Impact fee? Don't hold your breath | Arkansas Blog

Impact fee? Don't hold your breath

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An article in today's Democrat-Gazette (pay wall) discussed the Little Rock Wasterwater Utility's indisputable need for a sewer rate increase — and soon — to continue corrective work to stop pollution caused by sewer line overflows.

Mentioned briefly was one way to cushion rate increases over time and also provide a bit on the front-end for sewer costs that pile up enormously on the back end — a development impact fee. In 2008, a rate committee suggested a flat $274 one-time fee for new homes and businesses to connect to the sewer system. This is a fact of life in many far-thinking cities.

Not Little Rock. We expanded and expanded westward, finally pushing homes into a new drainage basin and the need for a new treatment plant, without giving a thought to accruing costs. Growth would "pay for itself" is the mantra of city hall and its shills at city government command central, the Little Rock Regional Chamber of Commerce. The wisdom of that mantra was demonstrated recently in the emergency need for a half-billion-dollar tax increase, much of it to pay for deferred maintenance and unfulfilled promises for services (fire station, parks, police service, street maintenance) in developing areas that were supposed to "pay for themselves."

Reporter Lamor Williams observes that the impact fee "has not been popular."

Depends on who you ask. People who've thoughtfully studied rate issues? Hundreds of other cities in the U.S.? Civic planners? Grassroots groups that have long complained about the free ride the city gives developers (please, no whining here about larger sewer service lines required in some cases).

Do you think the real estate lobby gave $30,000 (and individual companies with development interests gave thousands more) to pass the new tax increase (a 200 percent sales tax increase, including on poor people's groceries) to see Mayor Mark Stodola and the City Board endorse a progressive sewer impact fee? I think you know the answer to that question. Little Rock is more captive of a regressive business establishment when it comes to impact fees than Republican Bentonville, if you can believe it. Bentonville, which imposed stout impact fees during its biggest boom years, has been growing. Little Rock? Not so much.

PS — Just for fun, I ran the numbers on what a $274 fee would add to the cost of a $100,000 mortgage at 4 percent over 30 years. Answer: $1.30 per month. To hear the developers tell it, this would "kill the goose that laid the golden egg," to repeat another old cliche you're certain to hear should the subject come up. Which it won't, if the mayor has anything to say about it.

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