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Minutes - 19890330
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Minutes - 19890330
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3/30/1989
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Minutes
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<br />the bill. The local governments would like to make the impact tax a replacement for the <br />impact fees because impact fees, where they are in place, have proven to be difficult to <br />administer and inflexible to changing local priorities. The tax is easier to administer <br />and the revenues can be flexibly applied to the capital needs on an ongoing basis. The <br />legislation itself does not put the tax in place. Orange County would have to adopt an <br />ordinance. The tax will be imposed on the impact of land development and the person <br />responsible for paying the tax will be the owner of the property where the construction <br />occurs. The method of applying the tax will be that it will be applied on each square <br />foot of dwelling space in the case of a dwelling and each square foot of commercial <br />building enclosed floor space. The tax will be collected at the time an occupancy permit <br />is issued ar at the time the building is occupied where someone occupies the building <br />without' obtaining an occupancy permit. Generally speaking the latter doesn't occur and <br />the tax will be imposed at the time the occupancy permit is issued. The tax rate will be <br />established annually by Orange County after consultation with Carrboro and Chapel Hill. <br />The rate will be uniform countywide. It may vary depending on the type of construction. <br />The bill also provides far a disclosure statement which is intended to provide notice to <br />homeowners of the obligation to pay this tax. The authorization to impose this tax <br />applies only to Orange County excluding the Town of Hillsborough. <br />Michael Brough, Attorney for the Town of Carrboro, went through the provisions of the <br />bill section by section. A copy of this proposed bill is in the permanent agenda file in <br />the.Clerk's Office. He reviewed some of the definitions that are stated in the proposed <br />bill. He listed the types of facilities that would be exempt from the tax. Section III <br />explains the purpose and relates to how the funds may be expended. Orange County can- <br />spend these funds for capital improvements related to specific areas as listed in the <br />bill. Section IV deals with the mechanics of how the bill would operate and how the tax <br />would be collected. Section V states that the Board of Commissioners will set the rate at <br />~' budget time. Section VI establishes the distribution formula. It provides that Orange <br />County will distribute to Chapel Hill and Carrboro 75~ of the net proceeds received by the <br />°---= county due to development that has taken place within those municipalities' corporate <br />limits, extraterritorial planning jurisdictions and transition areas as has been <br />established by the Joint Planning Agreement. <br />Ray Williford listed some significant points of the Impact Tax. The estimated cost of <br />all the capital improvements anticipated to occur within the municipalities and the County <br />during the next ten years totals more than two hundred million dollars. Between 1980 and <br />1988; 1,626 units (housing. and commercial) were constructed annually in Orange County, <br />including municipalities. Using transparencies, Williford showed an example of what <br />revenues would be generated by using fifty cents per square foot for residential and $1.00 <br />per square foot for commercial development. The revenues generated annually by this tax <br />would total approximately $1,500,000. Over a ten year period approximately $15,000,000 <br />would be generated by this tax. This would be 7-l/2 or 8$ of the total amount needed to <br />fund the capital improvements that are anticipated over the next ten years. This tax will <br />assist all the citizens in Orange County in meeting the expansion of the infrastructure <br />for these new units being added in the county. <br />THE PUBLIC HEARING WAS OPEN FOR PUBLIC COMMENTS <br />LARRY CARROLL spoke representing the Home Builders Association of Durham and Chapel <br />Hill. (His complete statement is in the permanent agenda file in the Clerk's Office). He <br />stated that in general the Home Builders Association opposes impact taxes because of their <br />negative affect on affordable housing and the long term economic health of the County. <br />However, he recognized that any development should pay their fair share for the cost <br />
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