St. Mary's County officials present updated impact-fee calculation and five-year CIP; commissioners debate borrowing plan

County finance staff presented an updated impact-fee calculation and a revised five-year capital improvement plan during a commissioners' CIP work session, identifying higher costs for parks and a need to balance borrowing against available transfer-tax revenue.

The county's presenter, Ms. Cudmore (finance staff), said the county's annual impact-fee update tracks projects in the plan and adjusts fees accordingly. She said the county's current consolidated impact fee remained at 45,100 and that the combined calculated per-unit impact across school, road and park components has risen in recent years as construction costs and new projects were added to the plan. Ms. Cudmore said the largest driver in the current update was recreation and parks, where growth-related projects in the package — including a new sports complex, Chaptico Park phase development, Central County Park, Myrtle Point Park, Shannon Farm property and a replacement recreation center — increased the parks-related capital need.

Commissioners pressed staff on the population and household growth assumptions used in the impact-fee math. Ms. Cudmore said the analysis used an annual new-household estimate of 1,000 from the Department of Business and Economic Development (DBEDD) and that municipal permit counts from Land Use and Growth Management are tracked and could be used instead. Commissioner Hewitt asked whether using Land Use and Growth Management permit counts would reduce the calculated fee; Ms. Cudmore answered that using the lower, actual permit counts would lower the per-unit number but the plan uses DBEDD for consistency across years.

The staff presentation also reviewed local funding sources used to pay for the CIP: state and federal grants, impact fees, transfer tax collections and existing county cash and bond proceeds. Ms. Cudmore and Patty Stigman (staff) showed the planning-year cash flows and noted that transfer-tax receipts substantially offset capital costs long used by the county; staff estimated roughly $5 million a year in transfer-tax collections in recent years, which when paired with the county's existing impact-fee level reduced the net local burden per dwelling unit.

On borrowing and debt capacity, finance staff presented updated debt-service projections and an illustrative borrowing plan that would seek $25 million in FY2017 and up to $40 million in a following year. Staff told commissioners the county remains within locally adopted limits on outstanding debt as a percentage of the tax base (below the 2% threshold used in county planning) but that the five-year plan would raise the annual average general-obligation-bond requirement compared with last year's plan. Commissioners discussed interest-rate assumptions (staff used roughly a 4% 20-year rate in modeling) and the timing of sales, with staff and outside advisors scheduled to meet next week to brief the board on the mechanics and six-month lead time typically required to execute a bond sale. Commissioner Morgan said he favors borrowing to accomplish delayed capital projects if the market remains favorable but cautioned that borrowing obligates future budgets.

Why this matters: the CIP sets spending priorities for major county facilities, schools and roads and determines how much the county will ask taxpayers to support through bonds or how much will be covered with pay-as-you-go sources. The updated impact-fee and CIP sheet changed several revenue and timing assumptions and will guide commissioners' decisions about which projects to prioritize, whether to accelerate borrowing, and whether to request more bond authority from the state for later-year work.

Staff follow-up and next steps: finance will update the CIP spreadsheets to reflect commissioners' sheet-level direction and return with revised cash-flow and bond-sale timing options at the next work session. Commissioners asked staff to update the transfer-tax analysis (last prepared several years ago) and to provide permits-based and DBEDD-based household scenarios for comparison.