Ground rules
Make clearer guidelines for local use of impact fees
The amount collected in impact fees from natural gas developers is expected to surge this year. It’s too bad the Legislature hasn’t enacted new guidelines to help municipalities better understand how they’re allowed to use the money.
In a report released in December, state Auditor General Eugene DePasquale recommended clearer guidelines because he found municipalities spending the money in a wide variety of ways, some more closely tied to the impact of shale operations than others. As Mr. DePasquale interprets state law, local governments are supposed to use the money to mitigate the effects of shale development in their communities. That’s why they’re called “impact fees.”
He believes the money should be used to repair roads and bridges damaged by fracking operations or to mitigate drilling-related pollution. Instead, his review of spending by 10 counties and 20 municipalities over three years found that 24 percent of impact fee money went for questionable expenses ranging from community events to purchase of a vehicle for a district attorney’s office. The 24 percent equated to $20.2 million.
Mr. DePasquale didn’t accuse the municipalities of wrongdoing but some of those he singled out in the report took umbrage with his findings, saying they acted in accord with a good-faith interpretation of the law. Which gets back to Mr. DePasquale’s point: It’s silly to leave state law so vaguely worded that counties and municipalities can interpret it in so many ways.
Impact fees are tied partly to the number of wells in operation and the price of natural gas. Fees this year are expected to total as much as $222.3 million, up from an unusually low $173.3 million in 2016, an off year for the industry.
Since 2012, the state has collected more than $1 billion in impact fees, according to the Public Utility Commission, which administers the program. Some goes to state programs. A portion goes to counties for specified environmental projects, regardless of whether they host fracking operations. Some goes to counties and municipalities that host fracking activity. Mr. DePasquale’s audit looked at the last category.
It matters little whether local governments use impact fee money for a narrow or broad list of purposes. But all should be applying the law equally. If one municipality uses the money to buy a vehicle, others should know they have the same freedom. Clearer guidelines would lend fairness to impact fee use and help communities get the most out of the money that fracking operations provide.