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DRAFT SCHOOL IMPACT FEES: CHnre~ tiiu-C~soeo Cmr SCHOOIS <br />Orange County, North Carolina <br />refunded..All of these requirements are intended to ensure that developments benefit from the <br />fees they aze required to pay. Thus, an adequate showing of benefit must address procedural as <br />well as substantive issues. <br />Demonstrating Proportionalitu. The requirement that exactions be proportional to the impacts of <br />development was clearly stated by the U.S. Supreme Court in the Dolan case (although the <br />relevance of that decision to impact fees has been debated) and is logically necessary to <br />establish a proper nexus. Proportionality is established through the procedures used to identify <br />development-related facility costs, and in the methods used to calculate impact fees for various <br />types of facilities and categories of development. The demand for facilities is measured in terms <br />of relevant and measurable attributes of development. For example, the need for school <br />improvements is measured by the number of public school-age children generated by <br />development. <br />METHODOLOGIES AND CREDITS <br />.Any one of several legitimate methods may be used to calculate impact fees. The choice of a <br />particular method depends primarily on the service characteristics and planning requirements <br />for the facility type being addressed. Each method has advantages and disadvantages in a <br />particular situation, and to some extent can be interchangeable, because each allocates facility <br />costs in proportion to the needs created by development. <br />Reduced to its simplest terms, the process of calculating impact fees involves two main steps: <br />(1) determining the cost of development-related capital improvements and (2) allocating those <br />costs equitably to various types of development. In practice, though, the calculation of impact <br />fees can become quite complicated because of the many variables involved in defining the <br />relationship between development and the need for facilities. The following paragraphs discuss <br />three basic methods for calculating impact fees and how those methods can be applied. <br />Plan-Based Fee Calculation. The plan-based method allocates costs for a speafied set of <br />improvements to a specified amount of development. 'The improvements are identified by a <br />facility plan and development is identified by a land use plan. In this method, the total cost of <br />relevant facilities is divided by total demand to calculate a cost per unit of demand. Then, the <br />cost per unit of demand is multiplied by the amount of demand per unit of development (e.g. <br />housing units or squaze feet of building area) in each category to arrive at a cost per specific unit <br />of development (e.g., single family detached unit). <br />Cost Recovery Fee Calculation. The rationale for the cost recovery approach is that new <br />development is paying for its shaze of the useful life and remaining capacity of facilities already <br />built or land already purchased from which new growth will benefit. This methodology is often <br />used for systems that were oversized such as sewer and water facilities. To calculate a fee using <br />Tischler~is~ 6 <br />Nxc=,Cmr~nicSr.Pli, ~~u~Ccn:utianis <br />