Saturday, November 1, 2014

Reed Flickinger | West Hawaii Today

The Hawaii County Council will today consider a bill adopting impact fees.

That sentence could have been used before, many times, over the past two decades. This county has been faced with the need to address impacts resulting from development for more than three decades, yet has never successfully addressed that need adequately.

If a single issue can be used to illustrate a gross failure and inadequacy within Hawaii County government, impact fees take that honor.

In 1991, the council had in hand a draft ordinance for an impact fee that stemmed from more than four years of discussion and a county-funded assessment of needs by Sutro and Co. titled "Infrastructure Financing Analysis and Plan."

The study delineated what most knew: The "island must look for growth to pay for the facilities needed to accommodate growth."

Then Mayor Lorraine Inouye expressed the need, as did council members. It died, however, after concerns that costs added to new construction -- then $7,240 for a single-family home and $8,000 per hotel room -- were too high. Council member Helene Hale, then Finance Committee chairman, foretold the future: "We'll never get an impact fee if Inouye and her administration don't get their acts together."

Then in 1992, Rep. Bob Herkes helped draft language for a state measure that stipulated counties could not impose impact fees without a corresponding impact fee ordinance.

Impact fees then became what were and still are called "fair share" assessments, amounts decided by the county -- often fairly capriciously and somewhat arbitrarily with a lot of behind-the-scenes "discussion" -- assessed to development to offset impacts. The word mitigation, though always used, has rarely -- if ever -- been achieved. The description "let's make a deal" was often applied to the powers and process.

Fast forward 20 years and in the interim the issue has resurfaced like clockwork about every four or five years, as the county acknowledges the need for impact fees to fund and offset the impacts of development -- and then fails to act toward that end.

In considering the county's 2003-2004 budget, the county sought $200,000 for yet another impact fee study. Now planning director and then Hilo Councilwoman Bobby Jean Leithead Todd tried to convince her colleagues to take $200,000 from several different accounts to fund a "need assessment study" to "identify the kinds of public facilities for which the fees shall be imposed."

In 2005, consultants Duncan Associates and Helber Hastert & Fee told the council that had residential fees been assessed on half of the building permits issued in the last five years, $10 million per year would have been collected and if all developers were charged nonresidential road impact fees, the county would receive $12 million per year. They proposed a countywide fee calculation, but with an east-west collection system, "so the money collected on one side of the island is not spent on the other side of the island."

Didn't happen, again.

Meanwhile, the county has collected those fair share assessments, a process that some are now claiming is illegal.

It has not, however, done a very good job of using those funds. In February 2010, we reported Hawaii County developers had pledged $108.5 million for infrastructure to accommodate population increases caused by their developments, but so far, only $8.1 million has found its way into county coffers and only $3.6 million has been spent according to the Fair Share Annual Report recently submitted to the County Council by the Planning Department. The bulk of the money that's been collected but not spent -- $2.4 million -- belongs to North Kona.

Today, we have Kohala Councilman Pete Hoffmann's impact fee bill facing its first reading.

Aside from being simply an impact fee measure, Hoffmann's bill does two unique and critical things: Protections built into the bill require money collected must be used within the benefit district where it is raised. (The bill divides the county into five benefit districts.) The only exception is a certain percentage could be applied to a road in a neighboring district -- if it completes access into the district.

State law governing impact fees contains a "use it or lose it" provision that requires the money be used within six years or given back, with interest. This provision ensures infrastructure is built in a timely fashion, Hoffmann said.

The use it or lose it clause would compel the county to act, or forfeit the funds with interest, meaning many small homeowners would likely see fees returned after the county failed to implement needed improvements within the allotted time.

Point blank: The bill should be passed. We have seen too much development with inadequate infrastructure improvement allowed by the county and our quality of life has correspondingly declined.

Government acknowledges the need. It must act -- finally. The clock has run out on government responsibility and developer accountability.

rflickinger@westhawaiitoday.com

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