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3. PRESENTATIONS A. STAFF OVERVIEW OF IMPACT FEES Community Development Director Bob Keating presented staff's overview of the Impact Fees. Through a PowerPoint presentation he defined what an impact fee is and/or does, and what an impact fee is not, which is a tax. He said an impact fee is a one time capital charge for new development, and existing developments do not pay impact fees. An impact fee implements Capital Improvement Element, and Capital Improvement Program improvements that are identified by jurisdiction. Director Keating outlined the legal principles that have to be met in establishing an impact fee, which include a Dual Rational Nexus Test where the fees need to be proportional to need, or fees spent have to provide benefits; Proportionate Share Principles, which do not charge for higher level of service, or do not charge twice for the same level of service; and State law. One requirement of State enacted Legislation is that fees need to be based on the most recent and localized data. He stated that in order to establish or to modify an impact fee, there needs to be documented information, objective criteria, and a defendable methodology, which means there needs to be a detailed study done to document different aspects and or need for a change in fees. Director Keating discussed the need for a defendable methodology and disclosed that there are two basic methodologies for doing impact fee ordinances: a consumption based methodology, and an improvements based methodology. He believed most studies are done using the consumption based methodology, which is the methodology being used in this County. He explained what each methodology entails and gave examples of advantages from a consumption based methodology. He presented a basic impact fee formula, explained how impact fee revenue may be used, and how impact fees may be distributed. 2 March 6, 2008 Public Workshop