Foley approves first reading of potential impact fee under consideration by council

By Jessica Vaughn
Posted 6/28/21

FOLEY - The Foley council approved the first reading of an ordinance to potentially create impact fees for new developments in the City of Foley. A second reading will be held at an upcoming meeting …

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Foley approves first reading of potential impact fee under consideration by council

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FOLEY - The Foley council approved the first reading of an ordinance to potentially create impact fees for new developments in the City of Foley. A second reading will be held at an upcoming meeting and must be approved before impact fees will be implemented.

During the May 17 council meeting, TischlerBise President Carson Bise presented findings of a recent impact fee study performed by his company within the City of Foley. Within the study, Bise highlighted the current state of Foley and the projected growth within the next ten years.

“At the time of the presentation, we studied parks and recreation, streets, fire and police,” said City Administrator Mike Thompson. “Some of the input that the council brought back to the staff was for us to look at the fees and see if we could restrict them down a little bit to a smaller subset of that, so what’s before [council] in this ordinance is the impact fee that would fund the effects of growth through parks and recreation then a portion of the streets impact … You can see that what we’re bringing to council is a substantial reduction of the overall impact.”

Impact fees are designed to offset the financial impact a new development may have on public infrastructure. With the impact fee, a municipality has a set amount of time to use the funds to create or improve new infrastructure. In Alabama, municipalities have five years in which to spend collected impact fees. In Baldwin County, impact fees may not exceed 1 percent of the estimated fair and reasonable market value of a new development after completion.

The current impact fee ordinance under consideration by Foley council has the impact fee being charged at the point of a building permit, which is when the one-time payment would be made. Thompson said with the way the ordinance is currently written, the Community Development Department would analyze the work being done to determine if it would qualify for an impact fee or not. Thompson said there’s nothing to keep the city council from modifying the impact fee ordinance as and when they see fit.

“TischlerBise recommended, and what is anticipated, is that periodically a city council or county commission would reanalyze the impacts that occur, so typically you would do that in a four or five year timeframe,” Thompson said. “So if for example [council] decided to back off some or to add some other components that we studied, the logical time period to do that I think would be when council initiated a new impact fee study.”

A large question from council was who would be affected by the impact fee. Thompson said that depends on if a development adds a new impact to the city overall.

“If for example someone had a single-family home and for whatever reason they decided to tear it down and build another single-family home, well there wouldn’t be any impact because it had a family in it to begin with, so there would be no new impact,” Thompson said. “If however somebody were to purchase, say, five single-family homes that were abutting one another and they decided to put in 50 apartment complexes, then there would be an impact associated with going from five single-family homes to 50 multifamily homes, so there would be a corresponding impact related to that.

“And with businesses, like Tanger, for example, they have tenants coming and going and they go in and do work to those spaces when a new tenant comes in, they go in and redo the inside, they’re not expanding it though. So from a commercial perspective, if you have a building that’s let’s say 10,000 square feet and then you decide to expand it to 12,000 square feet, the impact fee would apply to that additional 2,000 square feet that wasn’t there before.”

A second reading of the ordinance will be held at a future council meeting. For agendas and information, visit cityoffoley.org.