Fort Mill council considers impact fees

Fort Mill Town Council members are searching for a new way to pay for growth without causing other damage.

The town council considered 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 exposing the town 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 funds for municipal use, fire protection, transportation, and park and recreation services.

All but park and recreation would be charged for 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 affect park and recreation services, that fee only would apply to residential construction.

Schools, in particular, concern the council. If voters approve a $225 million referendum on May 5, the bonds would finance construction of a new high school, middle school, aquatics center and other facilities. School construction 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 is to brainstorm ways around that impact.

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

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

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 from new residential development had that fee been in place Jan. 1.

Brown Simpson, town park and recreation director, recently completed a five-year plan that calls for more ball fields, a gymnasium and office space.

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

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.

The 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, such as 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 purchases 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 used on regional projects should Tega Cay or York County ever enact similar fees.

Yet the problem remains with schools and business. The transportation fee is by far the biggest cost on new construction. Council members worry they won’t be seen as business-friendly.

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.

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

The start-and-see plan

An idea, and one agreeable 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 remaining impact fees. Council could also, at any time, vote to collect 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.

This story was originally published March 21, 2015 at 7:54 PM with the headline "Fort Mill council considers impact fees."