Bill 324 Impact Fees Letter from Planning Director

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Honorable Pete Hoffmann Chair and Presiding Officer and Members of the County Council COUNTY COUNCIL Page 3 September 9, 2005 subdivisions created in the 19's and 190's. It also applies to broader range of development than fair share, such as retail and industrial buildings, churches, and private schools. Impact fees are a revenue- gencrating 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. Horne construction on the island varies greatly, in cycles usually following nationwide economic trends. In 20051 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. roar this figure, we must deduct the homes in projects that will have offsets due to zoning requirements, and the affordable housing grants discussed belo w. If we assume that impact fees will be paid on 1,500 residential units per year, and that % are single - family, at $6,387 /unit, and 20% are multi - family (this is close to the historical average), at , 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 r. is a reasonable estimate, based on building permits taken out in recent years. f this estimate of about $11 rn 1111on yr., about 4 0 % would go to roads, about 5 % to parrs, and police, fire, and solid waste would cumulatively be about 10%. These percentages are approximate because of offsets and the fact that there are different fee levels for different types of development. Revenues s of 11 million/yr. would cover the annual interest and principal payments on a $133 million bond at % interest and a 20 year tern. In practice, because annual impact