Horry County poised to adopt limited fees on new growth — but it’s not a perfect solution
The Horry County Council tonight is poised to adopt impact fees — a new charge on newly-built homes, businesses and hotels — for the first time, a historic move in which the county will charge builders as the region continues to grow.
But those fees are likely to be lower than originally proposed — and therefore a smaller impact on builders and developers — and some county leaders say the fees aren’t the silver bullet some think will solve Horry County’s growing pains.
“(The public) expects for police and fire to be there when they need it, they expect there to be fireman and police officers, they expect for road to be resurfaced regularly. The impact fee doesn’t address any of those issues, you can’t use impact fee money to do any of those things,” said Horry County Council member Cam Crawford, who represents the Socastee area and who’s raised concerns about impact fees in recent weeks.
Impact fees would be a charge Horry County puts on builders and developers whenever they construct new homes, hotels, apartment buildings or stores. After collecting the money, Horry County leaders are allowed to spend the money on certain capital projects — meaning buildings, roads or heavy equipment — within a certain number of years after collecting the fee.
County Council members are poised to give a final vote on impact fees Tuesday night, the third and final vote needed to enact the new charges on development. Impact fees have already received two prior approvals from the council in recent weeks.
South Carolina state law sets strict parameters for impact fees meaning, in Horry County’s case, that the county must break up its total impact fee into separate “buckets” and then spend the money in those buckets on specified projects. For example, a full impact fee in Horry County would collect part of the fee for parks, part of the fee for new roads, part of the fee for stormwater improvements and part of the fee for public safety projects. But rather than collecting a lower fee for all specified buckets — a difficult and legally tenuous thing to do, the county’s lawyers have said — Horry County plans to keep the full fee, but only collect it for certain buckets.
Under a deal reached by a majority of the council members, Horry County will collect the full impact fee for three buckets of spending: Public safety, waste management and parks and recreation, about half of the available buckets. That means builders of new homes and businesses won’t pay an impact fee that will help pay for new roads and stormwater improvements.
A breakdown of how much the impact fees would be for each kind of building — including single family homes, hotels, manufacturing facilities and more — wasn’t available ahead of Tuesday’s council meeting. But County Council member Johnny Vaught, who helped negotiate the deal, said the council was looking to adopt impact fees that would charge builders approximately $1,200 for a new single family home and about $1,800 per 1,000 square feet of a new retail business.
“We have basically trimmed back what we planned to do, from the full package … we’ve trimmed the package back to a more manageable size,” Vaught said. “We didn’t feel like that was fair to the economy (and) not fair to the people moving here.”
Under the original proposal — in which the county would have charged the full impact fee for all available spending categories — the breakdown of charges for a new single-family home would have looked something like this:
- $814 for parks and recreation infrastructure;
- $76 for police stations or large equipment;
- $524 for fire and emergency medical service infrastructure;
- $38 for the new emergency operations center;
- $3,113 for new roads;
- $273 for waste management
That would have totaled $4,838 per new single-family home. Additional fees would have been charged for stormwater infrastructure, though those fees are based on which watershed a project is based in.
But by leaving out the transportation, stormwater and part of the parks and recreation parts of the impact fees, county leaders plan to collect a smaller impact fee, hoping to strike a balance between paying for needed infrastructure and keeping the county growing. Developers have warned council members that impact fees could slow down the region’s economy and mean fewer people ultimately move here, meaning lower collections from the impact fees.
Under the deal struck by council members, the $1,200 charge on a new single-family home may include the $76 charge for police, the $524 charge for fire and EMS, the $38 charge for the emergency operations center, the $273 charge for waste management and part of the parks and recreation bucket that would allow the county to build more public boat landings along its waterways.
“I think what we’re doing is the best trade off between how much impact fee we’re charging and the best bang for our buck,” Vaught said.
Vaught explained that the state’s strict rules for impact fees meant the new charge wouldn’t be a silver bullet to ease the county’s growing pains. As the county has grown, residents have complained about traffic congestion and public safety services and flooding, and the county has worked to widen roads, build new fire stations and ease flooding risks. But because impact fees are so limited by the state, the county could only pursue certain projects with the money, and not necessarily the ones the public needs most.
For example, Vaught said, impact fees collected along the Highway 90 corridor could build a new fire station in the area, but they couldn’t be used to hire new firefighters to work there. Impact fees collected outside of Conway could help build new roads, but they couldn’t resurface Cates Bay Highway.
Vaught also explained that the county enacting impact fees in a limited manner allows leaders to add more of the fees in coming months and years if they determine the county needs the money. For example, Vaught said, if the county fails to enact a fourth RIDE program to build new roads — a special voter-approved sales tax — the county could add in impact fees for transportation to help pay for those projects anyway.
Adopting impact fees turned into a more difficult endeavor than some county leaders realized, Vaught said, and council members felt most comfortable adopting limited fees first, and adding more fees later, than adopting the full fees right away.
“It’s a lot more complicated than we ever thought it would be and that’s because real estate firms helped write the law, and real estate firms don’t generally like impact fees,” Vaught explained, pointing to the strict requirements the county has to follow under state law. “If this things turns out to be a big mistake lets make it a small mistake.”
But the deal struck by council members doesn’t please everyone, including County Council member Harold Worley, who represents North Myrtle Beach and has been a vocal proponent for full impact fees.
The deal, Worley said, “is nothing more an a killer amendment to the ordinance and at the end of the day the development community will put the burden of new development on the current residents of Horry County.”
“I think they’re setting us up for a lawsuit which we will lose,” Worley added. “I’ll be voting for the full impact fee and seeing where the chips fall where they may.”
After a number of developers and others in the building and real estate industry raised concerns about the county adopting impact fees at a June workshop, Vaught said he and other council members attended two meetings with builders in recent weeks, and ultimately shaped the current deal after hearing more of their concerns.
Crawford said he was happy to see the county moving forward with the parred-down impact fees, in part because he was worried that too-high fees could hamper the development of new businesses in the county.
“I thought that would have an adverse affect on future small businesses in the unincorporated area, which are the backbone of economic activity in the unincorporated area,” he said. “I think that we’re moving in the right direction with starting with a smaller scale.”
