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Honorable Pete Hoffmann Chair and Presiding officer and Members of the County Council COUNTY COUNCIL Page September 9, 2 Development of county facilities has not kept up to serve the fast - growing areas of the island. There are many reasons. For example, if the roof of an old gym leaks, and is going to rot the floor, fixing the roof is going to be a budget priority, But a series of decisions like this tends to reinforce investment in existing facilities that serve the older population pattern, rather than spending money where the population has moved. Impact fees must be spent on facilities that increase capacity, such as new parks or new roads, and must be spent, at least generally, to benefit the regions where the fees are collected, so this will tend to follow the growth in population. 4. Impact fees tend to make new developments pay for the new infrastructure. Impact fees are charged to new development, which is creating the need for new parks, roads, and other county facilities. In that respect, it may seem fairer to charge those buying into those developments for ne w f acilities. 5. Impact fees will generate substantial funds from areas where zoning conditions don't require developers to provide improvements. At least 0% the new homes In the island are being built In the subdivisions created from the 1950's to 1970's like Hawaiian paradise Park and Hawaiian Ocean View Estates. In some years, 60-70% of nevi homes may be built on lots subdivided before 1980. In these areas no zoning conditions require developers to provide parrs or other improvements. Impact fees will generate major revenues which can be used to build facilities for these areas, especially parrs. (This is the flip side of one of the "Cons" discussed below—that individual lot owners will have to pay impact fees.) Cons I. Impact fees may increase costs to home buyers. Obviously, someone pays the impact fee. It is not so obvious who ultimately bears the cost, when a developer builds hornes, even though the developer actually pays the fees when getting the building permits, it is not clear whether the developer bears the cost in the end, accepting a lower profit. It is possible that the developer passes the cost on to the home buyer, or that the developer will offer less when buying land on which to build project. If you think of the homebuilding process as involving three main players: l