February 25, 2022
By: Dwayne Page
Should the county enact impact fees for new residential and commercial construction?
The county commission may consider taking that action Monday night when it meets in regular monthly session at 6:30 p.m. at the Mike Foster Multi-Purpose Center in the county complex.
Seventh district county commissioner Bruce Malone, who is backing the move, said the county is missing out on new revenue opportunities with the housing boom the last few years and he would like to see impact fees adopted and the money go for school construction projects. If approved, the fees would not apply to new construction within the City of Smithville, which has its own regulations under city building codes and ordinances. The fees would also not apply to rehabilitation or remodeling projects of existing structures. Malone raised the issue during Thursday night’s committee of the whole meeting of the county commission. He said the idea has also been discussed recently at regional planning commission meetings of which he is a member.
Because it applies to new construction, Malone said the impact fees would not affect county taxpayers.
Under Commissioner Malone’s proposal which he would like to see enacted by April, an impact fee of $1.00 per square foot would be assessed for new residential and $2.00 per square foot for new commercial construction plus an additional $500 per plan.
“Several counties in Middle Tennessee are incorporating impact fees in their revenue planning. I think this is an excellent way to benefit from growth and it does not penalize taxpayers in any way,” said Commissioner Malone. “It is a one-time fee. I have discussed this with several developers and builders as well as DeKalb County Community Planner Tommy Lee with the Upper Cumberland Development District who has stated that impact fees if properly adopted and maintained can benefit a growing community. Impact fees adopted should reflect communities’ per capita income. These fees I have proposed are in line with a community of our size. For example, a 1,500 square foot home, which is a small home, would generate $2,000. There have been 90 starts this month alone so that would generate $180,000 (if all homes were 1,500 square feet in size based on this example),” he said.
With a possible new school building project on the horizon, Commissioner Malone said impact fees would be a good source of new revenue without saddling taxpayers with an extra burden.
“Sooner or later, we are going to have to do something. Little projects like this add up and if we combine this (impact fees) with money that was set aside for debt payment on the Northside Elementary School which is now paid off and other available money from the school board it will put us in a better position,” said Malone.
Fifth district commissioner Jerry Adcock said this idea (impact fees) was tried decades ago but fizzled out. Although there may be a housing boom now, Adcock said a downturn in the economy may be on the way due to inflation which will affect the housing market. Adcock further added that the county needs to be careful in committing more local funds to schools due to state maintenance of effort requirements meaning that once the county gives a certain amount of local funds to schools it cannot give less in subsequent years. Adcock said if the county commits a large amount of impact fees to schools in one year (due to a housing boom), it may have to commit the same level of funding in future years when the housing boom busts, and impact fees are not generating the same level of revenue.
Commissioner Malone said he does not believe impact fees count toward maintenance of effort funding for schools.