has never been charged.
“It’s been a source of ongoing confusion for me,” Councilman Steve Hogan said. “How can you have a revenue-generating measure on the books in place and never enforce it?”
The city’s urban services extension fee, which was enacted in 1986, requires new homeowners outside the city’s primary service area to pay $131.64 a year to help cover the cost of extending public services. Businesses also are required to pay a fee based on the size of their commercial properties.
Instead, the city has bartered with developers, trading the fee for one-time payments or other amenities – such as a firetruck, The Denver Post reported Tuesday. The value of those deals was hundreds of thousands of dollars less than what the fee would have generated.
Hogan wants to know how much money has been forfeited because the city failed to collect the fee. He wonders about all of the new housing developments in the outer areas and how much money would have been collected based on the millions of square feet of industrial complexes off Interstate 70.
The fee would generate between $300,000 and $500,000 per year if enforced today, and it would cost $200,000 to set up collections, city finance director John Gross said.
The City Council will be briefed on the fee at its next meeting and will likely consider a study on how to best pay for new development, according to City Manager Ron Miller.
City officials said the fee wasn’t enforced because of upfront costs and little development until recently. Instead of charging homeowners an annual fee, the city charged developers, Gross said.
The fee was initially established to discourage leapfrog development, Miller said, but recently growth in the city has occurred in a contiguous fashion.
Nevertheless, between 1994 and 2004, the city exchanged the annual fee for payments or property eight times, according to records. For example, the developers of Tollgate Crossing agreed to pay $250 per home for a total of $403,250. The fee would have generated $212,335 a year.
The fee also is supposed to be applied to retail/commercial developments at 15 cents per square foot. Under this formula, the 1.5 million-acre Southlands shopping center off E-470 and Smoky Hill Road would generate an estimated $225,000 per year for the city.
City officials will consider whether to assess the fee on the Southlands center, Gross said.
Discussion of the fee comes as the city is dealing with a budget crunch that is expected to leave it $10 million short next year. The city was in similar straits in 1986, when it enacted the fee.
Hogan said he has asked why the fee wasn’t charged. Now, some of his fellow council members are wondering if an opportunity has been missed.
“If we haven’t been collecting it so far, I think we should because we have this big budget gap,” Councilman Brad Pierce said Tuesday.
Councilman Larry Beer agreed that the fee’s time has come.
“With the pace of development accelerating, it probably does make sense to start collecting.”
