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Infrastructure and Public Facility Needs Assessment St udy – Ordinance Issues Memorandum, March 1, 2006, page 4 There are several alternative for dealing with this issue. Four Option 1. One of the options that is under considerati on is to allow any existing lot of record to be developed with one dwelling unit without paying an impact fee. Any additional dwelling units or any nonresidential development on the lot would be require d to pay an impact fee. A concern here is that if the amount of development not paying the fee is large, the impact fees will not be sufficient provide the level of service that the fees are intended to provi Option 2. Instead of waiving fees for the first dwelling unit on existing lots of record, an alternative would be for the County to use other funding sources to pay the impact fees for a single-family dwelling unit on existing lots. This approach ensures that the funding in the impact fee account is sufficient to maintain the level of service on which the impact f ees are based. The County would not need to pay fees for existing lots for which fair share assessmen ts had been paid, since the credit for such payments would likely offset any impact fees assessed. Assuming total impact fees of $10,000 per unit and that 1,000 of the 2,000 si ngle-family houses being built each year are on existing lots of record for wh ich fair share assessments had not been paid, a $10 million annual appropriation would be required. Since the likely source of the appropriation would be property taxes, and since new development paying th e fee would be generating some of those property tax revenues, the fees would need to be reduced by a credit that takes this into account to avoid double- charging (new development paying the fee should not ha ve to pay the full share of their costs, while also having to pay for part of the costs attributable to new development that is having their fee paid by the County). Option 3. An alternative to a permanen t waiver of fees for the first dwelling unit is to make it a temporary transition provision. Fo r example, the state impact fee enabling act in Texas allows own of lots that were subdivided prior to the impact fee ordinance to pull a building permit within one year following adoption of the ordinance without being requi red to pay the fee. A longer time period than one year could be considered, but it should probabl y not exceed five years. The transition exemption could be a blanket one that applies to all building perm its for all existing lots, or a more limited one such as the one-unit-per lot approach described above. If structured as a transition provision, the effects of the exemption would be minimal when viewed from a long-term perspective. For example, assume that a park impact fee includes a three-year Ñgrace peri odÒ during which fees are not charged on one unit per lot. In the first year, none of the 2,000 single-f amily permits is assessed a fee, while virtually all 3,000 multi-family units pay. In the next two years, th e number of units exempted would likely drop as the supply of newly-created lots declines, so perhaps a to tal of 4,000 single-family units would be exempted. Over the first ten years of the program, about 50,000 units would be built, of which less than 10 percent would be exempted due to the transition provision. The percentage would be even less for road, fire and police impact fees, which also apply to nonresidential devel Option 4. A fourth alternative would be to exclude the area where most of the existing lots are located (i.e., Puna and KaÓ u Districts) from the impact fee system. Exclusion means that no impact fees would be collected in this area, and no impact fees would be spent there. Exclusion would not have to be permanent. For example, for Kansas City, Missour i, we first developed arter ial street impact fees for the area north of the Missouri River, before preparin g impact fees for the southern part of the city. In each area, the older part of the city that was anne xed prior to 1950 was excluded from the impact fee system. 13276 research blvd , ste 208 austin tx 78750 phone 512 258 7347 fax 512 258 9994 email clancy@duncanplan.com # # # #