Steamboat Springs The community Impact Fee Committee has determined that a one percent excise tax is the best alternative to impact fees.
Charged with the task of finding an alternative to impact fees that would be fair, generate equal revenue and could be passed by the voters, the committee decided that an excise tax charged on construction value was the best solution.
After the committee's presentation, the City Council will discuss Tuesday night if it wants to see that excise tax on November's ballot.
If voters approve an excise tax, it would replace the current impact fee.
If the question fails, the impact fees would remain in place.
Anthony Vaida, chairman of the Impact Fee Committee, said the proposal would be an excise tax on residential, commercial and industrial construction, and include remodeling, expansions and new construction.
Under the proposal the city would tax on construction valuation and collect it at the time of issuing the building permit.
During last Tuesday's council meeting, Vaida said the tax would be designated for capital items and not imposed on affordable housing or government buildings.
Using projected revenue from impact fees, Vaida said that the one-percent levy was chosen because it would generate a similar amount of funds.
Since impact fees have been collected beginning in November, they have brought in more than $69,000.
Under the current fee, it costs the builder of a new single-family home $4,000, but exempts affordable housing.
In the committee's proposal, a one percent excise tax would mean a $3,100 fee for a $310,000 house the median home value in the Steamboat Springs multiple listing service.
But a higher end home in the $1 million range would bring in $10,000 or more.
Vaida said while there was discussion about how much an excise would impose, using an excise tax was approved by unanimous consent.
The group also decided to tax construction valuation as opposed to an excise tax that would levy a tax based on square foot per construction.
This means a house 10,000 square feet should pay almost 10 times as much as a 1,000 square foot house.
"We felt square footage doesn't give you a good picture, a fair picture. You can build for $150 a square foot, but you can get a lot more goodies for $300 a square foot," Vaida said.
"This valuation is much better than square footage. It better reflects and spread costs.
"The end result is those building mid-sized houses do not pay as much as those building luxury houses."
The committee did debate when the excise tax should be collected.
Although Vaida said paying the tax when the building permit is granted should not have much effect on the average single-family homeowner, it would affect developers.
"For a developer building and selling, it's always better to pay at time of the closing," Vaida said. "For the typical homeowner, it's not as critical to pay now and recoup (costs) later."
The committee, which was formed in May and comprised of two developers, a realtor, transportation expert, financial worker and community members, has held six meetings.
Vaida said he has put in 30 to 40 hours attempting to find an alternative.
After handing the council its recommendation, the committee is finished with its designated job, Vaida said.
But he said he would be willing to promote the tax if it is included on November's ballot.