Davidson drops fees on public facilities

Davidson town commissioners voted last week to remove the town’s version of an impact fee from the planning ordinance, citing its ineffectiveness and the fact that the N.C. Court of Appeals has ruled that such fees are illegal.

Commissioners unanimously voted to suspend the town’s adequate public facilities ordinance after consultants suggested in their review of the planning ordinance that it be removed. They suggested the town look for other methods to accommodate growth.

“I hope the headlines do not read, ‘Davidson walks away from strategic management of growth.’ That’s not what we’re doing here,” Commissioner Connie Wessner said during the board meeting. “We’re making a move to make sure the ordinance reflects what current conditions are on the ground now.”

The adequate public facilities ordinance levies a charge on developers – similar to an impact fee – for new developments they build. Revenues from the fees help pay for new infrastructure that is needed because of the demand created by the developments.

In recent months, several N.C. Court of Appeals panels have ruled that impact fees are illegal, noting state law prohibits municipalities from using them without General Assembly permission.

“We looked at the court cases and felt that this approach was good for its time but probably wasn’t going to work going forward,” Commissioner Rodney Graham said.

In the past, the town has calculated the total fee charged to developers based on a number of factors, including location, size and type of the development.

Developer Jim Burbank, president of JCB Urban, said on average, it has cost his company a couple of thousand dollars per unit under the now-suspended ordinance.

Still, he said, he just saw it as a part of doing business with Davidson.

“I took it as a given. It will be nice going forward to not pay that, but it was never the end of the world for me,” he said.

Urban said he has experienced much more burdensome impact fees in other communities.

Still, he understands the rationale, he said. After all, impact fees similar to the adequate public facilities ordinance shifts costs from the taxpayer to the developer on the theory that the town wouldn’t need more public facilities if a new development wasn’t coming to the area.

“I never felt like it was prohibitively expensive to do business in Davidson,” said Urban, who has worked on such developments as Davidson Pointe and Davidson Wood. “But it is always nice to pay less for anything.”

During last week’s town board meeting, planning manager Ben McCrary suggested the town would be fine without the ordinance for now, especially given the slowed development in the area.

“It gives us some time to think through how, when the economy turns around, how we make sure we’re providing adequate services for people,” Graham said.

But McCrary added that ultimately, they will need to find an effective substitute for the ordinance.

“It seems to me we need to move expeditiously to consider options to move forward with what Connie calls a strategic approach,” Commissioner Jim Fuller said.

Graham said he expects suggestions on a replacement for the adequate public facilities ordinance to be announced with the release of the newly revised planning ordinance, which is expected to be completed by December.

“This is not at all an effort to walk away from our smart-growth strategies,” Wessner said shortly before the board took its vote last week. “This is to move to the next best practice that we feel we’re ready to go to.”