After months of negotiations, a joint road impact fee in Bargersville and Johnson County is a go, and developers will start paying it in six months.
The Johnson County Council on Monday voted 4-3 to pass the interlocal agreement between the county and Bargersville which details the obligations of both entities, including financials and other terms of the road impact fee. Melinda Griesemer, James Ison and Jonathon T. Myers voted against it.
The Bargersville Town Council on Tuesday unanimously approved both the interlocal agreement and an ordinance establishing the fee.
The Johnson County Board of Commissioners last week passed the ordinance and interlocal agreement by a vote of 2-1. Commissioner Ron West voted against it.
The fee will take effect Aug. 8.
About the fee
The fee will impact new developments, including homes and businesses, in the Interstate 69 impact zone. The impact zone stretches from Bargersville’s southern point to County Line Road, along State Road 37. The zone includes all of Bargersville and portions of White River Township in the area between State Road 37 and State Road 135, including county roads that will lead to I-69, such as Stones Crossing, Morgantown, Mullinix and Olive Branch roads.
The fee was established to collect money for road improvements that will be needed due to housing and commercial growth I-69 is expected to bring.
New single-family homeowners will be charged a standard fee of $2,571.64, including a $40.12 bridge and culvert impact fee, based on an average of trips per 24 hours. The fee is based on 10 trips per day, an industry standard that represents the average number of trips a household may take, said Luke Mastin, county highway director.
For commercial properties, the fee is based on the square footage of the building and the amount of traffic the business is expected to generate in a 24-hour period, Mastin said. The fee will be calculated using $268.17 per daily trip, and $4.25 bridge and culvert per daily trip.
The fee will be collected by county and town planning departments at the time a permit is issued, according to the interlocal agreement. If the fee is more than $5,000, the fee collecting agency can make an arrangement to pay the fee in installments, he said.
Fees collected in Bargersville will be sent to the county to hold in an account within the county budget until enough is accumulated to complete a priority road project.
The fee is expected to raise $3.5 to $4 million in the first five years from residential development alone, Mastin said. The amount of revenue from the fee for commercial properties is not something that can be easily estimated because the amounts collected will be highly variable, but would likely be several million dollars during the same period, he said.
The fee will only apply to new construction, not existing businesses and homes. However, existing neighbors, along with those who the fee does impact, will benefit from the road improvements the fee will pay for.
The county and town collaborated on the project because both will be impacted by I-69 and the two road systems are intertwined, as the county maintains some roads within town limits. Though many cities and towns have passed road impact fees, this is likely the first collaboration between two government units on such a fee, Commissioner Kevin Walls said.
The collaboration was important, officials said.
“It is all very interconnected so it was important to work together to make sure the roads are the best they can be for residents and visitors,” said Laura Kennedy, Bargersville’s spokesperson.
Another reason for the collaboration is to make sure the county and town are not in competition for businesses and residents, Mastin said. For example, if the town imposed a fee but not the county, developers might choose to save money and locate their project in unincorporated Johnson County instead, he said.
“We decided we did not want that competition,” Mastin said. “It would not be good for the overall area.”
Together, county and town officials set a list of three projects the fee income will support. The projects are roundabouts to be built at County Road 144 and Morgantown Road, Olive Branch Road and Mullinix Road, and County Road 144 and Saddle Club Road.
The projects are proposed to move traffic more quickly through the four-way stop intersections, which are already busy and will become even busier due to I-69 growth, Kennedy said.
For example, the County Road 144 and Saddle Club Road intersection is in the midst of one of the largest housing booms in Bargersville. With multiple subdivisions still under construction, another development from M/I Homes is in the works just up the road, and more land is available nearby.
Money from the fee will allow the town to address those concerns, she said.
“The idea is to play offense on traffic issues,” Kennedy said “The impact fee is another tool for the town to handle that increase in traffic above and beyond what would be possible with existing funding sources.”
Money collected from the fee may only be used on agreed-upon projects in the impact zone, according to state law.
Once the initial projects are completed, county and town officials would need to come up with new projects together, the interlocal agreement says.
County officials on the fee
The Bargersville Town Council showed united support for the fee. But on the county side, multiple county council members and West opposed it.
West, the commissioner who represents much of the impacted area, and Ison, the council member who represents northern White River Township, both said implementing the fee would over-tax those who have to pay it. Everyone who would pay the fee also pays for roads through vehicle registration fees and the gas taxes, they said.
Both acknowledged the need for more road funding, but disagreed the fee was the best way to generate it.
“I think this impact fee would be, in a sense, double taxing the people affected by it,” Ison said. “That’s the pill that I’m having trouble swallowing.”
There was some discussion about finding a different funding source. West attended this week’s council meeting, offering to help identify another solution if given a month.
The fee structure is the same as what’s outlined in state law, Mastin said.
Council members Griesemer and Myers were concerned about some of the language in the agreement, and both voted against it for that reason, they said.
“Words matter. This document is not perfect,” Griesemer, an at-large member, said during the meeting. “I can’t pass something on assumptions, suggestions and hope. We have to get something like this right.”
For Myers, who represents northern Pleasant Township on the council, the full-picture of the fee was lacking on Monday. He did not have the full context or the ordinance, beyond the agreement. At the time, there were “a lot of holes” in the document, he said.
Myers on Friday said he agrees with the concept and the collaboration it will bring.
“Knowing what I know now I understand to the extent that I agree with going forward,” he said. “I did not like the vagueness of the document that was before us (at the Monday meeting).”
Other council members who voted in favor of the interlocal agreement agreed with Griesemer and Myers’s concerns about the document’s vagueness, but were confident it would work out.
Council members Rob Henderson, who represents Franklin township and southern Plesant Township, and Pete Ketchum, whose district includes parts of Bargersville and the southern half of White River Township, said they voted in favor of the fee because, without it, the council might have to increase taxes for the whole county to compensate for wear and tear on roads not used by all residents.
“Right now, this is the best proposal in front of us,” Ketchum said. “This is going to be relieving some of the burdens from Nineveh, Needham, Hensley, Clark (township residents) who will, perhaps, never use that new road construction.”
Because it only applies to new construction in the I-69 impact zone, the fee would be targeted only to those who use the roads. There are few options right now to raise revenue for the White River Township area given that the most developed part of the township is annexed into Greenwood, Walls said.
Walls, who represents central Johnson County including parts of Bargersville, has been working on the ordinance and interlocal agreement for about six months, he said. Like others, he acknowledged the ordinance is not perfect, but said it is a good starting point.
“We do have some things that we don’t have finite or figured out,” Walls said. “But this is the first time this has ever been done through a county and a municipality. It has been a difficult lift but we have gotten it this far.”
Walls is confident in the agreement because Bargersville has been a good partner. County and town leaders work well together, he said.
The fee isn’t necessarily permanent. A new ordinance must be drafted every five years, and the interlocal agreement must be revisited every four years, documents say. So, at that time, county and town leaders could make changes to the process or abandon it altogether.