INDEPENDENCE -- Property developers building in Independence will be paying about 15 percent more in system development charges (SDCs) toward the city's water system under a new rate schedule.
Planned SDC hikes for the city's transportation, parks and recreation and sanitary sewer systems, however, will be put on hold until master plans more clearly outlining future projects are completed.
The Independence City Council approved the rate change at its July 14 meeting, based on recommendations from an SDC assessment completed this spring that examines the amount of funding the city requires for capital projects and improvements to meet population growth.
Under the schedule, water SDCs will increase from $1852 to $2153 for building a new single-family unit, and from $1481 to $1723 for a multi-family unit.
SDCs for a new commercial building will be raised from $2636 to $3067.
SDCs are one-time fees charged by local governments to builders as a way of offsetting the costs of public improvements necessitated by growth.
For example, a new commercial or residential building in town puts a burden on existing municipal systems; more residents means a need for wider roads or more water storage.
In theory, a developer or home builder's SDCs, which can only be used on capital improvements, covers his or her share of that burden.
According to the assessment, Independence's population is projected to reach 8,860 by 2017 and 10,180 by 2024.
City Manager Greg Ellis said Independence has a master plan that maps out several capital projects needed to meet growth levels at five, 10 and 20 years.
SDCs should be evaluated every five years to help fund those projects, he said. It's been more than five years since the city last altered its rates.
"We're late," Ellis said, noting that although the city's municipal systems are currently up to par, the SDC rate change was needed to maintain facilities and help preserve the recent building boon in Independence.
"If you don't have a good handle on SDCs, it ends up hurting infrastructure and keeping that updated for growth is necessary to have healthy environment for building," he said.
Independence officials had planned on increasing rates for all municipal systems, but put that on hold in light concerns expressed by local developers and the Marion-Polk Building Industry Association (MPBIA).
Officials from PacWest Engineering, the consulting firm handling the assessment, had to recalculate and recommend lowering the rates, after MPBIA members said that transportation and sanitary sewer SDCs were being raised without appropriate master plan documentation.
Before those changes, water SDCs would have risen by 29 percent and parks and recreation fees by 42 percent.
MPBIA argued that several proposed projects addressed existing deficiencies or beautification. State law requires that SDC money go toward growth capacity only.
Mike Erdmann, MPBIA executive director, also said he wanted clarification on a provision of the city's development code that allows developers of subdivisions to donate a tract of land or money for public parks and recreation purposes. Erdmann said he wanted to make sure that the city wasn't unintentionally "double-dipping" by having SDCs and those donations and payments going toward the same projects
"We aren't trying to be combative," MPBIA executive director Mike Erdmann said. "We understand that under state property tax limitations, it's tough for cities to pay (for improvements).
"But rates should be based on accurate master plans for the correct calculations."
Ellis said the city would revise its transportation and parks and recreation SDCs after it updated its capital improvements plans.