Finance Committee approves amendment to finish Santa Fe impact-fee study

The Santa Fe Finance Committee on March 9 approved an amendment to a contract with FCS Group to add approximately $81,758 so the consultant can finish an impact-fee study and deliver a report for the Capital Improvements Advisory (CIA) committee and the governing body.

The amendment (to contract 25-0480) will increase the agreement to about $1,316,488.25 including New Mexico gross receipts tax, according to staff. Shawn Moody of the Public Utilities Department told the committee the consultant had begun work under a prior agreement (about $20,000 spent of an earlier $60,000 contract), and the requested funds are to complete the report, receive CIA comments and return a resolution for governing-body consideration, which Moody said he expects around August: "The next step is to write the report, present it to the CIA, the capital improvements advisory committee and receive comments, deliver the report in the form of resolution to the governing body for approval ... in what I'm anticipating about August."

Why it matters: impact fees are charged so new development pays a proportional share of growth-related capital costs such as roads, parks, fire and police facilities. Moody told the committee these fees are governed by state statute and city code; the fee calculations must be prepared by a qualified professional, reviewed by the statutory CIA and updated at least every five years. He estimated the city collects roughly $5 million a year across the four statutorily defined categories (residential, commercial, industrial and institutional).

Committee members focused questions on accountability and how fee revenue is tracked. A councilor said developers have struggled to determine how fees they paid were spent; Moody acknowledged past accounting had not tied individual fee payments to specific projects in real time but said staff can perform a forensic reconstruction from current account balances back to recent projects to re-establish those connections: "I can rebuild the connection between the fees paid ... and the capital projects they devoted to. It'll be forensic but I have all the information drawn out of our systems to do that."

Members also discussed the statutory timing tied to projects funded with impact fees. Moody said the seven-year timeframe discussed in state law relates to the window in which a project funded with impact fees must be completed once the city expends those funds. He noted that eligibility is determined project-by-project and that some projects may be 100% growth-related while others will be only partly eligible.

The Finance Committee voted to approve the contract amendment at the meeting; staff said the report will go next to the CIA for comment and then to the governing body for final action.

Next steps: FCS Group will finish the study, the CIA will review and comment, and the governing body will consider a resolution expected in August.