Tega Cay mulls fees on new homes, businesses. The aim is for growth to ‘pay for itself.’

Prices may soon go up for new construction in Tega Cay. This time, the cost may affect both homes and businesses.

Tega Cay City Council unanimously voted Monday night to start charging fees -- also known as impact fees -- on new residential and business development.

One more vote is necessary, and the final decision is expected Aug. 6.

“We haven’t obviously decided on it yet, but we got our briefing on it, what all it entails,” said Mayor David O’Neal. “If everything goes as planned, we should pass it then.”

Tega Cay used the same consultant for its study as is working on a study of unrelated impact fees in York County.

The consultant also studied the Fort Mill School District impact fee for new homes, which was increased by more than six times on Monday night by the York County Council.

The Tega Cay study proposes the maximum amount, $6,656, that the city could charge on new each home. An apartment could be charged $3,827. The fees collected by the city would pay for recreation, police and fire improvements.

Charges on non-residential development would vary by type, and by size. They would be charged for every 1,000 square feet of space, with commercial charges higher than office or industrial business uses.

Water and sewer fees also would be charged on all new development. They vary considerably, by meter size, from a home to a large-scale commercial or industrial use.

Though the fees go up to more than $60,000 for a six-inch water meter, few builders would pay that amount.

“Very few entities are going to need a six-inch meter,” said Charlie Funderburk, city manager.

Stonecrest Villas has a master meter for the neighborhood, and the Revere apartment complex has one on each side of it. Tega Cay Elementary School has a meter that size, too.

“Generally, meters that size are used for apartment complex, schools and large commercial, industrial type projects,” Funderburk said. “The three-quarter-inch meter size is what is most commonly used for domestic service and residential irrigation.”

The fee figures could change by the final vote, but the mayor said he doesn’t expect it.

“The second reading could be less,” O’Neal said. “But I think it’ll be about the same numbers.”

Impact fees are charges on new construction. They are paid by a builder when a building permit is issued. Costs then are passed on to end users — homeowners or commercial tenants — through sales or rent prices.

O’Neal said he and Councilman Ryan Richard, who joined council at the same time, have been working for years on ways to have growth pay for itself. Recent additions to council have been a step forward, he said.

“We have a new council now,” O’Neal said. “The old council didn’t want to have anything to do with (impact fees), I think. But we’ve been working on it. This is finally here. It will finally have growth pay for itself.”

In his campaigns, first for City Council and then for mayor, O’Neal spoke about having new community growth follow a “plug and play” model. Impact fees are a way to help, he said.

“They need to come whole,” O’Neal said, referring to new developments. “They need to bring whatever they need. Whether you need a park or whatever, bring it with you.”

The city is working through major capital projects from a water tower to police station to water infrastructure. The city has had to add a fire station and other features to keep up with significant community growth.

Just Monday, the city considered an initial decision on a $4 million installment purchase revenue bond for a new police station and other improvements.

As for the impact new fees will have on new construction, they’ll combine with the new Fort Mill School District fees in Tega Cay for homes and apartments. The school fee is only charged on residential construction.

If Tega Cay finalizes its fee, a new home that would have paid $2,500 for the Fort Mill school impact fee a month ago now would pay more than $25,000 for the combined city and school fees.

The U.S. Census Bureau estimates the median home value in Tega Cay is more than $300,000. New homes often sell for more.

The proposed Tega Cay fees differ from the Fort Mill school fee -- like impact fees passed three years ago in Fort Mill -- in that the the Tega Cay charges also take aim at commercial construction. Large commercial additions have come in Fort Mill the past several years, from homes to headquarters expansions and more. The Kingsley area in particular has brought in considerable business, even with fees in place.

O’Neal said it helps having Fort Mill, the school district and others working through the impact fee process. Tega Cay residents understand, he believes, what the city is doing and why it could benefit taxpayers who won’t have to foot the bill for growth through bonds or tax increases.

“They do understand it now, and that’s a relief,” O’Neal said.