Members of the Lexington Town Council discussing updates on development impact fees.
The Lexington Town Council is racing against a deadline to finalize updates on development impact fees, increasing concerns for local businesses. Originally approved over five years ago, concerns arise as officials believe higher costs could impose burdens on local entrepreneurs. With rapid growth in the area, these fees are crucial to fund infrastructure needs while also considering the economic environment for established businesses. The final vote on adjustments will occur later this month.
In Lexington, time is ticking away as the town council has less than three weeks to finalize updates on its development impact fees. These fees, which serve as a one-time expense for new developments to support infrastructure needs, were originally approved over five years ago. However, the recent buzz around increasing fees has several local officials expressing concerns that higher costs could place a significant burden on local businesses.
The development impact fee ordinance was last updated five years ago and is now due for a refresh, as mandated by state law. With the town experiencing rapid growth—over 35% in the last decade—the increased fees are expected to be higher than before. This update is crucial, especially since the collected fees go toward critical areas such as transportation, parks and recreation, and municipal facilities.
Since the implementation of these fees in 2020, Lexington has managed to collect roughly $1.7 million from various developments. However, only about $500,000 of that has been spent so far. The goal behind these fees is to prevent raising taxes on existing residents, all while managing the town’s swiftly growing needs. With challenges such as the failed 2022 referendum for a sales tax aimed at funding road maintenance, the council is now wrestling with significant road infrastructure issues.
During discussions, some council members, notably Councilman Gavin Smith, raised flags about the potential impact on small businesses. They fear that increasing fees could make life harder for local entrepreneurs and discourage the establishment of new, locally-owned enterprises. The council’s focus on supporting these businesses is evident, as the majority of the fee burden tends to fall on commercial developments, which are believed to contribute heavily to traffic levels.
The council recognizes that they must find a balance. Plans are already in motion to allocate over $25 million in collected impact fees toward transportation projects over the next five years. This spending includes necessary road improvements, making it a valuable investment for accommodating all the new residents. On a brighter note, Lexington is also set to benefit from an additional $16 million in state funding for road projects, which will further support the town’s infrastructure ambitions.
The final decision on the fee adjustments will take place later this month, specifically focusing on the parts of the fee structure that relate to parks and recreation, and municipal facilities. Transportation fees will be revisited at a later date, ensuring the council has sufficient time to thoroughly review the proposed changes. However, concerns remain about the tight timeline for these updates, exacerbated by difficulties in hiring a contractor for an impact fee study.
The council has had a rough time lately, dealing with a mix of issues, including the cancellation of the town’s longstanding agreement with the county regarding roads and ongoing legal battles concerning PFAS matters. The upcoming weeks are sure to be crucial as council members work to meet the deadlines while ensuring that they support their community.
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