Fort Mill looks for creativity with impact fees

A riddling decision awaits Fort Mill Town Council as members are searching for a new way to pay for growth without causing collateral damage.

Council looked into impact fees, a to-be-determined charge on new construction, in November. The issue resurfaced at a recent workshop in Chester.

The problem is, the council can’t find an easy way to charge the fees without hurting schools, discouraging commercial growth or opening the town up to lawsuits.

But the council isn’t looking for an easy answer.

“This is a very critical decision for us to make,” said Councilwoman Guynn Savage.

A commissioned study shows how the town could charge impact fees, collecting for municipal use, fire protection, transportation, and park and recreation services.

All but park and recreation would be charged to any new construction based on how many more vehicles the development puts on the road.

Included are churches, schools and other nonprofits, along with businesses and new homes.

Because only new residences impact park and recreation services, that fee only would apply to residential construction.

Schools, in particular, concern the council. If voters approve a $225 million capital plan in a May 5 referendum, the Fort Mill School District bond sale would finance construction of a new high school, new middle school, aquatics center and other facilities. Which could mean millions of dollars in impact fees, something council members don’t want.

“They certainly don’t need any additional outlay of funding,” Savage said.

The task now is to brainstorm ways around that impact.

“There’s creativity built into the program,” said Mayor Danny Funderburk.

The aquatics center won’t be built if another alternative is available, district officials said, and thus that portion of the proposed bond sale will not occur.

Sitting prettiest at present is parks and recreation. Residential growth is a common complaint council members receive. The town could charge only the park and recreation impact fee, avoiding charges on new schools or incoming business.

Joe Cronin, town planning director, estimates the town already would have collected $100,000 to $150,000 for park and recreation just from new residential development had that fee been in place Jan. 1.

Brown Simpson, town park and recreation director, recently completed a needs study identifying a five-year plan for more ballfields, a gymnasium and office space.

“All of those projects would be eligible for impact fee funding,” said Matt Noonkester, impact fee consultant with Stantec.

The problem with just one fee is no money comes in for fire protection, transportation or municipal use. Road conditions are another complaint council members often get.

“I don’t see the windfall where I want to see it,” Savage said.

Town council could enact all the fees. In time fire stations could be built, roads improved and large capital projects funded.

Projects not covered by impact fees, like utility construction, could also see a benefit.

“It frees up money in your general fund for these larger capital projects,” said Dennis Pieper, town manager.

Intersection improvements and right-of-way purchase could aid traffic. The “biggest bang for the buck,” Cronin said, would be in partnerships.

Impact fee funding could help secure larger road funding grants, or pool together on regional projects should Tega Cay or York County ever enact similar fees.

Plus, a proviso in this year’s state budget doesn’t allow a town to charge impact fees on school construction without forfeiting an equal amount of state funding.

But the town couldn’t excuse schools without opening themselves up to legal challenge from someone who has to pay the fee.

“You’d have hard luck,” Noonkester said.

The start-and-see plan

An idea, and one amenable to several council members March 11, is to set up all the fees but only charge one.

Council could set up all four but discount all but the park and recreation fee to zero.

The town could begin collecting on residential construction as leaders work out details on the rest. Council could also, at any time, vote to start collecting the other fees without requiring more consultant studies.

Discounts are standard practice with impact fees. Towns generally charge just a percentage of what state law allows, Noonkester said, to help prevent legal challenges. Towns can discount some, most or all of the allowable fee.

The plan would allow leaders to find more solutions.

One proposal is to have schools donate right-of-way beside new construction that they would anyway, and have it credited toward the transportation fee. The same options would have to be allowed for businesses and other uses.

This story was originally published March 16, 2015 at 12:40 PM with the headline "Fort Mill looks for creativity with impact fees."