$33.5M safety building drives Port impact fee proposal

PORT WASHINGTON - To ease a bit of the pain of a proposed $33.5 million public safety building on taxpayers, Port Washington aldermen are considering using impact fees to ensure future developments will pay their fair share of the cost of the new facility.

The city is considering an impact fee of $4,464 for each new single-family home to pay for the public safety building.

That amount is based on a $35 million facility but will be adjusted to reflect the current $33.5 million budget for the building.

It would be added to the current $4,789 impact fee already charged for each new single-family home, a fee used to pay for parks and sewer connections, bringing the city’s total impact fee to $9,254.

This fee is not paid directly by home buyers but instead charged to developers and builders when they take out a building permit.

An impact fee would also be charged to non-residential development, be it a commercial, industrial or institutional building. These fees are charged on a per-square-foot basis.

In addition to new construction, impact fees are also charged for redevelopment projects that result in a new or intensified use of a property

When a building such as the new public safety facility are constructed, they are sized to meet the needs of a community for years to come. Impact fees allow the community to charge future residents for that portion of the structure intended to serve the need they generate.

City Administrator Melissa Pingel told aldermen recently that impact fees could reduce the tax impact of the building on existing taxpayers by $30 to $50 “depending on how much development we have.”

Christie DeMaster of Trilogy Consulting, which conducted an impact fee study for the city, told aldermen that these fees are most commonly used to pay for water and sewer services and parks, and less commonly for police and fire facilities and libraries.

Impact fees are “a good source of revenue” but only if development occurs, she noted.

It’s difficult to say how long an impact fee would be needed, she said, “because we don’t know the pace of development.”

One key factor to be considered when approving an impact fee is how it affects affordable housing in a community. DeMaster noted that in Port’s case, there would not be any impact on affordable housing.

“Based on the current market, new housing construction, which would be the only housing that would pay the impact fees, is generally not affordable for households at or below the median household income in the city,” she wrote in her report.

The median household income as of 2022 was $76,609, she said, meaning a house would need cost less than $1,915 a month to be considered affordable. That amount would finance a mortgage and property taxes on a house valued at $296,000.

For a household making 60% of the median income, or $45,965, an affordable house would be valued at $177,770.

A search of real estate website Zillow showed new homes currently for sale in Port ranged in price from $780,000 to $1.2 million for three to four-bedroom single-family houses and condominiums.

During the past five years, the study states, residential growth has occurred faster than it did from 2010 to 2020. During the last five years, the city issued permits for 87 new residential units a year, adding more than $92 million in new property value to the community.

Areas identified for new growth could add 2,100 residential units — both single-family homes and apartments — and 148 acres of new non-residential development, according to the study.

The Common Council will hold a public hearing on the proposed fees during its 6:30 p.m. Wednesday, Nov. 6, meeting and could approve the fees during its Tuesday, Nov. 19, meeting.