By Thomas J. Hennen Jr.

Originally published in June 2004 in Public Libraries magazine.

Abstract

The article describes how library staff can develop a plan for setting library impact fees. Impact fees are set on new houses as they are being built and designed to offset the impact that new residents will have on expanded library operations. The author provides a summary of the steps that must be taken, the format of a recommended plan, and advice on dealing with local officials when developing the fees. Sample language and tables are provided. A list of libraries, with the amounts of their impact fees, includes contact information.

Introduction

In growing communities, the use of impact fees can be a very effective tool in library capital funding and development. An impact fee is a property tax assessment placed on a new home while it is being built.

The theory behind impact fees is that new residents impose an impact on the library that should be borne by the new resident rather than current residents. The cost of the impact fee is usually rolled into the purchase price of a newly built home. State law must authorize the impact fees for library purposes. The community taxing authority, usually the city or county, – unless the library is a taxing district, must endorse the proposed fees based on a plan presented to it by the library. The impact fee plan will ordinarily need to be developed by the library or its agents unless the municipal planning department or a hired consultant can develop it.

Revenue from impact fees may only be used by the library for capital costs. Capital costs for purposes of impact fees are defined in state legislation. The definition usually includes buildings and furnishings, of course. Depending on the state, the definition the fees can also include library materials and major maintenance on the building. If statutes allow the use of impact fees for library materials, remember that all you are doing is using the fee on a new home for the initial investment in materials. The household will continue to be taxed for operating purposes to maintain the collection.

One planning team puts it this way:

These newcomers bring with them all their fondest dreams of the future. They bring dreams that are the same as ours – dreams of a better life and a better future. What they don't bring with them are the roads, the bridges, the schools, the hospitals, the libraries, the parks, the utilities, the sewers, the waterlines, and all the vast and varied human services that will be needed to realize our dreams. [1]

Impact fees are far more workable in larger units of service and growing suburban areas than in smaller units or established urban areas, but librarians in all sizes of libraries should consider impact fees as part of their overall planning process.

Different states have different names for impact fees and the laws are structured in a variety of ways. In some states they are called “quality of life” assessments, in other states, such as Colorado and California, the fees are based on the establishment of “Community Facilities Districts.”

Many libraries in Illinois use impact fees for library development. Nann Blaine Hilyard directs the library in Zion, Illinois where they use impact fees now and are looking forward to statutory changes that will enhance their program. She notes that legislation is pending in her state that will improve possibilities: “Right now impact fees can only come from developments in municipalities. With the [statutory] change, we nonmunicipal [district] taxing bodies can get some income to offset costs to serve our constituents who live in unincorporated areas.”

The specific legal requirements of the state and the legal and procedural requirements of your local government will vary. Check with your legal counsel, local planning office, system staff, or state library personnel on the requirements for your library.

In most states impact fees cannot be used to close existing deficits. The fees can only be used to maintain standards levels such as volumes per capita [explain what you mean by standards levels] that are based on the impact of new residents. A library therefore needs to know what the existing standards are and how the library compares to those state standards. The use of such standards only works in states that have specific numerical standards, of course. [This section needs to be moved to the beginning of the article.]

In the library world, we need model state laws, model local ordinances, and specific examples of successful impact fee development. Homebuilders and real estate agents will often oppose impact fees for libraries. They have much deeper lobbying pockets than libraries do, so the political aspects of an impact fee strategy must be considered on a local basis.

State laws usually require that impact fees cover only the capital costs of a library rather than the ongoing operating costs. However, for purposes of impact fee calculations and distributions, books and tangible library materials are often considered capital assets. Note also that new audit and accounting standards in GASB 34[2] indicate that library materials should be counted as capital assets in this context. This may make it possible in your state to argue that impact fees can be used to cover the cost of new library materials as well as buildings. [This paragraph should also be moved to the beginning of the article.]

This article provides a description of the 13 sections I believe should be included in an impact fee statement. The library board and administration should develop the impact fee statement. Assistance may be necessary from the municipal planning department or from a planning consultant hired by the library for this purpose. Be sure that the suggested wording and recommendations in this article are relevant to your specific library circumstances before adopting.

Sample Format for Impact Fee Statement

State laws and local requirements will vary, of course, but the following outline will cover the needed elements for many impact fee statements. Not all authorities that assess impact fees will require as much detail as presented here. A few will require even more. Library planners should bear in mind that the impact fee plan will often be considered by officials that have little familiarity with the library, its program, or its building needs. Even if the impact fees are turned down, this may be a chance to educate your city council on the library’s needs, so be careful to put useful information into your plan. The following summary format is the one that I use when working with libraries to develop an impact fee statement. Others may choose different formats. Check with your community’s planning department to see if there is a preferred format.

Summary of Impact Fee Statement Sections

Executive Summary & Fee Statement
Community Profile
Library Profile
Community Growth Characteristics
Population and Building Projections
Municipal Plans for Zoning and Development
Current Library Circulation and Use
Narrative on the Library Building
Narrative on the Library’s Long Range Plan
Impact Fee Calculation
Statutory References
Municipal Planning and Code References
Related Reports

1 Executive Summary & Fee Statement

The executive summary should indicate the schedule of impact fees recommended in the report and reference the calculations that went into the fee recommendation as indicated later in the report. It should also indicate the major planning considerations for this specific impact fee statement. This would include such things as the need for a new or remodeled building, the rate of growth for the community, and so forth. A reference should be made to the impact fee calculations as being detailed in section 10. The executive summary should also state the author of the study and when it was approved by the needed agencies (the library board, planning council, and so forth).

Impact fee chart example

*Type of household*	*Impact Fee*
Condominium	$250
Rental units	$300
1-2 Bedroom Home	$350
3-4 Bedroom Home	$450

The summary should indicate the inclusive years for the study and recommended impact fees. The projections are ordinarily done for a 10 to 25 year period. The plan should note that the fee structure is only accurate if the anticipated trends in the report develop as projected in the report. Unanticipated development will alter the planning needs and require a revision of the planning document and related fees.

Library planners should project residential development through a 10 to 25 year planning period with assistance from the local municipal planners and preliminary plats of proposed development in the area.

Development outside the municipal limits, but within the library’s service territory is not extensively considered in the report because the municipality does not have the ability to impose impact fees outside its boundaries. Consider potential annexations and discuss them in the context of the planning report, however. When I refer to a municipality in this article, I am using it in its larger legal definition which includes counties and library districts.

Clearly state your assumptions for purposes of the report. For example:

We estimated a City population for 2025 using the regional average of 2.88 persons per housing unit.
The fees were established based on 2004 expenses, budgets, and cost estimates. In order to keep pace with inflation, the fees will need to be adjusted on a yearly basis, using an appropriate cost index.

The report should indicate the context of impact fees in the general municipality. If there are impact fees for other services such as schools or parks, indicate them. If not, explain why it is that the library should be considered for impact fees.

Close your executive summary with a clear statement of purpose for the report. For example:

“The purpose of the report is to assist the City in developing an impact fee ordinance for libraries that is in conformance with the requirements of Chapter ____ of the State Statutes. Substantial development is anticipated in the City, and the cost of expanding the library to adequately serve the new development will exceed the ability of current residents to pay for this service unless impact fees are assessed.”

2 Community Profile

A short overview of the community served belongs in any impact fee statement. Indicate the date of incorporation of the community as well as its current and projected populations. Most of this information will be readily available from library resources, and municipal planning documents.

3 Library Profile

With this section, you are setting the stage by putting the library into the context of the current community. Describe how the library serves the current community. Indicate the way in which new users will impact the library’s service profile. The library profile should include statements on the primary as well as the extended service territory of the library. If there are competing libraries nearby, or if the library is a heavy draw to other communities with libraries, this should be noted. In this section use statistics sparingly and give them context. For example, note that the rate of visits per capita is one of the highest in the state rather than just giving the raw numbers. The library profile will include an indication of its membership in a library system. Provide a brief history of the library building as well.

4 Community Growth Characteristics

Preliminary Plat Breakdowns

[Include the Plat table indicating projected housing developments in the community for the next 10 to 15 years. This is usually available from local planning and zoning agency. Contact them directly.]

Residential Equivalent Units

A statement similar to the following is often used:

Impact fees are not assessed on a per person basis, so the population was converted to Residential Equivalent Units (REU's) by dividing the population by the regional average of 2.88 persons per housing unit. That number is fairly standard, but you may want to contact your local or regional planning agency for a more appropriate number for your community. One housing unit is equal to one REU.

5 Population & Building Projections

Place a local population projection table here. This should be available from either your local planning agency, regional development commission or the state population planning agency. The table should project population for 15 to 25 years in the future since that is the ordinary time frame for an impact fee report. Note that if there are a large number of non-City residents that use the library, an estimate of the non-residents population must be made as well to adequately size the library and its collection.

Sample Population Projection Table

6 Municipal plans for Zoning and Development

The municipality will usually have zoning and development statements available. Reference those plans here and indicate important elements of the plans as they relate to likely residential development in the library’s service area.

7 Library Circulation and Use

Include locally appropriate library circulation numbers in this section, of course. Indicate trends over the last several years. Put a library circulation report in this section Every library will have circulation and registration data for the past several years. Reproduce representative numbers here to indicate trends in the library’s current use. If you have done satisfaction or user surveys recently, summarize the results and refer readers to the full report. Indicate other local library use factors such as annual visits, program attendance and so forth. Include a narrative indicating how the data compare to regional, state or national peers. Indicate future changes anticipated as the result of recent building activities, program changes or budget changes for the library.

Sample Circulation and Use Table

8 Library Building Narrative

Introduction to the Narrative

The narrative here will vary with the library, of course. You will want to describe the current circumstances of the library as if you were writing an article for the newspaper. The reader should be able to determine if the library is old or new, crowded or spacious, by simply reading this narrative. Here is an example:

The original spaciousness of the library has gradually disappeared as more materials have been added to the library collection. The limit may have been reached. Books fill all of the shelves, and some books that the librarians would rather keep had to be discarded to make space. There is no room available for proper display of the video or audiocassettes,

There is a definite lack of study rooms, which are often requested by library patrons. Meeting room space is very limited, holding just 26 chairs. Many groups who want to use it are turned away because it is heavily booked. Storage space is very limited. County (or state, if applicable) minimum standards and the more expansive state materials standards indicate that the collection needs to grow to accommodate an expanding population of users, but there is no shelf space.

You are outlining the needs of the library as a justification for impact fees, of course, but take care that you can distinguish between deficiencies that exist with the current population and those that will occur because of expanding population. Most impact fee laws prohibit the use of impact fees for existing deficiencies. A substandard existing library will need to use both current municipal revenue as well as impact fees to expand a building.

Specific Building Elements

Address building considerations in a brief narrative and with details on the numbers involved. For instance how much seating is there in the current building and how does this compare to state or national standards for seating in this library’s population size. The following are suggestions only:

If a library building assessment has been done, include the relevant citations here and summarize the conclusions as they relate to the current building planning by the library.

If there are design standards recommended by the State Library Agency regarding collection size, space needed, and so forth, cite them here. If there are such standards, include a calculation for the existing and future population needs for the building. If not use whatever building planning considerations have been developed by the library to indicate that the library has carefully planned for the building and for its upkeep.

9 Narrative on the Library’s Long Range Plan

A library seeking to develop impact fees will almost always have a written, up to date long range plan that indicates the library’s plans for the future relating to both its building and service program. Key elements of that plan should be indicated here and the reader should be referred to the entire plan for further information.

10 Impact Fee Calculation

[Note that fairly specific language is included here, but take care that it actually suits your specific situation.]

The future gross area needed was calculated based on the projected population of 25,000. This is the total of resident and non-resident users. The space to be included in the cost estimates for the impact fee was calculated by taking the space needed in 2015 and subtracting the existing (2004) space and deficiencies (2000). The impact fee was calculated by dividing the total project cost by the number of applicable Residential Equivalent Units (REU) for the City.

The library fee was determined to be $525 per Residential unit. [note that impact fees are frequently scaled by the type of unit – more for single family homes on large lots, less for condominium units, still less for apartments of various sizes. This sample plan includes just one impact per residential unit, but gradations are frequently more appropriate.]

The space needed to serve the existing population was determined. The table is a summary of the calculations for needed space. The size of the collection needed to serve the population was calculated and used to determine the needed space. The cost of' increasing the collection size and items the library will need to properly serve the additional population from new development is included below and was compiled with the assistance of the library director.

The most recent state survey found that for libraries in the 10,000 to 25,000-population range the average square footage was 0.92 per capita. This included quite a few inadequately sized facilities, of course, so a range of 1 to 1.5 square feet per capita is realistic. [Use appropriate state data for your state, of course. This information should be available by population size from your state library agency].

Using the building specifications in the appendix to Anywhereville Public Library’s Long-range Plan, we calculated that ____ square feet are needed for an extended service population of ______ . That is about 1.5 square feet per capita. Some of the space needed is fixed and not population sensitive, such as administrative and mechanical space. This needs assessment determined that a figure of 1.2 square feet per capita was appropriate for impact fee calculation.

Assuming 2.88 residents per home, each household will add 3.45 square feet to the needed facility. Current construction costs would indicate between $100 and $150 for library building and equipment costs.

Note that I have used a projected building space per capita of 1.2. If your state or region has a different standard you will want to use that. You will also want to verify building cost per square foot in your area and the number of persons per household (although 2.88 may work as a default assumption).

This example uses the Wisconsin Materials spending per capita standard. You will want to use your own state’s standard. Not also that the funds generated here are for the initial materials stock only. Once residents of the home become taxpayers they will be paying for ongoing library materials from the library operating tax.

11 State Standards Comparison

12 Statutory References - Impact fees.

[Reprint the state’s impact fee statute here or at least provide statutory references.]

13 Sample Municipal Planning and Code Impact Fee Ordinance

State law will normally require a specific ordinance to institute an impact fee. This one references Statutes that may or may not exist in your state. Check on that fundamental point before using the document.

State law will normally require a specific ordinance to transfer Impact Fee funds to the library fund. This one references Statutes that may or may not exist in your state. Check on that fundamental point before using the document.

WHEREAS the City Board of the City of Anywhereville imposes impact fees in accordance with State Stat. § _______ pursuant to Anywhereville Municipal Code § ____; and

WHEREAS a separate impact fund for public library improvements exists pursuant to Anywhereville Municipal Code § ____(6) which consists of impact fees collected by the City for the purpose of paying the capital costs of public library improvements; and

WHEREAS Anywhereville Municipal Code § ____ authorizes the use of monies collected per its terms for capital costs for new, expanded or improved public facilities which are related to the effects of general population growth in the City of Anywhereville; and

WHEREAS the City of Anywhereville has experienced such population growth within its system and has made necessary improvements to the City's public library system pursuant to Exhibit A, attached hereto and made a part hereof by reference, in conformance with the Public Facilities Needs Assessment; and

WHEREAS the capital costs for the expenditures shown on said exhibit were paid by the City of Anywhereville Public Library System from various accounts as listed in said Exhibit A, and properly consist of public library system improvements capital costs:

NOW, THEREFORE, BE IT RESOLVED by the City Board of the City of Anywhereville, that, pursuant to the above, $ __________shall be transferred from the City of Anywhereville Public Library Improvements Impact Fee Fund to the City of Anywhereville Public Library System Operating Account and $_______shall be transferred from the City of Anywhereville Public Library Improvements Impact Fee Fund to the City of Anywhereville Public Library System Fundraising Account to reimburse the Library System for the capital costs for public library improvements expended through___________, having made the findings as follows:

These expenditures for these items bear a rational relationship to the need for new, expanded or improved public library facilities created by land development within the City of Anywhereville and the attendant population growth; and

The costs of these capital improvements do not exceed the proportionate share of the capital costs to serve land development compared to existing uses of land within the City; and these costs are actual and not estimated capital cost items; and

There are no special charges or offsets against these expenditures, and there are no federal or state contributions of any nature toward the acquisition of these capital assets; and

These capital costs were not incurred for the purpose of addressing existing deficiencies; and the City finds that it is in the best interest of the public library system of the City of Anywhereville to reimburse the public library system accounts for these capital costs.

14 Related Reports

If there are related reports done by the library, community, regional library or state library agency, include the citations here.

Such reports would include the library’s long range plan, state library standards, local building and zoning plans, population projections, and so forth.

Conclusion

Putting together an effective impact fee statement pre-supposes that the library has a good long range plan to which it can refer for the necessary information. If you don’t have an effective long range plan, why not begin one now and develop an impact fee statement at the same time?

It is unlikely that the city council or county board will come to the library suggesting impact fees. The initiative must nearly always come from the library. You will almost always hear that the timing is wrong. The reasons will vary but don’t let the first negative response stop you. Persistence will pay off. You may also hear that there are technical requirements that require consulting assistance. This article should give you a good running start at those technical requirements and will reduce, if not eliminate, the need for consulting assistance. Check with your regional library staff or state library agency for assistance and a list of area libraries that have instituted impact fees. The table at the end of this article also lists a half dozen libraries in the country that have impact fees and are willing to talk to other libraries about how to go about instituting them.

[1] **(ADAPTED FROM FLORIDA STATE COMPREHENSIVE PLAN COMMITTEE 1987: 6 from A Practitioner's Guide to Development Impact Fees, Nicholas, Nelson & Juergensmeyer, 1991, p. 1) [please follow Public Libraries style for endnotes]

[2] For information on GASB 34 see my article "Do You Know the Real Value of Your Library?" in Library Journal, 6/15/2001, Vol. 126 Issue 11, p48, 3p [please follow Public Libraries format for endnotes]