Lawmaker’s bills target fees charged to developers in 8 counties

Bills filed this week in the N.C. House would leave local governments without the ability to charge school impact fees on new housing, and end fees that developers pay to control stormwater and build new roads and other amenities.

State Rep. Sarah Stevens, a Republican representing Surry and Wilkes counties, is the sponsor of House Bill 406, which would repeal the state’s decision in 1987 to let Orange County collect impact fees that help pay for school construction.

Chatham County also has legislative authority to charge school impact fees. Both counties use the money to pay for school construction.

Orange County Manager Bonnie Hammersley said the impact fee brings in about $2 million a year to help pay the debt on school construction and renovation projects. The county has about $16 million in school-related debt, of which about $11 million can be paid using impact fee revenue, Hammersley said.

The additional money is the equivalent of 2 cents on the local tax rate, she noted.

Stevens also filed a bill Wednesday – HB436 – that would strip the ability of multiple governments to levy impact fees for development-related infrastructure needs, including streets, bike lanes, sidewalks, stormwater measures and public recreation space. The bill would affect fees charged in Carrboro, Chapel Hill, Pittsboro, and Orange and Chatham counties, among others.

Carrboro officials are looking into the potential effects, Mayor Lydia Lavelle said. The hit to budgets and taxpayers “could be pretty horrific” in some places if the bill passes, she said.

“It makes you wonder how, when you take away the ability to require developers to share those costs (and) when you combine that with these efforts to put in our North Carolina Constitution a cap on how much taxing authority we have, you kind of wonder how are we going to be able to find money to provide basic services to the town? It’s a real challenge if these monies go away,” she said.

Stevens is the only sponsor listed on both bills; HB436 affects Democratic and Republican districts in eight counties. Efforts to reach her were unsuccessful.

Stevens also has not contacted Orange County’s legislators, said state Rep. Verla Insko, a Chapel Hill Democrat. Insko said her understanding was that the impact fees bill was filed in response to a recent change in the way Orange County levies its impact fee on new residential construction.

The new formula, which took effect Jan. 1, takes into account the type and size of home, the number of bedrooms, and whether the home or apartment is built for senior adults.

The fees also vary, depending on whether the new construction is in the Orange County Schools district or the Chapel Hill-Carrboro City Schools district.

Developers with projects in the approval pipeline complained, and the Orange County Board of Commissioners set grandfathering rules under which they could pay the 2016 impact fees. The rules required projects to have a building permit or a zoning compliance permit before Jan. 1.

Orange County Planning Director Craig Benedict said at least three developments took advantage of the new rules.

Insko said the bill may stem from a problem with the Residence at Grove Park project – formerly the Town House Apartments – in Chapel Hill. The developers may have not gotten the required approval before the county’s deadline, she said, pushing their estimated impact fee bill of $300,000 to more than $1 million.

“I assume this is to put pressure on speeding up the process, but I don’t know that,” Insko said. House and Senate Republicans “have the votes to pass the bill,” she said. “We can’t stop anything if they have the votes, if they don’t have anybody opposed to it.”

Chapel Hill town planner Judy Johnson confirmed Grove Park developers were still working out some details of their plans and had not yet received a zoning compliance permit, which is required before seeking a building permit.

Grove Park developers submitted a petition asking to be grandfathered in at the commissioners Feb. 21 meeting. Benedict planned to talk with Hammersley and the county attorney about how to address that petition.

The reason for the second bill filed Wednesday is unclear.

This story was originally published March 21, 2017 at 12:17 PM with the headline "Lawmaker’s bills target fees charged to developers in 8 counties."