Queen Creek Town Manager John Kross

Right or wrong, Queen Creek and its development impact fees totaling $16,000 for a single-family home have become a prime example used by Arizona’s homebuilders this year as they lobbied the state Legislature for a moratorium on such fees for a couple of years. The homebuilders viewed the move as Arizona’s own economic stimulus.

I discovered today just how much that argument irritates Queen Creek leaders during a meeting at their town hall between some Tribune journalists and a couple of top administrators.

Town Manager John Kross and assistant manager Patrick Flynn (who oversees town finances) were discussing the status of Queen Creek’s budget, which has shrunk from around $30 million in 2008-09 to $20.1 million this fiscal year. They mentioned an unexpected rebound in new home building permits (59 since July 1 compared to near zero before) could be a real boon. Unexpected revenue from a surge in home sales could offset likely funding cuts from the state, picking up bond payments on capital projects that Queen Creek has been covering from the General Fund because of the lack of impact fees in the past 18 months.

I asked if Queen Creek officials had learned anything from that experience with an eye toward better matching impact fees with one-time expenditures that could be delayed or canceled when bottom falls out of the housing market. Kross realized my question was prompted by how often homebuilders mentioned Queen Creek’s impact fees when they asked state lawmakers for some relief. Kross decided he was going to fix my thinking then and there.

“There has been a commitment, going back to when this community was incorporated, that growth was going to pay for itself,” Kross said. “I think today you can go down the list of every existing resident, and none of them want to subsidize the cost of building streets and water infrastructure to serve a new development.”

As with every municipality with impact fees, Queen Creek has to go through an extensive study process to determine what each fee will cost and what it will fund. Queen Creek currently has fees for site engineering, planning, building safety, fire prevention and construction monitoring. Flynn said Queen Creek also has a working committee that includes homebuilder representatives to advise the town.

Queen Creek’s process is fairly easy to understand when it’s applied to construction of streets and water utility infrastructure. Queen Creek comes up with a multi-year construction plan, determines what percentage is driven by new growth, and sets impact fees to cover the costs of that percentage (either in cash or in bond payments over time). But the process is harder to grasp when it’s applied to a single facility or structure that’s intended to serve the entire community at once. In fact, impact fee critics point to the Horseshoe Park & Equestrian Centre as a municipal project that meets a quality-of-life desire but isn’t a need that can be placed at the feet of community growth.

Queen Creek wants to add a new impact fee for water services. The Tribune Editorial Board questioned the timing of that move, considering the current heat at the state Capitol. But Kross said the new fee would fund $45 million of improvements to the water delivery system that the town acquired last year.

Gov. Jan Brewer has twiced blocked legislative attempts to limit the ability of municipalities to collect impact fees. Kross and other Queen Creek officials are crossing their fingers that she will do it one more time if the Legislature sends her a new state budget that bars any new fees for the next three years.

Posted in: Arizona Legislature • Governor • Queen Creek • Arizona homebuilders • Development impact fees • Jan Brewer |

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