Thursday, July 30, 2009

Impact fee update

Impact fees are touted as being the big fix to "growth paying its own way". However, that is just not true. Impact fees make a difference in revenue, but only when buildings are actually built - not something that's been going on too much lately.

Anyway, the 3rd quarter (Apr-June) numbers are out and the impact fee collections continue to be sparse. And the loan balance continues to rise.

At the end of FY2008, the impact fee loan balance was $23.6 million. (The loan balance comprises spending money on projects that should be funded by impact fees but since impact fees are disappearing they are funded out of places like the property tax. This needs to be accounted for and theoretically someday the general fund will be paid back. Why this accounting? The only good explanation is - it's the rule.) Nine months later, the loan balance is over $26.3 million - a 11% plus increase.

What's really going the wrong way is the collection of impact fees period. We are now seeing a number of requests for refunds, almost $400,000 this year so far. Let the handwringing begin.


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