After seeing an increase in the level of discussion on impact fees in Columbia County, we felt that a clear, concise overview of the facts were in order.
Our goal is to educate the citizens of Columbia County as to the procedures for implementing impact fees; what can and cannot be funded by impact fees; and, to explore some of the arguments against impact fees.
We believe that the citizens of Columbia County will see the benefits of impact fees and that our elected representatives will implement legislation for such action.
The Georgia Development Impact Fee Act (DIFA) was enacted into law in 1990. This legislation sets forth the rules and regulations that local governments must adhere to in order to charge developers for a portion of the additional capital facilities needed to serve their newly built projects. This law allows local government to impose exactions on developers only through an impact fee system. These exactions are to help finance the expansion for specific types of facilities and infrastructure as listed in the law. It is important to understand that an impact fee is payment for infrastructure returned, and the fee cannot exceed the cost of the infrastructure.
The intent of the law as set forth by the Georgia Department of Community Affairs is to:
Ensure that adequate public facilities are available to serve new growth and development.
Promote orderly growth and development by establishing uniform standards by which municipalities and counties may require that developers pay a proportionate share of the cost of new public facilities needed to serve new growth and development.
Establish minimum standards for the adoption of development impact fee ordinances by municipalities and counties.
Ensure that developers are required to pay no more than their proportionate share of the costs of public facilities needed to serve new growth and development and to prevent duplicate and ad-hoc development exactions.
Impact fees can only be implemented after a community has adopted a comprehensive plan. This plan must meet the minimum standard and procedures for local comprehensive planning and must include a Capital Improvements Element (CIE). The CIE must also include the Annual Financial Report and an update of the Short Term Work Program (STWP), which is updated annually.
The CEI is intended to serve as a road-map for the community and requires the following components: projection of needs; levels of service; service areas; schedules of improvements; and funding sources. There are seven categories of capital improvements or infrastructure that can be financed with impact fees. These are listed in O. C. G. A. 36-71-2:
Water supply, treatment and distribution.
Wastewater collection, treatment and disposal.
Roads, streets and bridges.
Storm water collection, retention, detention, treatment and disposal facilities, flood control facilities, and bank and shore protection and enhancement improvements.
Parks, open space, recreation areas and related facilities.
Public safety facilities (police, fire, emergency medical and rescue facilities).
Libraries and related facilities.
Impact fees may not be used to recoup the costs of capital facilities such as schools, government offices, hospitals or landfills. As a general statement, impact fees may not be used to replace aging infrastructure such as public buildings, roads, bridges, water or sewer facilities that only serve existing development. However, where new growth occurs in an area that has excess system capacity utilized by new development, the community may be able to recover some of the cost of the capital facilities already in place.
In addition, DIFA states that impact fees shall not be used to subsidize capital improvements for existing developments, finance maintenance, or the replacement of worn-out equipment, maintenance and operation.
For example, impact fees could be used to build a new sheriff's substation, but not pay for additional patrol cars or additional deputies, regardless if the new development created the need for more officers.
Please reread the list of approved categories that can be funded by impact fees. Columbia County is currently using the Special Purpose Local Option Sales Tax (SPLOST) to fund these types of projects, including the new library, recreation centers and the $1 million road improvement in front of the Wal-Mart on Washington Road. It is our contention that impact fees should fund these projects, leaving us with two options for the SPLOST:
Do away with this tax.
Use the SPLOST funds to rebuild the county infrastructure from the inside out, meeting the areas of new development and paying for those items not covered under impact fees. (Most people will agree that a sales tax is a fair tax in that everyone who purchases goods and service in the county pays the tax.)
Let's look at some of the arguments against impact fees. We will include information provided by The Brookings Institution Center on Urban and Metropolitan Policy, June 2003.
Do impact fees discourage local economic development as defined by job growth?
In theory, impact fees contribute to capital formation by developing infrastructure. It should be assumed that this community would perform better with the improvements than without them, all things considered. The Brookings Institute finds that a significant positive association exists between impact fees collected per building permit in one year and job growth over the next two years.
This finding is consistent with our hypothesis that impact fees spent on infrastructure development are not a drag on the local economies with respect to job growth, but instead be beneficial to them.
Will impact fees dampen development demand?
Consider the case of Alpharetta, Ga, in the 1990s. Local studies showed that to meet the infrastructure needs of new development, the city would need to raise $90 million more than the projected total revenues from all sources -- including state and federal transfers -- and property taxes. Options included raising property taxes on all development, deferring maintenance and diverting general funds from such activities as public safety, accepting congestion of facilities, or charging impact fees. The city of Alpharetta chose impact fees.
Fears that impact fees would dampen development demand never materialized. At the time, Alpharetta was one of the state's fastest-growing cities. A decade later it still is.
The process of enacting impact fees will no doubt be a long and costly administrative headache. But the planning process will uncover the truth about the fiscal reality of impact fees.
Please get informed on the subject. There is surely going to be strong opposition from the development community. There will be half-truths and scare tactics to lead us off course. But the last time I checked, there were about 100,000 citizens in Columbia County. Let us all work together for the good of the overall community. Do not let partisan politics sidetrack this issue.
Now is the time for impact fees before it is too late. Columbia County deserves this tool to make it the best place in Georgia to live, or for that matter in the whole United States of America.
(Scott C. Nichols is first vice chair of the Democratic Party of Columbia County.)
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