It’s not just schools. Here’s why and how much more Fort Mill impact fees may rise.
Fort Mill impact fees may be on the way up, and in places by a good bit. How they’d get there is a little more complicated.
State law requires the town to update its impact fee every five years. That update is due, since fees started in 2015. The town planning commission will hear a case Feb. 18 for increasing rates on two of the three major town fees. Fort Mill Town Council will get a recommendation from the commission before itself setting the fee rates.
Impact fees are charges on new construction. The idea is specific charges aimed at new growth can help pay for town costs that come as the town grows. The amount for those charges gets into some complicated math.
So here’s a breakdown on some key points about the fees, why they might change and what they might fund:
▪ The town technically has four impact fees. In 2015 council set up fees for parks and recreation, fire protection, municipal facilities and transportation. Council decided not to charge anything for transportation, since impact fee funding for roads hits businesses hardest and elected leaders heard considerable pushback from the business community.
Parks and rec, on the other end, only charges new residential construction. So council charged that fee at the highest rate. Municipal and fire protection fees charge both residential and non-residential construction.
Through the 2018-19 fiscal year, the town collected more than $6 million in impact fees.
▪ So far impact fee money went to the purchase of a new town hall, a second fire station, land surrounding Dobys Bridge Park and both the Banks Athletic Park and Walter Y. Elisha Park amphitheater projects.
A study completed Feb. 10 looks at impact fee revenue, but an accompanying capital improvement plan envisions ways to spend it. A new capital improvement plan shows items the town could spend impact fee money on in the next five years.
Included are three fire stations and an engine, three police substations, town hall expansion, downtown parking and many of the same recreation parks and town buildings that already saw money in the first five years.
Those capital improvement projects combine to cost about $45 million.
The capital improvement plan projects a more than 68% population growth from 2018 to 2028 and an almost 124% growth in employment.
▪ The math on impact fees compares how much it costs for existing town services, and how many residents or businesses or employees use them. If the town were to build its existing recreation system from scratch, for example, the study found it would cost more than $11 million. That figure gives the town a per capita cost to calculate the share each home or apartment would need to pay.
Those same types of calculations determine how much new homes should pay for fire or municipal construction, or what new businesses should pay based on size and traffic generated. Costs can be per capita, square foot, unit, room or acre.
The end results are maximum fees allowed by law.
▪ It’s common for municipalities not to charge the full amount allowed by law. They often set discount rates, as Fort Mill did five years ago. The town now charges 10% less than what’s allowed for recreation and just 50% of what’s allowed both for fire and municipal fees. The town set a 100% discount for its transportation fee, putting it on the books in the event a future council may want to use it.
The idea of discount rates is, charging less than the full amount gives the municipality a cushion against potential legal challenges to the data used. Council can set any discount rate it wants, or none.
▪ Town planning staff offered its recommendation for discount rates ahead of the planning commission meeting Feb. 18. Here is where fees could increase. Planning staff recommends a 10% discount rate for all three charged fees. That figure wouldn’t change the parks and rec rate. It would increase the fire and municipal rates considerably.
Take a major project coming to town, for example. Piedmont Medical Center plans a hospital in Fort Mill, with a zoning change for it on the same planning commission agenda Tuesday night. Plans at Piedmont include a 200,000-square-foot hospital with another 80,000 square feet in a medical office building.
Using the recent impact fee study, that setup would involve $734,200 in maximum allowable impact fees. At the current discount rates, the fees would be $367,100. At a proposed 10% discount for municipal and fire fees, it would be $660,780.
The town estimates a 10% discount on all three charged impact fees would result in about $4 million for parks and rec in the next five years. Municipal and fire are harder to estimate, with square footage and other measures varying more than the per-unit residential figures. But, town planning staff estimates the 10% discount rates would bring in about $2 million for fire protection and $3 million for municipal needs.
Those figures are more than twice what those same two fees brought in since they began.
