Download Infrastructure Financing PowerPoint

Infrastructure
Financing
Impact Fees
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What Are Impact Fees?
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Why Do We Have Impact Fees?
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Local Government Fiscal Stress and
the Rise of Impact Fees
Sienna
Legal Concepts of Impact Fees
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Authority to Impose Impact Fees
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Impact Fees as Unlawful Taxes
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Federal and State Constitutional
Issues
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Economic Implications of Impact Fees
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Who Ultimately Pays an Impact Fee?
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Implications of Higher House Prices
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Are Impact Fees Really Necessary?
Summerlin
Impact Fee Technical Studies
Things to consider:
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Methodology
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Population and Land Use
Assumptions
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Levels of Service
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Credits
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Construction and Land Costs
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Offsets
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Credits
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Service Areas
Becker at Porch Street on Adele, TK Images
Impact Fee Technical Studies
Things to consider:
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Transportation-Related Issues
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Legitimacy of Growth-Related Costs
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Proportionate-Share Impact Fees
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Discount Impact Fee Schedules
Eastmark
Commonly Found Errors
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Construction Cost Estimate and
Adopted Capital Improvements Plan
Inconsistencies
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Impact Fee Alternatives Not
Considered
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State Stature Compliance
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Current Levels of Service Not
Properly Documented and/or
Applied
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Misappropriation of Impact Fees
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Funding Offsets Ignored or
Improperly Applied
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Inflated Land and Building Cost
Estimates
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Math Errors
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Correcting Existing Deficiencies
Definition of Capital Costs
Generally accepted cost items include:
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Land
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Buildings
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Durable Equipment and Machinery
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Grading
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Paving
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Landscaping
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Associated Energy Costs
The use of impact fees to pay the interest portion
of debt service for capital facilities is controversial.
Camelia at Summers Corner, Johnson Pictures Inc.
The Comprehensive Plan and Capital
Improvement Plan
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The public facility needs assessment
should not be a "wish list.“
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The comprehensive plan is the
benchmark by which nexus is
measured.
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The capital improvement plan (CIP)
or capital budget will attach a cost to
the facilities identified in the
comprehensive plan and match the
facility to an appropriate funding
source.
Alto at Midtown, Jeffrey Aron Photography
Independent Fee Calculation Study
An applicant commissions and pays for a study
which may entitle the applicant to a reduction in
impact fees if it convincingly shows that the
project will require less public capital expense
than assumed in the impact fee study.
Some ordinances specify exactly how an
independent fee study must be conducted and
some even require that the government hire a
consultant to conduct an independent impact
fee study, although the applicant must pay the
consultant's fees.
Firethorn at Summers Corner, Johnson Pictures Inc.
When Fees Are Due, Accounting, and
Refunds
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From the building industry's point of view, it is preferable for the impact fee
amount to be determined at the earliest possible time (i.e. development
agreement or plat map recordation) but to fall due and payable at the latest
possible time (i.e., certificate of occupancy).
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Unlike tax revenues, which are deposited in a general fund to be spent with
broad discretion, impact fees must be separately accounted for and expended
for the specific purposes for which they were collected.
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When the government collects an impact fee for a specific purpose but does not
spend it for that purpose, it has no choice but to refund the fee because it may
not be used for any other purpose.
Credits, Reimbursements, and
Exemptions
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A developer may agree to provide land or to construct facilities of the type for
which impact fees would be charged. In such cases the developer is entitled to
receive a credit or reimbursement equal to the market value of the land or
facilities provided which is subtracted from his impact fee bill.
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Credits should also apply when there is a change in existing land use. For example,
if a land use is changed from residential to commercial, there will be an impact
due to increased traffic. But the impact fees should not be based on the total
number of trips generated by the commercial use but on the net increase in trips.
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One example of exempt land use might be affordable housing for low- and
moderate-income households.
Alternatives to Impact Fees
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Taxes
General Obligation Bonds
Revenue Bonds
User Fees
Special Taxing Districts
Tax Increment Financing
Private Exactions
Partnership Schools
Small-Scale Water and
Wastewater Systems
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Certificates of Participation
Community Development
Districts
Design-Build
Electronic Road/Toll
GARVEE Bonds
Municipal Lease Finance
State Infrastructure Banks
and State Revolving Loan
Funds
Infrastructure Financing Challenge
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Development more
complicated and riskier today
Limited commercial lending
for new development
Government revenues remain
strained too
How to finance infrastructure
efficiently and effectively
without driving up housing
costs
More and better financing
mechanisms are needed today
than ever before
Eastmark
The Search for
Solutions
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Need to better understand available
tools and where they have been used
successfully
Rethink assumptions and better
leverage available existing resources
Requires innovation and collaboration
between public and private sectors
Eastmark
Latest in NAHB’s
Series of Reports
States that Allow
Use of Key Tools
Change in Enabling
Authority 2007-2012
Many States Now
Allow the Use of
Special Districts
Good Climate for
Collaboration!
It’s hard work, no question!
But:
• Public & private sectors realize
they cannot do this on their
own
• Public-private partnerships
manage risks and rewards for
both partners
Sienna
Questions?
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