Impact fees’ ruling won’t affect county

Adequate facilities charge on sound foundation

By Matt Irvin, Staff Writer

Sunday, June 11, 2006 — A court ruling on development impact fees apparently won’t hurt the system used to collect fees on new housing construction in Stanly County.

The N.C. Court of Appeals ruled Tuesday Durham County's impact fees on new home construction are illegal.

The decision could affect other counties attempting to find ways to pay for new schools.

Stanly County Manager Jerry Myers said the ruling would not affect the county’s adequate public facilities ordinance (APFO) fees passed by the county and all municipalities except for Albemarle.

“That is why we took that approach,” Myers said. “We thought it would stand up in court.”

The court said counties may not charge developers a fee for each new house, apartment or condominium without legislative approval.

The legislature has not granted a county’s request to charge such a fee since 1987 when several N.C. counties were granted the legislation.

Stanly County’s public facilities fees are different from the approach Durham County took, local officials say. In Durham County, the fees applied to any new home, apartment or condo.

Stanly County’s fees only apply to major subdivisions.

Stanly County Planning Director Michael Sandy said the method chosen has held up in the North Carolina court system.

“Currituck County’s adequate facilities fee has been upheld by the court system,” Sandy said.

“There is a state law that allows subdivision ordinance legislation that can require adequate facilities.”

The county ordinance uses the law as a basis for the local ordinance.

In Stanly County, a major subdivision is defined by three or more lots, other towns in the county the definition may differ according to local ordinance.

For the ordinance to work best all municipalities in a county need to sign on and enact a matching ordinance to match the county’s to prevent developers concentrating in the area that is not covered by an APFO .

According to Albemarle City Manager Ray Allen the city council has discussed adopting an APFO. “The council has delayed on the APFO because there is concern about the legality of the ordinance,” Allen said.

Many N.C. counties are struggling with the cost of building new schools due to the rapid rate of residential growth. Neighboring Union and Cabarrus counties have been dealing with crowded schools due to their residential growth.

Impact fees are pushed by counties to get builders of new housing - those who profit from rapid growth - to help pay for new schools and infrastructure improvements needed to accommodate new residents.

“Most people don’t know it costs about $13,125 to create one seat in a school in Stanly County,” Sandy said.

Sandy said the estimate of constructions costs are based on 2001 dollars.

Locust City Administrator James Inman said Locust adopted the adequate public facilities fee more than a year ago.

“People need to understand that homes by themselves do not pay for for schools and needed services,” Inman said.

“The city supports the fees, we don’t want to get into the situation that other counties have gotten into.”

Inman said Stanly County had one of the lowest facilities fees in the area. In Locust, the APFO applies to the construction of two homes or more.

Lindsay Dunevant, a member of Citizens for Planned Growth and a Republican candidate for county commissioner, said counties need to find a way to pay for much needed schools and infrastructure.

“Stanly County’s adequate public facilities ordinance shows we have good people working for our county,” Dunevant said.

Home builder Tim Furr is building a subdivision in Locust called The Meadows and he is opposed to APFOs or impact fees.

“I’m not too happy about the fees,” Furr said.

“We are considering pulling out of Stanly County - homes in Cabarrus County sell faster.”

Cabarrus County passed an APFO on Sept. 20, 2004, the fee for a single dwelling is $4,034.

In Union County, county commissioners imposed a building moratorium while the planning and zoning board came up with recommendations for an APFO.

“On the 5th of June, the planning and zoning through a consultant presented a draft proposal,” said Richard Black, director of the planning department.

“The commission will be going through a review period and work sessions about the APFO.”

Union County Board of Commissioners will consider the APFO in the fall with a public hearing in October and a possible ratification in November.

The moratorium imposed 10 months ago is just about to expire and commissioners are considering an amendment to extend it.

“The moratorium only applies to new projects,” Black said.

“We have had more permits applied for then before the moratorium.”

Montgomery County has been considering an APFO, according to County Manager Lance Metzler.

“We have looked at Cabarrus and Stanly counties’ APFO - we are starting to see some growth in our county,” Metzler said.

The N.C. Home Builders Association (NCHBA) was pleased with Tuesday’s court ruling.

NCHBA is concerned about raising the cost of entry level homes.

“On a $110,000 home, $1,500 can make the difference whether someone can qualify for a loan or not,” NCHBA Executive Vice President and general council J. Michael Carpenter said.

“It is critically important to get people into entry-level homes.”

The association contends counties must get legislative approval to impose any fee on builders.

“Imposed fees must have legislative approval,” Carpenter said. “Anyone else who has gone this path is going at risk.”

In 2003, Durham County became the first county in the state to create impact fees without a legislative mandate.

In the court's ruling Tuesday, Durham must refund more than $7.5 million it has collected.

Refunds would be made to the home builders, not to home buyers.

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