How Impact Fees are Determined

September 27, 2016 by Dan Hennessey

This is the second in a three-part series regarding rough proportionality and its effect on development projects.  Here’s a link to Part 1 .  Check back for updates to the BIG RED Blog.

Part 1 of this series introduced rough proportionality and discussed why impact fees are used, and how they can be beneficial to both jurisdictions and, in some cases, developers.  This post will discuss how impact fees are determined, what is included in impact fee calculations, and for what they can be used.

Often, developers have paid for only their share of specific improvements identified in impact studies; this manner of collecting for improvements can miss the larger picture regarding the surrounding transportation network.

In attempting to plan for growth, jurisdictions can also create Capital Improvement Programs (CIPs) and other programs to identify these types of improvements (and their costs) ahead of facility deficiencies.  CIPs are typically funded through impact fees, in which funds are collected from every development regardless of their specific impacts.

The fees are determined from the cost of the anticipated projects and the anticipated proportion of the traffic due to future growth.   This is an important point – these fees can only include the proportion of the cost that is attributable to growth.  It cannot be used to maintain existing facilities or alleviate existing issues.

These fees are then whittled down to a cost per unit, where they represent maximums that can be charged to development as the cost of maintaining the transportation system on account of future growth.

Fees are subject to jurisdiction approval and a public review process.  Fees can be per land use unit (square foot or dwelling unit) or per vehicle trip generated by the development.

Both the City of Austin and City of San Antonio have calculated their fees as a cost per vehicle trip generated (more than $3,400 per vehicle trip).  As will be exhibited in the third and final part of this series, this method of calculation makes the trip generation step of a transportation impact analysis all the more important.

rp-traffic-1Overestimating trips generated by land uses can lead to excessive traffic impacts and related mitigation that can discourage development of otherwise desirable projects, or transportation that is not sized to the setting of the development (leading to inappropriately-large intersections like that shown below).  There are many variables to consider for trip generation – it’s not as simple as looking up a rate in a book.  Part 3 of this series will discuss important variables that can affect vehicle trip generation (and thus impact fee/rough proportionality payments).

rp-traffic-blogDo you have questions about trip generation estimates for your project? At BIG RED DOG, we’ve done this before. We’re here to help. Contact Dan Hennessey or James Schwerdtfeger in the Austin office today.

Written by Dan Hennessey

Dan Hennessey

Dan Hennessey, P.E., PTOE is our Public Infrastructure Services Market Director. Dan holds a Master’s Degree in Civil Engineering (Transportation) from the University of California, Berkeley and a Bachelor of Science in Civil Engineering from The Ohio State University.

Dan is responsible for managing our Raving Fans and prospective clients, overseeing the performance of our public infrastructure engineering design staff, steering our marketing strategy, and spearheading our community outreach and volunteer efforts.

Dan’s professional experience and expertise focuses on Traffic Impact Analysis (TIA) studies, highway, freeway and arterial operations analysis, signal coordination and synchronization, traffic signal design, travel demand forecasting, and pedestrian and bicycle facility design.