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The Advocate Newsletter | June 1, 2021

June 1, 2021

City of Aurora Increasing Building Material Use Tax
The City of Aurora collects a building material use tax (BMUT) deposit at the time of permitting. The deposit is based on a 3.75% use tax rate calculated against 50% of the construction cost. This is an estimate of taxable materials used in a project. For most single-family homes, the City has utilized a cost estimate of $105 per square foot for more than a decade. In order to more accurately reflect current actual material and construction costs, Aurora is increasing this estimate June 1 to $130.58 per square foot utilizing building valuation data published by the International Code Council in February 2021.  It is important to note that this is merely for calculating a use tax deposit at the time of permitting. The contractor and building owner are jointly responsible for accurate use tax reporting and the City of Aurora codes requires a reconciliation detailing actual liability to be filed no more than 90 days from the date of the issuance of the final certificate of occupancy. Please see the City of Aurora’s website for additional information regarding the building materials use tax.

Brighton, Commerce City and Thornton School District 27J - Set to Increase Fee-in-Lieu School Impact Fee
School district 27J has recently conducted a study to determine whether its impact fees for capital construction costs related to new residential development are in line with current market prices. The school district’s current fees have been in place since 2000 when the market price of an acre of residential land was set at $32,077 per acre. According to the school district, the price of this land has risen dramatically, and the current fee structure no longer accomplishes what it was intended to do. Because 27J operates in the three municipalities of Thornton, Commerce City and Brighton, the school district has been working with all three local governments to make sure impact fees were increased uniformly across each political subdivision. It has recently come to our attention that all three local governments intend to increase their school impact fees from roughly $30,000 per acre to roughly $60,000 per acre. Within the next couple of months, residential builders in all three municipalities can expect to see a dollar amount per dwelling unit increase as follows:

  • Single-Family Home Detached Dwelling: $930.00
  • Single-Family Attached Dwelling/Duplex: $436.80
  • Townhome/Condo: $363.60
  • Apartment Unit: $234.00

For more information, please reach out to Morgan Cullen.

Brighton City Council Unanimously Passes Increase to Water Fee In-Lieu of Dedication Rates
On May 18, Brighton City Council unanimously approved its water fee in-lieu of dedication impact rates. This decision was made following a study of the municipality’s existing water resources. Utility staff updated City Council on the current water fee in-lieu of dedication rate during its March 23 study session. Staff highlighted that while the City has purchased an additional 300 acre feet of water over the past three years, that amount has not kept pace with the 543 acre feet that has been dedicated to new development. In order to meet the current level of demand and cover the municipality’s costs, the City proposed an increase to the fee in-lieu rate from $11,000 per unit to approximately $23,696 per unit. This proposed fee structure was an average based on a typical residential development of 8 units per acre and could be adjusted based on the density of the site plan. The increase was justified on the need to increase Brighton’s local supply of water by purchasing regionally, which is more expensive. Members of council broadly supported the staff recommendations and intend to revisit the fee in-lieu rates each year going forward to make sure costs are being covered and that new development is paying its own way. A copy of the new ordinance is available online here for your review.

Implementation of Denver’s Net Zero Program Picks Up Momentum
The objective of the NZE initiative as it relates to the homebuilding industry is to implement a comprehensive update to the Cities ICC code, requiring all new homes built in Denver to be fully electric and net zero by 2024. This means that new residential housing units will have to be highly energy efficient, all-electric, powered by renewable energy and providers of demand flexibility for the grid. Obviously, this represents a monumental shift in the way homes will have to be constructed in the City. At our next Denver Joint Taskforce Meeting, The HBA of Metro Denver will get an update from Denver municipal staff on how this initiative is progressing and what we can expect the implementation to look like over the remainder of 2021. We have recently met with the Office of Sustainability to discuss what we need to do to make sure our industry is properly represented on any established stakeholder and working groups for both NZE and the 2021 Code Revision.

2021 Denver Building and Fire Code, Denver Green Code adoption process – Your Input is Needed
The City and County of Denver is adopting a new building and fire code, which will incorporate the 2021 series of international codes, as well as advance the voluntary 2019 Denver Green Code. To kick-off the code adoption process, the City has created a series of working groups to consider updates to energy and holistic sustainability requirements in Denver's building codes and regulations. It is important that our members participate in this process and share their interests, concerns and priorities. The initial energy performance stakeholder meeting related to residential building will take place on June 1t from 10:00 a.m. to noon. More information on how to participate in this virtual meeting is available here.

Town of Erie Considers Expanding Oil and Gas Setbacks for Residential Development 
The Town has begun studying potential changes to its oil and gas ordinances with particular interest in O&G setbacks and reverse setbacks. The issue came before Board of Trustees on March 9, where a number of issues related to setbacks, air-quality monitoring and coordination with other jurisdictions was discussed. Previously, we were assured on the issue of setbacks that any new requirements would only be applied to new applications. Land-use applications previously submitted and in the “review stage” will not be subjected to the new requirements retroactively. Town Board met on Tuesday, April 15, in executive session to discuss this matter, but it was closed to viewing by the general public. On May 5, the HBA hosted a meeting with active builders in Erie to discuss the potential impacts and preferred outcomes. We have since received formal staff recommendations from the Town’s Planning Director, Fred Starr, regarding this issue and last Friday, the HBA submitted formal recommendations to the Town outlining the potential consequences of the new regulations based on the feedback we received from our membership. The Town Board will begin considering the formal recommendations at its June 1 study session.

Lakewood City Council to Consider Series of Metro District Reform Measures in June
Lakewood continues to hold discussions on metro district reform.  There are a series of proposals the City is reviewing, which run the spectrum of adding guardrails to metro district service plans to an outright ban on new districts.  HBA staff has held a series of meetings with members of the Lakewood City Council on the proposed staff recommendations. The first two full council study sessions presented the Development Dialogue Committee’s initial proposals on March 15 and April 19. A proposed final Council meeting on the subject is scheduled for June 21, with the objective to discuss and determine consensus on proposals that have been put forward and provide direction to municipal staff to finalize a draft ordinance for consideration. The HBA will be reaching out to the relevant committee members in Lakewood prior to this meeting and will be following all new developments closely.

Thornton City Council Considering Amendments to Model Service Plan Governing Metro Districts 
Thornton is considering updates to its model service plan governing metro districts. Potential reform matters include mill levies, debt/interest rates and fee limits, as well as greater transparency and disclosure requirements. The HBA submitted two letters to appropriate City staff and held follow up meetings to go through our concerns on the initial staff recommendations. The City Council has since held three meetings on metro districts. The first two were purely educational, and no specific proposals to modify service plan requirements were presented. City Council attempted to take up the staff recommended changes to its service plan on April 20 but quickly postponed the discussion when it became apparent that it was simply too much information for the Council to absorb in the time allotted. Council and staff agreed to set up multiple planning sessions in the coming months to provide ample time to properly discuss and study the various proposals. HBA staff will be paying close attention to these upcoming study sessions and provide any outreach to Council and staff to make sure our concerns are fully recognized and considered. More information regarding the Thornton’s recommended proposals on metro districts is available on the City’s website here.

HBA of Metro Denver Issue Tracker
Questions on what is happening in a specific city or county? The HBA is regularly monitoring the council and board activities in every political subdivision in the metro Denver area. Our HBA of Metro Denver HBA Issue Tracker offers a great resource to learn about the issues being deliberated with links to agendas, packets and ordinances. The Issue Tracker is available to all HBA members here.

HBA Committees - All of the Metro Denver HBA’s Regulatory and Technical Committees are meeting regularly – Join today and make your voice heard!
As a volunteer-driven organization, the HBA's Jobsite Safety Committee, Permitting Committee, Regulated Utilities Committee and Stormwater Management Committee help guide the HBA's events and activities throughout the year. Consider joining one — or more — if you want to build strong, long-lasting relationships and make a difference to your fellow HBA members, while sharpening your leadership skills. Please visit the HBA website for more information or reach out to Morgan Cullen if you are ready to participate.

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