An economic carrot – that’s how Clark County Commissioner Tom Mielke described a resolution to delay implementation of some traffic impact fee increases through 2009 to motivate development of several major construction projects in the county. The Board of Clark County Commissioners adopted the resolution April 28.
A project’s TIF is calculated when a developer receives preliminary site plan/plat approval. The rate remains in place for three years. If the developer doesn’t obtain a building permit before the three years are up, the project’s TIF rate is recalculated at the current year’s rate.
Escalating oil, steel and other costs caused the county to significantly increase TIF rates in October 2007, with an average increase of 120 percent, said Steve Schulte, transportation manager for the county’s Public Works Department.
Some TIF districts saw more than a 250 percent increase, and school impact fees also took a steep hike.
In the meantime, the economy has caused several developers to delay projects, and they are now running up against the three-year TIF rate deadline.
And, they claim, they can’t afford to pay the new, higher rates.
If a project’s TIF rate were to more than double, “now the project doesn’t make (economic) sense,” said Ron Frederiksen, president of Vancouver-based RSV Construction Services Inc.
How bad is it?
There’s no doubt the construction industry has been hard hit in Clark County.
The number of county building permits issued has plummeted from 1,260 in 2007 to 592 in 2008, said Gus Harb, president of Vancouver-based Harb Engineering.
And the Department of Community Development is projecting only 240 permits for 2009, said Steve Madsen, the Building Industry Association of Clark County’s governmental affairs director.
Frederiksen said the impact fee issue is a matter of life and death to the construction industry.
“If we drive people into bankruptcy, it doesn’t do anyone any good,” he said.
Harb put it another way – the county and schools can choose to collect some fees at the old rates or, if the projects go bankrupt, no fees at all.
Unifying for a cause
The building industry banded together to propose that the county give developers two more years at the 2006 TIF rates to apply to projects that have received preliminary approval in the Evergreen, Battle Ground and Vancouver school districts.
The commissioners agreed to freeze the rates through the end of the year.
There has been some public outcry about bailing out the construction industry, but Mielke disagreed.
“It’s not giving anything,” said Mielke. “It’s just not taking as much.”
Eight months isn’t enough time to finish permitting, get funding and finish a project, Madsen said. Plus, limiting the rate freeze to projects with final approval eliminates almost half of the projects in the area covered by the proposal, and more than half of the total-dollar-value of the projects.
“Given that construction is a lagging economic indicator, anything the county does that is less than a two-year timeframe will be ineffective,” Frederiksen said. “Let construction recover – then collect the fees.”
He is encouraged, however, by the county’s dialogue with the business community.
“The county listened on the stormwater issue and it is listening now,” Frederiksen said.
“We’re in this together,” Mielke said of the economic mess. “We can either watch it crumble together, or make it work together.”
TIFs by the numbers
Traffic impact fees are based
on a metric called Average Daily
Trip. Each type of development
has a specific method of
calculating how many ADTs a
project will generate.
For example, for single-family
residential construction, the
calculation is based on number
of lots, and the county figures
10 ADTs per lot.
For hospitals, the rate is based
on number of beds, assuming
12 ADTs per bed.
The county has six urban
and two rural TIF districts.
The following table shows
the current TIF rates for each
district. These rates reflect the
current infrastructure needs
of the area. For example, the
North Orchards district has
considerable future capital
projects and incomplete roads.
Therefore, its TIF rate is higher
than South Orchards, which is
mostly built out.
TIF District | Current cost per ADT
|
East City | $322 |
Evergreen | $379 |
North Orchards | $681 |
South Orchards | $409 |
Mt. Vista | $657 |
Hazel Dell | $451 |
Rural 1 (close-in) | $338 |
Rural 2 (distant) | $73 |
Source: Steve Schulte, Clark County
transportation manager
