Should Charlestown Stop Collecting Development Impact Fees?
When: Tuesday, May 27 at 7 p.m.
Where: Charlestown Town Hall
What: A public hearing to discuss this question and the Zoning Ordinance amendments proposed, which, if adopted, would revoke the town’s Capital Facilities Impact Fees Ordinance.
The Rhode Island Development Impact Fee Act recognizes a need for an equitable program for the planning and financing of public facilities to serve new growth and development.
The state law is intended:
- to ensure that new growth and development does not place an undue financial burden upon existing taxpayers;
- to promote orderly growth and development by establishing uniform standards to require that those who benefit from new growth and development pay a proportionate fair share of the cost of new and/or upgraded public facilities;
- to establish the standards for the adoption of development impact fee ordinances; and
- to empower governmental entities to adopt ordinances to impose development impact fees.
Charlestown’s Growth Management Plan adopted in 2000 spells out the need for development impact fees:
“The reason for requiring development impact fees is that growth is costly to the Town. With every new subdivision, new homes are built, more families move in and more children must be educated. It also means that more residents need more recreational facilities and more people have to be protected by the police and fire departments. In addition, more people mean more roads that must be either upgraded or constructed, which also require proper drainage systems. As the Town grows, the need for open space and conservation of natural resources becomes more acute. While Charlestown has no public water or sewage treatment facilities, each new dwelling requires private wells and individual septic systems, which in turn affects groundwater quantity and quality.”
Historically, the town designated the fees collected for school facilities, such as the construction of the Chariho Middle School, the addition to the Chariho Middle School for the CALA program, and the like. Because Charlestown is part of the Chariho regional school system, Chariho’s Superintendent was the “department head” who was to submit Charlestown’s share of school capital improvements on the basis of Chariho’s capital improvement program to the town.
Tax Assessor Ken Swain has reported that between 2000 and 2023—even during a period that saw the Great Recession of 2007 and also the Covid pandemic—Charlestown had added 582 dwelling units and had collected impact fees totaling $830,514. Between 2006–2021, the town spent $673,201 of this amount on school facilities, and in 2024, the balance—approximately $157,313—was used to construct a new playground at the Charlestown Elementary School.
In addition to schools, under state law, impact fees have the potential to provide capital funds for open space and conservation areas, recreational facilities, public works, and public safety.
Charlestown is not in violation of state law because it is not collecting impact fees; however, the development impact fee ordinance is out of compliance. To bring the ordinance into compliance and provide for the planning and financing of additional public facilities, the town would need to develop a Five-Year Capital Improvement Program (CIP) that sets out the need for the capital improvements, the costs of the improvements, and proposed funding sources.
The May 27 hearing is a continuation of the public hearing that was opened on April 14. At that time, there were unanswered questions, some of which it seems would require legal interpretation.
On April 14, Councilor Serra first expressed concern that any affordable housing which will be built would be exempt from impact fees. Resident Ruth Platner, who is chair of the Planning Commission, stated that it is only deed-restricted low- and moderate-income housing (LMIH) that would be exempt and that in a likely Comprehensive Permit application, only 25% need be LMIH, and 75% of the units would be market-rate units that would be subject to development impact fees.
Ms. Platner also informed the Council that the Planning Commission had already done considerable work in the early 2000s regarding development impact fees for open space.
Resident Frances Topping, who sits on the Planning Commission, testified that she believes that the town will likely be facing much more growth in the future than it has experienced in recent years and that eliminating the impact fee would be a disservice to the taxpayers of the town.
Councilor Serra totally agreed with Ms. Topping, saying, “We should have an impact fee.” He added, “Otherwise, it is taxpayers who pay for impacts.”
Councilor Carney supported revoking the ordinance, stating that a CIP would take over a year to develop and would cost an estimated $100,000. She also expressed the opinion that the capital improvements would need to be “attributable” to a specific new development and that, given the cost of developing a CIP, the impact fees would not generate enough revenue to make financial sense.
Councilor Serra thought that Charlestown’s capable town staff and town solicitors could put a CIP together and that saying a study that would cost $100,000 is needed is “an excuse not to do it.” Councilor Serra also maintained that any capital improvement need not be specifically tied to a certain development.
Because of the increased growth mandated by state legislation, Councilor Stokes saw the potential for the town to raise more than $20,000 a year in revenue. He pointed to the two large development projects likely in the pipeline, both of which would be heard as comprehensive permits, and he observed that just one of the developments would add three times more dwelling units in one year than the town had seen in total over the last few years. Councilor Serra agreed.
Councilor Stokes stated that he is not in favor of striking the ordinance. He agreed that the town’s ordinance is not in compliance but said, “Scrapping the process is not the way to go.” He concluded that developing a CIP is what towns should be doing anyway.
On May 27, if the Town Council were to pass the amended ordinance as proposed, the town would lose its ability to collect impact fees. If the Town Council rejects the amendments, the denial would not put the town in violation of state law because there is a moratorium on collecting fees, and the Town Council could then get answers to the unanswered legal questions and develop a CIP.
A CIP would have benefits beyond enabling the town to assess impact fees. Since the town brought the last of its town roads up to current standards approximately three years ago, it has been shown that the town would benefit from a CIP. In fact, the need for a CIP is a position that Councilor Carney has taken over the years.
Benefits of a CIP are widely seen as the following:
- Improved Financial Management–A CIP helps ensure that there are sufficient funds available for large-scale projects.
- Strategic Planning–A CIP integrates capital investments into the broader strategic goals of the municipality.
- Transparency–The CIP document provides a public record of the town’s capital management and planning strategies.