Ruling may key repeal of Cary road-funding rules

akenney@newsobserver.comDecember 14, 2012 

— The town of Cary may repeal its “adequate public facilities” ordinance, after a N.C. Supreme Court decision cast doubt on the legality of a policy the town has used to keep up with development since the 1990s.

Cary and other local governments adopted such ordinances to require local developers to build or pay for new roads, schools and other improvements. In August, the state Supreme Court ruled that the policy in Cabarrus County was illegal, because it wasn’t specifically authorized by the legislature.

Now Cary, along with Cabarrus, Lincoln and Union counties, are looking at major revisions or repeal of their ordinances, and countless other local governments are checking their rules against the court’s ruling.

The changes could make it harder for cities and counties to pay the costs that come with new housing and commercial projects, according to Rich Ducker of the UNC School of Government. With one source of revenue eliminated, many towns and counties are wondering now whether to raise taxes or fees to make up the difference, he said.

“Well, local governments are having trouble raising money to build some of these facilities, and it’s not real clear who’s going to blink first,” said Ducker, an associate professor. “Are taxpayers going to blink, or are city councils going to blink, or are developers going to blink?”

The “APF” philosophy took root in Cary in the late 1990s, when town council members wanted to ensure roads and schools kept up with the demands of new construction.

“People just were screaming that growth has to pay for itself. Every one of us ran on balanced growth,” said longtime councilman Jack Smith.

But developers and builders’ associations have long contended that the rules are an unfair burden on builders and home buyers, and that state law doesn’t explicitly allow them.

“Our members put in a lot of money to take these cases to the (state) Supreme Court,” said Lisa Martin, director of government affairs for the N.C. Home Builders Association.

Builders primarily targeted school-funding policies, which they felt unfairly put townwide costs on the shoulders of developers, Martin said. They’re more accepting of policies like Cary’s, which require them to fund intersections directly affected by development, she said.

That distinction won’t help Cary, though. The high-court decision in Lanvale v. Cabarrus was broad enough to annul any ordinance that wasn’t specifically authorized by the legislature.

The Orange County school system’s APF policy will likely survive, as it already has a special state exception. Cary council members, however, hold out little hope that a Republican-dominated legislature will be lenient with exceptions.

Cary’s road revenue

Instead, the town of Cary plans to hash out another way to fund road improvements alongside new development. The council will have a substantial gap to fill: 30 projects proposed in 2012 were large enough to potentially require developer-funded traffic improvements, though not all will be completed.

The traffic studies alone for those projects can cost more than $10,000 each; data on the actual project costs weren’t immediately available.

Cary may raise additional revenue by hiking the town’s transportation impact fees, through which developers pay a set amount of money for each residential unit or square-foot of commercial space.

“We’re definitely going to look at our fee structure – is it equitable?” said Councilwoman Gale Adcock. “As you open a notebook with a clean piece of paper, you kind of put everything in there.”

For now, the town is preparing for a transition away from the APF policy. The council will hold a public hearing on the topic Jan. 10 and may repeal it on Jan. 24. Cary will be aided in the change by a consultant, for which the council budgeted $300,000 in a split vote Thursday.

Not every town has a bank account as large as Cary’s, though, and some may find themselves unable to keep up with development now that they’ve lost a tool, Ducker said.

It’s possible that voters in some areas will “be so unhappy with crowded schools and crowded roads and deficiencies in these public facilities, that they are going to be interested in blocking further growth,” he said.

Kenney: 919-460-2608 or twitter.com/KenneyOnCary

News & Observer is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

Commenting FAQs | Terms of Service