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Council could slash utility impact fees

By Staff | May 31, 2008

Months after elected officials rejected a reduction in capital expansion fees for residents receiving city utilities, the council will reconsider the idea at Monday’s session.

Mayor Eric Feichthaler pressed for slashing impact fees last fall, but his proposal was rejected by an overwhelming 7-1 margin. On Monday, he will bring forth a proposal to cut the fee only for single family residences, by $590, bringing it down to $2,771 per home. The per-unit fee for multifamily structures would remain at $2,319.

“Our economy has not improved in the last six months since I last proposed this,” said Feichthaler. “I just think our impact fee is not in line with what our projects will or should cost.”

The fee cuts would only apply to residents in the Southwest 5 and 6/7 utility expansion areas.

While he is willing to listen to the mayor’s proposal, councilmember Bill Deile is wary of an impact fee reduction.

“Let me make it perfectly clear that I’m in favor of reducing any costs to the citizens of Cape Coral,” he said. “What I am not in favor of is increasing our debt that will have to be paid off later.”

Aside from a possible debt increase, Deile sees the plan as simply cost shifting — moving the burden “from those who have yet to be assessed, to those who have already paid their impact fees.”

Deile cited an analysis from financial chief Mark Mason which indicated that the city is facing a shortfall in paying for new wastewater treatment plants and would likely need to hike usage charges to pay for that deficit. Cost overruns on those plants led to a number of capital expansion fee hikes in the past.

“If the cost of the impact fee is inflated, and I don’t believe it is based on Mason’s analysis, then cutting it further means that the shortfall is going to be even greater,” Deile said. “I haven’t seen anything that would lead me to conclude that there is money to cover this.”

Feichthaler said Friday that he does not support a usage charge hike, and insisted that the council stand up for the residents and demand lower costs

“What the memos from staff completely fail to address is how we have lowered the cost of our water plants,” he said. “We know these things cost less.”

A retired corporate attorney, Deile also sees a pair of legal issues with Feichthaler’s proposal. He is particularly skeptical of the legality of reducing the fee on single family homes while leaving the charges on other properties alone.

“If the city council would like to go forward with this Monday, I have no issue with bringing a reduction of impact fees across the board,” said Feichthaler.