Introduction
Nothing gets done without funding. So, it is important to understand potential funding sources.
Impact Fees
Impact fees are payments required by local governments of new development for the purpose of providing new or expanded public capital facilities required to serve that development. For example, Hawaii County and the State of Hawaii could charge developers impact fees to pay for the additional infrastructure needed to serve the development. Impact fees can be charged to developers for increasing the capacity of (e.g., adding lanes to) arterial roadway systems; building new fire stations, police stations, parks, schools; extending water, wastewater and drainage systems to serve new development, etc. Impact fees cannot be used to pay for operation and maintenance of such facilities (only taxes and user fees can be used for that). To learn more about impact fees, see:
Hawaii County retained a consultant to prepare an impact fee study in 2005. To view documents related to that study, click on the following links:
ImpactFees.com website - an online impact fee resource provided by Duncan Associates, the County's consultant.
Hawaii County retained a consultant to prepare a technical report on potential impact fee levels in 1990. To view the indicated portions of the Development Impact Fee Technical Report Draft, click on the following links:
Early in 2005, the County issued a Request for Proposals (RFP) for development of a Community Development Plan for North Kona and South Kona districts (see a copy of the RFP here) that reveals its approach to such plans. The document states that "an impact fee infrastructure study" is on-going. More recently, the study has been called a "level of service study."
Many of the Zoning Ordinances passed by the Hawaii County Council in recent years contain the following clause: "Should the council adopt a Unified Impact Fees Ordinance setting forth criteria for the imposition of exactions or assessments of impact fees, conditions included herein shall be credited towards the requirements of the Unified Impact Fee Ordinance." The Hawaii County Council has discussed such an ordinance, but has not passed one. Hawaii State law allows counties to adopt such ordinances.
The State Legislature commissioned the following study of imposing school impact fees. The bill did not pass the legislature:
Volunteers are sought to investigate what the perceived benefits/problems are with impact fees.
Concurrency (Adequate Public Facilities) Requirements
An adequate public facilities (or concurrency management) ordinance is a growth management approach that ties or conditions development approval to the availability and adequacy of public facilities and services, thus ensuring that new development does not take place unless the infrastructure is available to support it. An Adequate Public Facilities Ordinance (APFO) is an ordinance adopted by the County Council that allows it to defer the approval of developments based upon a finding by the County Council that public facilities would not be adequate to support the proposed development at build out.
Mayor Kim Veto of Bill 112 - this message explaining a veto of a bill that would have added affordable housing requirements at Hawai'i County subdivision approval illustrates the issues involved
Communities have used different approaches have been used to ensure that infrastructure is provided concurrent with development. Here are some examples:
Washington State Law (RCW 36.70A.070 and RCW 36.70A.302) contains a straightforward transportation facilities concurrency requirement that appears to be applicable to conditions in Hawaii County. The law prohibits approval of a development if the development would cause the level of service on a State- or County- owned transportation facility to decline below the standards adopted in the transportation element of the applicable comprehensive, unless transportation improvements or strategies to accommodate the impacts of development are made concurrent with the development. These strategies may include increased public transportation service, ride sharing programs, demand management, and other transportation systems management strategies. For the purposes of the law, "concurrent with the development" means that improvements or strategies are in place at the time of development, or that a financial commitment is in place at the time of approval to complete the improvements or strategies within six years. The law does not extinguish rights that vested under State or County law before adoption of the applicable comprehensive plan.
City of Rockville, Maryland - This APFO establishes standards for public facilities such as transportation (roads, transit, pedestrian facilities, bicycle facilities), schools, water, sewer, and fire protection. New developments are now required to perform studies to evaluate their impact on public facilities and to mitigate unacceptable impacts prior to approval.
Adequate Public Facilities Ordinances and Transportation Management - The report by the American Planning Association shows how to use adequate public facilities ordinances (APFOs) to ensure that adequate transportation facilities will be in place in time to accommodate the traffic generated by new development. It also explains how to prepare an APFO that will stand up to legal challanges, especially when combined with comprehensive capital improvement plans. Flow charts and tables make interpreting data easy. Case studies, concentrating on Maryland and Florida, show how some communities have implemented their APFOs. A necessary guide for anyone in a region undergoing rapid, or even rampant, growth.
Concurrency Literature Review - report prepared by Eastside Transportation Concurrency Study includes links to and summaries of many reports on concurrency and APFOs.
Community Facilities Districts
With this approach, land owners in an area that will be benefited by an infrastructure project, for example, a road, petition the County to increase their taxes to pay off a bond that is sold to finance construction of the road. This technique has been suggested as a way to finance roads in Waikoloa and Waimea.
Property Taxes
Property taxes are charged to property owners on an annual basis based on the assessed value of the property. All similar properties are taxed at the same rate. Property taxes are used to fund the operating budget of the County and to pay off General Obligation bonds, the proceeds of which are used to pay for infrastructure improvements. If impact fees are charged, property tax rates can be decreased because less tax revenue is needed to finance infrastructure construction.
Gasoline taxes are collected from gasoline users and the proceeds dedicated to roadway improvements.
User Fees
User fees are charged to the users of a public facility. For example, Hawaii County charges user fees to those who use the county's water and wastewater systems.
Federal Funds
Federal funds for construction of transportation facilities (like highways) are appropriated by Congress at regular intervals. Federal funds are allocated by the State to selected transportation projects as follows:
Possible Issues
The community may decide that the following issues are important:
Should Hawaii County adopt a Unified Impact Fee ordinance and lower property taxes a commensurate amount?
Should the State of Hawaii adopt a Unified Impact Fee law (e.g., for State Highway construction) and lower income taxes a commensurate amount? Or, should the counties be allowed to collect such fees?
Communications
The following communications have been received that identify issues to be considered in evaluating funding options:
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