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Question

Payment of Impact Fees Over Time

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John Pick
John Pick asked

Do any entities that impose impact fees (particularly for water and sewer) allow such fees to be paid over time rather than in a lump sum? If so, what are the terms and how is the entity protected?


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Jeffrey Repp

John....Cumberland does not charge impact fees but in a similar situation many of our buildings in the downtown during renvoations require fire taps to the water system which can be quite expensive and we do allow them to set up payment plans if necessary to pay them back.

 
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Douglas Miller

John; both here in Aberdeen and also in my La plata days we required the fees to be paid up front even though there was a good deal of pressure to string those payments out. I view the payment of fees a cost of construction and that they should be paid up front. Plus try to collect after the building is built and occupied.

 
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Christopher Cullinan

Generally speaking, Douglas' response is both the best practice and what is required in many states. However, given the current economic realities, many communities are trying to assist the development community by allowing the deferral of payments (not to be confused with out-right waivers or exemptions). To minimize the risk to the public sector, a development agreement should be written which spells out the specifics of when and how the fees will be paid. Two of the requirements should be the posting of a letter of credit or bond for the full amount of the fees and the fees have to be paid prior to certificate of occupancy.

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27 Jul 10
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30 Jul 10

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