Hildale, Colorado City eliminate water impact fees in effort to spur growth

Hildale, Utah, date not specified | Photo by Cody Blowers, St. George News

SHORT CREEK — The cities of Hildale and Colorado City, Arizona, have voted to remove water services impact fees for both areas.

Hildale City Council voted in February to repeal its impact fee, and Colorado City did likewise last month.

“We hope that this change will signal that both Hildale and Colorado City are looking to encourage new areas of growth and development,” said Harrison Johnson, the managing director for the Hildale-Colorado City Utilities Department.

Johnson was hired in July to determine if the impact fee was discouraging new customer growth among other things. The utilities department conducted an analysis and developed a report of its findings before recommending to the utility board in July that the water services impact fee be removed.

Johnson said the department found that the impact fee was “too high, and it wasn’t justified.”

The capital facilities plan, funded in part by the impact fee, was designed in 2015 and based on outdated information, Johnson said. The impact fee was supposed to be funded by growth, but the communities were shrinking due to mistrust and high impact fees.

With that change, Johnson said Short Creek is hoping to become a little more customer-friendly and “be more accessible and workable with customers trying to build” in the community.

A new supermarket looking to open in Colorado City decided to delay the project until a decision had been made regarding the impact fees, Johnson said. The company was facing about $90,000 in water service impact fees.

Residents were also facing hardship, according to Johnson, who said residential fees started at around $11,820.  

Residents living in or moving back to the community said the impact fee made it almost impossible to afford building a house or – at the very least – installing a water meter.

Johnson said the change will not have a major impact on the community because the funds received were insignificant. The utilities department had received one impact fee, which it refunded Friday.

“It wasn’t something that we could use and we figured it would be helpful for customer service.”

Impact fees go toward the capital facilities plan and are meant to cover consumer impact to the overall system. This does not cover any construction or meter services on an individual’s property, but was charged on top of those fees for future capital facilities, like water treatment and new source development.

Johnson said the Short Creek community is severely under capacity, and the community was able to produce more water than it could use. Additionally, the capital facilities projects that the impact fees were going toward were no longer being pursued because of the community’s stunted growth.

The utilities department is looking into a water treatment plan and redevelopment of the water system to help address the community’s contaminated groundwater, but Johnson said the water services impact fee would not cover “treatment or qualitative increases.” The impact fee could cover obtaining more water, but not obtaining better water.

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