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Honorable Pete Hoffmann Chair and Presiding Officer and Members of the County Council COUNTY T Y COUNCIL Page September 9, 2008 fee revenues will vary greatly, we could not count on impact fees being the sole source of funding for a bond of this magnitude, but this gives an example of the ftmding potential. In compal *son, annual real property tax revenues for the 2008 -2009 fiscal year are projected at $232 million. If impact fees were 11 million/yr., they would equal about 5% of real property tax revenues. Or, to put it another way, it would take a % across - the -board increase in real property tax rates to yield this level of impact fee revenues. This analysis assures that impact fees do not significantly reduce the level of development. At the fee lever proposed in Bill 324, this seems a reasonable assumption. 2. Impact fees have a sound legal basis. Questions have been raised about the legality of the "fair share" assessment system. Although there was a study to establish the level of assessments in the early 1990'x, the system was never enacted by a comprehensive ordinance. Although there are legal defenses of this practice, and it bas never been directly challenged by someone liable for fair share payments, the impact fee has a more solid legal basis. It should be noted that even if the courts ultimately invalidated "fair share" assessments, the specific improvements required by many of the rezoning ordinances, such as road construction or the dedication of land for pans, would still be valid because they are rationally related to the impact of those projects. In practice, rimy projects, especially the larger ones, have not paid lair share for reads or parks because they are building roads or dedicating parrs which qualify for an offset. 3. Impact fees provide funds for new infrastructure in areas experiencing rapid growth. The development of new county facilities has not matched the trends in population growth. Since 1970, most population growth In the island has occurred In Puna (about 35% of the island's population growth), forth Kona (about % of the island's population growth), and South Kohala (about 14% of the growth). At the same time, the proportion of the island's population living in the South Hilo district has dropped from 3% to less than %. The overall population of the Big Island has almost tripled since 1970.