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August 4, 2004

"Déjà vu, All Over Again," Is A Waste of Time

Alan Imhoff

Several years ago, County Commissioners' President John "Lennie" Thompson made a statement in a meeting I attended to the effect that ".what do we not need is another study for we already have plenty sitting on the shelfgathering dust?"

While I do not recall the specific reason for which that comment was raised, to those who have sat through many a public meeting over many years that statement has an element of truth that was born out again recently in another commissioner meeting.

In a local newspaper recently there was a report given by the Infrastructure Finance Committee, formed 10 months ago, to look into finding ".creative ways to pay for the county's education needs, water and sewer, bridges, roads, highways, and parks and recreation services.."

While laudable, I hearken back to Commissioner Thompson's remark with a sense of exasperation and frustration that once again demonstrates the bureaucratic cycle of inaction.

On September 12, 1988, the Board of County Commissioners voted to ".establish a permanent advisory committee on Capital Funding." This was a recommendation from a blue-ribbon Ad Hoc committee that had studied funding mechanisms for infrastructure expenditures for over a year and made several recommendations, of which the permanent advisory committee was one.

Once established, the Capital Funding Committee gave an annual report with specific recommendations every year from 1989 to 2000 to the Board of County Commissioners.

Then, for whatever reasons, the permanent committee was dissolved.

In May of 1995 Frederick County Public Schools issued its report from the Future Growth and School Schedule Advisory Committee.

In October 1998, the Chamber of Commerce of Frederick County issued a report and recommendations from the Task Force on Capital Projects, Funding, Planning, and Management.

In the summer of 1999, the State Growth Commission, Environment and Economic Development Subcommittee published a report done by the Infrastructure Finance Workgroup on the statewide problem of funding infrastructure at the local and state levels.

Hopefully the most recent county Infrastructure Finance Group reviewed these reports. If they did, their job was easy as they all looked at the same methods of financing. Nothing has changed in the various methods of financing since the first report of 1988.

What has happened is the lack of follow-through by the governing bodies, in this case the County Commissioners.

Case in point, had the commissioners not disbanded the advisory committee four years ago, the transfer tax may have been a reality several years ago as opposed to still struggling to get through the state delegation.

The Capital Funding Committee had accumulated over 11 years worth of data upon which to base its annual recommendations. Many have noticed that in 1993 when the impact fee was first introduced the number of new homes sold was about equal to the number of existing homes resold (51% to 49%).

By 1999 it was 38% to 62% and the trend favored more existing homes being up for resale for the foreseeable future. By the way, last year was only 18% for new and 82% resale of the 6,049 listed as residential and condo, $40,000 or more on less than 10 acres. This was a recorded total of $1.456 billion in transactions.

So, what does it all mean?

With new homes at such a small percent, it means not enough money is really being collected to fund schools. Had an transfer tax of just 1% on all home sales replaced the impact fee for just new home sales the county could have raised approximately $14,565,000 for school construction instead of the $9,851,632 (which included library as well) from Impact Fees.

But, you may ask, why is that important? Well not all increases in student population for the public schools come from new homes. So the best way to cover all contingencies is to use a broad-based type of tax or fee.

As an aside, if a transfer tax replaced the impact fee for new homes it would in all likelihood carry some savings to the purchaser, which in turn might cause a small increase in new homes sold, but that's another topic for another column.

All the studies mentioned above give the broad-based approach top marks. It takes care of changes in supply and demand. It can be adjusted more readily that the complicated formulations required for an impact fee. It just makes more sense.

Which brings us back to the original statement, what do we need another study for, especially when some many others on the same subject already exist.

Now is the time to dust off the old studies, reconstitute the permanent Capital Funding Committee and begin to execute recommendations already made.

Update the financial parameters rather than study, one more time, what already has been studied to death and make new recommendations on how best achieve a solid, predictable capital improvement program.



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