Agenda - 12-01-1998 - 10b - Laserfiche WebLink

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Technical Report lb Detailed calculations of the capital improvement cost associated with each dwelling unit are presented in Table 8. The costs per dwelling unit are indicative of what impact fees for public school facilities would be before any adjustments are made. PROPORTIONATE SHARE OF CAPITAL COSTS The standard to which impact fees will be held is that the fees not exceed a proportionate share of the costs that local government will incur to accommodate new development. Normally, new development will pay towards capital improvements in the form of general taxation, debt service, and other payments. The task is to calculate how much of capital costs are covered by these payments. Whatever is not paid could be charged as impact fees. Among those factors which should be considered in establishing a proportionate share of capital costs are the following: 1. The cost of existing facilities; 2. The means by which existing facilities were financed; 3. The extent to which new development has already contributed to the cost of providing existing facilities; 4. The extent to which new development will, in the future, contribute to the cost of constructing existing facilities [through debt service or other payments]; S. The extent to which new development should receive credit for providing facilities required as a condition of development or construction approval; 6 Extraordinary costs in serving the new development, and 7. The time price differential inherent in fair comparisons of amounts paid at different times. Payments by New Development Toward Capital Cost To determine how capital improvements have been financed, the fiscal structuring of the community must be examined. Each type of facility needs to be analyzed in terms of how it was financed and also in terms of how new development will contribute toward capital finance in the future. It would be unfair to require new development to pay some portion of either existing or future capital improvements and also require them to be totally responsible for the capital improvement costs that new development will need. Thus, a system of "credits" must be identified which recognizes the extent to which to which new developments have already contributed to and will pay for (in the future) the cost of existing capital improvements. Property Tax Revenues. Bonds, whether general obligation or revenue, are commonly used to finance infrastructure. Where general obligation bonds are used, the debt incurred by the approval and issuance of such bonds is generally retired through the use of property tax revenues. For