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Infrastructure and Public Facility Needs Assessment St udy – Ordinance Issues Memorandum, March 1, 2006, page 6 assessments for the value of those contributions. We recommend types of improvements in much the same way as credits for fair s E. POST-ORDINANCE REIMBURSEMENTS For fair share assessments and pre-ordinance contri butions, we have recommended credits that run with the land rather than developer reimbursements. So it may make sense to use the same approach when dealing with new developer exactions that occur after the impact fee ordinance is in place. However, an alternative approach is at least worthy of cons ideration, since the fair share credits affect a limited number of parcels and will expire in a certain number of years. The alternative approach is to reimburse developers who make eligible improvements with impact fees collected from other developers who do not. This approach was pioneered by Raleigh, North Carolina when it established road and park impact fees in 1 987, and although it has not been widely emulated by other jurisdictions, we think it has much to recommend it. Rale agreement with each developer who makes an impact fee-eligible improvement. If the improvement is an expensive one, the reimbursement is scheduled to occur over a five-year period, subject to available funding. The City also categorizes each developer contribution as Priority I or Priority II. Priority I projects include dedication of land or right-of-w ay and projects in the CityÔs five-year capital improvements plan. Each year, the City sets aside a percentage of impact fees collected in each benefit zone (20 percent of park fees and 27 percent of road fees) into reimbursement accounts. If the reimbursement account has sufficient funds to pay all reimbursements owed for that year, all developers with outstanding reimbursements for that year receive full payme reimburse all developers, developers with Priority I im provements are reimbursed first. If funds are still insufficient, each Priority I developer receives a pro rata share of his reimbursement amount, with the unpaid amount rolled over to the next year. The reimbursement approach used by Raleigh is considerably simpl approach, and it also has the advantage that a predi ctable percentage of impact fee revenue is available to the local government to program for priority im provements. The first advantage would not be as pronounced for HawaiÓi County for the first few years , since staff would need to track fair share assessment credits for a number of years. However, those credit properties and would disappear after a few years. After that, the collection of fees at the building permit counter would be automatic for all permits, with no need to check to see if cred its are available to offset the fees. The second advantage would also be so mewhat attenuated in the first few years, since fair share credits would reduce the amount of fees collected, but the County would be guaranteed that subsequent developer contributions would not consume more than a impact fee revenues. Our recommendation is that the County consider using a reimbursement approach similar to RaleighÔs for post-ordinance developer contributions. F. ASSESSMENT DISTRICTS In an impact fee system, it is important to clearl y define the geographic areas within which impact fees will be collected and within which the fees collected will be spent. There are really two types of geographic areas that serve different functions in an impact fee system: assessment districts and benefit districts. Assessment districts, which may also be calle d service areas, define the area within which a set of common capital facilities provides service, and fo r which a fee schedule based on average costs within 13276 research blvd , ste 208 austin tx 78750 phone 512 258 7347 fax 512 258 9994 email clancy@duncanplan.com # # # #