Consultant: Edgewater impact-fee study would raise some service fees but leave overall single-family charge roughly unchanged

A consultant told the Edgewater City Council at a July workshop that updates to the city’s impact fees would raise several service-specific charges — in some cases by more than 50% — while leaving the overall city-only charge for a single-family home near the current level.

Megan Kemp of consulting firm Banish, who led the technical study, said the update covers five service areas: fire/rescue, law enforcement, parks and recreation, transportation and a new government-buildings impact fee. "Impact fees by definition are a one-time capital charge to new development," Kemp said, explaining the study uses a consumption-based methodology that charges new growth only for the additional capacity it consumes.

Kemp said the study values existing capital assets, subtracts credits for other funding sources (for example, grants and state or county contributions), and multiplies the net cost by demand measures (population for most services, person-miles for transportation). She said the result produces higher fees in some categories but lower fees for many nonresidential uses, and that the single-family city fee including government buildings would be about $3,900 (the study excludes water and sewer fees).

On legal constraints, Kemp summarized state rules cited in the presentation: fees must be based on recent, localized data; a minimum 90-day notice is required before increases; and the government bears the burden of proof in challenges. She said House Bill 337 (2021) added phasing limits — up to 25% increases phased over two years, 25–50% phased over four installments — and that increases above 50% are permitted only if the jurisdiction documents "extraordinary circumstances," holds two public workshops and wins a two-thirds vote of the governing body. Kemp said this workshop was the second of the two required extraordinary-circumstances workshops for any categories exceeding 50%.

Kemp described transportation modeling in detail: per-lane construction and design costs, travel-capacity calculations and the allocation of travel to city roads versus county/state roads. She gave a transportation example in which gross fees before credits reached roughly $6,600 per single-family unit, netted to about $5,700 after credits, and resulted in a city-specific transportation charge near $340 because only an estimated 6% of travel occurs on city roads.

Kemp also described service-specific results: a fire-rescue asset inventory valued at about $15 million produced a per-person valuation near $712 and a net per-person cost near $670 after credits; translated to per-unit fees, fire-related charges were shown near $1,000 for a single-family home. Police-related fees decreased compared with the prior (2019) study, Kemp said, because the earlier study used a needs-based method that charged for projects not yet provided, while the current consumption-based approach aligns charges with actual consumption.

Kemp identified unfunded needs the city’s impact fees could help cover, including a new fire station, a training facility and parks projects such as pickleball courts. She said the ordinance schedule is a first reading on Aug. 5 and an adoption hearing on Sept. 9; any approved increases would become effective 90 days after adoption. Kemp noted a recently signed law requiring interlocal agreements for transportation impact fees between cities and counties, with jurisdictions given one year from the law’s effective date to develop such agreements.

Council members asked clarifying questions during the public workshop. One council member asked why the police fees dropped; Kemp replied that switching from a needs-based to a consumption-based methodology removed charges for projects not yet delivered. Another member sought confirmation of the total per-home charge and whether the extraordinary-circumstances increases would be phased; Kemp and the Chair clarified that the studied increases would be applied all at once under the extraordinary-circumstances proposal and that the 90-day notice/implementation timing would follow adoption.

The Chair opened public comment; no speakers were recorded in the transcript. The council thanked the presenter and adjourned the workshop. The ordinance timeline Kemp provided sets the process for potential adoption; council discussion and the adoption hearing on Sept. 9 will determine whether the proposed changes take effect.