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HomeMy WebLinkAboutAgenda - 06-07-1993 - VIII-A 1 O R A N G E C O U N T Y BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: June 7, 1993 Agenda Abstract Item # vim_ F\ SUBJECT: IMPACT FEES FOR PUBLIC SCHOOL CAPITAL FACILITIES DEPARTMENT: Planning PUBLIC HEARING: Yes X No ATTACHMENT(S) : INFORMATION CONTACT: Proposed Ordinance Planning Director X2592 5-27-93 Resolution PHONE NUMBERS: Hillsborough 732-8181 Mebane 227-2031 Durham 688-7331 Chapel Hill 967-9251 PURPOSE: To consider the adoption of an ordinance establishing a system of impact fees to help finance a portion of school capital needs in Orange County. BACKGROUND: For several years, Orange County has pursued an objective of helping to fund school capital needs created by growth. During the 1987 Session, the General Assembly authorized the County to levy impact fees in its planning jurisdiction for a number of needs, including school capital. A joint governmental work group investigated the possibilities of an impact tax in the county in 1988-89. The County proposed legislation in the 1991 Session of the General Assembly seeking authority to impose an impact tax for school capital needs. The legislation was withdrawn due to local opposition. During the 1991 Session of the General Assembly, the County received authority to impose impact fees for school capital needs throughout the county, not just within the County's planning jurisdiction. Recently, the Board held a public hearing on adopting an ordinance which focused on impact fees ranging from $500 to $750 per residential unit. The purpose for such fees is to fund the public school capital needs created by growth in the county. Projected growth in the student population converts, in the County's 5-Year Capital Improvement Plan, to a capital need of one high school, two middle schools, and two elementary schools. These needs 2 have been partially met through the approval of a $52 . 0 million bond issue in November, 1992 . A new high school and two middle schools are being constructed with these funds. There is an unfunded need for the two elementary schools identified in the 5-Year CIP. To fund the identified needs of the school systems through impact fees, Orange County is required to calculate the maximum fee. Although this has been done, the Board of Commissioners has elected to set the fees at a lesser amount, averaging from $500 to $750 per residential unit, to fund a portion of the cost of new elementary school space. Revenues from such a fee range would generate approximately $770, 000 to $1. 2 million for both school districts during the first year. The alternative being considered by the Board was an 1.8 cent to 2 .8 cent increase in the property tax rate to raise similar amounts for both school districts. The Board conducted two public hearings to receive comments from citizens and organizations interested in school impact fees. The first hearing was held on May 18, 1993 in conjunction with a regular Board of Commissioners' meeting. The second hearing was held in conjunction with a regular quarterly public hearing on May 24, 1993 . By adopting the resolution that is included with this abstract, the Board of Commissioners decided to establish a fee of $750 per dwelling unit, collect the fees at the time of issuance of a Certificate of Occupancy, provide for a capital planning period for public schools to 10 years, and establish a fund from which impact fees for low-income housing units would be paid. An ordinance including all applicable points has been prepared and is included with this abstract for the Board's consideration. If the Board adopts the ordinance, it must establish an effective date and adopt a shorter time frame (five years) within which school impact fees must be expended (see Section 5.C.5) . Including a 10-year period in the ordinance will require Board approval of a 10-Year CIP Plan for schools and revision of the technical report, including recalculation of the maximum impact fees. There is insufficient time to accomplish these steps if the Board wishes to establish an ordinance effective date of July 1, 1993 . RECOMMENDATION: As the Board decides. 3 A RESOLUTION REGARDING MAJOR POINTS FOR CONSIDERATION IN ESTABLISHING A SYSTEM OF IMPACT FEES TO FINANCE PUBLIC SCHOOL FACILITIES IN ORANGE COUNTY, NC WHEREAS, Orange County public school facilities are vital to the health and economic prosperity of Orange County; and WHEREAS, public school facilities in Orange County must be expanded in order to maintain current levels of service if new development is to be accommodated without decreasing current levels of service; and WHEREAS, the expansion of the public school facilities in Orange County necessary to maintain current levels of service while accommodating new residential growth, several methods of finance will be employed, one of which will require new residential development to pay an appropriate share of the reasonably anticipated new educational facilities in the form of impact fees; and WHEREAS, impact fees will provide, in a reasonable manner, for the public health, safety, and welfare of persons residing within Orange County by providing a portion of the costs of new school facilities which bears a relationship to the benefits of the new school facilities to the new residential growth in Orange County; and WHEREAS, the Board of Commissioners has conducted public hearings as required by G.S. 153A-323 on May 18, 1993 and May 24, 1993 and received citizen comment on the proposed system of impact fees. NOW THEREFORE BE IT RESOLVED by the Orange County Board of Commissioners that it intends to establish a system of impact fees to finance a portion of the cost of public school capital needs which includes the following points: 1. Impact fees will be collected at time at which the Certificate of Occupancy is issued. 2. The amount of the impact fee will be $750 per residential dwelling unit. The same fee will be applicable in both the Orange County and Chapel Hill-Carrboro school districts. 3 . The issue of housing affordability will be addressed through special annual County budget appropriations to a fund, from which, the County would pay impact fees for low-income housing units built or sponsored by agencies and organizations such as, but not limited to, Habitat for Humanity and Orange Community Housing. 4 . Following their collection, impact fees must be spent within ten (10) years, the time frame coinciding with the public school facilities CIP impact fee period. BE IT FURTHER RESOLVED that the Board of Commissioners will consider for adoption an ordinance establishing a system of impact fee which incorporates the above mentioned points at its June 7, 1993 regularly scheduled meeting. Adopted this 27th day of May, 1993 . • 4 ORANGE COUNTY EDUCATIONAL FACILITIES IMPACT FEE ORDINANCE SECTION 1 - LEGISLATIVE FINDINGS The Orange County Board of Commissioners makes the following legislative findings: 1. Orange County public school facilities are vital to the health and economic prosperity of Orange County; 2 . That public school facilities in Orange County must be expanded in order to maintain current levels of service if new development is to be accommodated without decreasing current levels of service; 3. To finance the expansion of the public school facilities in Orange County necessary to maintain current levels of service while accommodating new residential growth, several methods of finance will be employed, one of which will require new residential development to pay an appropriate share of the reasonably anticipated new educational facilities in the form of school impact fees; and 4 . These school impact fees will provide, in a reasonable manner, for the public health, safety, and welfare of persons residing within Orange County by providing a portion of the costs of new school facilities which bears a relationship to the benefits of the new school facilities to the new residential growth in Orange County. SECTION 2 - DEFINITIONS For the purposes of this ordinance, the following terms shall have the following definitions: Certificate of Occupancy. A certificate issued by Orange County or a municipality located therein allowing the occupancy or use of a dwelling unit and certifying that the building or structure has been constructed and will be used in compliance with all applicable codes and ordinances. Dwelling Unit. A room or group of rooms forming a single independent habitable unit with facilities used or intended to be used for living, sleeping, cooking, and eating by one family. Feepayer. The person constructing or responsible for having constructed a new dwelling unit or new dwelling units. In the case of a mobile home, the person installing or responsible for having installed a new mobile home or new mobile homes. 5 SECTION 3 - SCHOOL IMPACT FEES IMPOSED ON NEW RESIDENTIAL DWELLING UNITS In addition to all other charges prescribed by ordinance or resolution now or hereafter in effect, there shall be public school impact fees charged to new residential dwelling units located within Orange County, and within the municipalities and their extraterritorial planning jurisdictions located within Orange County. No person may occupy any new residential dwelling unit until all applicable public school impact fees contained in the following schedule have been paid in full. No certificate of occupancy or other type of occupancy permit shall be issued for any new residential dwelling unit until the public school impact fees hereby required have been paid in full. Payment of such fees shall not relieve the feepayer from the obligation to comply with applicable land development regulations of Orange County or the municipalities located within Orange County. Schedule of Public School Impact Fees The amount of the public school impact fee will be $750 per residential dwelling unit. The same fee will be applicable in both the Orange County and Chapel Hill-Carrboro school districts. SECTION 4 - PUBLIC SCHOOL SCHOOL IMPACT FEE EXCEPTIONS Public school impact fees as provided in Section 3 shall not be imposed in the following circumstances: 1. Buildings or structures, including alterations, repairs, renovations or additions thereto, which are to be occupied and used solely for non-residential purposes. 2 . Residential dwelling units for which a certificate of occupancy was obtained prior to the effective date of this ordinance. 3 . Alterations, repairs, renovations or additions to a residential dwelling unit where no additional residential dwelling units are created, and the use, as shown within the Schedule of Public School impact Fees, is not changed. In the case of alterations, repairs, renovations or additions to a residential dwelling unit where additional residential dwelling units are created, public school impact fees would be levied based upon the net increase, if any, above that which the existing dwelling unit would pay. 4 . Replacement of a building or structure or mobile home with a new building or structure or mobile home of the same dwelling type. In the case of the replacement of a building or structure or mobile home where additional residential dwelling units are created, public school impact fees would be levied 6 based upon the net increase, if any, above that which the former dwelling unit would pay. 5 . Accessory buildings and structures, including, but not limited to, garages, decks, storage buildings, and similar structures, provided they are not used for residential purposes. 6 . Temporary buildings and structures, provided they are not used for residential purposes. However, public school impact fees would not be levied in the case of a mobile home being used to provide custodial care under the provisions of an approved Special Use Permit. Likewise, such fees would not be levied in the case of a mobile home being used as temporary residential space during the installation of a replacement mobile home or the construction of a stick-built dwelling unit. SECTION 5 - COLLECTION OF FEES A. CREATION OF PUBLIC SCHOOL BENEFIT AREA TRUST FUNDS Public school impact fees collected by Orange County pursuant to this ordinance shall be kept separate from other revenue of the County. There shall be one trust fund established for each of the benefit areas, shown on the map labeled Public School Benefit Areas and included as a part of this ordinance. B. RESPONSIBILITY FOR FEE COLLECTION All public school impact fees are due to Orange County and shall be paid to Orange County prior to a certificate of occupancy being issued for a dwelling unit. The fees will be collected by Orange County and/or by interlocal agreement between Orange County and a municipality located therein. All public school impact fees shall be properly identified by the appropriate benefit area and transferred for deposit in the appropriate trust account. If the type of new construction activity is not specified on the Schedule of Public School Impact Fees as contained in Section 3, the most nearly comparable type of housing on the Schedule shall determine the fee. Where there is an interlocal agreement in effect for collection of the public school impact fees by a municipality, the municipality must remit the fees to Orange County as provided in the agreement, including a report of the amount of funds collected and the benefit area from which the fees were collected. Upon receipt, the County shall deposit the fees in the appropriate trust fund. C. LIMITATION ON EXPENDITURE OF FUNDS Funds withdrawn from public school impact fee trust accounts must be used solely in accordance with the following provisions: 7 1. Funds may be used for capital costs associated with the construction of new public schools, including actual building construction; design, engineering, and/or legal fees; land acquisition and site development; equipment and furnishings; and/or infrastructure improvements. 2 . Funds shall be used exclusively for capital improvements within the benefit area from which the funds were collected. 3 . Funds may be used for providing reimbursements as permitted in Section 5.E. 4. No funds shall be used for public school operating expenses, periodic or routine maintenance, or the administration of this public school impact fee program. 5. Following their collection, funds shall be expended within ten (10) years, the time frame coinciding with the public school facilities capital improvements program (CIP) school impact fee period. The disbursal of public school impact fee funds shall require the approval of the Board of County Commissioners upon recommendation of the County Manager. D. INTEREST ON FEES Any public school impact fee funds on deposit and not immediately necessary for expenditure shall be invested as allowed in N.C. General Statute 159-30 for other public monies. All income derived shall be deposited in the applicable trust fund. E. REIMBURSEMENT OF FEES Any funds not expended within the time frame established in Section 5.C.5. shall be returned to the feepayer, or the land owner if the address of the feepayer provided to Orange County is not current, with interest at a rate not to exceed that being paid on public school impact fees deposited in accordance with Section S.D. If the Schedule of Public School Impact Fees as contained in Section 3 is reduced, the difference between the old and new fees shall be returned to the feepayer, or the land owner if the address of the feepayer provided to Orange County is not current, with interest at a rate not to exceed that being paid on public school impact fees deposited in accordance with Section S.D. If the Schedule of Public School Impact Fees as contained in Section 3 is increased, no additional fees shall be collected from new construction for which certificates of occupancy have been issued. 8 F. ANNUAL REPORT A report shall be made to the Board of County Commissioners each year showing where public school impact fees have been collected, what projects have been constructed with such fees, and what reimbursements have been made. The report shall also include an evaluation of this ordinance, including its effectiveness and enforcement, and the methods and data used to calculate the Schedule of Public School impact Fees contained in Section 3. The Board of County Commissioners shall review the report to determine if, within each benefit area, all areas of new construction are being benefitted by the fees. If the Board of County Commissioners determines that areas of new construction are not being benefitted, then it shall readjust the capital improvements program to correct this condition. If, after review of the methods and data used to calculate the Schedule of Public School Impact Fees, the Board of County Commissioners determines that adjustments are required in the Schedule, then it shall direct the County Manager and his staff to prepare a report which outlines recommended changes for its consideration. SECTION 6 - CREDITS Any conveyance of land or construction of new school facilities received and accepted by Orange County, a municipality located in Orange County, and/or the Orange County or Chapel Hill-Carrboro School Board from a developer shall be credited against the public school impact fee due if the conveyance or construction meets the same needs as the public school impact fee in providing new public school facilities. If the developer wishes to receive credit against the amount of the public school impact fee due for such conveyance or construction, the developer shall enter into a fee agreement with the County. The fee agreement shall provide for the establishment of credits and payment of the fee in a specified manner and time. The value of land conveyed or facilities constructed by a developer and accepted by the County, municipality or school board for purposes of this section shall be determined by an appraisal based on the fair market value of the land or facilities as established by the County. Construction shall be in accordance with applicable County, municipal, school board, and/or State standards. Any land awarded credit under this section shall be conveyed no later than the time at which public school impact fees are required to be paid. The portion of the public school impact fee represented by a credit for construction shall be deemed paid when the construction is completed and accepted for maintenance or when adequate security for the completion of the construction has been provided. 9 SECTION 7 - PENALTIES In addition to any other remedy allowed by N.C. General Statute 153A-123 , the failure to pay a public school impact fee is hereby declared to be a civil penalty. The amount of the penalty shall be equal to the amount of the unpaid school impact fee, plus an interest charge of one-half percent ( 1/2%) per month compounded monthly and a service charge of one hundred dollars ($100. 00) . The County may assess this penalty against the land owner whereon new construction has occurred without payment of the public school impact fee. However, no service charge will be assessed when the County staff has made an error in the fee determination. Furthermore, no penalty shall be assessed until the person or persons alleged to be in violation are served by registered mail, certified mail - return receipt requested, or personal service with notice to pay. The County Attorney is hereby authorized to institute a civil action in the name of Orange County in the appropriate division of the General Court of Justice in Orange County for recovery of the penalty. All monies recovered shall be deposited in the appropriate trust fund. SECTION 8 - LEGAL STATUS PROVISIONS All ordinances and clauses in conflict herewith are hereby repealed to the extent of said conflict. If any clause or section of this ordinance or application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or application of this ordinance which can be given separate effect, and, to this end, the provisions of this ordinance are declared to be severable. This ordinance shall not diminish any prior contractual or special or conditional use district zoning obligation to pay for or install road, park or other improvements required by Orange County or a municipality located therein, nor shall the fulfillment of those obligations diminish any applicable public school impact fee owed to the County. This ordinance shall not diminish any prior obligation of the County or a municipality located therein to reimburse persons for road, parks or other improvements, nor shall the fulfillment of those obligations by the County or a municipality diminish any applicable credit owed to the feepayer. 10 SECTION 9 - APPEAL TO THE ORANGE COUNTY BOARD OF ADJUSTMENT [Reserved] This ordinance shall be effective from and after the day of Adopted this day of ORANGE COUNTY PLANNING DEPARTMENT 306F REVERE ROAD HILLSBOROUGH, NORTH CAROLINA 27278 I r rj 32 kit MEMORANDUM TO: Geofrey G1 hill, •9u ty Attorney FROM: Marvin Collins, Planning Director DATE: June 16 , 1993 - SUBJECT: Educational Facilities Impact Fee Ordinance COPIES: John Link, County Manager ' Mark Sheridan, Assistant County Attorney Beverly Blythe, Clerk to the Commissioners Attached is a copy of the above mentioned ordinance. I have attempted to revise it based on the discussion and action taken at the Commissioners' June 7 , 1993 meeting. You may wish to check with Beverly Blythe and Mark Sheridan for their perspective. As we discussed previously, the adopted ordinance and resolution (copy attached) will be placed in the Appendix of the Technical Report and new copies printed. Since I am trying to wrap up loose ends and get some implementation steps underway, your prompt attention to this matter would be greatly appreciated. If you have any questions, let me know. Subject to County Attorney review ORANGE COUNTY EDUCATIONAL FACILITIES IMPACT FEE ORDINANCE SECTION 1 - LEGISLATIVE FINDINGS The Orange County Board of Commissioners makes the following legislative findings: 1. Orange County public school facilities are vital to the health and economic prosperity of Orange County; 2 . That public school facilities in Orange County must be expanded in order to maintain current levels of service if new development is to be accommodated without decreasing current levels of service; 3 . To finance the expansion of the public school facilities in Orange County necessary to maintain current levels of service while accommodating new residential growth, several methods of finance will be employed, one of which will require new residential development to pay an appropriate share of the reasonably anticipated new educational facilities in the form of school impact fees; and 4 . These school impact fees will provide, in a reasonable manner, for the public health, safety, and welfare of persons residing within Orange County by providing a portion of the costs of new school facilities which bears a relationship to the benefits of the new school facilities to the new residential growth in Orange County. SECTION 2 - DEFINITIONS For the purposes of this ordinance, the following terms shall have the following definitions: Certificate of Occupancy. A certificate issued by Orange County or a municipality located therein allowing the occupancy or use of a dwelling unit and certifying that the building or structure has been constructed and will be used in compliance with all applicable codes and ordinances. Dwelling Unit. A room or group of rooms forming a single independent habitable unit with facilities used or intended to be used for living, sleeping, cooking, and eating by one family. Feepaver. The person constructing or responsible for having constructed a new dwelling unit or new dwelling units. In the case of a mobile home, the person installing or responsible for having installed a new mobile home or new mobile homes. SECTION 3 - SCHOOL IMPACT FEES IMPOSED ON NEW RESIDENTIAL DWELLING UNITS In addition to all other charges prescribed by ordinance or resolution now or hereafter in effect, there shall be public school impact fees charged to new residential dwelling units located within Orange County, and within the municipalities and their extraterritorial planning jurisdictions located within Orange County. No person may occupy any new residential dwelling unit until all applicable public school impact fees contained in the following schedule have been paid in full. No certificate of occupancy or other type of occupancy permit shall be issued for any new residential dwelling unit until the public school impact fees hereby required have been paid in full. Payment of such fees shall not relieve the feepayer from the obligation to comply with applicable land development regulations of Orange County or the municipalities located within Orange County. Schedule of Public School Impact Fees The amount of the public school impact fee will be $750 per residential dwelling unit. The same fee will be applicable in both the Orange County and Chapel Hill-Carrboro school districts. SECTION 4 - PUBLIC SCHOOL IMPACT FEE EXCEPTIONS Public school impact fees as provided in Section 3 shall not be imposed in the following circumstances : 1. Buildings or structures, including alterations, repairs, renovations or additions thereto, which are to be occupied and used solely for non-residential purposes. 2 . Residential dwelling units for which a building permit was obtained prior to the effective date of this ordinance. 3 . Alterations, repairs, renovations or additions to a residential dwelling unit. 4 . Replacement of a building or structure or mobile home with a new building or structure or mobile home of the same dwelling type. 5 . Accessory buildings and structures, including, but not limited to, garages, decks, storage buildings, and similar structures, provided they are not used for residential purposes. 6 . Temporary buildings and structures, provided they are not used for residential purposes. However, public school impact fees would not be levied in the case of a mobile home being used to provide custodial care under the provisions of an approved Special Use Permit. Likewise, such fees would not be levied in the case of a mobile home being used as temporary residential space during the installation of a replacement mobile home or the construction of a stick-built dwelling unit. SECTION 5 - COLLECTION OF FEES A. CREATION OF PUBLIC SCHOOL BENEFIT AREA TRUST FUNDS Public school impact fees collected by Orange County pursuant to this ordinance shall be kept separate from other revenue of the County. There shall be one trust fund established for each of the benefit areas, shown on the map labeled Public School Benefit Areas and included as a part of this ordinance. B. RESPONSIBILITY FOR FEE COLLECTION All public school impact fees are due to Orange County and shall be paid to Orange County prior to a certificate of occupancy being issued for a dwelling unit. The fees will be collected by Orange County and/or by interlocal agreement between Orange County and a municipality located therein. All public school impact fees shall be properly identified by the appropriate benefit area and transferred for deposit in the appropriate trust account. If the type of new construction activity is not specified on the Schedule of Public School Impact Fees as contained in Section 3 , the most nearly comparable type of housing on the Schedule shall determine the fee. Where there is an interlocal agreement in effect for collection of the public school impact fees by a municipality, the municipality must remit the fees to Orange County as provided in the agreement, including a report of the amount of funds collected and the benefit area from which the fees were collected. Upon receipt, the County shall deposit the fees in the appropriate trust fund. C. LIMITATION ON EXPENDITURE OF FUNDS Funds withdrawn from public school impact fee trust accounts must be used solely in accordance with the following provisions: 1. Funds may be used for capital costs associated with the construction of new public school space, including new buildings or additions to existing buildings where the expansion is related to new residential growth. Such capital costs include actual building construction; design, engineering, and/or legal fees; land acquisition and site development; equipment and furnishings; and/or infrastructure improvements. 2 . Funds shall be used exclusively for capital improvements within the benefit area from which the funds were collected. 3 . Funds may be used for providing reimbursements as permitted in Section 5. E. 4 . No funds shall be used for public school operating expenses, periodic or routine maintenance, or the administration of this public school impact fee program. 5. Following their collection, funds shall be expended within five (5) years, the time frame coinciding with the public school facilities capital improvements program (CIP) school impact fee period. The disbursal of public school impact fee funds shall require the approval ,of the Board of County Commissioners upon recommendation of the County Manager. D. INTEREST ON FEES Any public school impact fee funds on deposit and not immediately necessary for expenditure shall be invested as allowed in N. C. General Statute 159-30 for other public monies. All income derived shall be deposited in the applicable trust fund. E. REIMBURSEMENT OF FEES Any funds not expended within the time frame established in Section 5. C.5. shall be returned to the feepayer, or the land owner if the address of the feepayer provided to Orange County is not current, with interest at a rate not to exceed that being paid on public school impact fees deposited in accordance with Section 5 .D. If the Schedule of Public School Impact Fees as contained in Section 3 is reduced, the difference between the old and new fees shall be returned to the feepayer, or the land owner if the address of the feepayer provided to Orange County is not current, with interest at a rate not to exceed that being paid on public school impact fees deposited in accordance with Section 5 .D. If the Schedule of Public School Impact Fees as contained in Section 3 is increased, no additional fees shall be collected from new construction for which certificates of occupancy have been issued. F. ANNUAL REPORT A report shall be made to the Board of County Commissioners each year showing where public school impact fees have been collected, what projects have been constructed with such fees, and what reimbursements have been made. The report shall also include an evaluation of this ordinance, including its effectiveness and enforcement, and the methods and data used to calculate the Schedule of Public School impact Fees contained in Section 3 . The Board of County Commissioners shall review the report to determine if, within each benefit area, all areas of new construction are being benefitted by the fees. If the Board of County Commissioners determines that areas of new construction are not being benefitted, then it shall readjust the capital improvements program to correct this condition. If, after review of the methods and data used to calculate the Schedule of Public School Impact Fees, the Board of County Commissioners determines that adjustments are required in the Schedule, then it shall direct the County Manager and staff to prepare a report which outlines recommended changes for its consideration. SECTION 6 - CREDITS Any conveyance of land or construction of new school facilities received and accepted by Orange County, a municipality located in Orange County, and/or the Orange County or Chapel Hill-Carrboro School Board from a developer shall be credited against the public school impact fee due if the conveyance or construction meets the same needs as the public school impact fee in providing new public school facilities. If the developer wishes to receive credit against the amount of the public school impact fee due for such conveyance or construction, the developer shall enter into a fee agreement with the County. The fee agreement shall provide for the establishment of credits and payment of the fee in a specified manner and time. The value of land conveyed or facilities constructed by a developer and accepted by the County, municipality or school board for purposes of this section shall be determined by an appraisal based on the fair market value of the land or facilities as established by the County. Construction shall be in accordance with applicable County, municipal, school board, and/or State standards. Any land awarded credit under this section shall be conveyed no later than the time at which public school impact fees are required to be paid. The portion of the public school impact fee represented by a credit for construction shall be deemed paid when the construction is completed and accepted for maintenance or when adequate security for the completion of the construction has been provided. SECTION 7 - PENALTIES In addition to any other remedy allowed by N. C. General Statute 153A-123 , the failure to pay a public school impact fee is hereby declared to be a civil penalty. The amount of the penalty shall be equal to the amount of the unpaid school impact fee, plus an interest charge of one-half percent (1/2%) per month compounded monthly and a service charge of one hundred dollars ($100 . 00) . The County may assess this penalty against the land owner whereon new construction has occurred without payment of the public school impact fee. However, no service charge will be assessed when the County staff has made an error in the fee determination. Furthermore, no penalty shall be assessed until the person or persons alleged to be in violation are served by registered mail, certified mail - return receipt requested, or personal service with notice to pay. The County Attorney is hereby authorized to institute a civil action in the name of Orange County in the appropriate division of the General Court of Justice in Orange County for recovery of the penalty. All monies recovered shall be deposited in the appropriate trust fund. SECTION 8 - LEGAL STATUS PROVISIONS All ordinances and clauses in conflict herewith are hereby repealed to 'the extent of said conflict. If any clause or section of this ordinance or application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or application of this ordinance which can be given separate effect, and, to this end, the provisions of this ordinance are declared to be severable. This ordinance shall not diminish any prior contractual or special or conditional use district zoning obligation to pay for or install road, park or other improvements required by Orange County or a municipality located therein, nor shall the fulfillment of those obligations diminish any applicable public school impact fee owed to the County. This ordinance shall not diminish any prior obligation of the County or a municipality located therein to reimburse persons for road, parks or other improvements, nor shall the fulfillment of those obligations by the County or a municipality diminish any applicable credit owed to the feepayer. SECTION 9 - APPEAL TO THE ORANGE COUNTY BOARD OF ADJUSTMENT [Reserved] This ordinance shall be effective from and after the 1st day of July, 1993 . This ordinance shall only apply to residential dwelling units for which building permits are issued on and after the effective date of the ordinance. Adopted this 7th day of June, 1993 . HOME Home Builders Association of Durham and Chapel Hill CIATION of Durham&Chapel Hill 20 W, Colony Place• Suite 180• Durham, North Carolina 27705 • Phone 919/493-8899• FAX 919/490-5905 June 7, 1993 Verla Insko Qrange County Commissioner 610 Surry Rd. Chapel Hill, NC 27514 Dear Ms. Insko, On behalf of the entire membership of the Home Builders Association of Durham and Chapel Hill I would like to express our concern over the commissions recent decision to assess an impact fee for school construction on all new dwelling units built or placed in Orange County. We do not disagree with the need to provide proper facilities for educating our youth but we do disagree with the cost being funded by a small select segment of the tax paying population, the new home buyer. The residential units that have been projected and publicized to the general public are of a great concern to us as well . Even with a 3 .39% projected growth rate we are still unsure where the total number of units that are to generate the revenue are going to come from. We have listed below some facts of the numbers of residential units that have been built in Orange County over the last five years. These numbers represent single family and multi family built on site units. Year Single family Multi family Total 1993 63 to date 0 63 1992 538 59 597 1991 409 77 486 1990 414 37 451 1989 432 37 469 1988 537 69 606 Even in the highest production year of 1988 with 606 units built the impact fees raised at $750.00 per unit would only have been $454, 500.00. (LIP �n c4ffi�Cafc of t/ cNational ogssociaLion of ol{ome uitd ts" HILLSBOROUGH SAVINGS BANK, SSB rsa`�� s, �i,� 260 SOUTH CHURTON STREET • 112 NORTH CHURTON STREET •..p11j ;i ; .y..- HILLSBOROUGH, NORTH CAROLINA 27278-1000' '= '� PHONE: 919-732-2143/732-2144 • FAX: 732-6001 - '". DISTRIBUTED `��� � {` June 7 , 1993 s-_ �� Mr. Moses Carey, Chairman Orange County Board of Commissioners Post Office Box 8181 Hillsborough, North Carolina 27278 Dear Mr. Carey: The Hillsborough Savings Bank, SSB Board of Directors again wishes to go on record as opposing the proposed impact fee. We oppose the impact fee for the same reasons as the last time the commissioners presented the idea. The reasons are as follows: 1. The cost of living in Orange County is already above the North Carolina State average. Imposing another fee increases the cost of living even more for Orange County citizens. 2 . The implementation of the fee would impose a greater burden on existing Orange County citizens rather than on new home-owners moving into the county. Why would anyone want to move to Orange County and build a house when one could go to an adjacent county and build a home for less money? Many local real estate developers already develop in adjacent counties because of the burdensome process of developing home-sites in Orange County. 3 . The commissioners have previously expressed an interest in "affordable " housing in Orange County. The impact fee appears to be a step in the wrong direction. The low-income population would suffer the greatest burden. 4 . When an industry relocates, one criteria as to where to locate is the cost of moving employees. It appears that an industry would be less inclined to locate in Orange County due to the higher cost of housing due to the fee. 5 . How does an appraiser, including the property tax appraiser, adjust for the differences in the cost of houses. There could be two similar houses side by side, one being built before implementation of the fee, and the other afterward. Does the market value of the first house increase or will the market value of the second house be less than the actual cost due to the fee? :�.;� `• Your Hometown Financial Institution !` `t •• We Pay More Than Interest, We Pay Attention .�?*�"f �'N�SyStt� If the latter, the second house owner is further penalized because of the fee. An example of how the impact fee is unfair. 6. It has been said that the funds received from the fee will be used for education. Is this fair to the people that build homes, but have no children in the school system? 7 . The fee is another form of tax. Property tax, at best is an unfair tax, but at least there is some equalized basis as to the assessment of each taxpayer. The impact fee is a flat fee and therefore is not assessed on an equalized basis. A person building a $200, 000. 00 would pay , . 38% in impact fees whereas a person building a $75, 000. 00 would pay . 10% in impact fees. Another example of how the impact fee is unfair. 8 . Finally, a bad idea is a bad idea whether one has to pay $3 , 000. 00 or $750. 00. How long before the fee will be up to $3 , 000 . 00? For the reasons stataabove the Hillsborough Savings Bank, SSB, respectfully requests that the Orange County Commissioners not implement the impact fee. Sincerely, D. Tyson Clayton President cc: John Link County Manager A RESOLUTION REGARDING MAJOR POINTS FOR CONSIDERATION IN ESTABLISHING A SYSTEM OF IMPACT FEES TO FINANCE PUBLIC SCHOOL FACILITIES IN ORANGE COUNTY, NC WHEREAS, Orange County public school facilities are vital to the health and economic prosperity of Orange County; and WHEREAS, public school facilities in Orange County must be expanded in order to maintain current levels of service if new development is to be accommodated without decreasing current levels of service; and WHEREAS, the expansion of the public school facilities in Orange County necessary to maintain current levels of service while accommodating new residential growth, several methods of finance will be employed, one of which will require new residential development to pay an appropriate share of the reasonably_anticipated new educational facilities in the form of impact fees; and WHEREAS, impact fees will provide, in a reasonable manner, for the public health, safety, and welfare of persons residing within Orange County by providing a portion of the costs of new school facilities which bears a relationship to the benefits of the new school facilities to the new residential growth in Orange County; and WHEREAS, the Board of Commissioners has conducted public hearings as required by G. S. 153A-323 on May 18 , 1993 and May 24 , 1993 and received citizen comment on the proposed system of impact fees. NOW THEREFORE BE IT RESOLVED by the Orange County Board of Commissioners that it intends to establish a system of impact fees to finance a portion of the cost of public school capital needs which includes the following points: 1. Impact fees will be collected at time at which the Certificate of Occupancy is issued. 2 . The amount of the impact fee will be $750 per residential dwelling unit. The same fee will be applicable in both the Orange County and Chapel Hill-Carrboro school districts. 3 . The issue of housing affordability will be addressed through special annual County budget appropriations to a fund, from which, the County would pay impact fees for low-income housing units built or sponsored by agencies and organizations such as, but not limited to, Habitat for Humanity and Orange Community Housing. 4 . Following their collection, impact fees must be spent within ten (10) years, the time frame coinciding with the public school facilities CIP impact fee period. BE IT FURTHER RESOLVED that the Board of Commissioners will consider for adoption an ordinance establishing a system of impact fee which incorporates the above mentioned points at its June 7 , 1993 regularly scheduled meeting. Adopted this 27th day of May, 1993 . 1 -- 7- ?4,3 Date : June 7 , 1993 Subject: Impact Fees From: Peter MacDowell 967-9942 To: Board of Commissioners Mr. Alex Zaffron ' s letter saying that we need a progressive impact fees is exactly correct. There should not be a lump fee regardless of cost of house . Please act accordingly . •