What’s ahead: Fort Mill impact fees at a glance

Now that Fort Mill Town Council passed four new impact fees to help offset the cost of growth, here’s a breakdown of some common questions residents may have:

Who will pay the fees?

Builders will pay when getting their permits. Fees apply to new construction or major expansion, regardless what type. A business will cost more, usually far more, than a home. But, there are a lot more new homes projected that businesses. The town estimates up to 75 percent of fee money will come from residential construction. Fees begin Oct. 1.

How much will they generate?

Based on almost 5,400 new homes arriving in the next 10 years, impact fees would generate $8.6 million just on the residential side. A little more than $6 million would go to parks and recreation. Another $1.84 million would go to municipal facilities, and almost $720,000 to fire protection.

Overall commercial and institutional revenue is harder to pin. Costs vary significantly based on building size, how many cars the building serves, number of employees and other factors.

What about money for roads?

The transportation fee was tricky for council members. Money for transportation could be used for some road improvements, largely in partnership with other programs like Pennies for Progress or the Rock Hill-Fort Mill Area Transportation Study. But, that fee weighed heaviest on new business.

Council members put the transportation fee on the books, but will not charge anything for it. Council members could drop that discount at any time.

Why all the fuss about business?

New businesses could pay up to six figures in impact fees. If recent additions LPL Financial and Lash Group arrived after the impact fee ordinance, they would have paid more than $800,000 combined.

To help businesses, the town is changing its permit fee structure to reduce costs on the larger construction projects in town. Take Lash Group as an example. The fee ordinance would cost a similar project more than $287,000. But with the permitting change, the building would cost only $189,000 more than it would before Oct. 1.

What about schools?

Schools will not pay impact fees, thanks to a budget proviso, for the current state fiscal year running through June 30. Council members passed a resolution asking state legislators to exempt schools, nonprofits and religious groups from impact fees. For now, those groups are included.

Without the proviso, the Fort Mill ordinance would charge a typical elementary school more than $35,000. A middle school would be almost $46,000 and a high school $74,000. Those figures are based on square footage similar to existing schools. Schools would not see permit fee reductions similar to businesses.

What about taxpayers?

An argument for impact fees centers not on future business or residents, but current ones. Town staff compared the expected impact fee revenue to that same figure generated in 20 years of tax revenue through bonds.

Take LPL Financial. A same scale business would pay almost $530,000 in impact fees. But LPL Financial won’t pay any, because it predates the ordinance. The company would pay more than $1 million more in taxes the next 20 years to get to the same number brought in through impact fees.

A new home will bring in $1,822 in impact fees. A home would pay an extra $3,473 in taxes.

The argument breaks down with schools and nonprofits, which pay no taxes with or without impact fees.

This story was originally published August 28, 2015 at 3:27 PM with the headline "What’s ahead: Fort Mill impact fees at a glance."