Overview of Municipal Impact Fees

City of Westbrook, MaineSep 19, 2016

Jim DamicisSenior Vice

President

I. What are Impact Fees?II. Calculating Impact FeesIII.Alternatives for Financing GrowthIV.Use of Impact FeesV. Resources

Agenda

What are Impact Fees?

Plan

Calculate

AdoptImplement

Track

Method of financing land, capital, and infrastructure through fees on development for portion of need/demand generated by development

State Law Enables Municipalities to Enact Impact Fees

Title 30-A: Chapter 187: PLANNING AND LAND USE REGULATION HEADING: §4354. IMPACT FEES

“A municipality may enact an ordinance under its home rule authority requiring the construction of off-site capital improvements or the payment of impact fees instead of the construction.”

Impact Fees Uses

Waste water collection and treatment facilities Municipal water facilities Solid waste facilities Public safety equipment and facilities Roads and traffic control devices Parks and other open space or recreational

areas School facilities

Impact Fee Lawi. May impose impact fee before or after completing infrastructure

improvement

ii. Can apply to expansion or replacement of existing OR new infrastructure facilities to meet demand from NEW development

iii. Amount of fee must be reasonably related to development's share of cost of infrastructure improvements made necessary by development

iv. If improvements were constructed at municipal expense prior to development, fee must be reasonably related to portion or percentage of infrastructure used by development

v. Ordinance must establish reasonable schedule under which municipality is required to use funds in a manner consistent with capital investment component of comprehensive plan

vi. Ordinance must establish mechanism by which municipality shall refund impact fees or portion of impact fees, actually paid that exceed municipality's actual costs

Calculating Impact Fees

Understanding communities “current and future desired levels of service or infrastructure”

Cannot be used to fund current deficiencies or only to serve current capacity, impacts made necessary by new development

Projecting cost of improvements/expansions to be made in response to new impacts that will be completed within a reasonable period of time

“Netting-out” property taxes to be paid by new development to avoid double payment

Understanding and projecting “new” impact:o New students/residents and their impact on new recreation/open space needed,

sewer, water, roadso Demographic and fiscal projections

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2.

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Alternative Financing Methods

PropertyTaxes Tax Increment

Financing

not for single-family residential -most

applicable to commercial/and

workforce housingMitigations/Exactions require developers to

dedicate land or infrastructure for public

use (open space, sewer, water, roads

OR pay fee in lieu of, applied through subdivision or site plan

review ordinances)

Negotiations with developers for

“voluntary” land, capital, and

infrastructure improvements

Advantages & Disadvantages

Advantages

- Helps tie future costs to “those generating costs for expanded capacity”- Consistent and known to developers

- Cost of planning and administering- If set too high can impede development contrary to community goals- If not reasonable can and likely will be challenged in court

Disadvantages

Communities in Maine that Have or Have Tried Impact Fees

Scarborough Brunswick Auburn Gorham Saco

Windham North Berwick York Bangor

Tips on Use of Impact Fees

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• Involve public and development community in process to get results that best meet community’s need and is feasible in the market

• Consider goals and objectives against all financing alternatives

• Don’t consider unless you are committed to land, capital, infrastructure improvements • Will you be expanding capacity to meet

development needs?• Keep it simple and keep records

Impact Fee Resources

• Maine Municipal Association – legal resources, Maine Townsman Articles

• Maine State Planning Office Impact Fee Manual• Maine Association of Planners

Questions

Jim DamicisSenior Vice PresidentCamoin Associates

Phone: (207) 831-1061Email: jim@camoinassociates.comWeb: www.camoinassociates.com Twitter: @jdamicisLinkedIn: www.linkedin.com/in/jdamicis