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, . Further, it is important that the community imposing an impact fee is experiencing significant growth. If not, the jurisdiction will be unable to generate enough revenues to make the impact fee process worthwhile. Impact fees incur a set of administrative costs and, in most cases, are legally required to be segregated from the general fund by type of account, type of activity, and geographic subarea (where appropriate). For home builders, two nontechnical points are worth noting. First, several of the homebuyers assessed im- pact fee payments are already residents within a given jurisdiction. In some jurisdictions, over 50 percent of purchasers are trade-up buyers and therefore have been paying for capital facilities through the property tax from the time they started residing in the community. Elected officials should be aware of this conundrum. In some cases, those preparing the fees hide behind "sophisticated" models and use them as an excuse not to explain the methodology and the supporting data, Second, impact' fees give rise to an "intergenerational equity" issue. Many of us and almost all of our par- ents lived in a community where the capital facilities were paid as part of the regular tax burden. The in- creasing reliance on impact fees and other exactions means that households moving into a community must now buy into the capital facilities with a one-time fee. Steps to Take From the outset, a private sector advisory group should be convened to participate in the impact fee review process and to ensure that private interests present their concerns as a unified front. Experience suggests that such groups allow for more ration~! input into the fee determination process, help avoid method- ological flaws in setting the fee, and ensure the applica- tion of relevant data. All members of the advisory committee should be able to understand the data used to justify the fee. "Garbage in" will produce "garbage out" and wiII generally lead to unjustifiably higher impact fees. Paul S. Tischler is a principal of Tischler & Associ- ates,lnc., afiscal, economic, and planning consulting firm with offices in Bethesda, Mal)'land and Los An- geles, California. The firm has prepared over 75 im- pactfeesfor communities around the country. None of the public sector fees has been challenged. in repre- senting the private sect01~ Tischler has succeeded in reducing impactfee amounts 01~ in one instance, elimi- nating afee altogether. Note: Please let us kno\v if you would like to receive a copy of "20 Points To Know About Impact Fees", a reprint from Planning Magazine. ~ Tischler & Associates, Inc. Providing Solutions for Growth 4701 Sangamore Road · Suite N210 · Bethesda, MD 20816 Also: Los Angeles, CA S E R V ICE S . Fiscal Impact Analysis . Impact Fees . Capital Improvement Programs . Revenue Strategies . Market & Economic Feasibility . Growth Policy Studies . MUNIES . FISCALS . CRIM · CIPS (800) 424-4318 BULK RATE U.S. POSTAGE PAID PERMIT #293 " MERRIFIELD. VA REPRINT "IMPACT FEES-UNDERSTAND THEM OR BE SORRY"