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RBC — Heading the charge to address critical needs in community infrastructure, the Rio Blanco County Board of Commissioners presented a controversial impact fee proposal for residential, commercial and industrial development May 27.
If approved, Rio Blanco County would be the first in the state and possibly in the region to implement impact fees on heavy industry, not just on residential and commercial development.
“The commissioners have been aware of an increasing shortfall in funding for infrastructure for several years,” said RBC natural resources specialist Jeff Madison, “and we have been working toward solutions and seeking possible funding sources since that time.”
The proposed impact fees are only one of the options the county has examined. Mill levy increases, formation of a special taxing district, direct requests to companies bringing in most of the impact and toll booths on County Road 5 have all been discussed during a lengthy process of internal workshops and public meetings.
Capital items identified as priorities include law enforcement, county administration and roads and bridges. Impact fees would only be applied toward those items.
“There’s a feeling these impact fees are coming in without the consent or the vote of the people. In discussion, people feel like this is a way to circumvent taking it to a vote. But we’re still going to have to have that vote, because only half of the funds will come from the fees,” Madison said.
Based on 15-year projections, the county anticipates a need for $330 million for roads, $7.8 million for a new justice center and $5.7 million for administrative needs. The “priority No. 1” road project — repairing 42 miles of County Road 5 (Piceance Creek Road) – is expected to cost roughly $90 million. None of the industry impacted roads identified are in the eastern third of the county. County roads 7, 13 and 8 are identified as impacted primarily by residential development.
For the oil and gas industry, the fee per each standard depth well would be $17,981. Of that, $100 would be for administration, $181 for law enforcement and $17,700 for roads. Companies working independently to bring roads up to county standards would be credited back dollar for dollar in the fee structure.
Residential fees are based per unit, not on size, totaling $2,043 per unit. The breakdown of funds for residential impact fees gives $522 to administration, $921 to law enforcement and $600 for roads. In comparison, the impact fee on a new residential dwelling in nearby Rifle, Colo., is $17,000 per unit. Residential new construction under $250,000, not including the land price, would fall into an affordable housing exemption category.
More than 1,000 new homes are projected for Rio Blanco County in the next 15 years, based on a socioeconomic study done by the Associated Governments of Northwest Colorado.
Commercial unit fees are based on square footage, ranging from $,2023 to $9,000, with the majority of scenarios falling between $2,000 to $3,000. Madison said a Wal-Mart would fall at the highest end, a strip mall somewhere in the middle and a small business at the low end.
Business owner Kim Rule of Krule Construction said she would like to county to “hear from their constituents” before making a decision on the proposed fees. “I don’t think business owners were invited to the table,” Rule said.
Industry officials would like the county to hold off making its final decision on the fees, giving them a window of space to open communication. “We think it would be wise to postpone this decision for at least six months. Sit down, take more time and study other alternatives, investigate other funding options,” said Dean Tinsley of Williams Energy, representing the oil and gas industry.
“Our perception is there wasn’t really a whole lot of brainstorming about a win-win situation for the county and industry. We’re not trying to skirt around the issue, these are real problems that affect us as well, but we do think we have a better alternative than what the county has proposed.”
Industry officials pointed fingers toward what they consider unfair distribution of mineral lease and severance tax dollars by the state and federal government as the source of the shortfall.
“I share your frustrations with the tax issue,” Tinsley said. “Every dollar we generate out of the ground is taxed 3-6 percent off the top to help mitigate impacts at the local level, but RBC doesn’t get their fair share of that.”
However, Madison stated, even in a best case scenario, federal and state tax dollars will only generate a fraction of the total identified capital costs. If there are changes in mineral lease/severance tax dollar distribution the impact fees will be reduced accordingly.
EnCana representative Byron Gale questioned the reliability of the estimated number of wells to be drilled. “What if that well count falls short? The oil and gas industry is facing a lot of challenges right now.”
Madison said the county’s plan anticipates a “high end” scenario. “This is our best guess at what we think will be impacted if that happens. If you don’t have that many wells, you don’t have that much impact. That’s what the annual review is for.”
Federal and state funds and property tax revenue to come from projected facilities aside, RBC Commissioner Forrest Nelson, Sheriff Si Woodruff and RBC Assessor Renae Neilson stressed the point that the pressure on infrastructure is immediate and critical.
“It’s in the interim we’re hurting,” Nelson said. “It’s probably not a perfect system. But it would have been a lot more helpful if industry had come to us a year ago to look for a solution.”