Orange County NC Website
Browse       Search
/'.. ~ <br />Craig aeneaicj - v~,acnree.aoc Page <br />School Impact Fees ~ Orange County. North Carolina <br />The first major type of impact fee method is a buy-in approach. This method is used for <br />facilities that have adequate capacity to accommodate new development for at least a <br />five to six year time frame, which is the typical horizon for a Capital Improvements Plan <br />(CIP). The rationale far the buy-in approach is that new development is paying for its <br />share of the useful life or remaining capacity of the existing facility. When using the <br />buy-in approach, a question in the evaluation of credits is whether new development <br />has already contributed toward the cost of existing public facilities (i.e., a past revenue <br />credit). Outstanding principal and interest payments are typically subtracted from the <br />value of the asset that was oversized for new development. <br />The second basic approach used to calculate impact fees is the incremental expansion <br />cast method. This method documents current LOS standards and it is best suited for <br />public facilities that will be expanded incrementally in the future. Because Orange <br />County will continue to provide additional schools that are similar to those already in <br />use, the incremental expansion cast method is appropriate for public schools. There is <br />a potential for double payment of capital costs due to up-front payment of impact fees <br />and on-going principal payments an existing General Obligation bonds for schools. A <br />credit is not necessary far interest payments because interest casts were not included <br />in the impact fee calculations. <br />The third basic approach used to calculate impact fees is the plan-based method. This <br />method is based an future capital improvements needed to accommodate new <br />development. The plan-based method may be used for public facilities that have <br />commonly accepted service delivery standards to determine the need for future projects <br />(e.g., water and sewer systems) or the jurisdiction plans to significantly increase it <br />current LOS standards and it has a financially feasible strategy to cover the cost of <br />existing deficiencies. If a plan-based approach is used to derive impact fees, the credit <br />evaluations should focus on future bonds and revenues that will fund planned capital <br />improvements. <br />22 <br />