Critics of the city’s proposed new development impact fees say the increases are excessive and the revisions illegally allocate spending in the wrong places.

Tucson currently collects impact fees on all new development, but it will be forced to stop on Aug. 1 after failing to meet the deadline for adopting a state-mandated update on how it charges and spends the money.

On Monday, the City Council held its first public hearing on the new fee proposal, which it hopes to have in place by the end of the year. The city stands to lose about $3.2 million over the four months it will take to get the new fees in place.

Homebuilder groups said the city’s proposed changes need more work.

Among the biggest problems is where the city plans on spending the money it collects, said Carter Froelich, managing principal at DPFG, a Phoenix-based consulting firm hired by the Southern Arizona Home Builders Association.

State law requires the money be spent in the same area where the new construction project has an impact, Froelich said. It also prohibits the money from being spent to fix existing problems.

Froelich said the city’s current plan violates both of those restrictions by taking money from new developments in the south and southeast sides to pay for 430 miles of sidewalk projects in midtown and west- and east-side neighborhoods.

Higher fees were also a concern, as the proposed plan would boost fees from about $7,400 to $10,000 on an average 2,250-square-foot home. Fees would rise for apartment buildings and townhomes as well. Fees would decease for some nonresidential buildings.

Connie McMahan, a representative of the Metropolitan Pima Alliance, said the additional costs could stifle development in a market that has yet to fully recover.

She suggested the city wait until the economy recovers before raising fees.

Councilman Steve Kozachik empathized with residents who wanted an improved city, but said the law is clear.

“We all want a more walkable city, but we can’t rewrite state law to achieve that,” Kozachik said.

The council voted unanimously to direct the city staff to incorporate all of the speakers’ concerns in work toward a final draft.

Contact reporter Darren DaRonco at 573-4243 or Follow on Twitter @DarrenDaRonco

Contact reporter Darren DaRonco at 573-4243 or Follow on Twitter @DarrenDaRonco