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Impact fee public meeting draws few


The town of Farragut hosted the second of two meetings centered on impact fees Wednesday, Aug. 1, in the Community Room of Town Hall.

Unlike the first meeting, which was held Wednesday, April 16, only a handful of people were in attendance. Those attending included Mayor W. Edward “Eddy” Ford III, Vice Mayor Michael Haynes, Aldermen Thomas Rosseel, Dorothy “Dot” LaMarche and John Williams, Farragut Municipal Planning Commission chair Robert “Bob” Hill and a few others.

Leading the discussion was Clancy Mullen, who represented Duncan Associates, the firm contracted by the Town to study impact fees.

Mullen, following a brief introduction of his company and its members, projected a PowerPoint presentation that described Duncan’s findings, after which he entertained questions about the study.

Mullen said an important fact was that an impact fee was not a tax.

“It is a regulatory fee charged on new development,” he said, adding that the precursor to impact fees were those requirements placed on developers to improve the area in which they were building by allocating funds for parks and similar

improvements.

He said the impact fee is estimated to be about $4,095 per single-family unit. From that fee, $2,436 would go to roads and the remaining $1,659 would be dedicated toward park maintenance and improvement.

Mullen said that impact fees have replaced funding that no longer is readily available such as federal and state grants.

He said that with the rapid growth of Farragut — about 3 percent a year — the Town would benefit from an impact fee. The Town would collect about $1 million a year based on Duncan’s growth estimates.

Haynes wanted to know what the majority of the “groups that have adopted impact fees have done. Is there a trend?”

Mullen said, “No, actually it’s all over the map. I find it hard to state a general rule.”

He added that the state of Florida has made impact fees mandatory, adding that Duncan had done a study in Lee County, Fla., which was adopted and later challenged in court by builders. The builders lost the suit.

Williams wanted to know why the calculations weren’t done on a square-footage basis as opposed to the single-family dwelling.

“Fees that are charged on the square foot are usually a tax,” Mullens said, “rather than an impact fee. Your impacts on the road systems, the park systems, are not scalable, for residential, are not scalable with cost per footage.”

Putting it into perspective, Mullen said that if you increase the size of a 4,000 square-foot home to 5,000 square-foot, you are not necessarily increasing the impact on roads and parks because it doesn’t mean that 25 percent more people would be living in the home.

Rosseel asked, based on the development of South Campbell Station Road and the Turkey Creek shopping area, if re-evaluation of an impact fee should be done more frequently.

Mullen said, “Three years is a pretty standard period. We have clients in Florida that are real concerned about always charging the maximum they possibly can and they don’t typically do it more than every three years.”

Mullen added that [Duncan] could include in the ordinance language an inflation cost adjustment that would kick in every year, which would address a concern Rosseel voiced about rising asphalt prices.

Williams asked if Mullen had ever seen any reduction in development or affected bond ratings due to implementing an impact fee in any of the communities Duncan had been involved. Mullen said that there was no evidence that an impact fee had altered growth or impacted bond ratings, which some communities, such as Mesa, Ariz., paid off with impact fees.

Mullen said that a Florida study indicated that if impact fees were raised too high that a negative impact could be felt.

Currently, in lieu of an impact fee, builders in Farragut negotiate with the town on needed improvements to roads running adjacent to and into proposed subdivisions and commercial development.

In some cases, builders opt to improve sections of public road, gutter and sidewalk as part of the development.

 

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