Volume 16, Number 2
HB 436, filed in the North Carolina General Assembly the last week in March, could raise property taxes in Wake Forest and all other Tar Heel towns, cities and counties because it would repeal Wake Forest’s legal authority to levy impact fees on new construction and it would deny any local government the right to levy those fees now and in the future.
The bill targets Wake Forest, Raleigh, Rolesville, Cary, Garner, Knightdale, Wendell and Zebulon as well as Chapel Hill, Carrboro, Chatham County and Orange County by name. All of those were granted the right to assess impact fees several years ago.
Wake Forest’s was SB 576 passed in 1989, An Act to Allow the Town of Wake Forest to Impose Facility Fees. It said capital costs for community service facilities could be charged against new development for water and sewer, parks and recreational facilities, sidewalks and thoroughfares, emergency medical services facilities, fire stations, schools, cultural facilities, libraries, solid waste collection, and solid waste handling and recycling. “It is the purpose of this act to place an equitable share of the cost of providing new community service facilities upon all new inhabitants and upon those associated with the development process.”
Wake Forest has two impact fees, one for parks and recreation and one for fire stations, the newer first levied in 2007. The town’s impact fees for water and sewer were repealed after the town merged its water and sewer system with Raleigh’s.
In this current fiscal year, the town anticipates raising $804,783.73 from recreation facility fees and $445,761.83 from the fire impact fees. The total is $1,250,545.56 which represents 2.74 cents on the current property tax rate of 52 cents, according to Finance Director Aileen Staples. The fees raised the equivalent of 1.80 cents in fiscal 2015-2016 and 2.56 cents in fiscal 2014-2015.
The town transferred $2,764,487 from the accumulated fire impact fee fund to the independent Wake Forest Fire Department for the construction of Station #4 on Jenkins Road and its equipment in 2016. Fire Chief Ron Early said the total cost, including the land, building and fire truck, was “approximately $2.9 million.” The cost of training and outfitting the 12 firefighters for the station – three four-person crews for 24-hour coverage – was covered by the town’s contract and Wake County funds.
Of the 52 cents of the property tax, 11 cents is currently for the contract with the fire department and 41 cents goes to general government operations. One penny of the current tax rate is $456,936.
All the fees were authorized by the town commissioners after a study, at least one public hearing and were reasonable in light of the capital costs for new services. They can also be adjusted as the Wake Forest commissioners did last year after a new study. In this case the adjustments were downward. The old and new fees for fire protection impact are: $592 under the 2007 rate for a single-family home, $454 now; $481 for each multi-family unit, $341 now; $649 per 1,000 sq. ft. commercial/institutional, $767 now; and $389 for 1,000 sq. ft. industrial/manufacturing, $265 now.
Staples said the town could use the recreation fee for the new pool in Holding Park estimated at $2.5 million but at this time the town does not intend to use that source. Recreation fees are assessed only on residential property, $1,086 for each single-family homes and $945 for each multi-family unit.
Wake Forest officials are opposed to the bill as are the organizations – the N.C. League of Municipalities for one – that support local governments. Mayor Vivian Jones said, “I am very opposed to this bill. If we are not allowed to make these charges, the only recourse we have to provide these necessities/amenities is to raise property taxes. The developers recover these costs in the price of their homes. They have been reimbursed for any costs they incur and it makes their developments more desirable because we can have more parks and recreational facilities and/or better fire service.”
“We are concerned about HB 436 and its implication for Wake Forest,” Town Manager Kip Padgett said. “We currently leverage impact fees on parks and fire. This allows the Town to pay for these new facilities that are needed due to our growth and relieves the existing residents from shouldering all the burden. If this bill passes, the burden will shift entirely to our existing citizens.”