Impact Fees Update

Anne Arundel County is in the midst of a rare re-examination of its impact fee rates. The outcome of this process will have a big impact both on our county’s quality of life and its bottom line.

What are impact fees?

An impact fee is a one-time fee levied on new development. The idea behind impact fees is simple: new development should pay for the capital improvements it requires. Our county revenue structure is barely enough to maintain our existing infrastructure; it would be impossible to also fund the new schools and road improvements required by new development without additional funding.

When a new housing development is built, the new occupants create additional demand for county facilities such as roads and schools. Someone needs to pay for it. If the builder does not pay the full cost, then the balance is either subsidized by the taxpayers or the necessary improvements are unmet, leading to increased congestion and inadequate facilities. So it is important to make sure that our impact fee schedule accurately captures the cost of new development.

Our county has three impact fees, for roads, schools and public safety. Development within the City of Annapolis pays the county's impact fee for schools, but not for roads or public safety because the City provides those services separately.

History

Anne Arundel County has conducted a thorough review of its impact fees only twice. It first enacted impact fees for roads and schools in 1987. Thirteen years later, the county revised its fees in 2000 when it also created the impact fee for public safety. Both times the county first appointed an independent committee to review the fee schedule before submitting the legislation.

Last year County Executive John Leopold started the process to update our impact fee schedule. The county hired a consultant, Dr. James Nicholas, to analyze the fee schedule and recommend changes. Once Dr. Nicholas completed his preliminary review, the Executive presented it to the Executive’s Planning Advisory Board, which approved it in one sitting. The Executive then submitted Bill No. 06-08 to the County Council in January to implement the new impact fees.

After receiving Dr. Nicholas’ report, the County Council tasked its independent auditor with reviewing it. The auditor found several errors both in the methodology and in the raw data used as the basis for the analysis. Although all parties agreed on the need to revise the impact fee schedule, I and others had serious reservations about the proposal submitted by the County Executive.

Current status

On March 3rd the County Council unanimously adopted Resolution No. 13-08 to appoint an Impact Fee Advisory Committee. The Committee's role is to provide the critical, third-party review that should have taken place prior to the legislation's introduction.

The Committee is chaired by former County Executive and State Senator Bobby Neall. Its membership is balanced to reflect different stakeholders’ concerns. The members are listed below.

• Robert Neall, Chairman, former County Executive
• Robert Burdon, President and CEO, Annapolis and Anne Arundel County Chamber of Commerce
• Al Johnston, Citizen Representative
• Dwight Taylor, President of Development, Corporate Office Properties Trust
• Dan Ellis, Executive Director, Arundel Habitat for Humanity
• Jerry Walker, Vice President, DCA Imaging Systems
• Ann Fligsten, Esquire
• Robert Gallagher, Rhode/West Rivers Riverkeeper
• Sam Georgiou, Citizen Representative

Next steps

The Committee is charged with presenting a final report to the County Council next month. At that time the Council will hold additional public hearings to help us further refine the numbers. By this Summer I expect that the Council will have adopted a new impact fee schedule, one that accurately reflects the current impact of new development.

On the Web:

• The Examiner: Anne Arundel is looking to other counties for a little help on increasing its impact fees (March 14, 2008)