The Town Council now knows the maximum it can charge for a series of new development impact fees, but a final rate, or even if the fees will be collected, isn’t certain.
At a joint meeting Nov. 19 with the Town Planning Commission, the council heard a breakdown of the process of more than six months of crunching figures concerning impact fees.
Matt Noonkester, a consultant with Stantec in Charlotte, said his presentation wasn’t a recommendation but an overview of what’s allowed by state law.
The maximum fee per new home is $4,273. “That’s the most you could charge,” Noonkester said.
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It’s unlikely the figure for any Fort Mill fees will be that high. Noonkester said it’s common to discount the rate somewhat to protect against legal challenges. Also, setting the full amount allowed could have more significant effects on businesses.
Town leaders can choose to enact impact fees for transportation, parks and recreation, fire or municipal facilities and equipment. They can choose all, none or part.
Noonkester determined how much it costs per resident for fire service ($112.97), municipal ($283.59) and parks and recreation ($528.81). He also figured the per-employee cost of fire service ($433.09) and municipal services ($287.57).
For transportation, he found a cost of $185.75 per trip, which factors in the cost of roads and maintenance.
Those figures determined the $4,273 cap for new homes. The average new home in Fort Mill in 2013 cost more than $370,000.
Other uses had costs that would result in fees of a far higher percentage than residential use, furthering talk of a discount rate.
A new grocery store could pay up to $13 per square foot. A fast-food restaurant might pay a third of its construction cost in impact fees. Something like grocery distributor U.S. Foods, if built in Fort Mill, might pay well more than $1 million in impact fees, per the maximum allowable.
Noonkester projected the town’s population and the number of people who work for employers inside town limits to double by 2030.
“In the world we live in, that’s a big change,” he said.
How it works
Impact fees would be paid by developers of new properties, or significant expansion of existing sites, that generate more traffic, need for fire service or the like. The intent is to charge fees based on projected impact, so a large corporate construction would pay more for fire than a house would.
“That developer pays the municipality to help offset that impact,” Noonkester said.
The Fort Mill School District has a $2,500 impact fee on residential construction, and Rock Hill has a fee for fire, water and sewer service. There are nine more impact fees statewide, all in the coastal area.
If the town enacts an impact fee, money for recreation, fire and other municipal services would go into a fund and used in those areas, at the council’s discretion.
Transportation fees would go toward predetermined road projects. Money not spent within three years of the set project date would be returned to developers.
The financial-impact data would be updated at least every five years, and the council could change the impact fees within its allowable amount at any time.
Impact fees are a one-time cost. Developers would pay them, then choose how much cost they may pass along to buyers. A new resident wouldn’t buy a home and then have to pay an impact fee.
“When they get the construction done, when they get the (certificate of occupancy), it’s done,” said Dennis Pieper, town manager.
Issues to resolve
Council members expressed a desire for at least some impact fees.
There was little concern on the residential side, but some wondered about charging businesses. Impact fees can’t be lifted for fee-in-lieu arrangements, a popular way of luring businesses is by exchanging fees for taxation.
Pieper, who helped institute impact fees in Summerville, said big businesses are accustomed to impact fees and a rate that may seem high to the council won’t sway restaurants if the population and traffic figures are there.
“It’s never stopped them from building a Chick-fil-A, or a McDonald’s or anything like that,” Pieper said.
Also concerning is the council’s inability to pick and choose construction projects it wouldn’t want to subject to fees. New schools and churches would be charged on their employees and traffic impacts, just like an office project.
“It’s basically blind to what the use is,” said Joe Cronin, town planning director. “If you didn’t do it that way, we’d be opening ourselves up to legal challenges.”
Schools were of particular concern. Councilwoman Guynn Savage said the school district doesn’t build new schools because it wants to, like a business might; the district is keeping up with growth just as the town is looking to through the impact fees.
“The school district reacts to growth,” Savage said. “It doesn’t create growth, and that’s just wrong.”
Any imposed fee would have to go through Planning Commission review, council readings and public comment with both groups.