Consultants outline impact-fee methodology, projected increases and next steps

A consultant gave Orem City Council a detailed briefing on the city's draft impact-fee study, describing the statutory process, what services were included and the major drivers of higher fees.

The consultant said the study evaluates demand, inventories existing facilities, sets current and future levels of service, identifies growth-related facilities, examines revenue sources and then performs a proportionate-share calculation that produces the maximum justified fee under state law (Utah Code 11-36-7, as cited in the presentation). The analysis covers parks and recreation, police and fire, transportation, culinary water, wastewater and stormwater.

City staff and the consultant said the study isolates growth-eligible capital costs and allocates costs between existing users and new development. The presentation showed large planned capital investments — including more than $30 million in growth-related water projects and more than $25 million for parks and recreation — that are primary drivers of the projected fee increases.

Staff emphasized the difference between the calculated maximum and what the council may adopt: the calculated figure represents the ceiling the city could legally defend; the council may adopt any lower amount or choose not to assess impact fees at all. The consultant also reiterated statutory process steps: a notice of intent, adoption of the impact-fee facilities plan and analysis, required public notice, a public hearing, and then council action. The consultant said state law requires a 90-day waiting period for fee increases to take effect but noted reductions typically take effect immediately.

Council members asked for examples showing what a typical single-family house would pay, comparisons with nearby jurisdictions, and a version of the study broken down by typical zoning (for example R-8) and by whether a unit is inside the city service area or in the annexation area. Staff said they will prepare those comparisons ahead of public notice and the hearing. The consultant and staff also flagged implementation details: the ordinance must allow developers to present project-specific data that could justify an alternative fee for a particular site, and the city's ordinance should explain how fees are applied for redevelopment, annexation-area development and projects with partial credits for prior contributions.

The next steps are completion of the impact-fee facilities plan and impact-fee analysis documents, staff review, a 10-day public document posting prior to a public hearing, and then the public hearing where the council may adopt, amend or reject fees. The consultant told the council the city could phase in fees or adopt a percentage of the calculated maximum, and said these policy choices are for elected officials to make.