Adequate public facility ordinances (APFOs) tie local government development approvals to the availability of essential public facilities. In other words, development is not permitted at a particular site unless and until a defined level of public services is available or somehow, in some way, provided for — schools, roads, wastewater, fire services, and the like.

While this type of ordinance is common in many growing states, a quite specific approach is used in North Carolina. N.C.G.S. 153A-341 and 160A-383 grant counties and cities, respectively, the authority to regulate development “to facilitate the adequate provision of transportation, water, sewerage, schools, parks, and other public requirements.” This provides a statutory basis for local government facilitation of adequate public facility requirements. That being said, according to a study published in 2005 by the UNC School of Government, APFOs has been “sparingly applied” in our State.

The legal landscape changes when North Carolina local governments employ this APFO paradigm to assess fees — commonly referred to as “impact fees.” According to Professor David Owens, “Local governments in North Carolina have authority to impose fees for a variety of ‘public enterprise’ functions, such as the provision of water and sewer services. The zoning and subdivision statutes also allow regulations to require land dedication, construction, or payment of fees to address specific public facility needs generated by the development, such as internal roads, utilities, parks, and community service facilities.” However, in the absence of specific statutory basis to assess a particular species of fees, recent court cases have indicated that local governments are without authority to do so. And this is despite the broad language of N.C.G.S. 153A-341 and 160A-383. On this score, public enemy number one from a local government authority standpoint is with regard to “school impact fees.”

This very issue has popped up on the coast. New Hanover County, within which sits the City of Wilmington, is amending its planned development ordinance in the wake of developer-led challenges. It’s been reported that the current ordinance requires that developers of certain sized projects provide “adequate public elementary school facilities” by either donating land to the board of education or paying a fee equal to the tax on the market value of the land. Developers take issue with the fact that they, rather than home buyers, are footing this bill, which, in essence, will amount to double taxation. The County, for its part, is looking to “pass muster” with its protection of adequate facilities while encouraging “orderly” development.

We’ll report back as to what sort of language the County is able to whip up that will satisfy both the necessary obligations and restrictions.

Mike Thelen is a lawyer in Womble Carlyle’s Real Estate Litigation practice group. He regularly represents a wide variety of clients in land use and land development issues, from local governments to businesses, in both state and federal venues throughout North Carolina.