Loading...
HomeMy WebLinkAboutIPFNA_Policy Analysis Memo_Jan_06 Infrastructure and Public Facilities Needs Assessment: Policy Analysis Memorandum prepared for Planning Department County of HawaiÔi prepared by D A UNCAN SSOCIATES in association with H H & F ELBER ASTERT EE January 2006 Table of Contents EXECUTIVE SUMMARY............................................... INTRODUCTION.................................................... Background...................................................... LEGAL FRAMEWORK................................................. General Principles.............................................. State Enabling Act.............................................. FAIR SHARE ASSESSMENTS.......................................... APPROACH........................................................ Lots in Older Subdivisions...................................... Assessment and Benefit Districts................................ Methodology ...............................................................1 Administrative Costs............................................ Agency and Stakeholder Involvement.............................. Key Issues/Questions ........................................... ANALYSIS OF FEE TYPES........................................... Roads........................................................... Parks and Recreation............................................ Fire/EMS........................................................ Police.......................................................... Solid Waste..................................................... Wastewater...................................................... PROGRESSIVE RATES FOR RESIDENTIAL UNITS......................... APPENDIX A: IMPACT FEE GLOSSARY................................ APPENDIX B: STAKEHOLDER COMMENTS................................ List of Tables and Figures Table 1:COUNTY POPULATION GROWTH BY DISTRICT, 1990-2000 ....................4 Table 2:HAWAIÔI COUNTY POPULATION AND VISITORS.................. Table 3:GROWTH RATES, 2000-2005 .............................................5 Table 4:FAIR SHARE ASSESSMENTS PER SINGLE-FAMILY UNIT........... Table 5:POTENTIAL REVENUE, 2000-2005 ........................................11 Table 6:ROAD IMPROVEMENT NEEDS ..........................................17 Table 7:DWELLING CHARACTERISTICS BY NUMBER OF BEDROOMS.......... Figure 1:POPULATION GROWTH, 1940-2020 .......................................3 Figure 2:JUDICIAL DISTRICTS..................................... Figure 3:MAJOR ROADWAY SYSTEM................................... Figure 4:EXISTING COUNTY PARKS.................................. Figure 5:FIRE STATION LOCATIONS................................. Figure 6:POLICE STATION LOCATIONS............................... Figure 7:LANDFILL/TRANSFER STATION LOCATIONS.................... Figure 8:WASTEWATER TREATMENT FACILITIES........................ Principal Author: Clancy Mullen, Duncan Associates 13276 Research Boulevard, Suite 208, Austin, TX 78750 (512) 258-7347 x204, cl ancy@duncanplan.com, www.impactfees.com EXECUTIVE SUMMARY The purpose of this memorandum is to assist HawaiÔi County in de replace its existing system of fair share assessments with an impact fee program. An impact fee is a one-time charge on development, designed to cover the cost of gr Background Since the early 1990s, the County of HawaiÔi (Ñthe CountyÒ) has imposed Ñfair share assessmentsÒ on applicants for new residential (including agricultural zoning allowing lots one acre or less in size) and hotel zoning. The fees, which are imposed as a c ondition of zoning approval, are collected prior to securing final subdivision approval for new residential lots or prior to obtaining final plan approval for multi-family or hotel development. The fees, which are adjusted annually for inflation, currently total $9,761 per single-family unit for roads, pa rks, fire, police and solid waste facilities. While the fair share assessment am ounts are substantial, they have not generated much revenue. An analysis done in 2004 determined that over $74 m illion had been assessed on new zoning in the ten years of the program, but only $3.6 million had been co llected in cash and another $15.2 million had been provided by developers in the form of in-kind contributions in return for credits. This is because most of the land that has been subject to fair share assessm ents at zoning has not yet been subdivided. If the fair share assessment amounts had been in the form of impact fees collected at time of building permit, they would have generated $103 million in cash and credits since January 2000, and if they had been assessed on nonresidential as well as residential de velopment, they would have generated $170 million. General Approach The County should consider replacing its fair shar e assessments with a true impact fee system that follows the requirements for the State of HawaiÔiÔs impact fee e assessments, impact fees would be assessed on all new developmen development and residential development in areas wi th existing zoning. An impact fee collected from all new development would be more legally defensib le, more equitable and generate significantly more revenue than the current Ñfair shareÒ system. Th is additional revenue would translate into capital improvements that would benefit all fee payers. Lots in Older Subdivisions One of the reasons for the failure of a previous impa ct fee initiative in 1990 was a lack of support for assessing individual property owners. The Island of HawaiÔi has many buildable lots in older subdivisions that have not been fully developed. Ma ny of these subdivisions were created in the 1950's and 1960's prior to the comprehensive subdivision co de that was adopted in 1967. The perception is that many of these lots are owned by local re sidents who have owned them for years with the expectation that one day they would build a house on them. The fear is that imposition of impact fe may hurt this opportunity. Development in these older subdivisions could be a major source of the islandÔs affordable housing. The current fair share system only rezoning, at the cost of generating very little revenue for need There are two reasonable approaches to dealing with this issue in the context of an impact fee system. One approach is to allow one dwelling unit to be built on any existing lot of reco rd at the time of impact H Ô C \I N A ÐP A M January 5, 2006 , Page 1 AWAI I OUNTY NFRASTRUCTURE EEDS SSESSMENT OLICY NALYSIS EMORANDUM fee adoption without paying an impact f ee. The other approach is to give owners of existing lots a grace period during which they could build without having to pay the fees. Either approach would ensure that current owners of individual residential lots wo uld not have their opportunity to build a home impaired by a new fee. Progressive Residential Fees We recommend that the CountyÔs impact fees incorpor ate progressive fees for single-family homes that vary by the size of the dwelling unit. Assessment and Benefit Districts We recommend that all impact fees be calculated based on county-wide aver age costs and county-wide levels of service. Given the size of the island, it will probably be necessary at a minimum to have East and West benefit districts for all typ es of facilities. Park impact fees could continue to be earmarked to be spent in the judicial district in which they are collected Types of Fees There do not appear to be any technical obstacles to preparing impact fee studies for the facilities of interest to the County Ï namely roads, parks, fire, police, soli Methodology Basing the impact fees on a higher-tha n-existing level of service creates existing deficiencies that must be funded and requires credit against the impact fees for the re and used to remedy the deficiencies. To avoid th ese complications, the reco mmended approach is to base all impact fees on the existing level of service. H Ô C \I N A ÐP A M January 5, 2006 , Page 2 AWAI I OUNTY NFRASTRUCTURE EEDS SSESSMENT OLICY NALYSIS EMORANDUM INTRODUCTION The purpose of this memorandum is to assist HawaiÔi County in de replace its existing system of fair shar e assessments with an impact fee program. The impact fee project has been divided into two phases. The first phase will iden tify facilities for which it would be feasible to develop impact fees base d on available data and other factors. The specific methodology and approach to be used in developing th e fees will also be refined during this phase. The second phase will entail the preparation of detaile d impact fee studies and ordinance amendments to implement the policy decisions made in Phase I. This memorandum is the major consultant work pr oduct for Phase I. It is intended to provide background information and guidance to the County in deciding whether and how to proceed with the development of an impact fee program in Phase II. Background The County of HawaiÔi encompasses the entire isla nd of HawaiÔi and has the largest land area of HawaiÔiÔs counties. The land area of the County is approximately twice the combined land area of all the other islands of the State. Traditionally, agriculture has played an important role in the CountyÔs economy and Figure 1 much of the CountyÔs population growth and POPULATION GROWTH, 1940-2020 development was tied to the growth and employment needs of its agricultural economy. The islandÔs population declined after World War II with the decreasing need for agricultural workers. Since the 1960s, however, tourism has emerged as the primary economic activity. In addition, the County has seen substantial population growth beyond what would be expected from economic opportunities in the CountyÔs primary industries; such population growth has most likely been due to in-migration of people drawn to the quality of life in the County. The County of HawaiÔi is currently the second most populous county in HawaiÔi. The 2000 U.S. Census recorded the CountyÔs population as 148,677. Fi gure 1 shows the population growth since 1940, and the projected growth through 2020. The County of HawaiÔiÔs population growth has remained relatively constant over the last two decades, with a slight decline from an annual rate of 2. 71 percent in the 1980s to 2.14 percent in the 1990s. According to population projections provided in the medium serie HawaiÔi County General Plan , HawaiÔi CountyÔs population is expected to grow at about 1.9 percent a year over the next H Ô C \I N A ÐP A M January 5, 2006 , Page 3 AWAI I OUNTY NFRASTRUCTURE EEDS SSESSMENT OLICY NALYSIS EMORANDUM two decades. Under this growth assumption, the CountyÔs population is expected to be about 217,718 in 2020. Figure 2 JUDICIAL DISTRICTS As shown in Table 1, certain districts experienced much more rapid growth during the 1990s th an the county as a whole. The bulk of the growth occurred in the districts of Puna, South Kohala and North Kona. The districts of North Kohala and KaÔ u at opposite ends of the island also grew at a faster rate than the island average, but they started from a relatively small population base. In the 1950s and 1960s, the County allowed many subdivisions with minimal improvements, mostly in Puna and KaÔ u, with a few in South Kona. Today, th ere are about 53,000 residential lots in Puna, of which abou t 40,000 are vacant. KaÔ u has about 16,000 residential lots, of which about 13,000 are vacant (mostly in HawaiÔian Ocean View Estates). Thirty-seven percent of the islandÔs population increase in the 1990s occurred in Puna, almost entirely in these older subdivisions. Table 1 COUNTY POPULATION GROWTH BY DISTRICT, 1990-2000 Judicial Growth Growth District 1990 2000 Growth Share Rate 1-Puna20,78131,33510,55437.21%4.19% 2-South Hilo44,63947,3862,7479.69%0.60% 3-North Hilo1,5411,7201790.63%1.10% 4-Hamakua5,5456,1085631.99%0.97% 5-North Kohala4,2916,0381,7476.16%3.47% 6-South Kohala9,140 13,1313,99114.07%3.69% 7-North Kona22,28428,5436,25922.07%2.51% 8-South Kona7,6588,5899313.28%1.15% 9-KaÔ u4,4385,8271,3894.90%2.76% Total 120,317148,67728,360100.00%2.14% Source: County of HawaiÔi Data Book, Section 1 <http://www.hawaii-county In addition to the development potential on zoned and subdivided lots, there is also significant development that can occur without rezoning but th at will require subdivision. According to County Planning Department staff, eight areas outside of major resorts could be subdivided to accommodate 1 11,000 dwelling units without additional rezoning. 1 Waikoloa Village, Bridge Ainalea, Kohala Ranch Project IV, former ÑY.O.Ò property, University Ter Wilder Road property, Parker Ranch 2020 Plan in Waimea, former Haseko pr operty south of Kona Palisades per HawaiÔi County Planning Depart ment memorandum, March 9, 2005 H Ô C \I N A ÐP A M January 5, 2006 , Page 4 AWAI I OUNTY NFRASTRUCTURE EEDS SSESSMENT OLICY NALYSIS EMORANDUM In addition to the resident population, HawaiÔi Coun ty has a significant daily tourist population. Table 2 shows the resident population and visitor industry projections through 2020. Based on data from the HawaiÔi County General Plan , there were 1,265,700 visitors and 10,041 hotel rooms in the Co The average daily visitor census data illustrates the significance of tourism. The average daily number of visitors is projected to increase by 2.00 percent annually, f Table 2 HAWAIÔI COUNTY POPULATION AND VISITORS Resident Avg. Daily Hotel Year Population Visitors Rooms 1985105,900 8,040 7,511 1990120,317 16,970 8,952 1995137,290 18,650 9,575 2000148,677 21,831 10,041 2005159,908 24,103 10,513 2010176,937 26,612 10,892 2015195,965 29,382 11,200 2020217,718 32,440 11,452 Source: HawaiÔi County General Plan , Table 1-5; Average Daily Visitor Census, 1985 to 2000, from HawaiÔi County Data Book , Table 7.3, data from 2005-2020 derived used total visitor growth rate projected increase of 2% per year from HawaiÔi County General Plan . Nonresidential growth appears to be outpacing resi dential construction, base d on building permit data. Since the year 2000, the number of housing units has increased by a bout three percent annually, while nonresidential square footage has been increasing by almost six Table 3 GROWTH RATES, 2000-2005 2000 2000-2005 2005 Annual Land Use Census Permits Estimate Increase Single-Family Detached48,2319,06657,2972.91% Multi-Family/Other14,0562,76216,8183.04% Total Residential Un its62,67411,85574,5292.93% Total Nonresidential Sq. Ft.17,233,6266,727,88123,961,5075.65% Source: Residential data from 2000 U.S. Census and January 1, 2000 thro data; 2005 nonresidential square footage estimate from HawaiÔi C assessment date for 2005 tax year); 2000-2005 nonresidential per 2000 through August 31, 2005; 2000 nonresidential estimate is di H Ô C \I N A ÐP A M January 5, 2006 , Page 5 AWAI I OUNTY NFRASTRUCTURE EEDS SSESSMENT OLICY NALYSIS EMORANDUM LEGAL FRAMEWORK Impact fees are one of the most di rect ways for local governments to require new developments to p a larger portion of the costs they impose on the commu nity. In contrast to traditional ÑnegotiatedÒ developer exactions, impact fees are charges that are assessed on new development based on a standard formula and objective characteristics, such as the numb er of dwelling units constructed or vehicle trips generated. The fees are one-time, up -front charges. Essentially, impact fees require that each deve of a new residential or commercial project pay its pr o-rata share of the cost of new infrastructure facilities required to serve that development. General Principles Since impact fees were pioneered in states that la cked specific enabling legislation, such fees have generally been legally defended as an exercise of local governmentÔs broa d Ñpolice powerÒ to protect the health, safety and welfare of the community. Over time, various state courts have developed guidelines for constitutionally valid impact fees, base d on a Ñrational nexusÒ that must exist between the regulatory fee or exaction and the activity that is being regulated. The standards set by court cases generally require that an impact fee or other developer exaction 1)The need for new facilities must be created by new development (first prong of the dual rational nexus test); and 2)The expenditure of impact fee revenues must provide benefit to the fee-paying development (second prong of the dual rational nexus test). A Florida district court of appeal s described the dual rational nex us test in 1983 as follows, and this 2 language was quoted and followed by the Florida Supreme Court in St. Johns County decision: In order to satisfy these requirements, the local go vernment must demonstrate a reasonable connection, or rational nexus, between the need for addition al capital facilities and the growth in population generated by the subdivision. In addition, the government must show a reasonable connection, or rational nexus, between the expenditures of the funds collecte d and the benefits accruing to the subdivision. In order to satisfy this latter requirement, the ordinanc e must specifically earmark the funds collected for use in acquiring capital facilities to benefit the new residents In addition to the dual rational nexus test, impact fees may also need to meet Federal constitutional requirements for developer exactions. The most important recent legal development regarding 3 development exactions is the 1994 decision of the U.S. Supreme C Dolan v. City of Tigard . In Dolan , the Supreme Court expanded upon the rational nex us test, adding to it a requirement that there be a Ñrough proportionalityÒ between the impact of a proposed development and the burden of the exaction imposed on it. While this case involved an ad hoc land dedication requirement and may not 2 Hollywood, Inc. v. Broward County , 431 So. 2d 606, 611-12 (Fla. 4th DCA), review denied, 440 So. 1983), quoted and followed in St. Johns County v. Northeast Florida Builders AssÔn , 583 So. 2d 635, 637 (Fla. 1991). 3 Dolan v. City of Tigard , 512 U.S. 374, 129 L. Ed. 2d 304, 114 S. Ct. 2309 (1994) H Ô C \I N A ÐP A M January 5, 2006 , Page 6 AWAI I OUNTY NFRASTRUCTURE EEDS SSESSMENT OLICY NALYSIS EMORANDUM apply to legislatively-adopted fees, impact fees are mo re likely to comply with this standard than other types of developer exactions. These principles have some important corollaries, which may be broadly categorized under the headings of Ñproportionality,Ò ÑcreditsÒ and Ñbenefit.Ò The proportionality rules require that the fees cover only those costs that can be attributed to new development, and speci remedying existing deficiencies. In addition, applicants must have the option of attempting to demonstrate that their developmen t will have less impact on the need for public facilities than is indicated by the fee schedule. The credit rules are designed to ensure that new de velopment is not overcharged. These rules address both revenue credits, which are calculated up-fr ont in the preparation of the fee schedule, and construction credits, which are determined on a case -by-case basis prior to fee payment. Revenue credits reduce the impact fee schedules to account fo r other revenues that w ill be generated by new development and used to retire debt for existing fac ilities or to construct new facilities of the same type funded by the impact fees. Construction credits are used to offset an individual developmentÔs impact fees by the value of required land dedications or ot her developer improvements or contributions for the same types of facilities. Finally, the benefit rules require that the fee revenues be spen improvements that expand system capacity to accommodate the demands of the fee-paying development. State Enabling Act To date, 26 states, including HawaiÔi, have adopted im pact fee enabling legislation. Like most other state enabling acts, HawaiÔiÔs impact fee enabling act for counties re enumerated above. HawaiÔiÔs impact fee enabling a ct, adopted in 1992, authorizes counties to adopt impact fees for any Ñtypes of public facility capita l improvements specifically identified in a county comprehensive plan or a facility needs assessment st udy.Ò The only use of this authority to-date has 4 been the adoption in 2002 of a road impact fee by the City and County of Honolulu for the Ewa region. Counties in HawaiÔi are authorized by state law to enact impact fee ordinances, provided that they follow the requirements of Chapter 46, Pa rt VIII of HawaiÔi Revised Statu tes (Section 46-141 through 46-148). This section provides a brief summary of those requirements most Generally, developers prefer to pay impact fees as late in the development process as possible, and most state acts prohibit the collection of impact fees prio r to the time of issuance of a building permit or certificate of occupancy. HawaiÔiÔs act states in Section 46-146 that ÑAssessment of impact fees shall be a condition precedent to the issuance of a grading or buildin before or upon issuance of the permit.Ò Hawa iÔi CountyÔs Corporation Counsel has interpreted this language to mean that the County may assess and co llect impact fees at any time, up to and including the time of building permit issuance. 4 Chapter 33A of the Revised Ordinances of Honol ulu (the fee for a single-family unit is $1,836) H Ô C \I N A ÐP A M January 5, 2006 , Page 7 AWAI I OUNTY NFRASTRUCTURE EEDS SSESSMENT OLICY NALYSIS EMORANDUM A fundamental principle of impact fees is that n ew development cannot be charged for a higher level of service than is provided to existing developmen t. Section 46-142(b) states that an impact fee study Ñshall specify the service standards for each type of facility subject to an impact fee; provided that the standards shall apply equally to existing and new pu blic facilities.Ò If, for example, a County currently provides five acres of parkland per 1,000 residents, it cannot base park impact fees for new development on a standard of ten acres of park land per 1,000 residents, unless certain conditions are met. Fi another source of funding other than park impact f ees would have to be identified and committed to fund the capacity deficiency created by the higher level of service. Second, the park impact fees must generally be reduced to ensure that new developmen t does not pay twice for the same level of service, once through impact fees and again through genera l taxes that are used to remedy the capacity deficiency for existing development. Section 46-143 (d)(1) requires counties to consider the Ñmeans, other than impact fees, by which existing deficienci es will be eliminated within a reasonable period of time...Ò in formulating an impact fee. In order to avoid these kinds of complications, the general practice is to base the impact fees on the existing level of ser A corollary principle is that new development should not have to pay twice for the same level of service. As noted above, if impact fees are based on a higher-t han existing level of serv ice, the fees should be reduced by a credit that accounts for the cont ribution of new development toward remedying the existing deficiencies. A similar situation arises when the existing level of service has not been fully paid for. Outstanding debt on existing facilities that are co unted in the existing level of service will be retired, in part, by revenues gene rated from new development that will also pay impact fees to mai existing level of service. Consequently, impact fees should be payments that will retire outstanding debt on existing facilities. The HawaiÔi enabling act addresses this issue in Section 46-143(d)(6), which provides that one of the seven fa ctors that shall be considered in determining Ña proportionate share of public facility capital improvement costsÒ is the Ñextent to whi a developer required to pay impact fees over the next twenty yea contribute to the cost of existing public facility capital improvements through user fees, debt service payments, or other payments, and any credits that may accrue to a development because of future payments ...Ò The State act implies that credit may also be due fo r other types of revenues besides those used to pay debt service on existing capital facilities. Section 46-143(d)(2) states that another factor that shall be considered is the Ñavailability of other funding for public facility capital improvements, including but not limited to user charges, taxes, bonds, intergovernmental tra assessments ...Ò Also, Section 46-141 defines Ñpropor tionate shareÒ to mean Ñthe portion of total public facility capital improvement costs that is reasonably a ttributable to a development, less: (1) Any credits for past or future payments, adjusted to present va lue, for public facility capital improvement costs made or reasonably anticipated to be contributed by a developer in the form of user fees, debt service payments, taxes, or other payments...Ò Aside from debt service payments, however. credit against impact fees may not be required for other types of funding that have historically been used for growth-related, capacity-expanding improvements, or which may even be committed to be spent in th e future for such purposes. While new development may contribute toward such funding, so does existing development development benefit from the higher level of serv ice that the additional funding makes possible. To insist that historical capacity funding patterns must be continued after the adoption of impact fees, and that new development is entitled to a credit for its contributio argue that local governments cannot require Ñgrowth to pay for growthÒ unless they have always done H Ô C \I N A ÐP A M January 5, 2006 , Page 8 AWAI I OUNTY NFRASTRUCTURE EEDS SSESSMENT OLICY NALYSIS EMORANDUM so. Local funding that is committed to be used for capacity expansion in the future needs to be tak into account only in cases where there is no reasonable need for or benefit from higher levels of service than the existing level of service embodied in the impa ct fee calculations. As long as the fees are based on new development paying to maintain existing leve ls of service that have been paid for in full by existing development, and additional funding can re asonably be used to raise the level of service for existing and new development alike, no additional revenue credit HawaiÔiÔs statute is one of only a ha ndful of state enabling acts that re quire credit for past property tax payments. Section 46-143(d)(5) states that the Ñex tent to which a developer required to pay impact fees has contributed in the previous five years to the cost of existing public facility capital improvements and received no reasonable benefit therefrom, and any cr edits that may be due to a development because of such contributionsÒ shall be taken into consideration in the impact f ee calculation. And the definition of Ñproportionate shareÒ cited above makes clear that this refers not just to developer exactions, but also to past property tax payments. Prior to development, the owners property taxes that may have been used, in part, to construct capital facilities of the type for which impact fees are being assessed. Consequently, it will be necessary to reduce impact fees by the present value of property tax payments over the last five years that were used to construct existing capital facilities of the type for which the fees are being charged. H Ô C \I N A ÐP A M January 5, 2006 , Page 9 AWAI I OUNTY NFRASTRUCTURE EEDS SSESSMENT OLICY NALYSIS EMORANDUM FAIR SHARE ASSESSMENTS Since the early 1990s, the County of HawaiÔi (Ñthe CountyÒ) has imposed Ñfair share assessmentsÒ on applicants for new residential (including agricultural lots zoned one acre or less in size) and hotel zoning. The fees, which are imposed as a c ondition of zoning approval, are collected prior to securing fin subdivision approval for newly created lots or prior to obtaining final plan approval for multi-family or hotel development. The fees, which are adj usted annually for inflation based on the Honolulu Consumer Price Index (CPI), curre ntly (as of November 2005) total approximately $9,991.20 per dwelling unit; $6,411.25 for multi-family; and $10,994. 22 for resort, per rental unit. The assessments are collected for roads, parks, fire, police and solid waste fac The fair share assessments are compared with Calif ornia and national average impact fees in Table 4. HawaiÔi CountyÔs assessments for ro ads and parks are significantly higher than the national average although they are right in line with average fees charged in California. The total fair share assessment in HawaiÔi County is on par with wh at the average jurisdiction in Calif ornia charges in impact fees for the same facilities. Table 4 FAIR SHARE ASSESSMENTS PER SINGLE-FAMILY UNIT FacilityHawaiÔi Co.CA Avg.NatÔl Avg. Roads$4,281 $3,922$2,037 Parks$4,818 $4,856$1,810 Fire$459 $584$329 Police$232 $843$302 Solid Waste$201 na$179 Total$9,991 $10,205$4,657 Source: HawaiÔi County fair share assessmen ts; California and national average fees from Duncan Associates survey, January 4, 2006 The CountyÔs fair share assessments have never been adopted as a pass a general authorization in 1992 for the coll ection of such fees as a condition of development approval in 1992 (Hawaii County Code §2-162). Th e fees are based on an impact fee study that was 5 prepared by a consultant in 1990, but was neve r formally approved or adopted by the County. The fees calculated in that report are adjusted annually based on the cha Index. Many of the zoning ordinances passed by the HawaiÔi County Council in recent years contain a provision requiring that in the event an impact fee or dinance is adopted, it will give credit for the fair share assessments. A typical provision reads as follows: ÑShould the Council adopt a Unified Impact Fees Ordinance setting forth criteria for imposit ion of exactions or assessment of impact fees, conditions included herein shall be credited towards the require 6 Ordinance.Ò 5 Ann Usagawa, Development Impact Fee Pricing Technical Report , August 1990 6 Ordinance No. 05-74, adopted on May 18, 2005 H Ô C \I N A ÐP A M January 5, 2006 , Page 10 AWAI I OUNTY NFRASTRUCTURE EEDS SSESSMENT OLICY NALYSIS EMORANDUM While the fair share assessment amounts are substantial, they ha analysis done in 2004 determined that over $74 m illion had been assessed on new zoning in the ten years of the program, but only $3.6 million had been co llected in cash and anot her $15.2 million had been 7 provided by developers in the form of in-kind contributions in r This is because most of the land that has been subject to fair share assessm ents at zoning has not yet been subdivided. If the fair share assessment amounts had been in the form of impact fees collected at time of building permit, they would have generated $103 million in cash an d credits since January 2000, and if they had been assessed on nonresidential as well as residential de velopment, they would have generated $170 million in less than six years, as shown in Table 5. Table 5 POTENTIAL REVENUE, 2000-2005 FacilityResidential NonresidentialTotal Roads$44,176,556$58,813,053 $102,989,609 Parks$50,038,557$0 $50,038,557 Police$2,273,269$2,743,975 $5,017,244 Fire$4,783,316$3,618,026 $8,401,342 Solid$2,102,646$1,812,255 $3,914,901 Total $103,374,344$66,987,309 $170,361,653 Source: Estimated revenue based on building permits issued from January 2000 through August 31, 2005 and annual fair share assessment ra ÑFair Share ContributionsÏAdjustment s for inflation using the Honolulu Consumer Price Index.Ò 7 HawaiÔi County Planning Department, Fair Share Contributions Annual Report 2004 , May 21, 2004 H Ô C \I N A ÐP A M January 5, 2006 , Page 11 AWAI I OUNTY NFRASTRUCTURE EEDS SSESSMENT OLICY NALYSIS EMORANDUM APPROACH The County should consider replacing its fair shar e assessments with a true impact fee system that follows the requirements of HawaiÔiÔs impact fee enabling act. development would be more legally defensible, more equitable and generate significantly more revenue than the current Ñfair shareÒ system. This additional revenue w that would benefit all fee payers. Impact fees would essentially replace the fair shar e assessments. Lots that had paid fair share assessments would get credit agains t the impact fees or be exempt fr om having to pay impact fees for the same type of facilities. Fair share assessments made at zoning but not yet collected at the time of the effective date of the impact fee ordinance (beca use the property had not yet been subdivided) would become void; instead of paying fair share assessments, the prope A major difference is that impact fees would be assessed on all nonresidential development and residential de velopment in areas with existing zoning. Lots in Older Subdivisions One of the reasons for the failure of the previous impact fee initiative in 1990 was the lack of su for assessing owners of individual residential lots. The Island of HawaiÔi has many buildable lots in older subdivisions that have not been fully develope d. Many of these subdivi sions were created in the 1950's and 1960's prior to the comprehensive sub division code that was adopted in 1967. The perception is that many of these lots are owned by local residents who have owned them for years with the expectation that one day they would build a home on them. The fear is that imposition of impact fees at the building permit level may hurt this opportunity. De could be a major source of the islandÔs affordable ho using. The current fair share system addresses this concern by only charging developers who require rez oning, but at the cost of generating very little revenue for needed capital improvements. There are two reasonab issue in the context of an impact fee system. One approach is to allow one dwelling unit to be built on an exi impact fee. The impact fees would be collected prior to securing final subdivision approval for si family lots, while collection of fees for multi-family and nonresidential developments would be deferred, with interest, and collected at the time of building pe rmit. The fees for existing lots of record on the effective date of the impact fee ordinance would be collected at time of building permit, except for the first dwelling unit to be built on the lot, which woul d be exempt from the fee. Developments that were assessed and had paid fair share assessments would receive credi An alternative would be to give owne rs of existing lots of record a grace period during which they could build without having to pay the fees . Such a transitional provision wo uld ensure that owners of lots in older subdivisions with imminent plans to devel op would not have their opportunity to build a home impaired by a new fee. The amount of time given to owners of existing lots to build would be a policy issue for the County. When to coll ect the fee (e.g., at subdivision or building permit) could be t as in the first alternative. H Ô C \I N A ÐP A M January 5, 2006 , Page 12 AWAI I OUNTY NFRASTRUCTURE EEDS SSESSMENT OLICY NALYSIS EMORANDUM 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 this is understandable, it is important to understand that impact fees are not the solutio service inadequacies. Other funding sources must be found to in The principle to keep in mind is that you canÔt char ge new development for a higher level of service than you provide to existing development. For example, that assume a community has five acres of park land per 1,000 residents, but it wants to have ten acres/1,000. If th e community charges new development for ten acres/1000, and does not spend any other m oney on parks, then the level of service gradually increases over time, but it never g ets to ten acres/1,000. So new de velopment does not get the level of service it is paying for, and existing development gets a windfall. If on the other hand, the community passes a bond issue that will pay for the extra acres needed to serve ex isting development at the desired standard of ten acres/1,000, new development is helping to pay o a part of existing developmentÔs facilities as well as its own level of servi ce. Consequently, the fees would need to be reduced to prevent double-charging. The bottom line is that it is much simpler and more defensible to base the fees on the existing level of service than on a higher, desired le vel of service. Other money that the County gets from grants, t general fund, or other revenue sources can be used to in crease the level of servi ce, so the next time the fees are updated the existing level of service is higher and the fees can be raised accordingly. Administrative Costs An impact fee system should not be significantly more costly to administer than the current fair share assessments. Credits would need to be provided against the impa contributions, but this is also true of the fair sh are assessments. Collection of the fees could occur at the same points in the development process as the fair share fees. The ma jor additional expense may be more frequent updates. Agency and Stakeholder Involvement In order to provide the consultants with the necessary informati an Agency Liaison Team, consisting of representati ves from County and State agencies, was formed to provide data on the following type of infrastructure an d public facilities: transportation, police, fire, solid waste and wastewater. Stakeholder involvement and participation in the stud y process will help to determine the need for and the development of an impact fee or dinance. To date, two initial focus group meetings were held with representatives from key stakeholder organizations in Hilo and Kona. Future meetings will be held to assist in developing the methodology and the impact fee ordinance. The consultants have also held an initial workshop with the County Council on impact fees. The following is a summary of comments that have been made thus far. Additional information on the focus group meetings can be found in Appendix B. 1.Create of a fair system (exemption of existi ng lots does not seem fair nor appropriate). 2.Expand scope to discuss other infrastructure financing options 3.Government should identify their role and infrastructure finan 4.Create an inclusive impact fee program Ï include state highway 5.Look at the strategic issues/questions Ï how much money do we H Ô C \I N A ÐP A M January 5, 2006 , Page 14 AWAI I OUNTY NFRASTRUCTURE EEDS SSESSMENT OLICY NALYSIS EMORANDUM 6.Address how impact fees will affect affordable housing. 7.Larger assessment/benefit districts are advantageous to County 8.CountyÔs position on concurrency and implementation of impact 9.Recognize previous fair share assessments and contributions pa Key Issues/Questions Should the Infrastructure and Public Facilities N eeds Assessment Study justify the establishment of an impact fee system and ordinance for the County of Hawaii, the following are some of the questions wi need to be answered: 1.At what point(s) in the development approval process should th 2.When should the impact fee be collected? 3.How should the assessment and benefit districts be established 4.Should certain types of development be exempt or pay a reduced 5.Should impact fees supercede fair share assessments that have 6.Should developments that have paid fair share assessments be e have their fees reduced by the amount of assessments paid? 7.What types of future developer improvements should be credited against the impact fees? H Ô C \I N A ÐP A M January 5, 2006 , Page 15 AWAI I OUNTY NFRASTRUCTURE EEDS SSESSMENT OLICY NALYSIS EMORANDUM ANALYSIS OF FEE TYPES This section analyzes the types of facilities for which impact f There do not appear to be any technical obstacles to preparing impact fee studies for the facilities of interest to the County, namely roads, parks, fire, police, solid Roads The 1998 HawaiÔi Long Range Land Transportation Plan , prepared by the State in association with the County, identifies the islandÔs major transporta tion improvement needs to support anticipated growth to the year 2020. The major highways on the isla nd are the HawaiÔi Belt Highway and the Mamalahoa Highway, which together link the major towns of all of the distr improvement needs identified by the Transportation Plan include the reconstruction of the Saddle Road (Highway 200) and the widening of Queen Kaahum anu Highway (Highway 19) to four lanes between Waikoloa Road and Kona International Airport at Ke ahole. Figure 3 MAJOR ROADWAY SYSTEM H Ô C \I N A ÐP A M January 5, 2006 , Page 16 AWAI I OUNTY NFRASTRUCTURE EEDS SSESSMENT OLICY NALYSIS EMORANDUM Many of the islandÔs road capacity improvement needs are on the Corporation Counsel believes that the County will need authorizing legislation in order to participate in the funding of State road improvements. Such enabling legislation should be sought if the County is to pursue a road impact fee. However, there are significant improvement needs on the County system, including $174 million in unfunded needs, as summarized Table 6 ROAD IMPROVEMENT NEEDS PriorityCounty RoadsState RoadsTotal Tier 1 (1998-2005)$112, 400,000$291,000,000$403,400,000 Tier 2 (2006-2010)$49, 300,000$155,100,000$204,400,000 Tier 3 (2011-2020)$103, 100,000$307,800,000$410,900,000 Tier 4 (Unfunded) $173,900,000$124,200,000$298,100,000 Total$438,700,000$878,100,000$1,316,800,000 Source: Frederick R. Harris, Inc., HawaiÔi Long Range Land Transportation Plan , May 1998 Parks and Recreation Recreational facilities can be generally classified as resource-based or facility-based. Most resource- based parks on the island are provided by the Federal and State governments (231,400 and 800 acres respectively), with the CountyÔs role confined primarily to beac The County provides a variety of facility-based park s, ranging from small neighborhood parks to larger playfields to parks of county-wide scope. Th e County also provides nine swimming pools, 19 community/senior centers, 15 gymnasiums and 15 miscellaneous fac parks and recreation facilities is shown in Figure 4. The County of HawaiÔi Recreation Plan has not been updated since it wa s prepared in 1974. The General Plan sets out general guidelines for the size and mi nimum facilities to be provided in various types of parks, but does not include quantifiable level of service standa The CountyÔs Park Dedication Code (Chapter 8, Ha waiÔi County Code) imposes a requirement for the dedication of five acres of park land for every 1,00 0 persons or payment of f ees in-lieu of dedication. These requirements apply to the subdivision of land for residential purposes or the development of multi-family units. If this dedication requirement is maintained and the park impact fees include land costs, credit against the park impa ct fees will need to be provided fo r the value of land required to be dedicated. It would not be practical to make every subdivision its own benefit district, as some of them will have little development. Park fair share assessments are cu rrently restricted to the judicial district in which they were collected. Judicial districts might be the logical choice for im pact fee benefit districts as well. However, the County might want to consider reducing the number o order to provide greater flexibility in the expenditure of fees collected. H Ô C \I N A ÐP A M January 5, 2006 , Page 17 AWAI I OUNTY NFRASTRUCTURE EEDS SSESSMENT OLICY NALYSIS EMORANDUM Figure 4 EXISTING COUNTY PARKS Fire/EMS The CountyÔs Fire Administration is located in the County Building in Hilo. There are 14 regular fire stations, 18 volunteer fire stations and 2 Federal fi re stations on the Big Isla nd. The Kilauea Military Camp and Pohakuloa fire stations are Federal fac ilities. Kilauea Military Camp provides emergency medical services under an agreement with the Coun ty. The regular fire stations and three of the volunteer fire stations (Laup ahoehoe, P ahala and NaÔ alehu) provide 24-hour fire fighting and emergency medical services. The Waiakea and Kailua-Kona stations provide rescue services, the Ka umana and South Kohala stations provide hazardous waste re sponse and the South Kohala station provides air medical services. The General Plan establishes a standard of fire stations within five miles of concentrated settlement areas and first response emergency medical service within eight minutes of concentrated settlement areas. H Ô C \I N A ÐP A M January 5, 2006 , Page 18 AWAI I OUNTY NFRASTRUCTURE EEDS SSESSMENT OLICY NALYSIS EMORANDUM Figure 5 FIRE STATION LOCATIONS The County does not maintain data on fire/rescue inci dents by land use. A reasonable alternative is to use Ñfunctional populationÒ as the indicator of demand for fire protection service by land use type. The functional population methodology makes the reasonabl e assumption that the demand for public safety services is roughly proportional to the presence of people at the site of a land use. The methodology assumes that people spend about half of their time at their plac nonresidential land uses. While fire-fighting apparatus and ambulances may be dispatched from a station primarily to calls within that stationÔs primary response area, these units may also respond to calls in neighboring response areas if needed. In addition, the headquarters and trai ning facilities are centra lized. Consequently, fire/EMS facilities constitute an interrelated system that provides servi reasons, most fire impact fees use a single jurisdicti on-wide benefit district. However, given the size of the county, it should be divided into a minimum of two (east and H Ô C \I N A ÐP A M January 5, 2006 , Page 19 AWAI I OUNTY NFRASTRUCTURE EEDS SSESSMENT OLICY NALYSIS EMORANDUM Police Each of the eight districts is served by a main po lice station. Ther e are also four substations. The combined police headquarters for Hilo and the County is located in the Hilo Public Safety Building on Kaiolani Street. The General Plan establishes a standard of 2.5 police officers per 1,000 residen population. As with fire/EMS fees, most police im pact fees are assessed at the jurisdiction level and earmarked for expenditure within a single jurisdicti on-wide benefit district. However, given the size of the county, it should be divided into a minimum of two (east and Figure 6 POLICE STATION LOCATIONS H Ô C \I N A ÐP A M January 5, 2006 , Page 20 AWAI I OUNTY NFRASTRUCTURE EEDS SSESSMENT OLICY NALYSIS EMORANDUM Solid Waste The County currently has two landfill sites. The sanitary landfill at PuÔuanahulu on the west side of the island is active, while the unlined landfill in Hilo on the east side of the island will be closed in the near future. There are 21 solid waste transfer sites, like the one pictured at right, situated throughout the island. Residents can drop off their household solid waste for free at the transfer stations. Some residents pay private haulers to pick up their garbage. Commercial businesses and private haul ers are required to take their solid waste to the land fill, where they are charged a tipping fee. Commercial tipping fees account for 35 percent of revenue for the operation of the Solid Waste Division, while the remainder of the DivisionÔs budget comes from the general fund. Figure 7 LANDFILL/TRANSFER STATION LOCATIONS H Ô C \I N A ÐP A M January 5, 2006 , Page 21 AWAI I OUNTY NFRASTRUCTURE EEDS SSESSMENT OLICY NALYSIS EMORANDUM A solid waste impact fee could includ e the cost of constructing new cells in the landfill to accommod anticipated waste to be generated, and could includ e upgrades for recycling services when available to commercial entities. The costs of transfer stations and collection vehicles should only be included in the impact fees for residential development, sin ce this service is not provided for nonresidential development. Wastewater HawaiÔi County presently operates muni cipal wastewater systems in Hilo, P apaÔikou, Kapehu, Pepeekeo and Kealakehe. The rest of the is land is served by private wastewater treatment facilities, or individual facilities such as cesspools or septic tanks. About 77 percent by cesspools. The State Department of Health intends to promulg in HawaiÔi County. Figure 8 WASTEWATER TREATMENT FACILITIES H Ô C \I N A ÐP A M January 5, 2006 , Page 22 AWAI I OUNTY NFRASTRUCTURE EEDS SSESSMENT OLICY NALYSIS EMORANDUM The County currently charges a water Ñfacilities chargeÒ to cover the capital costs of water infrastructure, but does not have a comparable fee fo r wastewater. The water fa cilities fee is $1,190 for the first dwelling unit (or water demand equivalent), and $5,500 Residents and businesses that are connected to a Cou nty sewer system pay user fees which fund all operations and maintenance. The County could charge new wastewa cover a pro rata share of the capi tal costs of the treatment plants, interceptors, force mains and pumping facilities. The County recently completed a study th at could be used to provide the basis for such an 8 analysis. 8 R.W. Beck, Needs Assessment Study and C apacity Assessment Fee Study , prepared for the County of HawaiÔi, Department of Environmental Management, Wa stewater Division, January 2004 Draft Report H Ô C \I N A ÐP A M January 5, 2006 , Page 23 AWAI I OUNTY NFRASTRUCTURE EEDS SSESSMENT OLICY NALYSIS EMORANDUM PROGRESSIVE RATES FOR RESIDENTIAL UNITS Typical impact fees charge a flat ra te per dwelling unit, regardless of size . A wide range of housing sizes are being produced in todayÔs housi ng market. Because smaller units tend to cost less and house families with lower incomes, the one-size-fits-all approach taken by most impact fee systems imposes a much larger burden, proportionately, on smaller units, whic h incidently tend to house residents less likely to be able to afford it. The regressive nature of one-size- fits-all impact fees was clearly dem onstrated in a seminal 1992 article 9 by Dr. James C. Nicholas of the University of Florida. The 1985 data he presented in that article have been updated with 2001 data in Table 7 below. These national da between the size of the dwelling unit, whether measur ed by the number of bedrooms or square footage, the number of persons living in the unit, which is a measure of the demand on facilities, and the value of the unit and the income of the household, which are measures Table 7 DWELLING CHARACTERISTICS BY NUMBER OF BEDROOMS Median Median $2,000 fee Unit Family as percent Median Mean Bedrooms Sq. Ft. Persons Value Income of income 0500 1.2n/a$14,95613% 1828 1.5$73,740$21,7169% 21,248 2.2$83,655$28,3437% 31,692 2.8$119,539$44,6494% 4+2,406 3.5$188,052$68,8343% Source: U.S. Bureau of the Census, 2001 American Housing Survey (median square feet, mean persons and median family income based on all dwelling units; median unit value based on owner- occupied units only). A flat $2,000 impact fee per dwelling unit, regardless of size or type, would constitute 13 percent of annual income of the median household living in an efficiency apartment, but only 3 percent of the median income of a dwelling unit with four or more bedrooms (see Table 7 above). Also, since the demand on public facilities is often a function of the number of people living in a community, a large house tends to have about three times the dema nd for services as an efficiency apartment. Consequently, not only is a one-size-fits-all fee regre ssive, it tends to overcharge smaller units and undercharge larger units. While most impact fees do acknowledge the differe nce between housing types, such as single-family and multi-family units, few of them vary by unit size. This is changing, however. For example, 30 percent of the 20 Florida counties that assess school impact fees currently base the fees on some measur dwelling unit size. Three of the counties base fees on the number of bedrooms in combination with housing type, two have translated bedrooms into four or five size categories (e.g., a one-bedroom unit is on average less than 800 square feet, etc.) and one county charges school fees on a per square foot basis. 9 Nicholas, James C., ÑOn the Progression of Impact Fees,Ò Journal of the American Planning Association , Vol. 58, No. 4, Autumn 1992, p. 517-525 H Ô C \I N A ÐP A M January 5, 2006 , Page 24 AWAI I OUNTY NFRASTRUCTURE EEDS SSESSMENT OLICY NALYSIS EMORANDUM There are several reasons for the continuing predominan ce of impact fees that do not vary by unit size. One obvious reason is that a flat fee per dwelling unit is easier to calc ulate and has fewer data requirements. While this is still the case, the da ta requirements are not in surmountable, and greater resources are now available. The other principa l reason for the predominance of one-size-fits-all residential impact fees was legal in nature. In the early days of the development of impact fees in the late 1970s and early 1980s, there were no state impa ct fee enabling acts, and impact fees were based on the Ñpolice powerÒ of local governments to regulate development welfare of the community. Great care had to be ta ken to ensure that impact fees would not be struck down by the courts as an illegal tax. Even today, there is a residual feeling by some attorneys that a fee per square foot for residential development may appear more like a tax than a re gulatory fee. However, this should no longer be a major concern, as the authority to enact impact fee ordinances is now well- established in most states. We recommend that the CountyÔs impact fees incorpor ate progressive fees for single-family homes that vary by the size of the dwelling unit. H Ô C \I N A ÐP A M January 5, 2006 , Page 25 AWAI I OUNTY NFRASTRUCTURE EEDS SSESSMENT OLICY NALYSIS EMORANDUM APPENDIX A: IMPACT FEE GLOSSARY Assessment Districts refer to geographic areas subject to a uniform impact fee sched Benefit Districts refer to geographic areas in which impact fees collected are earmarked to be spent. Deficiencies, Existing refers to the cost to provide developm ent existing at the time of adoption of an impact fee ordinance with the higher-than-existi ng level of service on which the impact fees are based. Development, Residential refers to subdivision of land for or construction of single-fam or multi-family dwelling units. Development, New refers to development that is not in existence at the time of a fee ordinance. Development, Nonresidential refers to subdivision of land for or construction of buildings other than residential development. Fair Share Assessments refers to the CountyÔs informal policy of requiring applicants and hotel rezoning to agree to pay f ees at time of platting, site plan or building permit to cover primarily off-site infrastructure costs relating to roads, park s, fire, police and solid waste facilities. The amount of the fees are based on a 1990 st udy, with annual inflation adjustments based on the Consumer Pri Index. Impact Fees are one-time charges assessed on new development to cover prima infrastructure costs as authorized by Chapter 46, Part VIII of HawaiÔi Revised Statutes. Level of Service is a measure of the service pr ovided by a certain type of capital facility. In impact fee analysis, level of service is typically expressed as a ratio of some characteristic of the facility type to the amount of development being served. For exampl e, a common level of service measure for parks is acres of parkland per 1,000 residents. Level of Service, Existing refers to the actual level of servi ce provided by the County at the time of adoption of an impact fee ordinance. Level of Service, Higher-than-Existing refers to the calculation of impact fees based on the cost of providing a better level of service than is being provided to ex adoption of an impact fee ordinance. Lot of Record, Existing refers to a parcel of property in existence on the date of adoption of an impact fee ordinance on which a building or structu re could legally be c onstructed without going through the CountyÔs subdivision process. Lots in Older Subdivisions refers to lots that were created in the early 1950s and 1960s and do not conform to present-day subdivision code requirements. Many of these lots were created without County facilities and services: they have private roads, which are often unpaved, no County water system, no H Ô C \I N A ÐP A M January 5, 2006 , Page 26 AWAI I OUNTY NFRASTRUCTURE EEDS SSESSMENT OLICY NALYSIS EMORANDUM parks, police or fire substations in the vicinity, an d are on cesspool. A large number of these lots are in the Puna and KaÔ u Districts. State Enabling Act refers to Chapter 46, § 141 to148 of HawaiÔi Revised Statutes, which was passed by the Legislature in 1992 and authorizes counties to assess, impose, levy and collect impact fees upon conducting a facility needs assessment study and the adoption of an impact fee ordinance. H Ô C \I N A ÐP A M January 5, 2006 , Page 27 AWAI I OUNTY NFRASTRUCTURE EEDS SSESSMENT OLICY NALYSIS EMORANDUM APPENDIX B: STAKEHOLDER COMMENTS Stakeholder Focus Groups Meetings November 18 (Kona) and 21 (Hilo), 2005 A. List of Participants Frederic Berg, Brookfield Homes Will Espero, DR Horton Sid Fuke, Planning Consultant Jacqui Hoover, Hawaii Leeward Planning Conference (HLPC) Keith Kato, Hawaii Island Community Development Corp. (HICDC) Kimo Lee, W.H. Shipman, Ltd. Ken Melrose, Hawaii Leeward Planning Conference (HLPC) Glenn Miyao, Wilson Okamoto Corp Bill Moore, Kohala Ranch Development Corp. Harold Murata, Self John Ray, Parker Ranch Skylark Rossetti, Hawaii Island Economic Development Board (HIED Marianna Scheffer, League of Women Voters Amy Self, Corporation Counsel Bob Stuit, Hokulia Dean Uchida, Land Use Research Foundation (LURF) Bill Walter, W.H. Shipman, Ltd. Marian Wilkins, League of Women Voters B. Written Comments Submitted by Stakeholders: 1.Impact Fees level the playing field for new proj ects but do little to address the increased stresses on infrastructure based on infill on existing lo ts. Need parallel sour ce of funds to fulfill government portion of costs. 2.I learned a lot Ï very interesting. I hope we ca n follow the suggestions of Duncan Associates. We must get our act together. I hope there w ill be more presentations open to the general public. 3. Positive: Good Questions and Answers. Ha ndout/powerpoint informative. Negative: Started Late 4. Why is impact fee good for the County of Hawaii? What proble 5. Good Presentation. Endeavor to educate the County on a variety of funding mechanisms. Make sure ordinance recognizes previous contribu tions exacted Ï credits. Examine county-wide fee calculation. H Ô C \I N A ÐP A M January 5, 2006 , Page 28 AWAI I OUNTY NFRASTRUCTURE EEDS SSESSMENT OLICY NALYSIS EMORANDUM 6.There is a need for a broader look at infrastructure needs and or fairest portion of cost should be paid by impact fees. 7.After listening to the presentation yesterday my principle concerns are the impacts on our housing programs for both low and moderate income households. P exempted units from impact fees if the units were part of our program, this appeared in rezoning approvals and in the pre-emption resolutions. If an impact fee ordinance is to be adopted I would hope that it would similarly exempt affordable housing otherwise it will make the homes more expensiv e to develop and that in turn will cause less units to be constructed. While funding infrastructure is necessary for the continued development of affordable housing I hope that it doesnÔt become a burden on such housing while other less regressive alternatives are under-utili 8. Hawaii Leeward Planning Conference (HLPC) had a study done that shows tremendous growth/contribution in property taxes by the K ohala Coast resort homes - why canÔt these funds be used? At very least, need to integrate those revenues assessment. The impact fees are being consider ed to give the County another funding source but it does not appear that the Administration has really consid Will County acknowledge that their position on c oncurrency is contradictory to implementing impact fees? Substandard lots are purchased at lower rates just by virtue of being substandard, therefore the exemption does not seem appropriate. 8.Thank you for inviting me to this presentation. 9.Need for an overall perspective. Impact fees ar e one of the many ÑtoolsÒ that government has available. Impact fees need to be fair and pred ictable. Leveling the playing field and affordable housing. B. Summary of Key Points Made by Stakeholders (written/verbal) 1.Create of a fair and predictable system 2.Exemption of existing substandard lots does not seem fair nor 3.Take a comprehensive approach and expand sc ope to discuss other infrastructure financing options to supplement impact fees. 4.Government should identify their role and infrastructure finan 5.Create an inclusive impact fee program - include state highway 6.Look at the strategic issues/questions - including, how much m H Ô C \I N A ÐP A M January 5, 2006 , Page 29 AWAI I OUNTY NFRASTRUCTURE EEDS SSESSMENT OLICY NALYSIS EMORANDUM 7.Address how impact fees will affect affordable housing. 8.Larger assessment/benefit districts are advantageous to county 9.CountyÔs position on concurrency and implementation of impact 10.Recognize previous fair share assessments and contributions p H Ô C \I N A ÐP A M January 5, 2006 , Page 30 AWAI I OUNTY NFRASTRUCTURE EEDS SSESSMENT OLICY NALYSIS EMORANDUM