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(- information. The most fail-safe way to ensure this is to obtain your own information from the departments. II. Analyze the capital improvement budget. The potential impact fee revenues will need to be related to the capital improvement budget or capital improvement element. It is important for the analyst to be familiar with this budget 'and its validity, both short and long term. 12. Be familiar with the possible geographic service areas in order to comply with rational ne.rus. As the development community becomes more concerned about pass-throughs due to tighter markets and fiscal constraints, they are more likely to look at the geographic service areas and their relationships to their project. There is a tendency for jurisdictions to have larger service areas than may be appropriate. The service areas will vary by type of activity. 13. Can a jurisdiction provide the needed capital facilities? The recommended impact fees should have some relationship to what the jurisdiction can actually provide. Whether it is due to time lag, backlog of existing facilities, debt ratios or political constraints, the impact fee work will be diminished if the jurisdiction cannot provide the needed capital facilities (assuming that impact fees do not pay 100% of the new cost). 14. Beware of granting credits. In some state statutes, the future tax payments of a house or nonresidential property which are utilized for debt service of a particular capital facility will need to be credited on a discounted basis against the impact fee amount. Even in states where this is not required, the "spirit" of impact fees is to avoid any double payments. Therefore, credits will be granted in most cases. IWhat are the realities of charging nonresidential development? 15. What are the realities of charging nonresi- dential development? In many states the juris- diction may not discriminate between different types of land use for the same service. In one county, a road impact fee was not implemented because the officials did not wish to add another fee to nonresidential development. This particu- lar juriscl, iction wanted to attract as much non- residential development as possible. The ques- tion of charging nonresidential development should be raised and answered near the outset of the study in order to avoid extra work if the answer is no. 16. Be aware that some new home buyers are already residents within the jurisdiction. In some jurisdictions 50-70% of new home buyers are trading up within the same jurisdiction. The reality is that these people have been paying for capital facility needs through their existing tax base from the time they were in the community and are now being asked to pay a second time. As a point of information, elected officials should understand this. 17. Decision makers should be aware of the "intergenerqtional equity" issue, a negative aspect of impact fees. In many cases, impact fees mark the change from intergenerational equity to site-specific equity. Many of us and almost all of our parents lived in a community where the capital facilities were paid as part of the regular tax burden. The use of impact fee and other exactions means that those who move into the community are now buying into the capital facilities with a one time fee. Educate elected officials on impact fees. 18. Educate elected officials on impact fees. For many elected officials the term impact fee means a new revenue source that can be utilized in tight times. The only thing they may know about (continued on next page) 63