Agenda - 03-30-1989 - Laserfiche WebLink

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