CHARLES TOWN — Impact fees are too high.
That was the near-consensus during a recent work session attended by a bevy of county officials and business leaders, who met to discuss what to do about the one-time fee on new construction in Jefferson County. Revenue raised from the fee is used to offset the cost of parks and recreation, fire and rescue, law enforcement and schools.
County Commission President Walt Pellish said he did not want to eliminate impact fees altogether, but called their current level too high.
“First of all, I believe in impact fees,” Pellish said. “I don’t want anybody thinking that I want to do away with them. I don’t. I think they’re important and they have a value. That said, I strongly believe that the impact fees in existence right now are excessive.”
Commissioner Dale Manuel said without the revenue generated from impact fees for the building of new schools, individual taxpayers would end up footing the bill.
“I don’t want to kill the golden goose that has been laying the eggs for us,” Manuel said. “If we kill her, or if we break her wings, get out your checkbooks, because that’s where it’s going to come, on the individual taxpayers of Jefferson County.”
Commissioners voted last year to reduce commercial impact fees to $1 for 24 months in the hope of attracting businesses. Officials with the Jefferson County Development Authority argued that businesses are locating in surrounding counties, where commercial impact fees are not charged. The Development Authority’s position was that the amount of money collected from commercial impact fees did not compensate for the amount of business development the county lost.
The authority is again asking that commercial impact fees be eliminated.
“The [authority] believes that permanently eliminating the commercial impact fees will spur new businesses, growth, create more jobs and provide additional tax revenue for the county that will far exceed the revenue collected by this burdensome impact fee,” Amy Allen, the authority’s program manager told commissioners.
According to a new study, prepared by consultants TishchlerBise of Bethesda, Md., the maximum amount the county should charge in impact fees for commercial space is $399 for law enforcement and $669 for fire and rescue.
Fees are not charged for parks and recreation or schools, since these services are not impacted by business development.
The maximum amount the county should charge in impact fees for office and institutional space is $156 for law enforcement and $1,110 for fire and rescue, according to the study.
For a business park, the maximum amount is $176 for law enforcement and $1,030 for fire and rescue. For light industrial, the maximum amount is $98 for law enforcement and $772 for fire and rescue. For warehousing, the maximum amount is $50 for law enforcement and $306 for fire and rescue. Finally, the maximum amount for manufacturing is $54 for law enforcement and $600 for fire and rescue.
The fees were derived through methodologies, determining levels of service and costs for planned capital projects, the study notes. Commissioners can adopt fees lower than these amounts, but that will result in a decrease in revenue.
Allen said residential impact fees also need to be reduced.
Builders of new homes currently pay impact fees when they obtain building permits. But homebuilders forced to pay the higher fees simply pass on the added costs to the homebuyers.
For a single-family home, the fee is $752 for parks and recreation, $262 for law enforcement and $698 for fire and rescue. On a townhouse or duplex, the fee is $575 for parks and recreation, $200 for law enforcement and $533 for fire and rescue. On a multifamily home, the fee is $566 for parks and recreation, $197 for law enforcement and $525 for fire and rescue.
According to the study, the maximum amount of impact fees the county should charge for a combined single-family home, town house and mobile home is $72 for parks and recreation, $242 for law enforcement and $778 for fire rescue.
For a duplex, the highest amount feasible should be $530 for parks and recreation, $178 for law enforcement and $572 for fire and rescue. And, for apartments and condominiums, the highest amount is $530 for parks and recreation, $178 for law enforcement and $572 for fire and rescue.
Finally, the current impact fees for new schools is $11,358 for single-family homes, $8,560 for townhouses and duplexes and $6,306 for apartments and condominiums.
According to the study, the proposed maximum amount is a combined $9,725 for single-family homes, townhouses and mobile homes, $8,133 for duplex homes and $6,306 for apartments and condominiums.
David Hartley, executive director of the Eastern Panhandle Home Builders Association, said impact fees negatively affect consumers’ bottom line and their ability to afford a new home.
“In the case of Jefferson County today, new homebuyers pay over $13,000 in impact fees when they purchase a new single family home,” Hartley said in a letter to commissioners. “Not only does this add extraordinary costs to the homes, it can inflate the home price to a point where the ability to borrow from the bank becomes more difficult and costly.”
Commissioner Patsy Noland agreed that the current fees are too high.
“We’re going to have great schools, but we’re going to have a hard time finding teachers that can afford to build a house here,” she said.
Pellish said the county has serious budget issues and the only way to generate more revenue is through more businesses and more residents.
“If we do not get new development and new growth, we’re not going to get new revenues,” he said. “We cannot continue to take care of this county with the existing revenues. It just won’t happen. Things are going to have to change … We need to do everything in our power to get new businesses here and to get new residents here. One of the ways to make that happen is by coming up with more reasonable and realistic impact fees. I think ours are way out of whack.”