Wellington (Colorado) wants to boost building activity by letting contractors defer thousands of dollars of impact fees when they pick up home building permits.

To make that option possible, the town board on Feb. 9 passed an ordinance that outlines how the program will work. The change will take effect March 16. Deferred costs could range from $14,000 to $18,000, depending on the development agreement for the subdivision where the new home will be built.

Deferred fees include water tap, raw water, sewer tap, cash in lieu of park land, and charges for roads, library and storm drainage. Those fees, however, will come due within 12 months, or earlier if the home is sold or ready for occupancy.

If a contractor doesn’t pay the deferred fees on time, the town will charge 15 percent annual interest on the unpaid balance retroactive to the date the deferral was granted.

Some fees will still have to be paid when the contractor gets a building permit. Those include fees for plan review and inspections during construction, use taxes and a $1,000 fee to Poudre School District.

To use the program, a contractor’s financial backer would have to agree that the town could file a lien on the property if the fees are not paid when they come due.

Building permit fees can make up a significant portion of the revenue stream for the town budget, but that has not been the case during the current economic slump. Wellington issued 13 building permits for homes in 2009. In comparison, during the town’s construction boom, it issued 296 permits in 2004. The town has issued four building permits so far this year.

During the past decade, the town board approved numerous subdivision requests. Town administrator Larry Lorentzen estimated that Wellington currently has 200 buildable lots, another 200 lots that are close to buildable and about 600 lots that are platted but have little or no infrastructure in place.

Mayor Larry Noel noted that Greeley had a similar program to defer fees on building permits, and he thought it was successful.