Fort Mill School District
2233 Deerfield Drive, Fort Mill, SC 29715
P: (803) 548-2527 | F: (803) 547-4696
Transportation: (803) 802-1998

Impact Fee 101
Impact Fee 101
Posted on 01/30/2020

UPDATE 1-30-2020: The district has received notification from the Sixteenth Judicial Circuit Court that Judge William A. McKinnon has ruled in favor of the State of South Carolina and York County, upholding the implementation of impact fees in the district. 

In his findings regarding the constitutionality of the South Carolina Impact Fee Act, Judge McKinnon wrote “The Act at issue is clear on its face. It clearly delineates that governmental entities, such as the District, can implement impact fees in order to provide funding for capital projects, such as the building of new schools.” 

He went on to add “The Court finds that the Act is clear in its requirements to establish an impact fee, even if it does not provide a specific cap on the amount that can be charged. As such, the Court finds that the Act is not void for vagueness and does not violate due process.”

Judge McKinnon also found that the District’s ordinance substantially complies with the Act. In his findings he wrote “The District provided substantial evidence concerning the need for the fees in order to support the growing number of schools required within the District as a result of the rapid residential growth. Mr. Bise provided substantial evidence to support his calculation of the maximum allowable impact fee that could be charged by the District, and this was the amount that was chosen.”

He went on to add “Here, though the fee is a substantial increase, it meets the requirements of the Act and, according to Mr. Bise’s study, does not exceed the proportional share of the costs of the required school development for each new residential home. As such, the Court finds that the ordinance at issue substantially complies with the Act.”

In his conclusion Judge McKinnon stated “There are many ways to fund public schools. The South Carolina General Assembly offered an impact fee as one option, and the York County Council accepted the offer and implemented the highest impact fee their report justified. The only question for this Court is whether these actions are unconstitutional. The Court finds they are not.

For the reasons set forth above, The Court finds in favor of DEFENDANTS on ALL COUNTS.”

UPDATE 8-19-2019: A non-jury trial date has been set for December 9, 2019

UPDATE 5-31-2019:
 
Judge Daniel Hall has issued an order outlining steps for the case moving forward. Both parties have agreed to a non-jury trial for which Mediation is not required, but is an available option until August 15, 2019. The plaintiffs have until August 15 to present the court with their arguments. Both sides will have an opportunity to respond between August 15 and October 1. The trial will be scheduled to start on or after October 14, 2019.

 

UPDATE 4-11-2019: Judge Brian Gibbons recently denied a request by The State of South Carolina and York County to dismiss the lawsuit. The denied appeal to dismiss does not mean the case has been won by either side. The matter will now move forward in the litigation process.


UPDATE 3-13-2019: As outlined in the South Carolina Impact Fee Act the York County Council received their first annual update regarding the impact fees at their March 4, meeting. Per the report, as of December 31, 2018 the county had collected more than $5 million in impact fees since its inception in July of 2018.

To date there have been 312 new single family homes and 202 multifamily permits applied for under the new impact fee amounts.

Based on this data, the growth in our area does not appear to have slowed at this point.

The lawsuit filed by the South Carolina Builders Association continues in the court system at this time. Fees are still being collected by the county. Under the advice of attorneys, the district has elected not to access these funds until the outcome of the litigation is completed. The funds will remain in an escrow account with the county until the issue is resolved.


Click here to view the county’s report.   


UPDATE 9-21-2018:
 T
he South Carolina Home Builders Association has filed a lawsuit challenging the validity of the South Carolina Impact Fee Act. Although the district has not been named in the lawsuit, it has impacted our ability to use the funds collected from the new impact fee enacted in July, 2018 by the County Council. The district cannot responsibly use the new funds collected as planned to fund new construction projects until this matter is settled by the court. As always, the district is thankful for the support of our community and we will continue to act as good stewards of public funds while working to minimize the impact growth has had on taxpayers in our area.

UPDATE 6-17-2018: The Fort Mill School District Impact fee passed third reading at the York County Council Meeting on July 16, by a 6-1 vote in favor. The fee will now be instituted on all new construction at $18,158 per single family home and $12,020 per unit for multifamily dwellings. Thank you to the County Council and our community for your continued support of the Fort Mill School District.



What is an Impact Fee?

An impact fee is a fee that is imposed by a local government on a new or proposed development project to pay for all or a portion of the costs of providing public services to the new development. These fees are collected on new construction only. These fees are designed for new development to help pay for the higher cost associated with the expansion of the community, such as the need for new schools to accommodate new students.


Click here for a quick look at the myths and facts about impact fees. 


Impact Fee Facts

Under South Carolina Law:

Basic legal requirements are need, benefit, and proportionality.

Must spend funds within 3 years of scheduled construction date.

Publish an Annual Monitoring Report.

Review and update every 5 years.

Fee changes require an updated study.

Requires an analysis of the effect on affordable housing in the district.

Growth In Our Area

The growth in the Fort Mill School District has far exceeded the original estimates of the 1996 study. The district’s student population has grown at an average annual rate of 6% from 5,929 students in 2002 to more than 15,000 in 2018. This is the highest rate of growth per capita in our state. In order to deal with the rapid growth in certain areas of the district, enrollment freezes have been placed on schools who's student population is exceeding the capacity. Our community has continued to support the the district by passing $653.3 million in bonds to build or expand schools since 1996 to accommodate the growth. 

 

Impact Fee History

In 1996 the York County school districts were giving the option to institute an impact fee on new construction homes. The Fort Mill School District was the only district to move forward with implementation of the fee. At that time, a study was conducted to estimate the growth and determine the amount of the fee. The study projected that the district would need 1.68 new elementary schools, 0.86 new middle schools, and 0.66 new high schools by the year 2020. The fee was set at $2500 per dwelling. (Since that time, the district has actually constructed 7 new elementary schools, 5 new middle schools, and 2 new high schools prior to 2020 with 3 more recently approved.)

Shortly after the impact fee was implemented the State passed legislation that did not allow the creation of any new impact fees. The legislation did allow the new fee implemented by the district to continue to be collected but did not allow for any modification of the fee.

In 2016 the state passed the South Carolina Development Impact Fee Act (State law Title 6, Article 9, Section 6-1-910) that again allowed counties to implement impact fees on new development.

In the fall of 2017 the Fort Mill School District presented information to the county detailing the need for an increase in the impact fees collected due to the growth in the district. The district, in conjunction with the county, has recently completed a study to assess the need for an impact fee in our area with the nationally recognized TichserBise firm. The study has shown that based on the growth in our area and under the statutes of the new law, a maximum allowable impact fee of $18,158 for single family homes and $12,020 per unit for multifamily dwellings is recommended for implementation. The resolution passed by the school board is linked below.

Click here to view resolution. 

On June 27, the impact fee ordinance passed second reading by the York County Council and has been raised from the $5,038 recommended by the York County Planning Commission based on a 1996 study to the $18,158 for single family homes and$12,020 per unit for multifamily dwellings recommended in the 2018 impact fee study.

On July 16, 2018 the impact fee ordinance passed third reading by the York County Council and was instituted.