Road and Bridge Impact Fee
The secret is out: Johnson County is a great place to live.
With great schools, engaging communities, and easy access to Indianapolis and the surrounding region, it's no wonder that many have chosen to call Johnson County home. Additional growth is all but guaranteed, especially with the completion of I-69 only a few years away.
Unfortunately, rapid growth can stress existing infrastructure. Recognizing the need to fund future road and bridge improvements to accommodate additional homes and businesses in the White River Township area, Johnson County and Bargersville partnered to develop a Zone Improvement Plan to determine exactly what improvements will be needed. This collaboration between the Town and County is unique; rather than implement separate competing fees, both entities recognized that any growth in this area affects regional infrastructure as a whole and is most effectively addressed by working together.
This plan is the basis for the implementation of a Road and Bridge Impact Fee ordinance, adopted by both entities in early 2021. This ordinance, effective August 9, 2021, equitably assesses a fee on new building permits for residential, commercial, and industrial development within the Zone Improvement Plan area to construct infrastructure improvements required by this new growth.
Impact Fee Overview
Indiana Code 36-7-4-1300 authorizes the implementation of Impact Fees by local governments to offset the costs of infrastructure improvements necessitated by residential, commercial, and industrial growth. These fees can be established for several different infrastructure types under a government agency's jurisdiction, such as water distribution, sanitary sewer installation, park construction, or in this case, road and bridge infrastructure. The statute is clear on the primary intent of this fee: addressing future infrastructure issues caused by growth, not existing deficiencies within the network.
The statute outlines the specific steps for establishment of an impact fee, but the technical process can be generally summarized as follows:
Establish an Impact Zone: The overall study area is defined, considering regional continuity and development potential.
Model existing traffic flow: A model of existing traffic flow within the Impact Zone is prepared to determine current patterns and infrastructure deficiencies.
Identify specific locations likely to be developed within the next 10 years: Any parcels that are currently undeveloped or are likely to be redeveloped within the next 10 years are identified. Adopted zoning and land use policies are used to project the type of development most likely to occur for each parcel.
Model projected future traffic flow: Traffic flow can be estimated for each of these parcels once the anticipated development type and size are projected, resulting in an additional number of vehicle trips that are added to the road network.
Compare current and future traffic models: Road improvement projects that will be needed solely due to new growth are identified by comparing the existing and future traffic models.
Develop cost estimates for identified projects: Cost estimates are prepared for each road improvement project necessitated by growth.
Calculate the per-trip Impact Fee: The total cost of all road improvement projects needed due to growth is then divided by the total number of trips added to the road network by the anticipated 10-year developments, resulting in a calculated per-trip fee.
When a new development is proposed within the Impact Zone, the Trip Generation Manual published by the Institute of Transportation Engineers (ITE) is used to estimate the number of trips based on the proposed type and size. This total number of trips is multiplied by the per-trip fee calculated by the study to determine the total Impact Fee amount for the new development. This fee is paid when a building permit is issued by the County Planning & Zoning Department or the Town Department of Development.
This Impact Zone study calculates a $268.17 Road Impact Fee and a $4.25 Culvert/Bridge Impact fee, for a total per-trip fee $272.42. The ITE Trip Generate Manual estimates 9.44 trips per single-family residence, which equates to a total impact fee of $2,571.64 ($2,531.52 Road and $40.12 Bridge/Culvert). Trip estimates for commercial and industrial developments can vary significantly based on the size and proposed use of the site and buildings, so these fees are not determined until a specific development is proposed.
Revenue generated by an impact fee can only be used to develop and construct the specific projects identified in the study and is deposited into a fund specifically created for this purpose . Costs to prepare a project for construction, such as engineering design and right-of-way acquisition, are expenses that are eligible to be paid with this fee revenue.
An Impact Fee ordinance expires after 5 years. In order to continue an Impact Fee a new study must be performed and a new ordinance must be adopted, taking into account actual development that has occurred since the previous study and adjusting the future 10-year development projection, which may result in a different calculated fee amount than the previous study.
I am building a new home or business in Johnson County, do I have to pay an Impact Fee?
Only homes or businesses built within the Impact Zone identified in the study are required to pay the fee. In this case, the zone encompasses the Bargersville Town Limits and the majority of unincorporated White River Township. The zone boundaries can be found in the Impact Fee Study document.
I am buying an existing home within the Impact Zone, do I have to pay an Impact Fee?
No, the impact fee only applies to new homes or businesses built in the zone, not to the purchase of an existing home.
Is the Impact Fee required for the construction of an accessory structure?
As long as the proposed structure is determined to be an accessory structure or building under the Zoning Ordinance applicable to that specific location, the impact fee does not apply. The Johnson County Zoning Ordinance applies to the unincorporated areas of the Impact Zone, while the Town of Bargersville Zoning Ordinance is applicable within the Town's corporate limits. The County's Planning & Zoning Department or the Town's Department of Development will assist with this determination when a building permit application is submitted.
Johnson County and Bargersville are partnering on this Impact Fee, how exactly does that work?
The Impact Fee statute allows local governments to jointly identify Impact Zones and establish Impact Fees as long as an Interlocal Agreement is adopted outlining the collection and distribution of the revenue. Johnson County and Bargersville recognize the importance of coordinating road improvements in this area, particularly with I-69 construction underway, and believe working together will provide the most benefit to the region. Under our interlocal agreement, each entity will be responsible for managing and building the specific road projects under its jurisdiction, as determined by its certified road inventory.
How much revenue will this impact fee generate?
Residential fees are estimated to generate approximately $3m-$4m in the 5 year lifespan of the ordinance based on recent Town and County building permits in the area. Additional revenue is expected from Commercial and Industrial development within the zone, but the timing will largely be dependent upon the completion of I-69. Much of the new development along the interstate could be delayed until construction is finished in 2024.
What projects will be built with Impact Fee revenue?
The full list of projects needed due to anticipated growth can be found in the Impact Fee Study, but the County and Town have jointly prioritized the development and construction of three specific projects: the intersection of CR 144 and Morgantown Road, the intersection of CR 144 and Saddle Club Road, and the intersection of Olive Branch Road and Mullinix Road. Actual revenue received will influence how quickly these first 3 projects can be built, as well as how soon other projects identified in the study can begin.
Can the revenue collected from the Impact Fee be shifted to another purpose?
No, Impact Fee revenue is kept in its own specific fund and cannot be used for any purpose other than the specific projects identified in the study.