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Council discusses interim discounts and incentive options for transportation impact fees for businesses on state roads
Summary
Staff recommended redoing North Ogden's transportation impact fee study and proposed a possible interim 20% discount for businesses whose trips use UDOT roads; council discussed alternative incentive structures tied to incremental sales tax generation.
City Manager and City Attorney John McPaul briefed the North Ogden City Council on Sept. 23 about a proposed update to the city’s transportation impact fee study and possible interim measures to encourage commercial development on corridors where much of the travel uses Utah Department of Transportation (UDOT) roads.
McPaul said the city’s transportation impact fees have not been comprehensively updated in about 10 years and that an updated study is warranted. In the interim he suggested the council consider an ordinance offering a temporary 20% discount on transportation impact fees for businesses located on UDOT right‑of‑way corridors, arguing those businesses cause a lower net impact to the city’s street system because many of their customer trips remain on state‑owned roads. “My thought is that in the interim, the council could adopt an ordinance that would apply a 20% discount, to businesses which are on UDOT right of ways,” McPaul said.
McPaul noted the Placer.ai patronage data the city purchased indicates a sizable share of customers for many North Ogden businesses come from outside city limits and often use state roads; he cautioned that the proposed 20% figure is an initial “gut check” and that a consultant‑led study should calculate more precise trip allocations. He also noted legal and practical alternatives: a discount based on estimated state‑road usage, or a fee waiver/incentive structure that dedicates a portion of an individual business’s incremental sales tax revenue to offset its impact fees for a fixed period.
Council members raised implementation questions and concerns about revenue impacts, fairness and precedent. One council member asked whether any discount requires specifying a revenue source to make up the city’s lost fees. McPaul replied a discount grounded in trip allocation (i.e., the business does not impact city streets as much) can be defensible without finding an immediate offset, but a fee waiver tied to a defined portion of future incremental sales tax is another tool the council could adopt for economic development and would be tied directly to new revenue. Council members noted North Ogden’s transportation impact fee is among the highest in the state and that potential developers had declined projects after reviewing the city’s fee schedule.
The council directed staff to begin the process of updating the impact fee study (including a budget amendment to hire a consultant) and to return with policy options: (1) an interim approach to discounts for businesses on state roads, (2) an option that creates a sales‑tax‑based incentive/fee waiver program for new sales tax generators, and (3) an analysis of historical and hypothetical impacts of any discount on recent prospective developments. The council requested staff provide anonymized examples showing how selected businesses’ fees and incremental sales tax projections would change under proposed options.
No ordinance or formal discount was adopted at the meeting; the council’s decision was to pursue the study and return with specific, data‑driven policy options.
