Commercial Impact Fees Have Paid For $790,000 In Fire District Equipment

This is one in a series of articles on what legislation before the General Assembly to abolish the fire district will mean for residents of East Greenwich.

One result of the possible dissolution of the East Greenwich Fire District could be the end of a 10-year-old funding source that has brought in $1.3 million into the district.

In 2002, the district passed an ordinance allowing for the imposition of commercial impact fees on developers building projects in East Greenwich. The Town of East Greenwich does not impose commercial impact fees and according to Town Council President Michael Isaacs, there's no plan to change that policy in the event legislation before the General Assembly passes to abolish the separate fire district in favor of a town fire department.

There's no question the impact fees have brought the district a lot of money over the years. In 2003, the first year, the district collected $21,000. The largest impact fee was paid in 2007 – more than $400,000 – by Brooke's, the pharmacy company, for its headquarters on Division Road. (The company was aquired by Rite-Aid shortly after the building's completion and the building was eventually sold to New England Tech.)

Impact fees collected by year:

• 2003   $21,204
• 2004  $39,955
• 2005  $71,789
• 2006 $257,217 medical buildings on South County Trail
• 2007 $464,916 Brooke's, the orig. developer of the NEIT building
• 2008  $89,575
• 2009  $61,189
• 2010  $93,098 CVS, South County Trail
• 2011  $49,859
• 2012 $141,227  Poliquin, So. Co. Trail; McDonald's, New London Tpk

To date, the district has spent $790,000 of that $1.3 million total. By law, impact fee money can only be spent on expenses that come as a direct result of development. In other words, it can be used to buy an additional vehicle, but it cannot be used to pay for a replacement vehicle. 

According to Fire Chief Peter Henrikson, the money can be used for new construction, fire apparatus, and communications equipment. He outlined what the district used the impact fee money for:

• $190,000 on communications improvements.
• $170,000 for improvements to the training grounds behind Station 2 on Frenchtown Road.
• $170,000 on emergency medical services upgrades
• $80,000 on firefighting operations equipment, particularly for Station 2
• $180,000 on equipment for the failed agreement with Warwick for that city to take over EG dispatch.

Vehicle replacement has been covered by the district's capital budget, which currently stands at $900,000. That fund represents money set aside from budget surpluses over the years. Chief Henrikson said the district has typically had a budget surplus at year's end.

Both fire commissioners and Henrikson say the two funds are the reason the district has no bond debt – although does have a significant pension liability (which will be addressed in a future article). 

The Town Council's decision against commercial impact fees was not unanimous, with Councilor Mark Gee voting in favor of their imposition. Gee also sits on the EGFD. He said this week he thought the town should continue the fire district impact fees if the legislation passes and the fire district becomes a town fire department.

"I would recommend we continue impact fees for fire department purposes and reinstitute them for town revenue purposes," Gee wrote in an email. "The vote to eliminate them for the town was based on making East Greenwich more attractive to commercial construction. My feeling is that EG is attractive to businesses with or without impact fees, but the bottom line is that eliminating the commercial impact fees leaves the residential taxpayer holding the bag to make up the difference."

Not surprisingly, developers have a different opinion of commercial impact fees. 

Frank Paolino spent three years building the CVS on South County Trail that opened in 2011.

"No one every pulled me aside and told me there was an impact fee that was substantial," Paolino said in an interview Thursday. He paid a $75,000 impact fee on the $2 million building. "I thought it was abusive," he said. "I pay a fire tax there."

Paolino said he didn't know of any other town or fire district that would charge that amount of money. "It was two years ago and it still bothers me," he said, saying that the store's "impact" on the town has been largely positive.

Paolino, who has lived in East Greenwich for the past 14 years, said he voted in favor of merging the Fire District with the town in the November referendum.

To read about the costs and savings that could result if the fire district legislation passes, click here. If you have other questions about this issue, please leave them in the comments section or send me an email: elizabeth.mcnamara@patch.com.