Its All About Fairness

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Its All About Fairness

• National Impact Fee Roundtable
• Denver October 2005
• Dr. Arthur C. Nelson, FAICP
• Professor Director
• Urban Affairs Planning
• Virginia Tech Alexandria Center

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One Fee Does Not Fit All

• Florida County A
• School impact fee per unit 5,443
• Assumes 0.31 students per unit
• Actual apartment rate is 0.12 per unit
• Proportionate share should be 2,057
• Apartments charged in excess of their
• proportionate share
• Public safety parks ? same problem
• fees based on 2.38 persons per unit but
  apartments average 1.81

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Proportionate Share

• Equal protection
• Similarly situated people must be considered
  similarly
• Some argue that each residential unit is similar
  to the other, hence equal impact fees acceptable
• Constitution addresses people not residential
  units
• If the average person is charged 3 times their
  school impact, equal protection may be violated

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Density Matters

• Impacts fall when density rises for
• Public safety
• Utilities
• Transportation

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Persons Per Unit
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Location Matters

• Distance to public transit
• Distance to schools
• Location in fully served versus partially
  served areas
• Atlanta reduces road fees by 25 if within 1,000
  feet of rail station
• DeKalb County, GA to reduce road fees based on
  rail and bus access

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Configuration Matters

• Integrated office, retail and residential
  reduces road impacts by 30
• Connected to multi-modal can reduce road impacts
  by 50
• Few impact fee programs recognize these
  reductions on fee schedules

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Assessment Base Matters

• Fees usually assessed on only residential
• Parks recreation
• Libraries
• schools
• What is the source of impact?
• New jobs new households
• Jobs impact
• Fairness
• Broaden the base to include all development

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Credits Matter

• External revenue credits
• Account for non-local government revenues
• Double-Tax revenue credits
• Several Florida counties give dedicated school
  construction property tax credits based only on
  residential share, not all development
• At least two counties give no such credit
• Residential pays once for impact fees and again
  for paying off bonds for schools used by existing
  residents

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Parks and Recreation

• Questionable Practices
• 2 Georgia counties assess the same fee on all
  residential units.
• Fees on apartments 36 to 51 higher than
  proportionate-share
• Best Practices
• Manatee County, FL
• Fees vary by type of unit and by size of unit
  based on bedrooms

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Fire EMS

• Questionable Practices
• 1 California city and 1 Georgia county assesses
  the same fee on all residential units.
• Fees on apartments 33 to 45 higher than
  proportionate-share
• Best Practices
• West Valley City, UT uses Functional Population
• Fees based on four residential categories
• Almost ? Missoula, MT has density-distance-based
  fees that vary from 91 to 1,354 per unit

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Roads

• Questionable Practices
• 2 California cities use same trip rate and length
  to charge fees in all residential units.
• 1 California city gives no credit.
• Best Practices
• Manatee County, FL
• 4 residential categories with 3 sizes in each,
  and different impact figures for each
• Albuquerque, NM
• Fees based on 7 service areas, type and size of
  unit and is 0 in several service areas

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Water Wastewater

• Questionable Practices
• Common to assess based on meter size and
  equivalent units.
• Emerging evidence suggests apartments overcharge
  by 2 to 5 times
• Best Practices
• Scottsdale, AZ
• 1 du/2.5 ac 5,492 1 du/ac 3,382
• 2-4 uncluster 2,203 2-4 cluster 1,802
• 4-8 du/ac 1,585 9 du/ac 1,337

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Next Steps

• Need to vary impact fees by type and size of
  residential unit
• Refine definitions of proportionate share,
• pro rata and reasonable relationship
• Base size on bedrooms (census) or square feet
• Encourage fee schedules to use automatic impact
  reductions for location, configuration benefits
• Adopt legislative finding that all development
  creates impacts on and benefits from facilities
  ? all development needs to be assessed.