COM 1329.014 2006-2008 - Laserfiche WebLink

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Honorable Pete Hoffmann Chair and Presiding Officer and Members of the County Council COUNTY COUNCIL Page 3 September 9, 2008 subdivisions created in the 1950's and 1960's. It also applies to a broader range of development than fair share, such as retail and industrial buildings, churches, and private schools. Impact fees are arevenue-generating tool. As such, they must be evaluated against other options, such as property taxes, the fuel tax, and funding mechanisms that are specific to a development project, like community facilities districts. Pros 1. Impact fees will generate substantial revenues. The amount of revenue depends upon the amount of development. Home construction on the island varies greatly, in cycles usually following nationwide economic trends. In 2005, the high point of the current cycle, we had building permits issued for 3,501 new single-and multi-family units. In 2007, there were 2,168 units, and, if the pace for the first seven months of 2008 continues, we will have only about 1,200 building permits for new dwelling units issued this year. The long-term average for the 1980-2007 period is about 1800/yr. From this figure, we must deduct the homes in projects that will have offsets due to zoning requirements, and the affordable housing grants discussed below. If we assume that impact fees will be paid on 1,500 residential units per year, and that 80% are single-family, at $6,387/unit, and 20% are multi-family (this is close to the historical average), at $4,734/unit, impact fees on new residential construction would generate about $9 million/yr. The amount from nonresidential development is very hard to estimate because we would have to do an analysis of the annual square footage of different types of buildings, but it is certainly much less than the residential. $2 million/yr. is a reasonable estimate, based on building permits taken out in recent years. Of this estimate of about $11 million/yr., about 40% would go to roads, about 50% to parks, and police, fire, and solid waste would cumulatively be about 10%. These percentages are approximate because ofoffsets and the fact that there are different fee levels for different types of development. Revenues of $11 million/yr. would cover the annual interest and principal payments on a $133 million bond at 5% interest and a 20 year term. In practice, because annual impact