EagleTribune.com, North Andover, MA

New Hampshire

March 2, 2008

Deep impact Towns say development fees help offset taxes

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Salem has only been collecting fees since 2005, for schools and other infrastructure, and charges $5,532 for a single-family home. The town plans to use some of the money collected through impact fees to help cover the costs of building and furnishing a new police station, if it is approved by voters at the polls next week.

Londonderry Town Planner Tim Thompson said the town has collected about $1 million in school fees, and used that money to pay down the bond debt on the new high school built about five years ago.

Development spurs fee movement

Londonderry adopted its impact fee ordinance in 1994, three years after the state legislature passed a law authorizing municipalities to adopt ordinances to levy the fees. Before doing so, towns must have a capital improvement plan, a master plan, and hold a public hearing on the proposal.

The fees can't be used for personnel costs — only capital costs — but they can be used for almost any kind of facility. Excluded are fees for open space. Any money collected must be spent within six years or returned, with interest, to those who paid them.

According to planning experts, impact fees work best in towns with enough staff to make sure the town ordinances are up to date and the fees accounted for.

Nationally, the idea of impact fees gained steam in the 1970s, when concerns grew about rampant development, according to Jack Munn of the Southern New Hampshire Planning Commission. He believes they started in New Hampshire in the early 1980s, with municipalities passing their own impact regulations.

Later, the Legislature codified the regulations surrounding the fees.

Before towns adopt these fees, they typically study whether they are a good fit for that town and hire a consultant to develop a methodology for their assessment and use, Munn said.

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