Reduction and Deferral of Impact Fees Board of County Commissioners Discussion Item March 29, 2011.

Reduction and Deferral of Impact Fees

Board of County Commissioners Discussion Item

March 29, 2011

• Purpose

• Impact Fee Reduction

• Deferral of Impact Fees

Overall Presentation Outline

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


Proposal

• Reduce Impact Fees by 20%

• For eighteen months

- Or until Ordinances are updated


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.


Background (cont.)

• Impact Fees

- Fire/Rescue Services

- Law Enforcement

- Roads

- Parks and Recreation*

- Schools*

• Payment due at building permit*Charged to residential uses only


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


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


Background (cont.)

• Key Factors

- Land Acquisition Costs

- Design and Construction Costs

- Equipment Costs

- Credits

- Methodology Changes

- Service Levels/Generation Rates


Impact Fee Collection


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


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


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


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


CIP Impact (cont.)

Future Project Impacts

• Obligations Under Existing Agreements

• Funding for Regional Developments

(Horizon West; Innovation Way)



Costs* - Vehicle and Equipment: $29,700- Basic Officer’s Equipment: $ 3,900

*Cost to equip single officer


Costs

- Fire Station Construction: $4.0M*- Fire Truck/Rescue Unit: $560,000- Equipment for Apparatus: $190,000

*Excludes Land Costs


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


Costs*- Elementary School $16M- Middle School $26M- High School $72M

*Excludes Land Costs


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


Survey of Other Jurisdictions (cont.)


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


Survey of Other Jurisdictions (cont.)


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


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

Action Requested

Board Action on how to proceed?

• Proposal

• Existing County Programs

• Issues

• Action Requested

Deferral of Impact 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


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


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



• 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)



• 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


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



Criteria

• Financial Security

- Letter of Credit (LOC)

- U.S. Treasuries

• Lien on the Property

• Interest on Deferred Fees


Issues

• Currently Allow Deferral to CO

• Adverse impact on CIP Revenue Stream

• Security not required

• Large Projects typically have stable financing


Issues (cont.)

• Lien may be subordinate

• Potential Bankruptcy Issues

• Other Liabilities and Remedies

• Legal Issues

• Administrative Costs


Action Requested

Board Action on how to proceed?

Reduction and Deferral of Impact Fees

Board of County Commissioners Discussion Item

March 29, 2011

Reduction and Deferral of Impact Fees Board of County Commissioners Discussion Item March 29, 2011.

Documents

Transcript of Reduction and Deferral of Impact Fees Board of County Commissioners Discussion Item March 29, 2011.