New fees to fund affordable housing and city transit met with some skepticism at the Durango City Council meeting Tuesday.
The city transit system needs $12.6 million over the next 10 years to maintain its existing service and would need even more money to expand services.
The deficit is driven in part by the Colorado Department of Transportation steadily cutting back grant money to the city over the next five years.
City consultant Julie Herlands, with TischlerBise, presented how much a dedicated sales tax, a utility tax and a transit operations fee could raise.
But the council did not vote on the issue or come to a consensus on a funding strategy to pursue.
Councilor Melissa Youssef expressed skepticism about raising fees for transit without taking a holistic look at all the city’s needs first because there is frustration in the community about increased utility costs, she said.
“I don’t think that this is the first and foremost fee or issue we need to address today,” she said.
The taxes that Herlands presented would require approval by city residents, but the Durango City Council could pass a transit fee that would cover the pending shortfall.
A .25 percent sales tax could generate $20.7 million over 10 years and a 2 percent tax on a utility bill from the city would raise $6.1 million over 10 years, according to Herlands’ presentation.
A fee for transit set by council could also be added to utility bills and could raise $12.6 million over 10 yeas. Residents in single-family homes would pay $5.30 per month, while those who live in a housing complex would pay $3.60 per month.
Businesses could also pay monthly bills, but it would be based on their square footage. Retail businesses could pay $2.80 for every 1,000 square feet of space, while a business with office space would pay $3.75 for every 1,000 square feet of space.
Councilor Sweetie Marbury suggested the city work on increasing ridership to help raise more revenue and reduce the need for those who don’t ride transit to pay for it.
However, increasing ridership will require shorter wait times between buses, which requires more funding.
She also presented how much the city could charge new nonresidential development to help pay for affordable housing.
The impact fees in the presentation represented the most that the city could charge, not a recommended amount.
For example, a hotel could be charged $15.45 per square foot and a retail store could be charged $36.20 per square foot, according to her presentation.
Youssef questioned whether the city should introduce a new impact fee while it is trying to encourage development.
Marbury asked the city to consider offering incentives instead to businesses for providing housing units as part of their design.
mshinn@durangoherald.com
