Oklahoma City Real Estate Developers, City Officials Grapple over Impact Fees

Article excerpt

After three public meetings with city staff, Oklahoma City real estate developers are asking for additional justification and clarity in new impact fees being proposed by City Hall.

City Planner Russell Claus said the biggest problem his staff still has to overcome is "general opposition - nobody wants to pay higher fees for anything."

Not true, said Mark Ruffin with PrecorRuffin in Oklahoma City: "Most of the development community isn't anti-fees. ... We understand that the city needs money to pay for infrastructure. But they really haven't done a good job of making the case that they need it and that they can spend it wisely."

A recent forecast of the city's 10-year growth trend suggests the cost of maintaining infrastructure and services will outpace projected revenues by about $54 million, city officials reported. City Council members and staff for months have been exploring the possibility of making up that shortfall by adopting new impact fees.

An impact fee is a charge on new development to pay for the construction or expansion of capital improvements required to support that development. Such infrastructure ranges from school districts to emergency services to wastewater utility systems. They are charged to developers according to standardized rates based on the expected effect of development, and developers pass those additional costs on to consumers.

Impact fees are common in municipalities nationwide, according to Texas-based consulting firm Duncan Associates. Such fees are used in about 60 percent of all cities with more than 25,000 residents and almost 40 percent of all metropolitan counties.

"There's no singular pattern or model around the country," Claus said. "They vary substantially across the country, ranging from fairly minimal to extremely expensive.

"The basic point to remember is that fees are introduced only to pay for the basic infrastructure that supports development. We've been accused of trying to penalize development, limit development and controlling development. We're introducing them only because ... current revenue streams are insufficient."

Claus said the three public meetings held so far were merely an early step in trying to arrive at an equitable solution. …