The Fort Mill Town Council now knows how much it can charge for a series of new development impact fees – but a final rate, or even if the fees will be collected, isn’t certain.
At a recent meeting with the town’s Planning Commission, council members heard a breakdown of the process of more than six months of crunching figures concerning impact fees.
Matt Noonkester, with Stantec Consulting Services of Charlotte, said his presentation wasn’t a recommendation but an overview of what’s allowed by state law.
The maximum fee per new home is $4,273.
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“That’s the most you could charge,” Noonkester said.
It’s unlikely Fort Mill would charge that much, and Noonkester said it’s common to discount the rate to protect against legal challenges. Also, setting the full amount allowed could have more significant effects on businesses.
Town leaders can choose to impose impact fees for transportation, parks and recreation, fire or municipal facilities and equipment. They can choose all, none or part.
Noonkester determined how much it costs per resident for fire service ($112.97), municipal services ($283.59) and parks and recreation ($528.81). He also calculated the per-employee cost of fire service ($433.09) and municipal services ($287.57).
For transportation, he found a cost of $185.75 per trip, which factors in the cost of roads and maintenance.
From those figures, Stantec came up with the $4,273 cap for a possible fee on new homes. The average new home in Fort Mill in 2013 sold for more than $370,000.
Other uses had costs that would result in fees of a far higher percentage than residential use, furthering talk of a discount rate.
A new grocery store could pay up to $13 per square foot. A fast-food restaurant might pay a third of its construction cost in impact fees. Something like grocery distributor U.S. Foods, if built in Fort Mill, might pay well more than $1 million in impact fees, if the maximum fee allowable were imposed.
Noonkester projected the town’s population and the number of people who work for employers inside the town limits to double by 2030.
“In the world we live in,” he said, “that’s a big change.”
How it works
Impact fees would be paid by developers of new properties, or significant expansion of existing sites, that generate more traffic, more need for fire services or other services. The intent is to charge fees based on projected impact, so a large corporate construction would pay more for fire than a house would.
“That developer pays the municipality to help offset that impact,” Noonkester said.
The Fort Mill School District collects a $2,500 impact fee on residential construction, and Rock Hill has a fee for fire, water and sewer service. There are nine more impact fees statewide, all along the coast.
If the town enacts an impact fee, money for recreation, fire and other municipal services would go into a fund to be used in those areas, at the Town Council’s discretion.
Transportation fees would go toward predetermined road projects. Money not spent within three years of the project date would be returned to developers.
Financial-impact data would be updated at least every five years, and the council could change the impact fees within its allowable amount at any time.
Impact fees are a one-time cost. Developers would pay them, then choose how much cost to pass along to homebuyers. A new resident wouldn’t buy a home and then have to pay an impact fee.
“When they get the construction done, when they get the (certificate of occupancy), it’s done,” Town Manager Dennis Pieper said.
Issues to resolve
Town Council members expressed a desire to enact at least some impact fees.
There was little concern on the residential side, but some wondered about charging businesses. Impact fees can’t be lifted for fee-in-lieu arrangements, a popular way of luring businesses by exchanging fees for taxes.
Pieper, who helped institute impact fees while working for the town of Summerville, said big businesses are accustomed to impact fees. A rate that might seem high to the council wouldn’t sway restaurants if population and traffic projections hold true, he said.
“It’s never stopped them from building a Chick-fil-A or a McDonald’s or anything like that,” Pieper said.
Council members also expressed concern at not being able to pick and choose projects to exempt from impact fees. New schools and churches would be charged on their employees and traffic impacts, just like new businesses.
“It’s basically blind to what the use is,” planning director Joe Cronin said. “If you didn’t do it that way, we’d be opening ourselves up to legal challenges.”
Schools are of particular concern. Councilwoman Guynn Savage said the Fort Mill school district doesn’t build new schools because it wants to; the district has to keep up with growth just as the town is looking to through the impact fees.
“The school district reacts to growth,” Savage said. “It doesn’t create growth.”
Any imposed fee would have to be reviewed by the Planning Commission and approved by the Town Council, with public comment allowed at both stages of the process.