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

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Technical Report 27 Title VI, Chapter 460, of the 1987 Session Laws addresses the issue of benefits and subareas through the following provision: "In order to insure that impact fees paid by a particular development are expended on capital improvements that benefit that development, the County may establish for each category of capital improvement for which it collects an impact fee at least two geographical districts or zones, and impact fees generated by developments within those districts or zones must be spent on improvements that are located within or that benefit property located within those districts or zones. If All the benefit tests look for is a rationale that establishes how the benefit is to be received. The greater the distance between the point of collection and the point of expenditure, the greater the chance that insufficient benefit will be found. Having improvements that are needed set forth in a capital improvements program is tYie best demonstration of benefit. Another benefit criterion is the timing of improvements. Expected use is the overwhelming criterion in matters of benefit. If improvements are in the remote future, benefits will be lessened and perhaps insufficient. The benefit from improvements declines exponentially with respect to time. Facilities improvements usually require large expenditures that can only be met through gradual accumulation of funding resources. In small jurisdictions and those experiencing modest growth, the period of time may be substantial. Most impact fee ordinances have provisions that stipulate the maximum period of time within which the fees must be spent on facilities that benefit the particular development. Once this maximum period is reached, the fees would have to be refunded with interest to the fee payer or successor in title. The most common period is six years, which is based on the normal five -year capital improvements cycle, plus one year to integrate the receipts into the capital improvements program. For public schools in Orange County, geographic districts or zones already exist in the form of the Chapel Hill - Carrboro School District and the Orange County School District. In addition, the need for new school facilities has been identified as part of County's Capital Improvements Plan. In addition, both school districts have prepared ten -year school improvement planning programs which identify new public schools needed within the next 10 years to meet projected student enrollments. Excluding those schools constructed or under construction, a new elementary school, a new middle school, and expansion of the new high school are needed to serve future growth in the Chapel Hill - Carrboro school system. For the Orange County school system, a new elementary school, a new high school, and an addition to the existing high school are needed. Clearly, applying the system of impact fees in Table 12 would be unreasonable in view of the differing needs of each school district. For example, the identified needs in the Orange County school system do not include a middle school. To impose an impact fee which included the capital cost for a middle school would violate the benefit test. Likewise, school districts may vary in the number of persons per household, students per household, and cost of housing. Unless such differences are addressed, the residents of one school district may be paying impact fees for facilities they will never use or paying a higher proportion of impact fees than conditions warrant.