At its March 28 meeting, the O’Fallon City Council voted 5-4 against legislation [Bill 7078] that would pose traffic generation assessment fees for new developers, whose developments would cause traffic increases on local roads. The council’s final vote followed the bill’s second reading.
The bill proposed a plan for TGA fees to be paid by builders of new subdivisions, developers of new businesses and other entities that create additional traffic on city streets. The collected TGA funds would be used to pay for road upgrades, new traffic signals, new signs and other infrastructure improvements required to address possible traffic influx due to the new development. With the defeat of the bill, the TGA proposal is currently on hold. A one year waiting period is required for resubmission if the proposal is not significantly changed.
Councilmembers voting for the bill sought to share new infrastructure costs upfront and across all developments that cause an increase in traffic, rather than only charging developers who come in later and generate the traffic that crosses the limit threshold, forcing infrastructure upgrades to be done. Councilmembers opposed to the bill were concerned that upfront fees could cause developers to avoid locating in O’Fallon. That the fees could hurt new home buyers and possibly burden small businesses also were concerns.
Prior to the vote, councilmembers Rose Mack [Ward 2] and Jeff Kuehn [Ward 4] sought to table the bill until the next council meeting on April 11. Mack and Kuehn said they both received calls from the O’Fallon Chamber of Commerce requesting additional time to discuss the bill with city staff in order to create language that would serve as a compromise for all involved parties. Kuehn said he also wanted to hear from the Home Builders Association and would use the time to speak to them. The council ultimately voted 5-4 against tabling the bill.
Prior to the final vote on Bill 7078, Councilmember Dale Kling [Ward 3] expressed concerns that the bill would discourage economic development and make O’Fallon less competitive. He said the fees could push developers to other nearby cities who do not have TGA fees and that the fees most likely would be passed along to buyers of new homes, thus raising prices and making homes less affordable to low income buyers, move-up buyers and other potential residents. Kling also said that the fees would hurt new small businesses and make them more susceptible to failure due to insufficient capital.
Kuehn rebutted Kling’s concerns saying that the bill would help developers and small businesses by dividing up the cost of new infrastructure across all new development rather than charging the last developer on the scene. He said that for the past 20 years without this type of fee structure, city staff has had to negotiate with the developers coming in at the end of development when, for example, a new traffic light was needed. Kuehn then provided a hypothetical example of the current infrastructure negotiation process. If a developer or new business could not afford to pay $300,000, he said, city staff would negotiate the cost, perhaps getting the developer to pay $100,000. Then, the remaining $200,000 would have to be paid by O’Fallon taxpayers.
Councilmember Mike Pheney [Ward 5] also spoke in favor of the bill and cited a real example of when an O’Fallon subdivision had requested a new traffic signal that the city turned down due to a lack of infrastructure funds. The subdivision then pursued independent funding and raised the money, which resulted in each homeowner paying $750 per year for 28 years to cover the signal’s cost, Pheney said.