‘Moving south’: Fees on new homes and businesses could reach beyond Indian Land.
Lancaster County could be the next area to add impact fees. For now the question is where the county would charge them.
Last Tuesday night Lancaster County Council brought in consultants from Maryland-based TischlerBise. It’s the same firm that worked on development impact fee studies for Fort Mill, York County and both the Fort Mill and Clover school districts.
“This is the process we were intending to start at the end of March, and then COVID-19 derailed some of our meeting schedule plans,” said Alison Alexander, deputy county administrator.
Impact fees have been a discussion in Lancaster County for at least four years. Carson Bise with TischlerBise met with county departments on Tuesday. He will be back in July or August with more details on a study council at some point can decide to approve or deny.
The firm will study impact fees to support law enforcement, fire, emergency medical service and recreation. Initial plans were to study fees north of S.C. 5 in the high-growth Indian Land panhandle. On Tuesday council voted, at the suggestion of county staff, to extend the study south toward Lancaster city limits.
Impact fees beyond Indian Land
Steve Willis, county administrator, sees cause to study impact fees beyond Indian Land.
“Growth is moving south,” he said. “The original growth area that was determined...do we look at expanding the coverage area for the impact fee to come south of Hwy. 5? That’s something that we’re going to face in a host of other areas.”
Council agreed to expand the study, but there was concern about approving fees south of S.C. 5. Chairman Steve Harper said he wouldn’t expect enough new growth there to shift numbers from the explosive growth happening in the panhandle. Almost all new construction in recent years has been in the panhandle.
“I want to encourage growth south of (Hwy.) 5,” Harper said. “That concerns me.”
Harper said the county charges more for building permit fees than neighboring areas. The county takes in about $5 million per year, he said, but costs to review are about a fifth that amount. Harper said he sees those fees as a sort of growth fee on its own.
“When I evaluate this, that’s part of my decision,” Harper said.
Councilman Brian Carnes, who represents Indian Land, said the difference is building permit fees come to the county to pay for whatever the county as a whole chooses. Impact fees charged in a certain area would pay for costs in that area.
“The only fair assumption is if money is generated in a specific geographic area, then we need to budget that money to pay for impacts in that geographic area,” Carnes said.
Carnes said he supports a study extension as growth trickles south of the panhandle.
“We would not be following a wise path if we did not look at extending below Hwy. 5,” he said.
The county wouldn’t look to extend fees beyond those northern Lancaster limits.
“We’re not recommending a countywide fee structure at this point,” Bise said.
Who an impact fee charges
Impact fees are charges on new construction. The idea is that incoming growth pays its fair share of costs common to a larger community.
“An impact fee is a one-time payment,” Bise said. “So it’s designed to offset new development’s demand for growth-related infrastructure.”
The county has several large projects at various stages of approval. Thousands of homes in Lancaster County are approved but not yet built. Some council members wondered if they haven’t already missed an opportunity to fund growth needs through impact fees.
Willis said built projects wouldn’t have to pay, nor would projects under certain terms of development or vested rights agreement.
“If it’s something that’s merely been planned and nothing’s happened yet, impact fees could conceivably be charged on those,” he said.
Typically fees are charged when construction permits are issued.
“Typically if you haven’t gotten a building permit yet, you’re going to pay the fee,” Bise said.
Impact fees or development agreement
Traditionally Lancaster County used development agreements to get land or money from large projects, which the county could use to offset growth costs. A development agreement is a case-by-case negotiation between the county and a developer.
An impact fee is a set cost per home, apartment, building based on its size or whatever the county chooses to charge. It covers an area more uniformly.
“A development agreement gives us a little more flexibility and options,” said Councilwoman Charlene McGriff. “I think both could be good. And it would be wonderful if we could use both.
For now, TischlerBise has the area to study and the impact fee categories. The firm doesn’t yet know what the costs per home or business will be. Those figures come with a fairly complex study to compare existing services with the cost to serve new residents or businesses.
While those studies don’t often garner the attention of a final figure for how much fees will charge, they are critical to the success of impact fees, Bise said. State rules require a firm financial foundation for how fees can pay growth costs and how they impact communities.
“If you don’t develop good assumptions that are defensible, that’s what gets you in trouble,” Bise said. “It’s playing loosey goosey with level of service standards, cost factors. That’s what gets you in trouble.”
The Fort Mill School District impact fee faced a legal challenge York County — the county sets up the fee for school districts — ultimately won. The ruling is under appeal. Bise told Lancaster County officials to expect some pushback as they move forward with fees.
“There’s a lot of scrutiny on the impact fees,” he said. “So I would expect that. No matter what happens, there will be a lot of scrutiny of the study.”
Several council members expressed support of new fees. Some offered concern if the fee amounts were to come back too low. Council can decide when the impact fee study is complete whether to charge all or some of the amount allowed by state law, and for what area of the county.
