The Development Impact Fee is a one-time fee assessed by a local government on new
development to pay for all or a portion of the costs of providing public services
to the new development.
Quick Facts
Community Mission When implementing a development impact fee be sure to show your community how this
fee helps you meet your community’s mission
Benefits of a Development Impact Fee Dedicated funds for expanding utilities (water, wastewater, stormwater, etc.)
Cost of expanding infrastructure is charged directly to the new development
Guarantees infrastructure to accommodate growth
Helps regulate community growth
Drawbacks of a Development Impact Fee Developing the fee structure and implementation can be a major under-taking
Businesses or residents may choose to move to a community without an impact fee
A Development Impact Fee provide for the costs of expanding public utilities and services to the new development.
This one-time fee is charged to new development to cover the costs of water and sewer
systems, roads, stormwater service, schools, libraries, etc.
Development impact fees should pay for the full cost of adding the additional development
to the public utilities. However, development impact fees cannot be used for the operation
or maintenance of capital facilities. Determining the impact fee structure and zoning
requires sound planning, and should be used in tandem with the capital improvement
plan.
Sometimes development impact fees are called impact fees, benefit assessments, user
feeds or connection charges.
Development impact fees may be attractive in communities where existing residents
are resistant to increasing other taxes, fees or rates to help cover the cost of new
facilities that serve new people.
Impact fees shift the costs of financing public facilities from the general taxpayer
to those that benefit from the new facilities. Some local governments have used impact
fees instead of a general property tax increase.
Consult with your municipality’s legal counsel prior to establishing a development
impact fee system.
Project Examples
City of Arnold, MO
Arnold, MO has a robust development impact fee structure that is posted online and
details what the fee covers. More info
City of Springfield, MO
Springfield, MO assesses a Sewer Impact Fee based on water usage, Trunkline Connect
fees, sewer extension cost recovery, and special connection agreements. More info
Consult your community’s attorney and financial advisors prior to moving forward with
any of these funding options. Any reference in this website to any person, or organization,
or activities, products, or services related to such person or organization, or any
linkages from this website to the website of another party, do not constitute or imply
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