Builders sue York County over higher Fort Mill school growth fee, councilman says

York County is being sued by home builders over higher residential development fees in the Fort Mill school district.

The lawsuit was brought after York County approved a much higher fee on new residential construction to pay for school growth in the Fort Mill district.

York County Councilman Michael Johnson posted on Facebook Thursday afternoon that he and the rest of council face a lawsuit over the fees. An accompanying photo, posted by Johnson, shows the Home Builders Association of South Carolina, Soni Construction and Shea Homes are the plaintiffs.

The Home Builders Association of South Carolina, Home Builders Association of York County, Soni Construction and Shea Homes are listed as plaintiffs on a compliant to the state Supreme Court, arguing York County violated fundamental rights by increasing the school impact fee in July. Listed defendants are the state, count and all seven York County Council members.

As of Friday morning the case hadn’t officially been filed with the Supreme Court, but the complaint dated Aug. 8 was served to council members on Thursday.

Johnson, whose district includes part of Fort Mill and Tega Cay, couldn’t provide many details online on the legal matter, but on the Facebook post he said the county “will defend its actions.”

Councilwoman Allison Love, who represents the Lake Wylie and Clover areas, also posted online that she received notice of the lawsuit. Love noted the home builder group had a few people come and speak against fees at a county public hearing, where she said “hundreds of local residents” spoke largely in favor of the fees.

According to the clerk of court with the state Supreme Court, the case has not officially been filed there as of mid-morning Monday.

Several people, including at least one council member, called the clerk’s office looking for information on the case. Papers served to council members indicate the case will be filed directly to the Supreme Court.

Typically, according to the clerk’s office, a case would be filed as papers are being served. But there can be a little lag time, and it’s possible, according to the clerk’s office, that the official filing may not come in or be available until as late as next week.

Development fees, also called impact fees, are charges on new construction. They are paid by builders and developers, but typically passed on to buyers and renters.

The fees are allowed by state law, and include requirements like capital needs lists and detailed math showing the fee will cover a proportionate share of costs brought on by growth.

Typically, the fees are charged at the time a construction permit is issued.

Fees can be charged for and used by schools, police and fire service, municipal costs, utilities and more. Fees can be charged on both residential and commercial growth.

On July 16, the council finalized a significant increase to the fee on new homes and apartments in the Fort Mill School District. The fee dates back to 1996 and, until this summer, the cost was $2,500 per new residence.

The council decided to increase fees to more than $18,000 for each new home and $12,000 for each new apartment.

The school impact fee change drew considerable community support, but also concern from state home builder and real estate groups.

Impact fees have been a tool for generating new money for schools and communities in high-growth areas.

The Fort Mill Town Council passed fees in 2015 for recreation, municipal service, fire protection and, though they’ve yet to charge for it, transportation.

Rock Hill enacted fees in 2003. The city phased in increases the past two summers, more than doubling fees on a typical new home to almost $4,000.

Tega Cay unanimously approved new impact fees Aug. 6 within that city’s borders. Fees for recreation, police, fire and utilities will be charged on residential and commercial construction. A typical new home will pay more than $8,000. Tega Cay is averaging 14 new homes per month. City Manager Charlie Funderburk said impact fee rates will be reviewed annually, as other city fees are, in budgeting.

“These fees, I don’t see would be any different,” he said.

Lancaster County is considering impact fees for the high-growth Indian Land area. Chester County is mulling them for Richburg, and perhaps the entire county.

And York County may not be done with impact fees. While studying the school district fee, the county put off efforts to begin charging its own fees for unincorporated areas. Now the county is working toward those fees.

There has been some discussion on whether new fees would target high-growth areas like Lake Wylie and unincorporated Fort Mill or Tega Cay. Or the fees could be implemented countywide. The new fees only would be charged on construction in unincorporated areas.

The fees wouldn’t compound with fees already in place in Fort Mill, Tega Cay or Rock Hill. They would be added to the separate school district fees, if passed, for unincorporated homes within the Fort Mill school district.

Back in 2015, leaders in Fort Mill approved their fees by narrow 4-3 votes, after some backlash from the business community over concern about stunted economic growth. The town studied impact fees for more than a year. Leaders were cautioned against charging the most under state law, to give them some wiggle room if someone wanted to take them to court over the math.

State law uses a variety of factors to set a maximum fees that municipalities can charge.

York County’s recent vote on the school district fee increase, and the one approved this week in Tega Cay, was the maximum amount each community could charge.

Check back for updates to this developing story.

This story was originally published August 10, 2018 at 8:21 AM.