County eliminates impact fees for development
by Sarah Fay Campbell
After Jan. 1, Coweta County will still have impact fees, but only in theory.
All Coweta County impact fees will be reduced to $0 in 2014, following Tuesday's action by the Coweta County Board of Commissioners.
The commissioners unanimously approved an amendment to the county's Development Impact Fee ordinance. The amendment eliminates the fees in every class and category.
"The impact fees are gone as of Jan. 1, 2014," Commission Chairman Bob Blackburn said.
The fees were previously charged on all new construction, whether it be residential, commercial or industrial. The fee was based on the proposed use of the buildings.
Certain developments, such as non-profit hospitals and large job creators, were exempt from the fees.
It's the third time the commissioners have voted to reduce the impact fees. In 2010, several changes were made. The methodology was altered to reduce the overall fees, some road projects were removed from the project list, and fees were capped at $7 per square foot. The cap only affected a few uses, such as convenience stores and fast-food restaurants, which had faced exorbitant fees. Before the cap, for instance, fast food restaurants had to pay $25.28 per square foot. The 2012 action reduced the fees by only assessing 25 percent of the cost of road projects, instead of 50 percent, and 50 percent instead of 100 percent for other project categories.
Coweta had implemented impact fees for the jail, Coweta County Sheriff's Office, Coweta County Fire Department, and parks and recreation projects. The 2012 decision also allowed impact fees to be paid in installments.
Tuesday's decision was hailed as good for business.
Dennis McEntire, general manager of Newnan Utilities and representing the Newnan-Coweta Chamber of Commerce, thanked the commissioners for their decision and their "willingness to listen to the business development and the economic development communities."
"I know they have been talking to you for years about this issue," McEntire said. He added he was surprised the commissioners actually voted to set the impact fees at zero.
"I applaud you so much for listening to the business community and making this tough decision," McEntire said.
Blackburn thinks increased development will more than make up for any money the county might be losing by not charging impact fees, especially since the majority of business in Coweta County is small business.
And small businesses are the ones hardest hit by impact fees, said Commissioner Tim Lassetter. "The ones that are large enough and have enough investment or enough jobs — they're exempt anyway," Lassetter said.
Commissioner Rodney Brooks has always been against impact fees. He said they are "nothing more than an illegal tax" because certain entities are exempt. "We worked it down to half" last year and "this was the final blow, to get it where it needs to be," Brooks said.
The current exemption criteria are nonprofit medical facilities, private schools and churches, as well as any investment over $50 million or any industrial job that is financed with revenue bonds and will bring at least 200 jobs.
Commissioner Paul Poole said he is in favor of doing away with the fees for commercial and industrial uses, but is not so sure about getting rid of the impact fees for residential development.
"Houses don't pay for themselves," Poole said. While commercial and industrial uses pay more in taxes than they use in services, residential development costs the county, unless the homes are very highly valued.”
"I understand why we did it … I'm just concerned," Poole said. "I have seen what SummerGrove did to Lower Fayetteville Road and we don't have the money to make improvements to roads, and roads are so expensive."
The impact fee for a single-family residence was $2,577 before 2012, when it was lowered to $1,288.
"I just want to know how we are going to replace the money," said Commissioner Al Smith. He thinks getting rid of the fees will help economic development, but the money has got to come from somewhere.
Between Oct. 1, 2011, and Sept. 30, 2012, the county collected impact fees totaling $524,462. That included $118,250 for fire protection, $15,762 for the sheriff's office, $43,595 for the jail, $96,230 for parks and recreation, $218,699 for roads, and $31,926 for administrative costs. These are the most recent numbers available. The total balance in the impact fee funds on Sept. 30, 2012, was $3,222,103. That was down from a fund balance of $4,763,990 on Oct. 1, 2011.
The impact fee ordinance is still in place, and all it would take is a vote to change the fee schedule to bring the impact fees back.
The county went through an extensive study process when first implementing impact fees in 2006 and when adding fees for transportation projects in 2007. Leaving the ordinance in place means the county wouldn't have to do all that work again in the future, if it ever wants to bring back the fees. Changing the fee schedule was the "cleanest way" to accomplish eliminating the fees, said County Attorney Jerry Ann Conner.
Brooks said the only way he could see impact fees coming back would be if there were no exemptions. "But I don't foresee that ever happening," he said.
Impact fees "may have had their place and time," Blackburn said after Tuesday’s meeting, but "this is not the place and it's certainly not the time."