Aurora – More than $780,000 has gone unclaimed by the city because a 20-year-old tax on new development has never been assessed, according to figures provided by Aurora officials.
City staffers say that for 20 years, they have been under orders by the City Council not to assess the $131.64-a-year urban services extension fee on new homeowners in outlying areas. The council instead wanted the city to use the fee as a negotiating tool to get concessions from developers.
From 2001 to 2006, the city says, it could have collected nearly $2.7 million by assessing the fee on 6,625 new homes and 3.2 million square feet of nonresidential development in outlying areas.
Instead, from 1994 to 2004, the city has negotiated and the council has approved nine exemptions totaling more than $1.9 million from developers in cash and in-kind contributions, according to records released Tuesday. Developers bought the city a $400,000 firetruck and provided a $500,000 house for an emergency services station, among other things, according to documents.
The city’s figures on the unclaimed tax take into account the value of those contributions – but not what the fee could have continued generating on those developments in coming years.
Councilman Steve Hogan, who was on the City Council when the fee was created in 1986, said changes must be made.
“Even though we made some good agreements, we’re still on the short end of the stick,” he said. “That ($2.7 million) would have paid for half of the Aid to Agencies budget over the past five years. It would have made a difference.”
Discussion of the fee comes as the city is dealing with a crunch that is expected to leave it $10 million short next year.
“I will keep pushing to get something done,” he said. “I’m just disappointed that it’s taken this long.”
In the past, council members have voiced concerns about the fee, and whether it was equitable to levy it against one homeowner and not another, said Nancy Bailey, manager of the city’s office of development assistance.
“There was a potential for disincentive of economic development and a concern that residents in metro districts would have additional layers of property taxes,” she said. “It was council’s preference over the years to assess developers, not homeowners.”
On Tuesday, members of city staff along with Hogan and two other councilmen discussed a study to assess the costs of providing city services to new developments in the city. Based on the study, the council could decide whether to begin assessing the urban services extension fee or some other type of tax on new homes.
“There’s never been a way to actually assess the costs of extending services,” said City Manager Ron Miller. “Part of the study would be to determine the most effective way to levy (a fee) for this kind of development.”
Hogan says it bothers him that the fee isn’t enforced.
“If you have an ordinance on the books, don’t you enforce it?” he said. “If you don’t, don’t you repeal it?”
Staff writer Jeremy P. Meyer may be reached at 303-820-1175 or jpmeyer@denverpost.com.
