Does it really make sense for the city to charge a laundromat $1
million in impact fees?
You have to wonder if Gilroy officials really want to ban laundries.
That may not be the intent of the impact fees levied against this type of business, but that surely might be the effect.
Bruce Rhett wants to open the Laundry Room on Monterey Street in downtown Gilroy, but impact fees of nearly $1 million – according to the staff report – might make that a financial impossibility.
A portion of those fees have been waived, but city staff are recommending that Rhett be required to pay $581,303 in water and sewer impact fees.
Rhett says that he has a letter promising that he would not have to pay any impact fees; others say the letter is vague. We hope the city can come to a compromise with Rhett – perhaps significantly reducing the impact fees and allowing them to be paid over time – that enables him to make it financially possible to open his laundry.
But we hope that City Council members take a look at the big-picture issues this situation highlights.
First, the impact fee rates are stunning: $7,308 per 1,000 gallons of water per day for water drawn, $38,840 per 1,000 gallons for water that goes down the drain.
The water and sewer impact fees total $46,148 per 1,000 gallons or $46.18 per gallon.
What justifies these numbers? Where do they come from?
Second is the virtual ban on laundries and car washes these impact fees create.
Gilroy – which is growing rapidly, thanks in part to City Council’s overly generous doling out of housing allotments – already has enough high-water usage business, like laundries and car washes.
But with impact fees like this, the city has made it a virtual financial impossibility for these kinds of businesses to open in Gilroy.
The city is rightly encouraging housing downtown, much of it apartment-sized. These residents need to wash their clothes somewhere. Even folks with washers and dryers in their homes occasionally need to wash an oversized item like a comforter.
Washing a car in a driveway uses more water and sends contaminants to the water supply, while washing a car in a car wash uses less water and recycled water, to boot.
These might not be glamorous issues, but they are clearly quality of life issues that highlight the unintended impact of impact fees.
