Denison continues impact fee studies

Denison may soon have a new tool for financing future infrastructure and improvements for incoming growth. The city council recently received an update on ongoing efforts to adopt impact feels that could put the burden of financing infrastructure improvements onto future growth.

In recent years, many cities in North Texas have turned to impact fees as a way of offsetting some of the costs of new infrastructure on existing taxpayers and instead shift the responsibility to new homes, businesses and developments locating in Denison.

The city of Sherman adopted a similar fee structure in late 2020.

“Impact fees are the costs that developers pay for their infrastructure to be placed in our city and it puts the cost back on the developers instead of having to do these improvements ourselves with CIP funds,” City Manager Bobby Atteberry said.

Impact fees have been a recurring topic for the city and were last discussed in July when the council voted to move forward with partnering with consulting firm Huitt-Zollars to draft the fee structure.

“As most of you know, most of our peer cities in North Texas have implemented impact fees over the past decade or prior,” Denison Capital Improvements Plan Manager Fanchon Stearns said in July. “…. Impact fees would require new development to assist in these improvements based on the impact each individual development would have on the system.”

John Ho, representing Huitt-Zollars said traditionally the fee is paid as a part of the building permit process and these funds can be used for new road, sewer and water infrastructure projects. These fees cannot be used for operations or maintenance expenses. While some cities have previously expressed fear that impact fees would price them out of the market and drive development away, Ho said they make up a relatively small part of the cost. As an example, Gainesville currently charges the highest impact fee in the area, which equates to about 2.9 percent the median home price.

As a part of the drafting process, Huitt-Zollars will review the city’s land use plan and form a capital improvements program and costs survey for the next decade. These documents will be used to formulate the fees.

The next step in the drafting of the fees will come next month when the city approves the formation of an advisory committee for the project. A public meeting on the proposed fee will likely come in February.