Impact fees: Georgia's comprehensive planning requirements, volume two [May 1992]

Impact Fees: Georgia's
Comprehensive Planning
Requirements
Volume Two
Office of Coordinated Planning
., I

Impact Fees: Georgia's Comprehensive Planning
Requirements
Volume Two
Georgia Department of Community Affairs
0f6ce ofCoordiDatedPianning 1200 Equitable Building 100Peachtree Street Atlanta, Georgia S0303 (404) 65&752B May 1992

Table of Contents

In:~.ucti.on ..... 1

DCA 'How to' Guidebooks on Impact Fees

2

DCA's Responsibilities Under the Georgia Development Impact Fee

Act

3

Coordinating the Preparation of a Comprehensive Plan with

Development of an Impact Fee System

4

Procedure for Amending a Previously Approved Comprehensive

Plan to Add a CIE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 5

How To Prepare the Capital Improvements Elementofa Comprehensive

Plan.

6

The Purpose of the Capital Improvements Element (CIE)

6

Formatting the Plan Document to Incorporate a CIE

8

The Five Required Components of a CIE

9

Projection of Needs

10

Service Levels

17

Service Areas

24

Legal Pitfalls to Avoid in Designating Service Area Boundaries .. 29

Schedule of Improvements

31

Description of Funding Sources

35

Policy Statements

40

Strengthening Legal Support for Impact Fee Systems Through

Policy Statements

40

Conclusion

.-................................... 42

.Ap1JeD.dix. ~

Table 1: Units of Measure and Criteria for Establishing Service

Levels

44

Table 2: Sample Methods of Establishing Service Area Boundaries

45

Introduction
In 1990, the Georgia Development Impact Fee Act (DIFA) was enacted into law. DIFA will significantly affect the way local governments in Georgia pay for public services and facilities in the future. Impact fees are one-time fees charged to land developers to help defray the costs of expanding capital facilities to serve new growth. DIFA enables local governments to charge new development for a proportionate share of infrastructure capacity it requires. However, the Act places restrictions on the categories of capital facilities for which new development can be charged. 1 It also establishes rules under which impact fees must be calculated, collected, expended, accounted for and administered.
In the past, many local governments have offset certain costs of expanding their infrastructure systems by charging utility hook-up fees or attaching exactions to their land development regulations. 2 Under the new law, many exactions previously required of developers by local governments will be illegal. Thus, complying with the requirements of DIFA will require many local governments to make changes to their land development regulations and associated administrative activities. DIFA will also have major implications for water and sewer authorities. Limitations on the collection of capital improvement costs by utility authorities is discussed in A General Overview of Impact Fees IVolume One, the first guidebooks in this series. For communities experiencing

I DIFA limits the categories of public facilities that can be financed through impact fees to water, wastewater treatment, roads, stormwater management systems, park and recreation facilities, public safety and libraries. Prior to the passage of DIFA, local governments had broader discretion and could require developers to pay exactions or make land dedications for schools, general government facilities and other public purposes.

2 DIFA defines a 'development exaction' as "a requirement attached to a development approval or other municipal or county action approving or authorizing a particular development project, including but not limited to a rezoning; which requirement compels the payment, dedication or contribution of goods, services, land or money as a condition of approval." See A GeneralOveroiew of Impact Fees/Volume One for a complete discussion of exactions as regulated by DIFA

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significant growth, impact fees will likely be a significant enough source of revenue financing for capital improvements to justify the cost of establishing an impact fee system. However, implementing an impact fee system under Georgia's new law will generally involve a significant expenditure of time and money by local governments, both in the initial stages of developing an ordinance and fee schedule, and in the form of ongoing administrative costs. The unpleasant alternative to implementing an impact fee system will be for local governments to absorb, or find new ways of financing, many infrastructure and capital facility costs that could previously be charged to new development through exactions.
DCA 'How to' Guidebooks on Impact Fees

Because DIFA involves planning for new capital facilities, lawmakers chose to tie the imposition of impact fees to comprehensive planning as promulgated under the Georgia Planning Act of 1989. This linkage between the two laws makes comprehensive planning the foundation upon which local government impact fee systems must be grounded. After November 30, 1992 (the transitional date by which local regulations must be brought into compliance with the new law) only those local governments that have adopted an approved comprehensive plan, been designated by the state as a 'Qualified Local Government' and adopted an impact fee ordinance in compliance with the provisions of DIFA can charge developers for 'system improvements.' 3
In addition to the six basic elements required of all comprehensive plans under the Georgia Planning Act, local governments that intend to charge impact fees must add a seventh planning element, called a Capital Improvements Element

3 System improvements are defined in the law as "capital improvements that are public facilities and are designed to provide service to the community at large." System improvement costs are "those incurred to provide additional public facility capacity to serve new development." Project improvements, as opposed to system improvements, are "site improvements and facilities that are planned and designed to provide service for a particular development project and that are necessary for the use and convenience of the occupants or users." Project improvements are not regulated by the Act and, therefore, local govemment activities relating to them are unaffected.

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(CIE). The CIE is intended to establish clear public policies regarding infrastructure development and ensure sound fiscal planning for capital improvements.
To provide technical assistance to local governments interested in developing impact fee systems, DCA has produced a set of two impact fee 'how to' guidebooks:

A General Overview of Impact Fees Nolume One is directed at policy makers. The guidebook presents an overview of the provisions ofDIFA and should prove helpful to those who have not examined the legislation in detail. It explains how DIFA will affect all local governments, describes some of the strengths and weaknesses of impact fees and is aimed at helping local governments decide whether impact fees can be a useful tool for their communities.

This guidebook, entitled Impact Fees: Georgia's Comprehensive Planning Requirements/Volume Two, is intended to help local governments that have decided to proceed with impact fees to develop the required Capital Improvements Element of their comprehensive plan. It assumes that the reader is somewhat familiar with the general scope and planning requirements of the Act.

Although these two guidebooks will attempt to familiarize the reader with the comprehensive planning requirements of DIFA, they are not intended to provide all of the technical information required to draft an impact fee ordinance or to develop a schedule of impact fee charges. Carried out properly, these are exacting tasks that should be approached carefully by local governments and will probably require assistance from various legal, fiscal and technical experts.

DCA's Responsibilities Under the Georgia Development Impact Fee Act

As the agency charged with overseeing local government comprehensive planning in Georgia, DCA's involvement with impact fees extends primarily to:

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interpreting the comprehensive planning requirements of DIFA through the development of Minimum Standards and Procedures;
providing technical assistance to local governments and regional development centers in complying with the state's planning requirements;
developing plan review guidelines for CIEs to be used by regional development centers in reviewing plans and formulating recommendations to DCA; and
granting final approval of local government plans as having met the state's Minimum Standards and Procedures and conferring the 'Qualified Local Government' status that is required to implement an impact fee system.

Coordinating the Preparation of a Comprehensive Plan with Development of an Impact Fee System

Local impact fee systems may be developed simultaneously with the comprehensive plan, or they may be implemented months or years after the plan is adopted. In deciding whether to include a CIE in its comprehensive plan, a local government should estimate the time lag between plan adoption and impact fee implementation. Local governments that prepare a CIE too far in advance of developing impact fee schedules risk having information in the CIE become outdated before their impact fee ordinances can be put in place. On the other hand, defining desirable levels of service and setting service area boundaries are matters of public policy that should be discussed within the citizen participation process set up to develop the comprehensive plan, even if the CIE must be added to the comprehensive plan as an amendment some time after its adoption.

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Completing an impact fee ordinance and developing defensible impact fee structures will require a somewhat different set of technical skills than those needed to develop a local government's plan, including the services of legal counsel, engineers, impact fee consultants and experts on local government finance. The specialized services of experts can be helpful in quantifying service levels and developing cost data required in the CIE component of the plan. Ideally, the CIE should be developed using a team approach in which planners work closely with these other experts. Without some technical assistance in various specialized areas of infrastructure planning, a meaningful CIE that meets the minimum standards will be relatively difficult to prepare. On the other hand, preparing a CIE should be relatively easy once the detailed capital improvement planning required to develop ail impact fee schedule is underway.
Procedure for Amending a Previously Approved Comprehensive Plan to Add a CIE
Local governments wishing to add a CIE to a previously approved comprehensive plan will be required to follow the same procedures required for preparing, submitting for review, and adopting their initial comprehensive plan. Local governments may not adopt their CIE's until 60 days after it is transmitted to their regional development center for review. The same process must also be followed when adding additional categories of capital improvements to a previously approved CIE. The five-year schedule of improvements in the CIE must be updated annually.

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How To Prepare the Capital Improvements Element of a Comprehensive Plan
The Purpose of the Capital Improvements Element (CIE)
The CIE is intended to be a planning tool to help local governments make rational decisions about the provision of community facilities and to provide legal support for a community's impact fee ordinance. Unlike most local government capital improvements programs, which generally address only short term capital facility financing, the CIE should encompass both short term (five year) and long term (six to twenty year) capital improvement needs.
Including a CIE in a local government plan ensures (through the required citizen participation) that decisions about the allocation of public resources have the benefit of adequate public consideration and comment. A well-prepared CIE will require a local government to do fiscal planning at a level of detail that will promote fair distribution of public services and an equitable sharing of costs between existing and new development. The CIE must also provide enough detailed information to ensure that a community's plan for infrastructure development is practical and realistic, and to demonstrate that a local government has concrete plans for generating sufficient matching funds for use with impact fees to complete scheduled capital improvements. Moreover, the CIE helps to coordinate a local government's scheduled public investments with the stated needs, goals and policies of its plan.
It is likely that the development community, the public and, potentially, the courts will look to a local government's comprehensive plan to assess the reasonableness of its impact fee regulations. One of the legal tests a community's impact fee ordinance could face is whether it is consistent with a community's goals and

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The CIE is closely related to the Community Facilities Element required in all local plans. In fact, local governments may find themselves somewhat confused as to the difference between the two elements. Both elements have similar functions, and thus may contain overlapping or interrelated data or analyses; however, the Community Facilities Element must cover all major types of community facilities and infrastructure, while the CIE need only address those categories of improvements a local government intends to include in its impact fee ordinance. For the categories of capital facilities that will be financed with impact fees, the CIE must provide information at a much greater level of detail than is required by the Minimum Standards and Procedures for the Community Facilities Element.
The Minimum Standards list five planning components which must be included in the CIE. These components must be developed individually for each category of capital facility to be financed with impact fees. They include:
a projectionofneeds;
determination ofdesired levels of service;
establishment ofservice areas;
development ofa schedule of improvements for the first five years after plan adoption; and
proposed funding sources for the first five years of scheduled system improvements.

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Thus, the ClE must go beyond the Community Facilities Element in these ways:
A CIE must establish future service levels for categories of improvements to be financed with impact fees. These service levels must be def"med in quantifiable terms so that the local government's progress in attaining its stated service level goals can be measured.
A CIE must delineate 'service areas,' This will involve defining exactly where within its jurisdiction the specific capital facilities and service levels will be provided during the planning period
The CIE must determine more precise project costs and more specifically define non-impact fee funding sources,.breaking costs out by service area.
The remainder of this guidebook will be devoted to explaining these components in depth. However, first it may be helpful to clarify some issues about formatting the ClE.
Formatting the Plan Do'cument to Incorporate a CIE
The Minimum Standards and Procedures allow a great deal of flexibility in the formatting of local comprehensive plans. This is even more true in the case of the CIE, since many local governments will be amending existing plans to
incorporate a CIE. The cm need not be organized or presented as a separate
chapter ofthe plan. As long as all of the required information is included somewhere in the plan document and canbe easilyidentified during the local plan review process, DCA encourages local governments to design the format and presentation of CIEs that best suits their needs.
In deciding how to format its plan, a local government should incorporate the CIE components to ensure an orderly flow of information, rational analysis, and a

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clear understanding of the relationship between infrastructure expansion and the overall goals, strategies and policies established in the comprehensive plan.
For example, a plan might merge the required schedule of improvements of the CIE with the Short Term Work Program that is required for the other five planning elements. The CIE might be completely integrated with the Community Facilities Element, or written as a separate chapter of the plan. The same principle applies to goal and policy statements. For example, a policy exempting affordable housing projects from paying impact fees might be grouped with the other policies related to the Housing Element.

Most local governmentsthat have already begun developing comprehensive plans under the Georgia Planning Act of 1989 will be familiar with the three-step planning process defined in the Minimum Standards and Procedures for preparing the six basic planning elements (i.e., population, economic development, natural and historic resources, community facilities, housing and land use). The CIE (which is only required if a local government wishes to charge impact fees) must be developed using this same three-step process. The process involves the preparation of an inventory and assessment, the establishment of needs and goals and the development of an implementation strategy.
The Five Required Components of a CIE
The following section deals with each of the required components of the CIE in greater detail. These five components--the projection of needs, levels of service, service areas, schedule ofimprovements and funding sources-must be developed for each type or category of infrastructure proposed to be financed with impact fees.
As stated previously, seven categories of public improvements are eligible for impact fee funding under the new impact fee law. These categories are:

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Water supply, production, treatment and distribution facilities
Wastewater collection, treatment and disPosal facilities;
Roads, streets and bridges, including rights-of-way, traffic signals, landscaping, and any components ofstate or federal highways;
Stormwater collection, retention, detention, treatment, and disposal facilities, flood conirol facilities, and bank and shore protection and enhancement improvements;
Parks, open space, and recreation areas and related facilities; Public Safety, including police, fire, emergency medical and rescue
facilities; Ubraries and related facilities.
This part of the guidebook discusses how to develop each component of the CIE. Under each heading is a brief description of the component, followed by bulleted statements that describe the specific plan requirements. Text following each bulleted statement offers suggestions, explanations or factors to consider in meeting the requirements. At the end of each component are recommendations-as opposed to requirements--which local governments may want to consider to strengthen their ClEs.
1. Projection of Needs
The projection of needs component of the CIE involves making informed judgments about the importance of providing of various public services. These judgments may be based on inventory and assessment data generated specifically for the CIE or found elsewhere in the plan. A general description of future community facility needs is required under the Minimum Standards, even for plans without a CIE. In contrast, a CIE should provide a more in-depth analysis of needs (for types of public facilities to be paid for by impact fees) than is required in a basic plan. Specifically, the projection of needs should be based on population projections and employment forecasts developed in the plan and indicate system

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improvements that will be required to serve this new growth. It should also consider how extending or upgrading services to various areas within a jurisdiction might affect the local economy, as well as the rate, direction and quality of development. The provision of services to various areas should also be assessed in terms of its impact on natural and historic resources. Since growth often follows, or even hinges upon, the availability of infrastructure and public. services, investments in these items will be a powerful force in realizing the community's future vision for development.

The projection of needs component of the CIE must:

Include an inventory of CUITel1t levels ofservice for each category ofcapital improvements for which impact fees are proposed to be charged. Service levels must be expressed in quantifiable terms or in a manner sufficient to allow future evaluation ofprogress in meeting capital improvements goals.

DIFA defines 'level of service' as "a measure of the relationship between service capacity and service demand for public facilities in terms of demand to capacity ratios, or the comfort or convenience of use or both." Thus, in order to define service levels in a CIE, the inventory must develop criteria' for measuring and describing service levels. These criteria will be different for different categories of capital facilities, but will always be designed to measure capacity against demand.

For example, a CIE might describe the current park service level as two acres of neighborhood parks for every 1,000 people. Or it might assign a fivemile service radius for neighborhood parks as a measure of 'convenient' access to such parks. Note that it would be possible, using the criteria described in this example, to calculate that a community with an existing population of 10,000 would need ten more acres of neighborhood park land to maintain the current level of service ifit added 5,000 new people over the next decade. Or, one could see that some portions of the county fall outside

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the service radius of existing neighborhood parks and thus pinpoint neighborhoods with a lower standard of convenience than others. Also, it would be possible to calculate that, if the community chose to raise its service level for neighborhood parks to three acres per 1,000 residents, it would need an additional 15 acres of park land.
Determine whether the existinglevel and quality ofservices is adequate to meet current needs and clearly identify DUQor deficiencies or underutilization ofexisting facilities within thejurisdiction.
This part of the assessment should consider whether the community IS
satisfied with the level of services currently provided. The eIE should
determine whether deficiencies in services create significant problems for the community or present obstacles to meeting the community's needs or goals, and assess the risks or potential negative impacts (economic, social or environmental) of failing to maintain existing service levels. 4 It should also identify any opportunities for economic development or land development presented by excess infrastructure capacity, if this exists.
Basically, the projection of needs should ask, "What will it cost to expand infrastructure or raise service levels, and will the benefits justify the costs?" and, "What service levels is the community willing to support?" Will urban gridlock bring development to a halt unless road are upgraded on the south end of the county? Will housing stock in a historic neighborhood deteriorate unless infrastructure investments are made? If a community is experiencing a great deal of new development, capital facilities will need to be expanded or added just to maintain existing service levels. Before proposing to raise service levels, a community should assess what maintaining existing service levels is likely to involve.

4 The assessment should consider political realities. Informal surveys, input from citizen participants, and feedback from elected officials may be some ways of determining the community's overall attitudes about various service levels in the planning process.

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Describe variations in current service levels throughout thejurisdiction (i.e., geographic areas that differ in regard to available capacity, distribution systems or quality ofservice delivery).
This data may be inventoried in the Community Facilities Element. If not, it is important to indicate areas within a jurisdiction that lack specific services. Are there development "hot spots" in a community where roads, public utilities and other services are overburdened? Are roads congested in some areas, but almost unused in others? Does part of the county have fire hydrants, while the rest must depend on pumper trucks? Have fire protection districts been established? Does the jurisdiction contain Community Improvement Districts with higher levels of service than elsewhere? Is centralized sewer available only in urban centers? Are recreation facilities more plentiful in one part of the county than another?
Identify any parts ofthe community where the provision ofservices is, or will be, limited by engineering, economic, or environmental factors.
This requirement is related to the previous one and could be included in the same discussion. For example, it could happen that sewer service is constrained by the division of the county by multiple drainage basins. Perhaps the topography and drainage patterns make it five times more expensive to provide sewer service on the east side of a mountain than on the west side. Do inadequately sized water lines make it physically and/or economically infeasible to install fire hydrants in sparsely populated parts of a jurisdiction? Explaining these limitations in the assessment will provide a rational framework to support the decisions reached in the implementation strategy portion of the plan.

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Identify areas where new capital facilities or infrastructure will be needed to support the local government's desired future land use distribution and promote othergoals establishedin the plan.
The availability of utilities (particularly sewer, water and roads) will affect the location and quality of new growth. For example, locating more intensive infrastructure in proximity to highway interchanges may encourage beneficial clustering of commercial activities. Centralized sewer and other types of infrastructure may be also be needed to support more medium-and high-density affordable housing in specific parts of the community. Soil conditions may also be related to land use and infrastructure planning. For example, in areas where soils are relatively unsuitable for septic tanks (dictating minimum lot sizes of an acre or more), lack of wastewater treatment capacity may perpetuate a pattern of sprawling development that could eat up rural open space as rapid growth occurs. Is the community trying to encourage industry to locate in a certain area? If so, providing roads, water and wastewater treatment in the proposed industrial corridor will be important, but it will be equally important to decide where infrastructure should not go. If infrastructure is extended based on market forces alone, a more random pattern of industrial development may occur. In short, the projection of needs should consider the future land use implications of infrastructure planning decisions.
Environmental policies should also be considered in capital facilities planning. For example, if the community has established a goal of protecting ground water quality under the Natural Resources Element, the CIE might assess whether centralized sewer should be a high priority in aquifer recharge areas, or whether it would be better for such areas to remain undeveloped. Is runoff from development in the flood plain affecting surface water quality? If so, a community's capital improvement

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element might assess the alternative of not providing infrastructure where it will encourage such development.
Include inventory data and projection methodologies used in assessing capital facility capacity needs that are essentially consistentwith information provided in other plan elements (i.e., population projections, economic forecasts, established development densities for various housing types, etc.).
The Minimum Standards and Procedures do not dictate which data sources a community should use for planning. Howevert once these sources are chosent they should be used as the basis for determining the projected needs listed in the ClEo The CIE should show how the infrastructure needs of the projected new population will be met. If the Population and Economic Development Elements of a communityts plan support a slow growth scenariot while the CIE describes massive infrastructure improvement projects aimed at fostering rapid growtht this would constitute an unacceptable internal inconsistency between the CIE and the rest of the plan.

Describe, in general terms, infrastructure needs for the entire planning horizon ofthe comprehensive plan.

ClearlYt project costs and growth projections become more uncertain the further into the future they are extended; however, the CIE is required to anticipate long-range needs along with short range priorities. When a community is building major facilities it may be most cost effective to size some types of facilities to meet the needs of the projected population of ten or fifteen years into the future. Other facilities may be designed to be developed in phases. Major capital facility needs for the entire planning period should be anticipatedt even if they will not be addressed during the five-year period covered in the schedule ofimprovements. While it may not be

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reasonable to define every project required to meet long range needs an overview or general indication of major infrastructure investments anticipated should be included in the CIE. For example if a local government knows that a new east-west highway is being planned to bisect the county by the year 2000 this knowledge may affect the planning and placement of other infrastructure in the meantime.
While not required to meet Minimum Standards local governments are encouraged to consider the following:
The projection ofneeds should consider the timing ofmajorservice capacity expansions in light of the five-year projecti~nintervals required in other plan elements.
To the extent possible capital improvements programming should be responsive to the growth curve shown in the projections. The CIE should indicate when a community must achieve its short to mid-range goals in order to avoid falling below its established service levels. Timing of proposed system improvements should be roughly consistent with the growth forecasts indicated by the five-year projection intervals required under the Minimum Standards. In other words if a community states that it expects to gain 10000 new residents in the next five years the CIE should i~dicate how its adopted service levels can be reached for these new residents in that time frame.
To the extent possible, population and employment projection totals should be disaggregated by service area, and projected capacity needs for each
service area should be translated into demand units SO that the em clearly
illustrates the relationship between projected growth andrequired capacity. 5

5 See page 18 for a description of demand units and also Table 1 in the appendix.

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Projection methodologies do not always lend themselves to predicting the spatial distribution of growth. Nevertheless, making some informed assumptions about how the predicted growth will be distributed among various service areas can be beneficial in programming capital facilities to serve these areas.
2. Service Levels
Service levels have serious legal implications under DIFA. Once a local government receives a developer's money under an impact fee system with the promise of providing a certain service level, it is under an obligation to achieve its stated goals. Establishing appropriate service levels is a policy decision. Service levels for each category of capital improvement to be financed through impact fees should be clearly expressed, preferably in the form of goal or policy statements within its plan. Service levels must be established for clearly defined service areas, which are discussed in the section following this one. 6
The service level component of the eIE must:
Designate future service levels (by service area) for each category of improvement for which an impact fee ordinance will be adopted.
Within a given service area, a local government cannot set higher service levels for new development than for existing development. Ifit sets service levels for new development higher that those that already exist in the area, the community must pay (through some means other than impact fees) to bring existing development in the service area up to the new level.

6 For each type of capital facility to be financed with impact fees, a community must define either a single service area that covers the entire jurisdiction, or multiple service areas. Service area boundaries may vary with the category of capital improvement. See the following section, which discusses service areas in more detail.

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Establishing different service levels for different parts of a jurisdiction will require defining separate service areas.

Capital improvements required to upgrade service levels for existing development need not be completed before a local government can start collecting impact fees, but capital improvements needed to remedy service level deficiencies must be included in the schedule of improvements of the CIE. To avoid potential legal challenges to its impact fee ordinance, a community will need to demonstrate that substantial progress is being made toward bringing service levels for existing development up to those established for new development within the same service area. Thus, it is important that projects targeted to remedy service level deficiencies be completed on schedule.

Descn1Je future service levels in a manner consistent with the definition of
service levels in DIFA. Express future service levels using the same terms or measurements that are used to describe existing service levels, so that progress toward attainingservice levels goals can be measured or
accurately assessed. 7

As stated in the discussion of the projection of needs, it is important to express proposed service levels in quantifiable, or at least very specific, terms. Units of measurement for service levels should establish a clear connection between growth trends (demand) and proposed systems improvements (new capacity). Service levels for different categories of capital facilities can be measured and expressed using a variety of

7 Service level descriptions should relate capacity to demand. For example, locally collected data might indicate that an average household uses 200 GPD of water. Therefore, a community might define 200 GPD as its residential demand unit for water. If the community currently has 10,000 gallons of unused water filtration capacity, it can accommodate 250 units of new residential development with its existing capacity. If the population and economic projections in the comprehensive plan indicate L-,e need to provide for 6,000 additional residential units by 2010, then the community must ada 1.2 MGD of additional capacity to maintain its service level goals. Industrial and commercial water needs could also be estimated in terms of the number of residential demand units such uses would consume.

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relationships, units and criteria. (See Table 1 in the appendix for some examples.) It is important that the comprehensive plan describe existing levels ofservice and establish future service level goals using the same criteria or units of measurement.
Service level criteria should be kept as simple as possible. Some local governments will wish to define service levels using an established service classification system. Designating service levels by highway capacity manual Level of Service (LOS) ratings, Insurance Service Organization (ISO) ratings for fire safety,8 or other specialized service rating systems is acceptable, as long as the units of measurement within the system can be translated into a total 'system improvements cost' (which will have to be calculated to develop an impact fee schedule) for each service area designated.
The best measures of service levels are those which relate most directly to capital facility costs and exclude items not fundable through impact fees. For example, instead of using an ISO rating for fire service levels, a local government might define its service level goal by specifying that it will locate fire stations to provide a five minute response time to all residential areas in the community, and/or it might set a service level goal of providing fire hydrants in all areas designated on the Future Land Use Plan as medium- to high-density residential, commercial and industrial. Using these standards, the total system costs used to calculate impact fees would consist of the cost of land acquisition and facility development for new stations plus the incremental cost of installing or upgrading water lines in

8 Consider, however, that if a community's plan sets a service level goal of raising the community ISO level, it may also be incurring responsibility for increasing its work force, providing specialized training to fire fighters, adding administrative expenses or acquiring equipment that cannot be funded through impact fees. Ifa community chooses to use ISO ratings as the standard for seIVice levels, all associated costs of meeting ISO standards (including those not eligible for impact fees) should be included in the total project costs listed in the CIE's schedule ofimprovements.

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fire protection service areas to deliver adequate flow and water pressure for fire fighting.
In setting service levels and choosing criteria by which to measure them, local governments should also take into consideration how much decisionmaking they wish to leave with governmental entities such as public utilities and recreation commissions once the plan is completed, since the directions set forth in the comprehensive plan will place some limitations on the activities and decisions of those line agencies and special purpose commissions.
Take parks and recreation service levels as an example. If a local government wishes to leave most of the locational and programming decisions to its parks and recreation department or commission, it may choose to define service levels. as a general acreage to population ratio, leaving the specific facility standards to be filled in when the park plan is prepared. On the other hand, if a community's comprehensive plan will be the only document guiding the local recreation commission or park department during the planning horizon, service standards should be clear enough to reflect specific capital facility needs, such as design capacity and service radii for various types of parks, or specific equipment or playing fields per capita. The same principle could also apply to roads, public utilities and other types of public facilities.
Discuss the rationale behind establishing different service levels in different parts ofa community, where future service levels will vary from one service area to anotberover the planningperiod.
One purpose of the eIE is to provide legal support for a community's impact
fee ordinance. If there is a logical reason for providing more intensive services in a particular part of a jurisdiction, or constraints that prevent

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extending capital facilities to certain areas, it is best to state the reasons for the decisions a community has made.

Indicate whether impact fees will be used to recover the costs ofexisting capital facilities (with remaining capacity to serve new growth) that were in place prior to implementation ofan impact fee system.

DIFA allows communities to charge new development for a proportionate share of the excess capacity that was built into existing facilities in anticipation of new growth. This practice, often referred to as 'recoupment,' is optional under the Act. However, local governments that plan to recover the cost of facilities or infrastructure already in place should state their intention to do so in the CIE. Communities that will use recoupment should be especially careful to document how much remaining service capacity existed for each eligible facility or service at the time of plan adoption. Recoupment will also require a careful study of all revenue sources in the original financing package for each capital improvement. If new development will contribute to the financing of existing facilities through means other than impact fees, these contributions must be considered in establishing the impact fee structure, so as not to charge new development more than its proportionate share of the total cost.



Describe any excess servI"ce capaC"l try em"aJD"Jng m"facili"ties already

completedorunderconstructionat the time of planadoption, basedonnew

service levels established in the eIE.

Establishing quantifiable service levels in the plan is a critical step in determining whether existing systems have excess capacity. Setting service levels will often involve a trade-off between recovering costs for existing facilities and collection of fees to build new facilities. If a high service level is set for a given category of infrastructure, less excess capacity (eligible for recoupment through impact fees) will remain in

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existing facilities, and more service level deficiencies may have to be made up from non-impact fee revenue sources; however, relatively high impact fees can be collected to serve newly developing areas. If a relatively low service level is chosen, more of the costs of existing facilities can be recaptured, but impact fees collected for future system expansionwill be limited to the costs of providing the lower level of service.
In most cases, the best way of describing service capacity is in terms of demand units. Table 1 in the appendix shows some typical ways of measuring units of capacity. These were drawn from impact fee ordinances and fee calculations established by communities across the country, and are included only to give the reader a general idea of the level of analysis required to set measurable, legally defensible levels of service. 9
Table 1 also shows which types of land development are most often charged impact fees for various categories of capital facilities. Note that it is not always necessary to charge impact fees to every type of development for every type of system improvement. Different land uses create very different demands on infrastructure. Some land uses create very little demand on some types of capital facilities. For example, industries do not impact libraries to any great extent; therefore, it would be logical to set up an impact fee formula for libraries that distributes the system expansion costs between anticipated units of new residential development and leaves factories out of the formula.

9 The measures of demand in Table 1 should not be construed as recommendations from DCA as to how to define demand units or set up fee structures. Additional information on criteria for measuring service standards can be obtained from appropriate professional organizations and by consulting other local governments.

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When the CIE is beingadded to an approved plan, include documentation of how data inother plan elements has been reconciled, amended or updated to elimjnate internal contradictions in the overall plan. 10

The best way to handle inconsistencies with a previously approved plan is to amend other plan elements while adding the CIE to remove or modify any information that has been superseded. However, if this is not practical for some reason, a local government should list by page or section any data or text that is no longer valid, and explain why. The CIE should also indicate how data from other elements has been used to arrive at the projects in the schedule of improvements or indicate if more recent or specific data has been employed in developing the CIE.

IT a CIE is developed concurrently with the rest of the comprehensive plan, there should be no problem explaining the relationships between the CIE and information presented in other plan elements. However, problems may arise in assuring that ClEs added later are coordinated with the rest of the plan. DIFA requires internal consistency between the CIE and other plan elements. 11

10 For example, 1990 Census data, annual building permits or new employment figures issued since the time the original plan was adopted may indicate that projections in the Population and Economic Development Elements of the plan are too high or too low. If these more accurate and up-to-date demand estimates are used in the CIE, the best solution would be to amend other plan elements to also reflect real world conditions and avoid conflicting sets of numbers in the plan.

11 The following examples illustrate the types of internal conflict that would be considered unacceptable in plan review:
1) The projected new households used in the CIE to calculate new park acreages needed by 2010 add up to three times those projected for the entire jurisdiction in the Housing Element for the same time period; 2) The CIE projects a demand for 20,000 new residential units in a designated service area, but this is physically impossible, since the Land Use Element calls for the same area to be developed as low density residential with a maximum density of 1 unit per 10 acres; 3) The CIE pwoposes adding 10 MGD wastewater treatment capacity to an existing plant to be discharged into a local river, although the Community Facilities Element states that permitted discharges are already being exceeded and no increase in EPD permitted releases of treated water into surface water bodies is possible.

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While not required to meet minimum standards for service levels, local governments are encouraged to:



Provide some indication ofhow the total projected residential, commercial

and industrial development is expected to be distributed among service

areas (for all categories ofcapital facility with multiple service areas).

3. Service Areas

A service area, as defined by DIFA, is "a geographic area. . . in which a defined set of public facilities provide service to development within the area." An entire jurisdiction may be defined as a single service area for a category of capital improvement, or it may be sub-divided into several distinct service areas. Multiple service areas will almost always be required if a community chooses to vary service levels from one area to another, although there may be cases where the same service levels will be applied across multiple service districts. Each category of capital improvement may have different service areas, since service area boundaries should be established based on criteria appropriate to the particular category of capital improvement.
Many of DIFA's provisions (especially the designation of service areas) are intended to establish a 'rational nexus' between charges and benefits. 12 Thus, establishing service areas will be one of the most important aspects of developing
the eIE and of providing legal support for an impact fee system.

12 One of the legal precedents upon which DIFA is based is commonly referred to as the 'rational nexus test.' The term comes from court cases in which impact fees were held to be valid exercises of police power by local government, provided that:

they are calculated by measuring the needs created for public infrastructure by the

development being charged the fee;



they do not exceed the cost of such infrastructure; and

,



they are 'earmarked', i.e., spent for the purposes for which they are collected so as to

benefit those who pay them.

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Providing appropriate levels of service to new development, and not growth management objectives, should be the primary purpose for assessing impact fees. However, establishing service levels for various parts of a jurisdiction can have social, environmental and economic effects that either support or subvert the growth management objectives embodied in the comprehensive plan. Some specific hints for avoiding legal difficulties in drawing service area boundaries may be found on page 29 of this guidebook.

DIFA states that service area boundaries should be based on "sound engineering or planning criteria." Table 2 in the appendix shows some typical criteria that might be used to establish service area boundaries according to the category of capital facility under consideration. Natural or environmental boundaries such as aquifer recharge areas, watersheds or flood plains might be used in defining service areas, as might other engineering considerations such as soil suitability for septic tanks, topography or the locations of existing facilities. Planning criteria considered might include political or jurisdictional divisions or utility service boundaries established by separate service providers. Other planning considerations that should be considered in setting service area boundaries are ease of gathering and tracking data over time (for example, using state Department of Transportation (DOT) traffic analysis zones or census tracts) or maintaining consistency with established planning boundaries such as neighborhood planning units, park or school districts. Additionally, service areas might be established to support growth management or economic development strategies or to reinforce the land use patterns established in the Land Use Element.

Poorly drawn service area boundaries can have unintended negative effects. On the other hand, appropriately drawn service area boundaries can promote infill development, help to control urban sprawl, lower the overall cost of public services by encouraging growth where most types of community facilities are in good supply, and effectively direct growth and land use activities, even in the absence of

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regulatory controls like zoning. For all of these reasons, local governments are advised to take a critical look at the potential long and short range effects of delineating service areas.

The service area component of the CIE must:

Determine whether the delineation ofseparate service areas within the jurisdiction is W81T8l1ted, and discuss the rationale behind establishing multiple service areas.

Designating multiple service areas has both drawbacks and advantages. In general, local governments should use the minimum number of service areas required to accomplish their objectives. DIFA requires that impact fees be expended to benefit the service area in which they are collected. Funds collected from one service area may not be shifted, even temporarily, from one area to complete capital improvement projects in another service area. In this respect, multiple service areas limit a local government's discretion and reduce flexibility as to how impact fee funds can be spent. When too many service areas are designated, each area may take a long time to accumulate enough capital to actually begin needed improvements.

Nevertheless, there are many cases when multiple service areas are the logical alternative. Some typical reasons to delineate multiple service areas might be to:

1) separate areas intended to have different levels of service (for example, urbanizing versus rural areas); 13

13 For example, overlapping service areas for public safety, water, sewer and transportation might take the form of a ring around a growing city where an intensive array of public services would be appropriate, with the balance of the county remaining in a rural service district requiring a different mix of services. Another example of a special purpose service area would be a developing industrial corridor, which might need special wastewater pretreatment facilities or major road expansions. Separate service areas can be used to ensure that the costs of these extra facilities are paid by those who will benefit from the higher service levels--either the

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2) separate areas served by independent facilities, or areas in which the costs of providing service are radically different; 14
3) steer infrastructure away from areas with severe development constraints; 15
4) phase or prioritize infrastructure provision to different areas over the planning period in support of environmental or land use policies;
5) minimize problems associated with making older, built-out areas conform to service levels appropriate for developing suburban areas. 16

land owners whose land will rise in value, or the developers and end users of the industrial park.

14 Costs may vary from one part of a jurisdiction to another based on proximity to existing systems, engineering or environmental factors. If the fees charged for infrastructure, (for example, standardized utility hook-up fees) do not reflect the actual cost of providing the service, leapfrog development is encouraged. Because separate service areas allow fees to be structured to reflect the real cost of providing services to a certain sector or area, creating multiple service areas may be one way to encourage rational, cost-based decisions by the private sector about where to locate housing, industry or commercial activity.

15 Without actually prohibiting development in isolated or environmentally sensitive areas, separate service areas (with fee levels that reflect the higher cost of extending infrastructure in such areas) can be used to ensure that all development within a community is not forced to subsidize the extra costs of providing services to parcels of land that are not particularly suitable for building.

16 In some cases, bringing all areas of a community up to a desired service level will be physically impractical. For example, if a downtown business district were included in a road service area where a local government proposed to raise the volume-to-capacity ratio of all arterial streets, the city might be forced to condemn some very expensive real estate, remove parking sp.aces, or narrow sidewalks to an unacceptable width in order to add the required traffic lanes. Conversely, if a community does wish to raise service areas in previously developed areas, there may be benefits to drawing service area boundaries to link older neighborhoods with vacant land expected to generate plenty of impact fee revenues for new facilities or improvements. For example, a local government building a community park might want to include both developed and undeveloped land in the same service area. In general, service area boundaries should encompass the area where a majority of the users of its facilities will live or work.

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6) separate fee assessment and collection by jurisdiction (especially in joint plans), or to otherwise facilitate proposed intergovernmental agreements.

Include legible maps that clearly identify all service area lX)lmdaries.

If an entire jurisdiction is designated as a single service area, no service area map is required in the CIE. However, if service area boundaries do not encompass the entire jurisdiction, or if they cross jurisdictional borders, a service area map must be included in the plan document. It will usually be best to show a separate service area map for each category of capital improvement covered in the CIE, since capital improvement categories will rarely have the same boundaries.

Designate one or more service areas for each type ofcapiUll facility to be financed through imPact fees.

While not required to meet minimum standards for service areas, local governments are encouraged to:

Designate service areas based on "sound engineering or planning principles, or both," as specified by DIFA.

Under DIFA, it is the responsibility of each local government to determine how to combine and prioritize needs and goals established under various plan elements and to reflect this synthesis of needs and goals through the service area boundaries it defines.

Designate service areaboundaries that support, and demonstrate general consistency with, plan goals and policies.

In particular, local governments should carefully examine service area boundaries and their designated service levels to ensure that there is no

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conflict between service extension policy and proposed intensity of land uses, housing densities or population distribution established in the Land Use Element of their plan. For example, an area designated on the future land use map as an agricultural zone should probably not be included in a sewer service area proposed to be served with centralized sewer, since this could inadvertently promote the conversion of farm land to residential subdivisions or commercial activities.

In jurisdictions where zoning is in place, making some types of infrastructure accessible in zones designated for low intensity land uses will encourage developers to petition for rezonings to higher intensity land uses, and will make the future land use map even less effective where no regulatory controls exist. Even communities with knowledgeable, committed planning commissions will find it difficult to uphold a plan with these types of inconsistencies. Once day-to-day land use and zoning decisions begin to diverge from the land use policies and objectives of the plan, the documenfs effectiveness and its value as a legal support for local government actions deteriorates.

Legal Pitfalls to Avoid in Designating Service Area Boundaries

The following suggestions are provided for consideration by local governments in developing service areas, and are in keeping with general legal principles in Georgia and judicial opinions expressed in other states.

1. Service area boundaries should not be "arbitrary or capricious." Rather, they should be consistent with, and supportive of, the stated objectives and policies of the comprehensive plan.

2. Service area boundaries should help to establish a "rational nexus" between fees charged to each new development and its system capacity needs. Service areas are intended to ensure that capital facilities are built

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within reasonable proximity to the new development and serve its residents or occupants. The actual distance from a development project to a capital improvement serving it is not important as long as a benefit link. can be established. For example, a water filtration plant might be located outside of a service area that financed it, but provide service via a major water main. In general, the rational nexus between a community facility and its service areas will be established by the designed service radius of the facility, or by some portion of its capacity that is earmarked for a particular service area.

3. Avoid defining service areas that give the appearance of discrimination against specific groups. For example, if the only predominantly hispanic neighborhood in a jurisdiction were defined as a separate service area with lower service levels than the rest of the community, the plan and/or an impact fee ordinance might be overtumed by the courts as discriminatory.

4. Be careful not to completely separate existing development from undeveloped land when designating service areas. Policies establishing much higher levels of service for newly developing areas than for existing neighborhoods or commercial areas may be particularly suspect.

5. Do not draw service area boundaries specifically for the purpose of denying public services to land holdings proposed for future public acquisition by a local government. Withholding public services to a particular parcel to prevent its development or suppress land values could be challenged as a 'taking.'

6. Establishment of lower service levels for an area being annexed than for other areas within a municipality can be problematic due to provisions of Georgia's annexation laws. Before annexation can be accomplished by the 60% method (one of several ways land can be annexed in Georgia), a plan of services must be presented at a public hearing as information to voters and

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land owners within the annexation area. On the basis of these proposed service benefits, individuals within the proposed annexation area then vote whether or not to come into the city. The law says that the services offered to the annexed area must be substantially the same as those offered in other parts of the municipality. Even if an individual voluntarily annexes his land into the city (another annexation method) and the city makes no promises to extend services to him, the next owner of his land could demand to be served and may have legal grounds to do so.
7. Any geological, topographical or other environmental factors that present barriers to providing the service in certain geographic areas within service areas should be explained in the CIE. Withholding services selectively inside designated service areas should be justified through supporting policy statements in the plan. For example, a policy might be formulated stating that no sewer connections will be provided to development proposed inside the 100 year flood plain. Table 2 in the appendix shows some typical ways of defining service areas for each type of capital improvement. It is meant only as a general guideline and may not be appropriate to every situation encountered by an individual local government.
4. Schedule of Improvements

To meet Minimum Standards, the CIE of a comprehensive plan must consider system improvements for the entire planning horizon of the comprehensive plan, which for most plans will be 20 years. This means that major long-range projects that will be financed with impact fees, but will not be initiated within five years of plan adoption, must be identified or described only in general terms. 17 These projects will often be covered in sufficient detail in the Community Facilities Element of the plan.

17 Mid- to long-range capital improvements may be shown in a combined ClEf Short Term Work Program by adding more year columns to the Short Term Work Program.

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The specific capital improvement projects and funding sources listed in a schedule of improvements are not set in stone. If a given revenue source does not materialize to complete a new facility, or priorities shift within a service area so that different projects take precedence at a later date, these changes can simply be reflected in the annual update of the schedule of improvements. On the other hand, changes in service area boundaries or modifications of officially adopted service levels are major policy shifts that would require a plan amendment.
As part of the implementation strategy for the ClE, the schedule of improvements is only required to list projects (including joint or interjurisdictional projects ) to be initiated within the first five years after plan adoption. In order to assure coordination of community facility development and other local government projects, DCA recommends combining the CIE schedule of improvements with the rest of a plan's proposed capital improvements in the Short Term Work Program. However the schedule of improvements is formatted, the CIE must identify the service area(s) of each capital improvement project.
The schedule of improvements must include:
A listing, by year, ofall impact fee-related capital improvements to be undertaken over the five-year period after adoption ofthe eIE, iDcluding:
1. a brief (but clear) description ofeach project;
This might be as simple as, "Widen Jones Road from two to four lanes from Broad Street to 1-75," or, "Add a police precinct station in Service Area One." Or, the project description could involve more detail if the improvement has a more complex technical function.
2. assignment ofeach Project to a specific service area or areas;

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3. implementation time frame (i.e., anticipated start and completion dates);
Generally, a breakdown of a project by phases should be included when: 1) the project phases will occur in different years; 2) part of the project will occur outside the short term planning horizon; and 3) funding sources or responsible administrative entities are separate and distinct for various parts of a project.
4. the amount ofadditional capacity that will be created to serve new development (if any). 18
Ideally, a CIE should describe additional capacity to serve new development in terms of demand units. For example, "This treatment plant will accommodate 600 residential equivalency units." However, for some categories of infrastructure (like roads or stormwater management facilities) in which individual projects have an interactive effect on the whole system of a service area, this may not be possible. The main idea is to
show the user of the eIE that the projects listed provide su,fficient capacity
to serve the projected demand in the particular service area. In some cases this requirement might be met by describing the need that will be met by the particular project. For example, "This road widening will channel 400 trips off Main Street and onto Belk Road during peak traffic periods."
It is possible that a project listed might include specific items or costs that add no capacity to serve new growth, either: 1) because they are operation, maintenance or replacement costs or 2) because the capacity created is intended to make up service level deficiencies. For example, in the first case, the schedule of improvements ,might list the cost of a road widening project and include the cost of resurfacing four lanes of roadway, when only

18 Since projects undertaken for the purpose ofraisinI current service levels for existinl development must be listed in the schedule ofimprovements, it is possible that none ofthe additional capacity of a listed project would be intended to serve new development.

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the two new lanes would add to system capacity. The total project cost (as drawn from a communities transportation CIP) might be $200,000; however, only $150,000 would go to build new lanes. The schedule of improvements might list the total cost of $200,000, but state that only 75% of the project would add system capacity.

A second example illustrates how a project intended both to provide new capacity and to make up some service level deficiencies would be treated under this requirement. Suppose a community proposes a new ten acre park ( in a service area with a service level of two acres per 1,000 population) for which 20% of the service capacity is designed to raise service levels for the 1,000 existing residents in the service area, while 80% will serve future development (a projected 4,000 new residents over the planning period). The schedule of improvements would state that 80% of the project would provide new service capacity.

A listingofall capital projects that willbe required to upgrade service levels for existing development within each service area. These projects must be
marked or designated as a part of the em.

DIFA states that, "Development impact fees shall be calculated on the basis of levels of service for public facilities that are adopted in .the municipal or county comprehensive plan that are applicable to existing development as well as the new growth and development." Therefore, projects required to raise service levels for existing development must be included in the ClE, even though they cannot be paid for with impact fees under DIFA.

While not required in order to meet minimum standards for the schedule of improvements, local governments are encouraged to:

Ensure that capitalimprovementprojects proposedfor eachservice area are consistent with any policies stated in the plan regarding the

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5. Description of Funding Sources

Going through the process of identifying funding sources should keep a local government's goals realistic. It also indicates to the community that its local government has planned for necessary matching funds to supplement impact fees. This requirement ofDIFA is meant to ensure that all service areas will eventually meet their established service levels.
The CIE should be as accurate as possible in estimating project costs and listing funding sources. If project costs need to be adjusted or financing strategies change, this should be addressed in the required yearly update of the schedule of improvements.
To provide the most efficient use of public revenues, traditional financing methods will have to be adapted and combined with impact fees. Ideally, the combination of funding sources listed for each capital improvement project should only be established after consideration of various alternatives. The description of funding sources in the implementation strategy should represent the optimum combination of financing methods that will be to the best advantage of the community.
The description of funding sources component of the CIE must include:
Accurate total project costs for each capital improvement project listed in the schedule ofimprovements, as generated in the course ofpreparing impact fee schedules. Or, ifthe impact fee scheduling process has not been initiated at the time ofCIE preparation, reasonable estimates oftotal project costs based on past facility costs, industry standard unit costs, etc.

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Some local governments may have difficulty estimating project costs for highly technical public works projects before having secured funds for engineering or feasibility studies. If special studies are required to pinpoint costs, and such studies cannot be conducted prior to the development of the CIE, the studies themselves should be listed as work items in the schedule of improvements along with the years when they will begin and be completed. Where specific project costs are unknown, it may help to examine cost data for similar recent projects, ask for volunteer assistance from knowledgeable experts, or contact other local governments that have installed comparable facilities about costs and financing strategies.

Local governments may find it difficult to decide what should be included in a 'total project cost.' Local governments are, to some extent, free to define this term as they deem appropriate; however, they demonstrate some consistency in their approach. As mentioned earlier, a local government might establish service level goals that involve expenses that cannot be financed with impact fees, such as adding specialized equipment, vehicles or personnel. In such a case, the 'total cost' of reaching the community's goal might, in fact, include major costs that are integral to expanding services that are not capital improvements or are not eligible for impact fee financing. 19

Some impact fe~ financed projects will likely be collaborations between cities and counties that have separate comprehensive plans while others will be contained in joint plans. Either way, each jurisdiction must have its own CIE and Short Term Work Program. Thus, local governments may

19 For example, a community might have set a public safety service level goal that involves increasing the number of patrol cars on each shift and adding several new precinct stations and a central radio dispatch office. If a community chooses a plan format in which the schedule of improvements for the OlE and the plan's Short Term Work Program are combined, stating total cost to include the cost of all these objectives (and then breaking out the portion of the total project cost that is an eligible 'system improvements cost' under DIFA) may be the best
approach.

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experience some confusion about how to show the total cost of multijurisdictional projects on each local government's ClEo
There are several ways to organize the implementation strategy and show funding sources for multi-jurisdictional projects within a joint plan. One is for a local government to show the entire cost of a joint project in its CIE, and then list the total contribution of other jurisdictions as a single amount, just like any other non-impact fee funding source. Another is for each jurisdiction to list only its own investment in the joint project as a total project cost for the purpose of its individual schedule of improvements, backing out the other jurisdiction's contributions. If this last method is used, matching funds, grants and other resources provided by the local government should still be identified, along with the percentage of the total cost stated that will provide new capacity to the particular jurisdiction (see next bullet). Either method is acceptable as long as consistency is maintained throughout the CIE, and it is clear how each project will be financed.
Percentage ofeach project's stated total cost that is directly attributable to adding capacity to serve new development. a> As stated above, the standards are designed to allow a great deal of flexibility in stating total project costs, with the intention of making the CIE a meaningful tool for local government and making it compatible with other planning documents. The requirement above is intended to establish the portion of the total cost stated that is actually a system improvements cost as defined by DIFA. The portion of the total cost designated as a system

20 DIFA allows local governments to recover the cost of excess capacity remaining in existing infrastructure systems when excess capacity has been planned to serve new development. The present value of such existing a capital improvement should be stated in the CIE as a total project cost. The existing capacity or demand units available to serve new development should be stated in the CIE, rather than (or in addition to) the original capacity of the project, since some of the original capacity will have been absorbed between the time the capital improvement was built and the adoption of the CIE.

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improvements cost represents the maximum amount eligible for impact fee financing.

Note, however, that the CIE does not require local governments to establish the percentage of the total cost that will be paid for by any particular financing source, including impact fees. As a matter of policy, some local governments may choose not collect the entire costs of system improvements through impact fees. Although it will be important for a local government to calculate the portion of the total cost of each project that will be generated through impact fees when developing an impact fee schedule, presenting this level of detail on funding sources in the CIE is optional.

One type of costs -- those for on-site project improvements -- should clearly be excluded from the totals stated in the CIE. As explained in Volume One, DIFA makes an important distinction between 'project improvements' and 'system improvements.' The Act says that, "If an improvement or facility provides or will provide more than incidental service or facilities capacity to persons other than the users or occupants of a particular project, the improvement shall be considered a system improvement." DIFA defines 'system improvement costs' as "costs incurred to provide additional public facilities capacity needed to serve new growth and development." DIFA also states that, "Development impact fees shall not be used for any purpose that does not involve system improvements that create additional service available to serve new growth and development."

In contrast to system improvements, 'project improvements' are defined as "site improvements and facilities that are planned and designed to provide service for a particular development project and that are necessary for the use and convenience of the occupant or users." DIFA further specifies that, "No improvement included in a plan for public facilities approved by the governing body on the municipality or county shall be considered a project

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improvement." Therefore, while some costs that are not system improvement costs may be included in CIE total cost figures, 'project costs' should definitely be excluded from in the CIE.
In reality, it will be unusual for 100% of a capital improvement project's capacity. to serve new development, especially for roads, parks and libraries, because these types of capital facilities are often used by people outside their defined service areas. 21 However, for the purposes of developing an impact fee system, the percentage of a proposed capital improvement project's capacity that is allocated to serve the existing population will depend primarily on whether a community is raising service levels (and thus defining current services as deficient) or accepting the service levels that existed at the time of plan preparation as adequate. If no deficiencies in meeting service levels goals are indicated, presumably all of the capacity added through new capital facilities or infrastructure will be available to serve new development.
A description ofproposed sources offunds other than impact fees that are expected to make up the remaining portion ofeach project's total cost.
Funding sources are required to be more precisely described in the CIE than in the Short Term Work Program. For example, instead of saying additional funding will come from grants, the grant source should be specified. Instead of saying funds will come from 'local government,' the CIE should specify 'general revenues,' 'special option sales tax,' 'revenue bonds,' 'private contributions' or whatever the financing mechanism will be.

21 Some impact fee methodologies will adjust fee structures to account for regional impacts on infrastructure, or for demands that are created outside a service area, but impact its capital facilities.

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As stated earlier, capital improvement projects required to upgrade service
levels for existing development must be included and identified in the eIE
or Short Term Work Program in order to demonstrate that a local government has planned to meet this provision of DIFA. The Act says that, "development impact fees shall be calculated on the basis of levels of service ... that are applicable to existing development as well as new growth and development." Thus, in addition to listing projects required to meet service level goals for existing development in the schedule of improvements, specific funding sources for such projects must be identified.

Policy Statements

DIFA states that:

... a municipality or county development impact fee ordinance may exempt all or part of particular development projects from development impact fees provided that such projects are determined to create extraordinary economic development and employment growth or affordable housing, providing that the public policy which supports the exemption is contained in the municipality's or county's comprehensive plan." (O.C.G.A 36-71-4(k.
Therefore, if a local government plans to allow special exemptions in its impact fee ordinance, the comprehensive plan must include policy statements supporting such exemptions.
Strengthening Legal Support for Impact Fee Systems Through Policy Statements

The following section describes a number of goal and policy statements that are not specifically required by DIFA to be in local plans or required in order to meet Minimum Standards and Procedures, but could be useful to local governments as a means of strengthening the legal foundations of their impact fee systems. Impact fee-related goals and policies should be reviewed by a local government's

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legal counsel, since unique local situations might make any of the following suggestions inappropriate:
1. State, as a formal policy, that new development will be responsible, by means of an impact fee system, for the financial burdens it will impose on a community.
2. State specific goals or policies in the plan that support the provision of public services in certain geographic areas, differential levels of services in different parts of a jurisdiction, or d~cisions not to extend services into certain areas. This will provide legal support for adopted service levels and service area boundaries.
3. If public utilities are under the direct control of the local jurisdiction and are not an independent authority with an autonomous board of directors, include a policy statement regarding any administrative, accounting or fee calculation procedures that will be changed to assure consistency with DIFA. Work items related to these changes (if any) should also be scheduled in the Short Term Work Program. If water or wastewater treatment is provided to a community by a utility authority, interjurisdictional agreements regarding the collection of hook-
up fees for system improvements may be required. The eIE should state the
community's intention to enter into any such agreements. It should also explain if impact fee credits will be granted for hook-up fees charged by utility authorities.
,
4. State, as a policy, the intention to bring existing land development regulations and local government administrative procedures into compliance with the Impact Fee Act (if, in the opinion of the local government's legal counsel, changes will be required), and schedule these revisions as a work item in the Short Term Work Program of the comprehensive plan.
5. Authorize through a policy statement any interjurisdictional agreements that may be required for the collection or expenditure of impact fees for joint planning projects.

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How to Planning Series
Conclusion
This guidebook is designed to provide assistance to local governments in understanding how to develop their CIEs. The contents focus on developing a CIE that will meet the planning requirements of DIFA and the Minimum Standards and Procedures for Comprehensive Planning.
However, it should be clear from reading the sections on the required components of the CIE that developing a CIE will require close coordination with the team members that develop a local governInent's impact fee ordinance and fee schedule. As an impact fee system is developed, consultation with these experts will provide much of the information required for t~e CIE. It is important to understand that the projects listed in the CIE should be the basis for the fee schedule established for each service area in a local government's impact fee ordinance. Thus, it will be impractical for a local government to develop a 'generic' CIE just in case the community should someday decide to implement an impact fee system. Preparation of a CIE should only be undertaken when a community is beginning the process of developing an impact fee system.
It is also important for a CIE to be consistent with a community's other capital improvement documents or plans (for example, park master plans, transportation improvement programs, utility authorities' service plans) adopted by a community. Such documents should ideally be used in preparing the CIE and, if necessary, updated to reflect the capital improvements defined in the CIE. As this guidebook has emphasized, the CIE is not merely a wish list, but should function as a practical bridge to plan implementation and the use of impact fees.

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Office ofCoordinated Planning

Appendix
Table 1: Units of Measure and Criteria for Establishing Service Levels Table 2: Sample Methods of Establishing Service Area Boundaries

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How to Planning Series

Table 1: Units of Measure and Criteria for Establishing Service Levels

Type of Capital Improvement

Some Typical Measures of Service Levels

Types of Development Usually Charged I Typical Demand Units

Water supply

Average gallons of treated water consumed per day; other criteria such as peak usage; line diameter; storage capacity.

Residential: household units; impacts of other land uses often expressed in residential equivalency units, or per 1,000 ft.. of floor area.

Wastewater Treatment

Gallons per day treated; gallons per day permitted for release into surface water or land treatment.

Residential: household units; all other land uses usually expressed in residential equivalency units or per

1.000 feet of floor area.

Stormwater management, flood control, shore

New runoff generated; impervious surface created, grade change, miles of shoreline.

All land uses: total project acres; acres of impermeable surface created; acres of land disturbed.

protection

Parks, recreation and open space

Acres per 1,000 pop. by park category (e.g., neighborhood, community, regional, etc.) service radius or design capacity by park category.

Residential: by unit, sometimes by household size; commercial: square feet of office space; commercial and industry often charged.

Roads, streets and bridges

LOS level by functional class of road (e.g., arterial, collector, etc); other criteria such as: volume to capacity ratios; lane miles.

Trips generated by land use, average trip length; residential: by housing unit; commercial: by square feet of floor space or , employees industrial: by , employees

Fire protection

1# sq. ft. of facility per full time personnel or fire fighting units (might be expressed in facility cost per unit); response time or distance from station; stored water capacity; ISO rating.

Residential: by unit (may consider 1# bedrooms); commercial: square feet or , employees; industrial: 1# feet, by SIC code, not always charged ifit has own sprinkler system.

Police Facilities

Patrol vehicles or officers per 1,000 pop. (Impact fees might be translated to facility cost per household unit, since impact fees do not pay for manpower or vehicles.)

Residential: by unit; number of calls for assistance to total population or average , calls by type of land uses.

Emergency medical services

Vehicles I stations per 1,000 population; maximum response time or distance from dispatch point.

Residential; by units; commercial and industrial: sq. ft. of floor area or , of employees.

Libraries

Square feet of library facility per 1,000 pop.; Books per capita.

Residential by units; commercial and industrial: often not charged.

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Impact Fees: Georgia's Comprehensive Planning Requirements /Volume Two

Table 2: Sample Methods of Establishing Service Area Boundaries

Capital

Typical Boundaries Used:

Improvement

Water

Ideally, the entire proposed service area of a public utility; could be defined

production,

based on proposed level of service provision; areas with differential cost of

treatment and service; areas served by specific filtration plants.

distribution

Wastewater

Ideally, the entire proposed service area of a public utility; service areas could

treatment,

also be based on relative cost of service, relationships between treatment plants

collection and or distribution systems; existing or proposed community improvement

disposal

districts, special tax districts or enterprise zones.

Roads, streets and bridges

Could be entire jurisdiction or multiple jurisdictions through interjurisdictional agreement; where service levels will be planned to vary

within a jurisdiction, boundaries may be recommended by a traffic engineer; DOT traffic zone information may be used to determine localized impacts.

Stormwater management

Usually based on drainage basins or watersheds, or the portion of a drainage basin or watershed that falls within a jurisdiction.

Parks:

Various categories of parks may have different service areas.

Neighborhood Aggregations of subdivisions; elementary school districts.

Community

May be the whole jurisdiction for a small to mid-sized city. Community parks

generally serve a population of 15,000 to 50,000. Service districts are based on

design capacity and user accessibility (distance or travel time).

Regional

Ideally, entire jurisdiction or multiple jurisdictions through

interjurisdictional agreement. A single regional park district could contain

more than one regional facility.

Urban open space

Central business districts or within a service radius of development nodes.

Natural open space

Ideally, the entire jurisdiction, but could be a neighborhood, community, multijurisdictional or regional service area depending on the total acreage,

shape and location, type of recreational uses, and users of the particular open

space.

Special

Could be a neighborhood, community, multijurisdictional or regional service

purpose

area depending on the total acreage, shape, type of recreation available and

recreation

users of the open space. Special purpose parks can have regional benefits for

areas

tourism (e.g., amusement park, historic district park, zoo or nature center, or

lake shore).

Emergency medical

Ideally, the entire jurisdiction, but if emergency medical service to a jurisdiction is divided among several service providers, their territories may

service

make logical service area boundaries.

Fire protection Ideally, the total service area served by a single fire department (since ISO

services

ratings are based on analysis of the service provider); more than one service
area may be called for if subareas are planned to receive different levels of fire protection; consideration should be given to existing special tax districts

for fire protection. Differing service areas often related to population density

or adequacy of water system to support fire hydrants.

Police services Ideally, entire jurisdiction, or multiple jurisdictions if served by a single

police department.

Libraries

Entire jurisdiction, or regional library service districts defined by the state.

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I I I I
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DCA
Georgia Department ofCommunity Affairs 1200 Equitable Building 100 Peachtree Street Atlanta, Georgia 30303