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Plum has raised the price of building a house by $1,000, but borough officials don't think a new impact fee will slow development.

By funding road projects that ease traffic congestion around new developments, the fee will likely encourage development, said Plum planning Director Greg Bachy.

"It's not going to stop development, it's going to put the burden of paying for traffic improvements on the developers," he said.

Cranberry was the first community in the state in 1989 to pass a traffic fee ordinance, said Cranberry manager Jerry Andree. Cranberry and its sister township in the eastern part of the state, Manheim, lobbied the state legislature to pass a law allowing the move.

"We needed a plan. We had to transfer the cost of road improvements to the developers. It's saying to them, 'You have to help upgrade the highways,'" Andree said. "It's good planning and more and more communities are doing it."

Ross, Murrysville and Penn Township either have impact fees are or are considering them.

Plum started charging a residential unit impact fee on Oct. 26 but must complete a land use study before it can spend any of the money or start charging impact fees on commercial and industrial developments.

The study has to predict how the borough's remaining empty lots will be developed and what road work will be needed to handle the extra traffic created by the development. Dividing the estimated cost of all the road work by the anticipated number of residential, commercial and industrial developments will give the borough its impact fee structure.

Bachy said the borough's 10-member impact fee study committee plans to have those answers by December 2006. The committee includes Plum's seven planning commissioners plus a realtor, a developer and a builder.

Plum is paying Trans Associates of Robinson $115,000 to help the committee find the answers. The committee held its first meeting on Dec. 19.

Mike Thomas, Plum's manager, said the $1,000 residential fee is based on the state law that allows municipalities to collect the fee.

"With a residential development, it's pretty cut and dried," he said.

Three hundred residential units, for example, mean at least 300 more cars using local streets, Thomas said.

The committee could determine that the extra road work needed to handle each car is less than $1,000. If that happens, the borough will refund developers the difference, he said. If the committee determines the road work per car is more than $1,000, the borough can only collect the higher amount on future developments. The borough can't collect it for developments already charged the lower fee, Thomas said.

Calculating the impact of commercial and industrial developments is more complicated because the borough has to estimate their contribution to peak traffic hours. A retail store, for example, would tend to add more traffic than an industrial building whose employees work a single shift.

Due to the complexity, state law prohibits Plum and other municipalities from collecting estimated fees on commercial and industrial project until they complete the impact fee study, Thomas said.

Bachy said Plum can't start spending even the residential impact fees until the study is finished, and it has to spend the money in the same approximate area as the development. The borough will have two or more development zones, and money from a project in one zone has to be spent in that same zone, but not necessary next door to the project, he added.

"It might not be at the end of the street of the development, it might be two miles down the road," he said.

The borough estimates the fee will generate about $100,000 a year, which is enough for some paving and signal work.

"We're not going to be able to rebuild road corridors with it," Bachy said.

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