Executive Summary In 1993, the New Mexico State Legislature passed the Development Fees Act to finance “Fire, Police, drainage, transportation, parks, recreational areas, and open space trails.” It also authorizes a city and county to develop a joint impact fee system within the city’s extra-territorial jurisdiction. Before an impact fee may be adopted, the Act requires that “a capital improvements plan” must first be prepared. In the case of a joint City/County impact fee system, the capital improvements plan must be a part of a joint powers agreement. The Act requires that the capital improvements plan address certain specific issues including detailed analysis and description of the project(s) in question. -Capital Improvements Plan/City of Albuquerque and Bernalillo county - May 8, 1995 Draft- The Benefit Impact fees confer the benefit of more predictable and consistent development costs. Sites previously considered too costly to develop might now be reassessed as land values even out in response to predictable off-site costs. Historically, these costs have been set according to the whim and will of individual municipalities. This practice resulted in fluctuating, unpredictable off-site expenditures. The Downside If Impact fees are set at the current level that is being discussed, they could stop construction of new apartment communities overnight. Currently developers pay $1,300 per apartment unit in impact fee’s (or codified fee’s including water & sewer). The City is currently discussing raising this number in excess of $4,300 per apartment unit. In order to afford this increase, the developer would need to pay $2.00 per square foot less for the land or raise the rents to the tenant $.10 per square foot. Neither of these propositions is affordable or likely. Neighboring communities (including Rio Rancho and Belen) are discussing fee’s that are 10% to 50% of Albuquerque’s proposed fees. What to do I currently sit on a committee known as the Coalition for Quality Growth that has presented a position paper on Impact Fee’s that includes recommendations to our City Councilors. If you are interested, please call me and I will fax you a copy of this position paper. A plan for the implementation of these fee’s must be put in place by July 1, 1995. The first meeting of the City Council to discuss these fees was scheduled for June 20, 1995. The city has postponed further decisions until August. I would recommend that you plan to attend the August meeting of the City Council. Although Impact fee’s would provide a level playing fee for developers, High Impact Fee’s will tilt the playing board entirely.