George's Information and Comments

Growth Impact Action Committee

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Proportionate Share Fairness and Evaluation Efforts

        -- George Edwards

11/18/07 Update: Asterisked footnote reciting local history on impact fees.

Click here to return to the overall "Growth Management Tools" page.

I appreciate Horry County PRIDE pressing for developments to contribute their fair share of the public infrastructure they require. I believe a “fair share” equals a “proportionate share,” that is, that a development should provide or otherwise contribute public infrastructure it requires in proportion to the public infrastructure it requires.

Consider a  new community. It must tax its members to pay for the schools, police and fire protection it requires. People not in the community who did not benefit from these public facilities could not reasonably be asked to share such taxes. But it is appropriate and fair to require later developments and so, indirectly,  new community members or others who do benefit from those public facilities, to contribute their proportionate share of the current value of those facilities they make use of to the extent those new developments could not build their own -- in addition to the taxes for ongoing maintenance and operating expenses they will share with prior community members.

An Internet search reveals that “proportionate share” and “fair proportionate share” statutes and ordinances have been passed in other areas. Florida addresses only roads as it feels it has meaningful impact fees to cover other public facility needs.

The S.C. impact fee statute does not adequately provide for workable impact fee ordinances. Furthermore an Horry County impact fee advisory referendum was categorically rejected against the best interests of current Horry County residents.* These facts make passage of an Horry County impact fee politically unlikely, certainly one adequate to cover the public facility needs of its exploding population growth.

Janet Carter, Horry County Planning Director and attorney, has stated that any similar ordinance must require a proportionate share of the public facilities attributable to a development’s needs and be applied uniformly to new developments throughout the county.

This all has led to the “proportionate share ordinance” proposal that uses more precise legal terms and more clearly defines its fairness and necessity than an “impact fee ordinance” does. This terminology also avoids direct conflict with the provisions of the onerous S.C. impact fee statute.

An attorney could argue that the lack of an enabling S.C. proportionate share statute would preclude the acceptance of a proportionate share ordinance by the courts. On the other hand, another attorney could argue for a proportionate share ordinance based on “home rule,” in the absence of its statutory prohibition.

The General Assembly could step in and appropriately amend the impact fee statute to make it meet the constitutional legal requirement of requiring it to truly provide for a proportionate share. Barring that apparently unlikely event, Horry County government should, in all fairness, enact an ordinance that gives the courts the opportunity to decide on the constitutional grounds that it meets the proportionate share requirement.

In any event, I am heartened that Horry County PRIDE is pressing to determine the per dwelling and per business financial amount that corresponds to a proportionate share that would apply uniformly throughout Horry County.

Sometime during the November 29 and 30 Horry County Council Work Shop starting at 9 a.m. both days, Planning staff will present the software they are evaluating to, hopefully, help determine the proportionate share of public facilities attributable to new developments. It does not currently include the all-important public school element on the grounds that public schools are an autonomous taxing body for which the county only collects the taxes the school district reports needing.

* For those of you who may not have been here then, here is a brief summary history of impact fees in  this area: An Horry County Impact Fee task force convened a year or two ago that met only three times over several months. If you choose, you can read our overall local impact fee history as it is memorialized on this Web site by clicking the “Impact Fees” item in the “Horry County and South Carolina” menu on the left..

The ill-fated result of the meeting outcome was what Chairman Worley could have initiated directly on the County Council -- a recommendation to County Council to hold an advisory referendum on impact fees at the next election. At the third and final meeting, Worley asked for assent and input on the wording of the County Council recommendation by and from the largely development community and County Council attendees who opposed impact fees.

The earlier two meetings were largely a statement of positions by various attendees and an early presentation by Tischler Associates. Tischler Associates was paid to supply further information on which they dragged their feet (among other things, Tischler vacationed in Europe) from January till, as I recall, September before providing anything further at all. By that time, it was too late to do anything but what was done if the measure were to get on that November's ballot -- provide a referendum recommendation watered down to what the committee would agree to.

Worley had previously said that the votes were not there on County Council to pass an impact fee ordinance. Maybe legitimately or just their excuse, the majority of the County Council cited the onerous S.C. Impact Fee statute framed by a coalition of development lobbyists including the Homebuilders Association -- whose representative on the task force bragged about having been instrumental in making it difficult for localities to comply and hopefully forget imposing impact fees.

Worley and many thought that the impact fee referendum was a slam dunk in favor of impact fees as the tax transfer so obviously favored current residents. The thought was to take that overwhelming referendum vote to delegates to the General Assembly to help persuade it to change the impact fee statute..

But the referendum announcement brought out the full force of the development and real estate communities. If I recall correctly, someone said they spent $150.000 opposing it. Rachel Broadhurst, broker-in-charge of Broadhurst Realty and former Coastal Carolina Board of Realtors president had an (it seemed to me hourly) radio message broadcast for days. There were mailings against "imposing" impact fees and a large Sun News advertising spread with a photograph of a number of clean-cut appearing county residents, unidentified by caption, but including Charlie Brindell, executive vice president of the board of realtors, alleging how bad impact fees would be for the county.

This all led to a stunning referendum defeat. I'm sure that the County Council majority breathed a collective sigh of relief. They are now in a position to "never oppose the will of the people by passing impact fees."

Other localities have passed impact fee ordinances under the current impact fee statute -- probably not close to all their developments' public infrastructure needs but still a help -- with the approval of the courts.

This has led, among other things, to now promoting a "proportionate share ordinance."

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This Web site’s copy of the proportionate share ordinance presentation to county council committees gets into a nitty-gritty application philosophy of a proportionate share ordinance including schools. Click here and, on the page that appears, click the menu link item "PowerPoint Presentation"  to view that presentation.

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