What was supposed to be a meaningful way for Lubbock to fund new roads, instead turned out to be complicated and anti-growth, according to David Glasheen, city councilman for District 3.
The Lubbock City Council struggled to understand the complicated math behind impact fees for about an hour and-a-half during a public hearing as part of Tuesday’s Council meeting.
“I’ve heard from many small and local businesses that are already struggling under the current impact fee scheme,” Glasheen said.
Impact fees are one-time payments for new developments. Lubbock uses them to offset the cost of major roads leading to those developments.
That got more complicated recently because road construction costs have nearly doubled in five years. There’s a proposal to increase fees to match.
“I’m afraid of what the consequences would be if we double those. I’m afraid that it could bring growth to a real standstill,” Glasheen said.
For some businesses, Lubbock’s impact fees are lower than other Texas cities. But not always. (Click here to open a new window and see our previous explanation of impact fees.)
Mayor Mark McBrayer said, “Someone wants to open a coffee shop and they’re going to be paying one of the highest rates in the state.”
I’m just saying this out loud because my brain cells are trying to wrap around that.
jennifer wilson, city councilwoman for disrict 5
Jennifer Wilson, city councilwoman for District 5, noticed a coffee shop with seating pays more than a coffee shop with only a drive-through.
“I’m just saying this out loud because my brain cells are trying to wrap around that,” Wilson said.
“So, you’re telling me one coffee shop that has people sitting in the chair versus one that has them driving through is a different amount? The same car – whether they’re driving to the drive-through … [or] parking in the parking lot – that’s the same amount of traffic to me. … It’s the same amount of cars,” Wilson said.
Tim Collins, councilman for District 6, was concerned about the costs for businesses setting up in new areas of town.
“Whether it’s a coffee shop or a small restaurant or whatever, it seems to be very discouraging to our small business, which is the backbone of Lubbock. I mean, we are small business,” Collins said.
Despite the consternation at the meeting the Council unanimously accepted a re-study of impact fees which must be done every five years under state law.
But that’s a far cry from final approval. The decision on impact fees follow three more meetings:
- July 22: Second public hearing.
- August (dates still to be finalized): First and second vote on impact fees.
Lost in the math
Thomas Payne, a local developer, defended impact fees during the public hearing.
“The Council hired experts to do the math. And they have done the math,” Payne said.
“The Council hired experts to do the math. And they have done the math.”
Thomas payne, developer
Payne was referring to the $289,100 re-study recently completed by Kimley-Horn and Associates. His advice was to not worry about complicated formulas.
“Impact fees originally were created as an attempt to more fairly distribute the cost of new development,” Payne told the Council, as opposed to bond elections which use property taxes to build roads.
People pay higher property taxes for roads they might not ever use.
“They may never even see it, much less drive on it,” Payne said.
Impact fees put some, but not all, of that cost of new roads on the new developments.
Lubbock is behind building new roads. Nearly everyone agrees on that. But how to pay has become strongly debatable.
Jordan Wheatley, another Lubbock developer, was highly critical of the re-study.
“That gave you a bunch of ‘calculus 3’ that is just, to me, worthless.”
jordan Wheatley, developer
“That gave you a bunch of ‘calculus 3’ that is just, to me, worthless,” Wheatley said.
Since June 2021, impact fees raised nearly $14 million in Lubbock. By contrast, Wheatley said, two recent road bonds raised more than $300 million.
Lubbock’s road needs are expected to be in the hundreds of millions of dollars going forward. Wheatley is advocating replacing impact fees with a permanent road bond committee.
Victoria Whitehead, CEO of the West Texas Home Builders Association, said new growth pays for itself.
Her organization did a study of one square mile in Southwest Lubbock. It covered the area between Milwaukee Avenue and Frankford Avenue – from the 6400 block down to the 9600 block.
“That exact development in our community in 2003 produced 1,312 single-family homes, 712 multifamily units, $433 million in one-time local income, $63.7 million in annual recurring income, [and] 5,888 local jobs … in addition to that – $35.3 million in annual recurring revenue from property taxes, utilities, hospital charges and more,” Whitehead said.
Glasheen offered the last word before the council voted to accept the study.
“Mathematical formulas can create some unfair and even nonsensical outcomes like in the different treatment between coffee shops,” Glasheen said.
“Elections are a fair way to raise money and ultimately to raise property taxes because it’s the voters deciding,” Glasheen added.
Glasheen mentioned stagnant sales tax growth in Lubbock and lethargic property tax growth which we covered here.
“I would encourage everyone to join me in in putting Lubbock back on track,” Glasheen said.
