From financial maneuvers to impact fees, the town’s transportation commission is considering potential ways Morrisville could fund much-needed road upgrades.
The Blue Ribbon Commission on Transportation Financing, tasked with finding innovative funding solutions for Morrisville’s traffic woes, is still in the information-gathering stage.
With the town’s AAA bond rating and strong income base, Morrisville could tap into some existing funding methods, Jack Vogt, an adjunct professor at the UNC School of Government in Chapel Hill, told the commission.
Vogt gave a presentation Thursday detailing how governments have traditionally used installment purchases, bonds, special assessments, impact fees and tax increment financing.
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“You have a tremendous tax base and you are in one of the best places in the state for development and growth,” Vogt said.
While tax increment financing, or TIFs, haven’t been successful in North Carolina, impact fees have fared better in towns where there is a lot of growth, Vogt said.
Tax increment financing assumes that infrastructure improvement will result in additional revenue in the form of property taxes. Property owners that would benefit from upgrades pay an additional fee to help finance the project.
Meanwhile, impact fees charge developers for the strain projects put on roads, parks and other services. If a project would add lots of traffic, for example, a developer would pay to help build a new road.
In North Carolina, only the state can grant towns and cities the authority to levy impact fees. Morrisville doesn’t currently have that authority.
Nags Head on the Outer Banks has used impact fees for several years, Vogt said.
Blue Ribbon commission member Craig Groce said he worried impact fees might hurt growth.
“Is there a tipping point where it’s stopped development?” he asked.
Vogt said impact fees typically don’t keep developers away from fast-growing areas. But there is some push-back from the development community.
“I have heard developers say we would do more in your jurisdiction if you didn’t have such high impact fees,” Vogt said.
New state program
Commission members said they were interested in a new statewide funding formula in which towns would be reimbursed half the money they put toward road projects.
For example, if Morrisville would chip in $3 million for a project, the N.C. Department of Transportation would return $1.5 million to the town to use on another road project, said Benjamin Howell, a transportation planner for Morrisville.
In 2009, the town identified 38 road projects that would span 23 miles and cost $160 million to ease rush-hour traffic. Morrisville has submitted about half a dozen projects to DOT and is waiting to find out if they will be approved.
Commission member Jason Shronce said the 50 percent bonus may be a good option for Morrisville.
“It makes sense,” Shronce said. “If we are being encouraged to spend money on a project that is ready to be built, then it puts money back in the same area in the future. (The project) isn’t benefiting anyone sitting on someone’s desk waiting for funding.”
During a forum earlier this month in Morrisville, DOT Secretary Tony Tata said towns could help fast-track road projects by entering into private-public partnerships to share costs.
The commission will meet again April 17. It has until early next year to present its recommendations to the Morrisville Town Council.