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p~ SCHOOL IMPACT FEES: Owwce Cout~nr SCHOOLS <br />Orange County, North Carolina <br />ACCOUNTING <br />lmpact fees should be paid at time of building permit. Certain accounting procedures should be <br />followed by the County. For example, monies received should be placed in a separate fund and <br />accounted for separately and may only be used for the purposes authorized in the impact fee <br />ordinance. Interest earned on monies in the separate fund should be credited to the fund. <br />COST UPDATES <br />All costs in the impact fee calculations are given in current dollars with no assumed inflation <br />over time. Necessary cost adjustments can be made as part of the recommended annual <br />evaluation and update of the fees. One approach is to adjust for inflation in construction costs <br />by means of an index specific to construction as opposed to the consumer price index (CPT), <br />which is more general in nature. TischlerBise recommends using the Marshall Swift Valuation <br />Service, which provides comparative cost multipliers for various geographies and types of <br />construction. The multipliers can be applied against the calculated impact fee. If cost estimates <br />or other factors change significantly the County should redo the fee calculations. A full update <br />is recommended every 3 to 5 years to reflect changes in development trends, infrastructure <br />capacities, costs, funding formulas, etc. <br />CREDITS AND REIMBURSEMENTS <br />FUTURE REVENUE CREDITS <br />Orange County Schools impact fees are calculated using an incremental approach. This method <br />documents current factors and is best suited for public facilities that will be expanded <br />incrementally in the future. Because new development will provide front-end funding of <br />infrastructure, there is a potential for double payment of capital costs due to future principal <br />payments on existing debt for public facilities. A credit is not necessary for interest payments <br />because interest costs are not included in the fees. 'This type of credit is incorporated into the <br />County Schools impact fees due to outstanding debt on OCS school capacity expansions and <br />land acquisition. <br />TISChIer~~SP 24 <br />ti~c~,Uorrvmk5i.Pl~nnLipCenwtianti <br />