CB South request for linkage fee waiver denied

“I think it is totally unfair”

Crested Butte South Metropolitan District manager Jack Dietrich didn’t expect the response he got from the Gunnison Board of County Commissioners after asking to be exempted from the linkage fee being assessed on the district’s wastewater treatment plant expansion.

Considering the $2 million expansion project was mandated by the state because of the increased volume of water being treated at the plant, and Crested Butte South’s status as a tax-exempt water and sanitation district, Dietrich thought the fee waiver was a sure thing.
But the commissioners didn’t see it that way. In a unanimous decision at a regular meeting on Tuesday, July 7, the board voted to keep the fee of more than $6,000 in place.
The linkage fee would go to the county to be invested in affordable housing to offset the effect construction has on the area’s housing market and, the commissioners say, to make it possible for middle class working people to own a home.
“This expansion doesn’t have anything to do with affordable housing. I’m not bringing more people into the valley. I’m trying to serve existing properties in [Crested Butte] South,” Dietrich says. “I was kind of surprised [by the decision]. I don’t think that was the intent of the regulations.”
When Dietrich requested a fee waiver application from the Housing Authority, director KT Gazunis says her office gave him the application “and explained that the only exemption that was stated in the workforce linkage fee was for individuals or families that make 120 percent of [Area Median Income] or below.”
The Housing Authority, Gazunis says, cannot make the decision to exempt the district from the linkage fee. It can only ask the commissioners, who also happen to form the Housing Authority board, to use linkage fee funds for its programs or exempt individuals who meet the criteria.
So then Dietrich asked the commissioners for the waiver and a lengthy discussion followed between the commissioners, county manager Matthew Birnie and county attorney David Baumgarten about whether the waiver would be consistent with the board’s thinking on linkage fees.
“It shouldn’t matter if the building being constructed might serve affordable housing some day in the future,” said Baumgarten. “It shouldn’t matter if a governmental entity is doing the construction, as long as we, the county, are willing to pay the fee on our own projects.”
The commissioners acknowledged that the county would be building a very large and expensive new jail sometime in the near future and a linkage fee would have to be paid on it.
Commissioner Hap Channell also said part of the reason the waiver request was denied was that “We have not and do not give any kind of governmental waiver [for the impact fee]. When we build buildings we will be paying a linkage fee unless some future board changes that. That’s something we expect of ourselves.”
But more than that, Channell said, there is an arguable contribution to the need for affordable housing created by the wastewater treatment plant expansion, since there are members of the workforce involved in the construction and because the plant is making it possible for Crested Butte South to expand, which will mean more construction.
Dietrich countered the argument that the project is drawing from the county’s workforce by pointing out that the company hired to do the work is from Salida.
Commissioner Jim Starr says he was inclined to vote against the waiver, at least in part because the county needs to demonstrate its commitment to addressing affordable housing issues in the county.
“To me it is an issue of economic development and how we can diversify the economy in our county,” he says. “There have been a number of studies recently that point out the lack of affordable housing as one reason businesses aren’t attracted to the area and we’re trying to address that.”
The county commissioners also feel that the rate being charged by the county results in a fee that is a tiny fraction of the total amount of the project.
“The Nexus study shows that to meet demand for affordable housing, the county could go much higher than we do, so it’s a comparatively small amount,” Channell says.
The Crested Butte South Water and Sanitation District is paying around .3 percent (three-tenths of a percent) of the total cost of the project as a linkage fee. But that doesn’t make it any easier on Dietrich, who is trying to figure out if the district or the contractor is responsible for paying the fee.
“I think it is totally unfair that either of us has to pay, but I have to pick my battles these days. So we’ll spend the $6,000 I guess—I don’t know that I have any appeals that I can go to,” says Dietrich. “I do have a 300,000-gallon water tank being planned for the 2010 construction season, so I have to continue to work with the county.”