Despite little benefit to city, Laconia keeps impact fees in place


LACONIA — The City Council this week unanimously agreed to make no changes to the administration of impact fees, despite Mayor Ed Engler's suggestion that perhaps the program should be scuttled altogether.

Impact fees are one-time charges, collected when a certificate of occupancy is issued, levied on new development to fund either investment in municipal capital projects serving the development or to recoup past investment in expanded facilities that accommodate it. The city applies the proceeds from impact fees to the school district, police department, fire department, recreational facilities, streets and library.

The fee schedule represents a proportionate share of investment in additional capacity required to accommodate the different types of residential and commercial development. The fees themselves reflect a reasonable relationship between the amount of the fee and the demand on the facility or service. The city assesses the fees at 25 percent of their full rate. For instance, the full rate for a single-family home is $7,630, but only a quarter, or $1,907, is assessed. The proceeds from impact fees must be expended within six years of being assessed and collected or otherwise refunded.

Critics of impact fees, particularly developers, claim that they simply add to the relatively high cost of housing, which many consider is a hindrance to first-time home buyers and young families settling in the community.

When the city introduced impact fees in 2011, it stipulated that they could be reviewed at any time, but must be reviewed no later than July 1, 2016.

Since the program began revenues have amounted to $72,354, $1,440 in 2012, $552 in 2013, $12,250 in 2014, $45,350 in 2015 and $12,761 in 2016.

Councilor Henry Lipman (Ward 3) immediately proposed making no changes to the program. "This is the wrong time to increase the fees," he said. Although he appeared to appreciate the effect of impact fees on the price of homes, he said that impact fees are a means of distributing some of the cost of expanded infrastructure to future residents who also share its benefit.

Councilor David Bownes (Ward 2) said that a vote to make no changes would be "premature" and urged the council to refer the matter to the Planning Board.

Then Engler asked "Why in the world would we have an impact fee at all? We should consider eliminating it."

When no one took the bait, the council voted to leave the program unchanged and seek the opinion of the Planning Board.