Memorandum

City of Lawrence

Legal Services Department

TO:	David Corliss,  City Manager
FROM:	John Jay Miller, Staff Attorney
CC:	Debbie Van Saun, Assistant City Manager Toni Wheeler, Interim Director of Legal Services
Date:	December 6, 2006
RE:	Impact Fees

Staff is exploring the viability of creating impact fees for the City of Lawrence.  Staff is currently reviewing what other communities have implemented and is working with the law firm of Stinson, Morrison and Hecker to assist the City in evaluating the legal concerns in establishing impact fees and preparing ordinances for the City of Lawrence. Attached are draft model Park Impact Fee and Traffic Corridor Impact Fee ordinances that have been prepared for City Commission review. 

In general, impact fees are used by local governments to recoup funds expended by a city, either now or in the future, to construct infrastructure to serve and support new development.  Because the 2005 Legislature eliminated the ability of the City of Lawrence to create development excise taxes while continuing to allow other cities to assess their previously existing excise taxes, the need to consider impact fees for future development becomes more important.   

Staff has contacted several communities in Johnson County to survey which cities have enacted impact fees and excise taxes and the amount of revenue the fees generate for their respective cities.   Cities such as Overland Park and Olathe have not enacted impact fees but instead assess development excise taxes.  Overland Park collects as much as 3 million annually in excise taxes.  In 2005 Olathe collected $2,731,638 for their street excise tax and $255,387 for their traffic signal excise tax.  Olathe is currently considering the need to also impose impact fees.  

Lenexa collects both development excise taxes and impact fees. In 2005 Lenexa collected $2,167,655 in excise taxes and $273,000 for a Transportation Improvement Impact Fee.  Last year Lenexa also created a Park and Recreation Impact Fee and through 2006 to date they have collected $142,000.  Shawnee has also enacted A Park Impact Fee and in 2005 collected approximately $200,000.

Leawood has created five different impact fees including a Park Impact Fee, a Public Art Fee, Street Impact Fee, a K-150 Impact Fee, and a South Leawood Transportation Impact Fee.  In 2005 they collected $101,401 for the Park Impact Fee, $20,158 for the Public Art Fee, $96,941 for the K-150 Corridor Impact Fee and $46,619 for the South Leawood Transportation Impact Fee. 

Staff is still collecting additional information from other cities on the types of impact fees they have, the revenue generated by the fees and the implementation structure used by the cities to adopt their impact fees.