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Impact Fees FAQ
See Also
GENERAL IMPACT FEE
COMPONENT CAPITAL IMPROVEMENT PLAN (CCIP)
What is an impact fee?
The New Mexico Development Fees Act says "'impact fee' means a charge or assessment imposed by a municipality or county on new development in order to generate revenue for funding or recouping the costs of capital improvements or facility expansions necessitated by and attributable to the new development ."
The term does not include utility hook-up fees, dedication of rights of way or easements or construction or dedication of on-site water distribution, waste-water collection or drainage facilities, or streets, sidewalks or curbs if the dedication or construction is required by a previously adopted valid ordinance or regulation and is necessitated by and attributable to the new development. The New Mexico Development Fees Act of 1994 forbids the financing by impact fees for libraries, community centers, schools or transit equipment.
What is a service area?
A service area defines the geographic territory that is to be served by the improvements or facility expansions necessitated by new development. The NM Development Fees Act says service areas should be "designated based on sound planning and engineering principles".
The service area should be big enough to generate enough impact fees to actually pay for the growth related improvements needed. But the service area should be small enough so that it is rational to conclude that the new development that generated the fees actually enjoys the benefits of the improvements it paid for.
For what infrastructure is the City of Albuquerque developing impact fees?
- Park, Recreation, Trails and Open Space Facilities (See the adopted Ordinance FS(2) O-04-69)
- Public Safety Facilities (See the adopted Ordinance FS(2) O-04-70)
- Roadway Facilities (See the adopted Ordinance FS(2) O-04-71)
- Drainage Facilities (See the adopted Ordinance FS(2) O-04-72)
How have we paid for the capital improvements or facility expansions necessary to support growth (without impact fees)?
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Infrastructure |
Funding Sources |
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Public Safety Facilities |
G.O. Bonds, Federal funds, State funds, Grants, Dedicated Taxes |
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Drainage Facilities |
G.O. Bonds, Federal funds, State funds, financial or construction exactions from developers |
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Park, Recreation, and Trails Facilities |
$78 fee for each new dwelling unit + dedication of land per Park Dedication Ordinance, G.O. Bonds, Federal funds, State funds, Grants |
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Open Space |
G.O. Bonds, Federal funds, State funds, Grants, Dedicated Taxes |
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Roadways Facilities (Arterial and Collector) |
G.O. Bonds, Federal funds, State funds, Dedicated Taxes, financial or construction exactions from developers |
How much does it cost to provide the infrastructure that supports new development?
It depends on where that growth occurs. In some areas of the city, fire and police stations, parks, roads and drainage facilities are already in place, and little or no new infrastructure is required. In other, more recently annexed areas, some infrastructure may be in place, but more will need to be built to provide a full range of public services.
As an example, the cost to provide parks, recreation facilities, trails and open space for a 2,000 square foot new residence has been calculated to be $2,420 on the NW Mesa, but $780 in the Central/University area of the city. These differences are due to the existence of plenty of parks in the Central/University area, with only minor new demand anticipated, since there will relatively little new housing built in this area. In contrast, on the NW Mesa, a great deal of new housing development is anticipated, which will create a demand for several new parks.
The City Of Albuquerque Impact Fees Service Area Composite Map showing fee reductions available (3/25/05) shows impact fees calculated to provide Public Safety, Parks, Recreation & Open Space, and Roadway Facilities to new development in Albuquerque. The serive area overlays show the sum of all four impact fees for the specifice type of development.
Are the "costs to provide infrastructure" the same as "impact fees"?
No. The "cost to provide infrastructure" to a given type of development represents the most the city could legally charge as an impact fee. The City Council, which must adopt the fees by Ordinance, has the option, by state statute, to impose a fee that represents a portion of the "cost to provide infrastructure" (i.e., reduce the fees across the board), phase the fees in over time, and/or reduce the fees on a policy basis.
Fees that were reduced on a policy basis would be intended to act as incentives for development that fulfilled the intent of the City's growth and comprehensive planning objectives. For example, development that significantly improved the jobs/housing balance might have a reduced fee. Similarly, mixed-use development might warrant a reduced fee. The City is interested in supporting both of these types of development because they reduce the automobile travel necessary to conducting daily life in Albuquerque.
Is new housing the only form of new development that must pay impact fees?
No, the consultants have recommended assessing all types of new development for roadway facilities, drainage facilities and public safety infrastructure. New housing does bear the entire burden for parks, trails and open space.
What is the CCIP?
The Component Capital Improvement Plan (CCIP) is a list of projects or facility expansions that may be funded by impact fees. It is a component of the City’s Capital Improvement Program (CIP), which lists capital improvement projects citywide. The CCIP is only designed to support growth, and the projects listed on the CCIP are found in growth areas.
Who decides what projects are included in the CCIP?
The CCIP includes park, recreation, trails and open space facilities, drainage facilities, public safety facilities, and roadway facilities in growth areas. Level of service standards determines the amount of impact fee funded infrastructure. Qualified professionals on the City staff propose the CCIP projects and the City Council approves or modifies them. There is also an advisory committee that advises the City Council in adopting land use assumptions, the CCIP, and monitoring implementation.
How often is the CCIP revised and updated?
The CCIP is updated every two years when the Council considers the CIP. The land use assumptions, which determine the levels of service, will be updated every five years after July 2005.
How exactly is the CCIP funded?
The CCIP is funded primarily by impact fees. The City is obligated to pay for as many CCIP projects as possible based on the amount of impact fees collected. However, some CCIP projects may be partially or entirely funded by other sources, such as GO bonds and Federal and State funds.