Who will pay for Truckee’s ‘progress’?
A fee slated to be tacked to new development as early as the beginning of next year could result in a sudden jump in housing prices and the cost of living.Truckee’s infrastructure will have to be updated, added to, or replaced as growth strains the existing system, and the brunt of the $87 million cost will be shouldered by new development, a Town of Truckee study says.The study suggests that $57 million in infrastructure costs will land directly on new development, a fee increase of almost $3,400 per new home that some say may be passed on to home buyers as developers and new businesses raise prices to recover the added expense.”I don’t think that any developer is going to absorb those fees,” said development fee committee member Pat Davison. “They are going to pass those on.”The builders are not going to pay for it, the developers are not going to pay for it. It’s going to be you and me,” she added.Affordable housing projects could also take a hit, unless the town commits to reimbursing development fees for affordable projects with grant or general fund money, said Town Manager Steve Wright. Affordable housing projects cannot legally be exempted from the fee. While the numbers in the report have generated controversy and discussion, almost everyone agrees that some type of fee hike is necessary to keep Truckee’s level of service from eroding under increased development.”These are not frivolous expenses,” said Davison of the list of projects that includes intersection improvements, storm drain expansion and law enforcement increases.”If people want police, if people want dog catchers, if people want storm drains, then property taxes are not enough to pay for them,” said Davison.Much of the discussion has revolved around how much new development should pay as opposed to the town’s general fund money. The calculations to come up with the fee have new development paying for existing infrastructure, such as roads that were built to accommodate the heavier traffic that growth will bring, as well the updates and expansions that new development will make necessary.The idea of a development impact fee has surfaced as town officials realize that the infrastructure inherited from the Nevada County 11 years ago upon incorporation will need a retrofit to accommodate the building projected into the future. Animal control, bridges and roadway intersections will all have to grow along with the town’s population.Until now, the inherited system and property tax revenue has been enough to allow the town’s infrastructure to keep up with demand, said Truckee Councilman Ted Owens.”We’ve had a pretty good ride on property taxes for the last five years and that has paid for a lot of things,” Owens said.Some committee members see where the town is trying to go with the fee, but have a hard time swallowing the numbers and the methodology of the increase.”It’s not black and white; it’s really a thousand shades of gray,” said committee member Jon Falk. “It’s not readily defensible and it’s not readily objectionable, and that is the problem.”Falk said that the split between the money developers will pay and the amount the town’s general fund contributes must be calculated so that the developers’ share is equitable. Also, specific calculations, such as the actual monetary value of infrastructure assets and whether asset depreciation is factored in, are being questioned to ensure that more than doubling the development fee is necessary.While these fees cannot be used to fix existing deficiencies, the town can require that developers pay for a nearly built-out road system that benefits new residents. These fees can be paid into the general fund and then used to fix deficient areas of the infrastructure, said committee members. Even with that fee schedule, the town will have a $9 million shortfall if it completes all of the infrastructure projects that it has listed. This shortfall will have to be considered by future town councils to decide whether they can get grant funding or whether they will have to cut some projects, said Wright.It has taken the committee several meetings just to begin to understand the intricacies of the study. It may be several more meetings, likely in August, until the group can formulate a recommendation to the town council, Wright said.Meanwhile, the committee is trying to determine whether the developers’ share of the cost should be less, or if some of the infrastructure projects are entirely necessary.”It’s going to be really important that the town get this right,” said Falk.