ST8804-CS 900612 UNIVEST DEVELOPMENT COMPANY
12770 COIT ROAD · SUITE 1215 · DALLAS, TEXAS 75251
Telephone 214-233-5771 / Fax 214-233-5881
June 12, 1990
Mr. Gary L. Seib
Director of Planning and Community Services
City of Coppell
P.O. Box 478
255 Parkway Boulevard
Coppell, Texas 75019
Re: Proposed Revisions to Utility Impact Fees
Dear Gary:
Please pass along the following comments on the proposed revisions in the impact fee ordinances
to the appropriate city officials so that they may be included in the process of consideration.
I must assume that the Impact Fee Study of May 1990 prepared by Ginn, Inc. Consulting
Engineers for the City of Coppell essentially follows the procedures contemplated by applicable
law, and I have no basis for questioning the facts or assumptions used therein. Assuming these
are correct, I would make the following three comments for consideration by the City Council:
1. Possible Duplication of Taxation - With respect to property located in the Coppell
Municipal District Number One ("CMUD"), I would echo the caution raised in the Ginn study
regarding the imposition of City impact fees on property located within the CMUD and served by
utilities paid for by the CMUD. This issue was also raised at the time the city initially adopted
utility availability fees several years ago. As I understand the purpose of an impact fee, it is a
method of taxation to direct the cost burden of required new utility infrastructure to new
development, rather than lo the general population of the city. It is difficult to see how this tax
is applicable with respect to property in the CMUD. In the CMUD area the city does not bear
much of the cost of utility infrastructure, but it is primarily paid for by a combination of the
CMUD and the developers within the CMUD. All of the property located within the CMUD has,
for roughly the last 20 years, paid a separate and additional property tax which provides the
funds to pay for utility infrastructure costs over and above those paid directly by the
developers.
On the other hand I realize that the cily may eventually absorb and take over the CMUD,
and at that time have to assume some amount of outstanding indebtedness. While the amount of
that indebtedness is unknown, it will surely be significantly less than the value of the
infrastructure "inherited" by the city.
Mr. Gary L. Seib - Page 2
The property located in the CMUD should not experience preferential treatment, nor
should it experience an additional tax burden over and above other property located in the city.
Possibly some formula could be developed for calculating a modified impact fee in that area to
reflect the potential debt assumption by the City at a future date, which could be adjusted
annually as the debt burden changes.
2. Developments in Process - With respect to properties which are already undergoing
the development process, the prospective developers and builders involved have already made
financial commitments, and determined the economics of their project based on those
commitments. It places an undue burden on these projects to change the rules on them in
midstream. Therefore, I would propose that properties which have existing preliminary and
final plats approved, but are not yet completely constructed, should be exempted from an
increase in impact fees.
3. Division of Costs - In a time when availability of development and construction
financing is a major retardant to new development and growth, the city should be careful not to
unnecessarily increase difficulties for either developers or builders. In general developers
will favor payment of the impact fee by builders, and in general builders will favor payment of
the impact fee by developers. This is because the shilling of the burden will ease the financing
difficulties for the other party. For the last several years the community has become
accustomed to one-half of the fees being paid by the developer upon platting, and one-half of the
fees being paid by the builder upon building permit. I propose that the city leave this procedure
in place so as not to increase the burden for either builders or developers.
If you have any questions please call.
Yours very truly,
Univest Development Company
Michael R. Allen, President
cc: Mark Wolfe
Alan Ratliff
Richard Dooley
IMPACT FEES/6.12.90