reduction and deferral of impact fees board of county commissioners discussion item march 29, 2011
TRANSCRIPT
Discuss Commissioner Edwards’ Impact Fee Proposal
• Reduce all Impact Fees by 20%
• Allow Deferral of Impact Fees Beyond Certificate of Occupancy (CO)
Purpose
Impact Fee Reduction
• Proposal
• Background
• Impact Fee Collections
• CIP Impact
• Survey of Other Jurisdictions
• Issues
• Requested Action
Impact Fee Reduction
Proposal
• Reduce Impact Fees by 20%
• For eighteen months
- Or until Ordinances are updated
Impact Fee Reduction
Background
• Definition:
Impact Fees are one-time assessments charged by local governments to new development to fund a proportionate share of capital improvements attributed to that development.
Impact Fee Reduction
Background (cont.)
• Impact Fees
- Fire/Rescue Services
- Law Enforcement
- Roads
- Parks and Recreation*
- Schools*
• Payment due at building permit*Charged to residential uses only
Impact Fee Reduction
Background (cont.)
• Indexed 2007-2009
• Impact Fees Require Periodic Review
- Updates for all Impact Fees due 2011
- Consultant Contracts Issued for Schools and Roads
- RFP for Parks, Law, and Fire underway
Impact Fee Reduction
Background (cont.)
• Review Process
- Consultant Updates Technical Study
- Technical Review
- Development Advisory Board (DAB)
- School Impact Fee Study Advisory Group
- OCPS Accepts School Impact Fee Study
- LPA/P&Z Worksession
- LPA/P&Z Public Hearing
- BCC Public Hearing
- Six to Nine Month Process
Impact Fee Reduction
Background (cont.)
• Key Factors
- Land Acquisition Costs
- Design and Construction Costs
- Equipment Costs
- Credits
- Methodology Changes
- Service Levels/Generation Rates
Impact Fee Reduction
Three Year Average* 20% Reduction
Law $366,803 $73,361
Fire $532,389 $106,479
Parks $1,586,428 $317,285
Schools $18,670,344 $3,734,069
Roads $6,358,237 $1,271,647
Totals $27,514,201 $5,502,841
CIP Impact
* 08-09, 09-10, 10-11 Projections
Impact Fee Reduction
CIP Impact (cont.)
• Public Works Funding Sources
- Impact Fees
- Gas Taxes
- Grants
- Invest in Orange County
- Pay-as-you-go/Prop share
- International Drive CRA
Impact Fee Reduction
CIP Impact (cont.)
Impact Fee Fund Revenues Current Projections
$0.0
$10.0
$20.0
$30.0
$40.0
$50.0
$60.0
FY01
FY02
FY03
FY04
FY05
FY06
FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
$57.0M$57.0M
$6.7M
Actual Projected
Impact Fee Reduction
CIP Impact (cont.)Projected Impact Fee Revenue
2011 - 2015
5-Year Total $56M5-Year Total $56M
$4.6M
$19.7M
$13.1M
$18.6M
CIP Impact (cont.)
Road Project Impacts
• Delay Lighting and Landscaping Further
– Currently in FY 16
– Delayed Minimum of One Year
• Delay Start of Future Project Phases
• No New Studies (RCA’s) or Designs
Impact Fee Reduction
CIP Impact (cont.)
Future Project Impacts
• Obligations Under Existing Agreements
• Funding for Regional Developments
(Horizon West; Innovation Way)
Impact Fee Reduction
Impact Fee Reduction
Costs* - Vehicle and Equipment: $29,700- Basic Officer’s Equipment: $ 3,900
*Cost to equip single officer
Impact Fee Reduction
Costs
- Fire Station Construction: $4.0M*- Fire Truck/Rescue Unit: $560,000- Equipment for Apparatus: $190,000
*Excludes Land Costs
Impact Fee Reduction
Costs -Two Baseball Fields $760,000- Four lighted Soccer Fields $820,000- Land Costs (per acre) $ 40,000- Playground System $ 80,000- Restroom Facility $300,000
Impact Fee Reduction
Costs*- Elementary School $16M- Middle School $26M- High School $72M
*Excludes Land Costs
Impact Fee Reduction
Survey of Other Jurisdictions
Jurisdiction Suspended
Brevard Transportation
Lake Transportation
Seminole N/A
Polk All (Except Schools)
Osceola Transportation (non-residential)
Potential 10% Reduction
Volusia N/A
Impact Fee Reduction
Survey of Other Jurisdictions (cont.)
Jurisdiction Suspended
Orlando Deferred Update Change of Use
Hillsborough N/A (Except for No Fee Zones)
Palm Beach N/A (2005 Rates)
Pinellas N/A
Sarasota Transportation 50% Schools
Impact Fee Reduction
Survey of Other Jurisdictions (cont.)
Jurisdiction Suspended
Charlotte All Except Transportation
Indian River Fire, Law, Corrections, Public Buildings,
Solid Waste
Lee Study Update 2011 Change of Use
Pasco Fire, Parks, Library,Hurricane Preparedness
St. Johns 25% Reduction of Recently Revised Rates
Impact Fee Reduction
Issues
• Adverse Impact on CIP
• Recently Suspended Indexing
• Many variables impact Development Decisions
• School Board must make recommendations on School Impact Fee
• Requires Ordinance changes
• May require refunds for Concurrency Reservation Fees
Proposal• For Nonresidential Projects Valued Over
One Million Dollars
– Pay 25% of Impact Fees prior to CO
– Pay 75% equally over years 2-4
– Require First Lien
– 3% Interest on Deferred Fees
– Equity Analysis Requirement
• Eighteen Month Duration
Deferral of Impact Fees
Existing Programs• Chapter 23
• Certified Affordable Housing Projects
• Commercial Projects with Building Permit Values of at least One Million Dollars
• Defer Payment to CO or Pre-power of first building
• Requires Lien
• Allows one to two year savings to Developer
Deferral of Impact Fees
Existing Programs (cont.)
• Chapter 23-141 (Schools)
• Multi-Family Projects
• Defer to CO
• Not to exceed eighteen months from building permit
• Letter of Credit required
Deferral of Impact Fees
Existing Programs (cont.)
• Workforce Housing Pilot Program
• Public Purpose
• Allows Deferral of Impact/Capital Charges beyond CO
• Approved in 2009
• Expires July 1, 2011
• One Application has been received to date (District #4)
Deferral of Impact Fees
Existing Programs (cont.)
• Certified Workforce Housing
– 40% of units rented to households with incomes not exceeding 80% of AMI
– For 15 Year Period
• One per Commission District
• Urban Service Area
• Between 100 to 400 Units
Deferral of Impact Fees
Existing Programs (cont.)• Required Developer’s Agreement
• Construction must commence twelve (12) months from Effective Date of Developer’s Agreement
• Time certain for Impact Fee payment (54 months maximum)
• School Board Approval– For School Impact Fees
– Capacity Enhancement Agreement (CEA) Modification
Deferral of Impact Fees
Existing Programs (cont.)
Criteria
• Financial Security
- Letter of Credit (LOC)
- U.S. Treasuries
• Lien on the Property
• Interest on Deferred Fees
Deferral of Impact Fees
Issues
• Currently Allow Deferral to CO
• Adverse impact on CIP Revenue Stream
• Security not required
• Large Projects typically have stable financing
Deferral of Impact Fees
Issues (cont.)
• Lien may be subordinate
• Potential Bankruptcy Issues
• Other Liabilities and Remedies
• Legal Issues
• Administrative Costs
Deferral of Impact Fees