2008-01-30 / Front Page

Proffer increase is under review

By Greg Pearson

Proffers often pay for road improvements like this turn lane into Hallsley on Old Hundred Road. Proffers often pay for road improvements like this turn lane into Hallsley on Old Hundred Road. Chesterfield County has fasttracked a plan to possibly increase proffers, in hopes that the General Assembly won't pass proposed legislation that would eliminate the cash proffer system. County Administrator Jay Stegmaier said the board of supervisors will likely consider an increase in cash proffers in March, if state law still permits it, after review and recommendation by the Budget and Audit Committee.

Because of limited time, much of the analysis by the county's Budget and Management Department will be based on estimates from December 2006 when the previous board voted down a proffer increase from $15,600 to $22,600. Developers pay proffers as a way of offsetting the costs of roads, schools, libraries, parks, police and fire services generated by new development.

According to Stegmaier, the proposed increase is estimated to be "in the vicinity of $7,000. We're trying to catch up to the increased costs over the past two years that are not reflected in our cash proffer system." Proffers haven't increased since October 2005.

"We haven't heard anything from the county about reconsidering higher proffers," said Executive Vice President David Reel of the Home Building Association of Richmond, "but it doesn't surprise me [that] we weren't consulted."

Stegmaier said the development community was included in discussions about proffers in 2006.

Consultation is also one of the county's complaints about Senator John Watkins' (RChesterfield/Powhatan) sponsoring of Senate Bill 768, which would do away with proffers statewide and impose impact fees.

"This bill was sprung on us," Stegmaier explained. "When we deal with infrastructure problems, we're inclusive and reach out to citizens and developers. Now we're reacting to the Watkins bill and don't even know what some of the language means because it's so complex and interacts with other pending legislation."

The legislation allows impact fees to be used for offsite improvements (roads) for commercial developments but not residential.

Another proposed bill would shift road construction responsibilities from the state to local governments and use an increase in the Grantors Tax, which would be paid by real estate sellers to fund new road construction. Watkins' bill proposes increasing that tax up to 20 cents per $100 for each transaction.

Watkins cites data from the county, saying just $27 million was raised over the past four years from proffers, while his bill would have raised $88 million from impact fees alone.

"We're trying to verify those numbers," replied Stegmaier, "but what's important to us is how this next generation of infrastructure legislation affects us in the future, not the past."

Chesterfield is cautious about Watkins' legislation because the Home Building Association of Virginia endorses it. "We didn't write it," said Reel, whose association is one of the member groups, "but we were consulted."

"We need to kill Senator Watkins' bill because it won't allow us to rezone residential property and use money from developers for improvements offsite," said Midlothian Supervisor Dan Gecker, shaking his head. "Senator Watkins is out of touch with his constituents. We can't just be accepting a turn lane into a community as the road proffer."

"We're still analyzing [Watkins' bill] and trying to determine its impact on Chesterfield," added Stegmaier. "The bill has some fairly complex requirements for implementation. There's language about transfer taxes we haven't deciphered. We're studying the bill to find out if existing zoning cases would still be required to pay the proffers that were agreed to."

"Watkins' bill spreads out the pain of infrastructure costs," said one General Assembly observer who declined to be identified. The development community has long insisted that new homes are paying for road improvements and other county services being used by everyone.

Proffer history 2005-present
Approved Proposed
10/05 12/06
Roads $8,942 $12,748
Schools $5,348 $8,634
Parks $604 $612
Libraries $349 $318
Fire stations $405 $409
TOTAL $15,648 $22,721
Board approved $15,600 $15,600

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