IPFNA_Policy Analysis Memo_Jan_06

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Assessment and Benefit 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 that district is calculated. Benefit districts, on the other hand, represent an area within which the fees collected must be spent. They ensure that improv ements funded with impact fees are constructed within reasonable proximity of the fee-paying devel opments to help ensure that developments benefit from the improvements. The assessment district is the geographic level at which you calculate the fee. Calculating the fees at the county-wide level, based on the county-wide existing le vel of service, vastly si mplifies the process. This was the approach used in the 1990 study used as the basis of the CountyÔs current fair share assessments. The consultants recommend calculating all of the proposed impact Concern has been expressed that a broad-based impa ct fee should be restricted to internal subdivision improvements like roads and parks, because otherwis e owners of individual lots would not feel they were getting any benefit. However, road impact fees need to be used to expand capacity, and should not be used to pave internal subdivision roads. Ma ny of the capacity needs in the county are on State roads and major County roads, in which case they could reasonably be county-wide. However, given the size of the island, it may be necessary at a mi nimum to have east and west benefit districts for all types of facilities. The only type of facility that it would appear to make sense to have more benefi districts is parks. Park fair share assessments are already restricted to the judi cial district in which they were collected. It would not be practical to make ev ery subdivision its own bene fit district, as some of them will have little development. In summary, regardless of how the f ee is calculated, the island should be divided into a minimum of two benefit districts (east and west) for the purpose of collecting districts might be appropriate for some facilities, suc h as parks (e.g., quadrants or judicial districts). The final decision about the number of benefit di stricts can be made later. The decision about assessment districts needs to be made in this phase, since it will directly affect the cost of preparing the detailed impact fee analyses in Phase II. As noted above, the c fees be calculated based on county-wide costs and levels of serv Methodology The recommended methodology is to base the impa ct fees on the existing level of service for all facilities. As discussed earlier, basing the impact f ees on a higher-than-existing level of service creates existing deficiencies that must be funded and re quires credit against the impact fees for the revenue generated by new development and used to remedy the deficiencies recommended approach is to base all impact fees on the existing The level of service used in the im pact fee analysis does not have to correspond with the desired level of service reflected in the CountyÔs planning documents. The County ma y very well feel that the existing level of service is inadequate, and may be hesitant to base the impact fees on such a standard. While H Ô C \I N A ÐP A M January 5, 2006 , Page 13 AWAI I OUNTY NFRASTRUCTURE EEDS SSESSMENT OLICY NALYSIS EMORANDUM