Impact Fees Increase For Commercial and Industrial Developers

A new fire fee was added to the fee structure to fund a new fire station in the southwest corner of the village and renovations of existing stations.

Fees for new industrial and commercial developers are set to rise in Menomonee Falls, which already has one of the highest fee structures in the area.

The Village Board approved a resolution to add an additional impact fee to fund construction of a new fire station in the southwest corner of the village, and renovate and expand existing fire stations.

Industrial developers will pay a fire fee of 37 cents per square foot, and commercial developers will pay 53 cents per square foot for new building projects. Combined sewer and water rates also increased from $4,421 per rec to $4,775 per rec. A "rec" is a unit of measure for use of sewer and water.

The news is better for developers of new single-family residential construction. Impact fees will actually decrease slightly from $8,999 to $8,825 including the new $1,596 fire fee. Parks, water and sewer fees were all reduced.

Impact fees are charged to new development to recover a proportionate share of the public costs associated with hooking up sewer and water to the new building. The fees cover only brick and mortar construction, and cannot be used for municipal vehicles or service.

The new fire fee is designed to recover about 42 percent of the costs associated with all the fire station projects. That comes out to about $2.7 million out of $6.5 million in total costs.

However, the new increased fee structure had some worried that Menomonee Falls is too costly to develop in. The current single-family residential impact fees are second only to the Town of Bristol on a list of 14 surrounding communities.

Village Manager Mark Fitzgerald added that direct comparison of impact fees with other communities is often misleading. For example, Fitzgerald said Germantown doesn’t assess a sewer and water impact fee; however, it does charge a connection fee. In the end, the total fees are very similar to those charged in Menomonee Falls, he said.

“So all of this data is subject to variations depending upon what each community does, what their ordinance is called, and how they are set up according to statutes,” Fitzgerald said. “Frankly, there is quite a bit of misinformation in this data.”

Despite the irregularities in the data, no one wants to see the community on the top of a high cost list. And that caused some concern among trustees.

“I don’t want to get to the point where we tax ourselves out of business,” said Trustee Dennis Farrell.

Jacque Sommers, a Falls resident and landowner, said the village has already priced itself out of business. He’s heard firsthand that high impact fees have deterred businesses from coming to the village.

“There’s trouble on the south end of our village,” Sommers said. “Two developers flat out told me they refused to build on the land I own because of the high impact fees. I don’t know what’s going to get things going, but the more you add on to these impact fees the longer land will remain vacant.”

Sommers proposed a moratorium on impact fees, but that would mean the cost of providing the infrastructure for new development would shift somewhere. Village President Randy Neuman said that burden will fall on the backs of current residents.

“That just shifts the burden to the general fund for the rest of the taxpayers in town,” Newman said. “So we should increase the taxes for those that are living here for people that are moving into the village? You have to balance the whole village, not just people that want to move to the village.”

The difficulty for village leaders is to encourage development, but balance the cost of the new infrastructure required for development in an era of municipal tax freezes.

“Growth has impacts, and in our world of levy freezes it just gets more difficult. The true impact of growth is most fairly shared by that new growth,” said Village Manager Mark Fitzgerald. “Otherwise it’s a very disproportionate burden on the existing tax base, who could make the case that they already paid their share for new growth.”

Community Comparison of Total Residential Fees as of 2008

Bristol $9,607 Menomonee Falls (proposed) $8,825 Grafton $8,681 Jackson $8,434 Lannon $7,632 Sussex $7,659 Oconomowoc $6,908 Cedarburg $6,718 Franklin $6,670 Mukwonago $5,925 New Berlin $5,786 Hartland $5,458 Slinger $5,340 Germantown $5,209


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