Impact fee vote postponed
The decision to reduce or suspend impact fees across Lee County for two years to allow the stimulation of economic development in the area will have to wait for another month.
The Lee County Board of County Commissioners unanimously approved a motion by Commissioner Larry Kiker to defer the public hearing on the proposal, so that the commissioners can discuss it further at a March 4 workshop before bringing the item back to a vote March 12.
County staff was asked to weigh the impact on various cities including impact fee interlocal agreements and the legal ramifications on impact fee credits regarding a reduction as opposed to a suspension.
“The additional information would be to include greatly reducing the impact
fees in lieu of suspension,” said Kiker during his motion. “Secondly, I would like to further direct staff to deposit all impact fees collected as of Feb. 13 into an escrow account, so that they might be fully reimbursed
depending upon the board’s final decision as expressed in the ordinance.”
Impact fees are levied on new construction for such things as roads, parks, schools and fire and EMS development projects necessitated by development. The fees are intended to help offset the economic burden on local jurisdictions that are trying to deal with growth within a specific area.
Commissioner Frank Mann thanked Kiker for his approach.
“I have learned a great deal and also have more to learn about the effect of both suspension and reduction and how the money and timing works,” he said.
“I look forward to the further discussion and possibly seeking a compromise to the deficit here.”
Commissioner Cecil Pendergrass also is looking forward to continued dialogue.
“I look forward to a balanced approach,” he said.
During public input, many people spoke for and against the issue with comments ranging from the suggested elimination of “impact fees would create construction right away” to “impact fees are extremely unfair” to county municipalities already have “a lot of overbuilt projects” already to lending problems.
“How would we replace the revenue from the suspension? How long would it
take for the revenues to go up? What projects are you looking to eliminate, or are we just going to go to reserves to balance this? I would like to understand the ramifications on all the municipalities and the legal
implications,” said Sanibel Mayor Kevin Ruane. “I think your decision today to defer this is warranted.”
“It is our belief that this would be a major stimulus to our economy,” said Stephanie Keyes of the Realtor Association of Greater Fort Myers and the Beach, Inc. The group represents 4,400 Realtors and affiliates in Lee County.
Before the board meeting, Kiker explained his reasons for suggesting the reduction or ceasing impact fees for a time period.
“We are trying to get that whole business industry back to work,” said Kiker. “The suspension should help stimulate growth throughout unincorporated Lee County.
I’ve heard that up to 10,000 jobs that don’t exist today could now exist tomorrow.”
Kiker said that there is a multiplier that states that with every person put to work in construction, two other ancillary jobs are created.
Studies show the industry has bounced back somewhat. Kiker mentioned one projection showing a 68 percent drop in impact revenue one year, then a 28 percent drop the next year followed by 30 percent drop the following year and a 49 percent increase last year.
“The problem with that scenario is that percentages don’t tell you what is going on, because 68 percent of $7,750 is a lot bigger than 49 percent of $300. We are 90 percent less than what we used to be in 2006,” he said.
“What has happened is that there has been no growth in the past four or five years, including last year.”
Kiker cited $480 million came in during 2006.
“Last year, we brought in $7 million, and next year is supposed to be even
lower,” he said. “Impact fees were designed for rapid growth.”
Kiker then referenced a 2007 newspaper article that stated impact revenues were not a steady source of income and that other revenue sources would need
to be looked into.
“Nobody ever did. Now we have the problem, and we have to fix it,” he said.
Suspending impact fees for a two-year period could impact future schools, parks and roads, opponents of the measure said. Two million of the $7 million was reported to be for road construction fees.
“Everyone thinks that their community road projects will fail with this suspension. The answer is ‘no,’ because $2 million is not going to put us out of that business,” said Kiker. “Estero Boulevard keeps getting pushed back because resources weren’t available, the road study didn’t get done and certain decisions didn’t get made. It is not because of money.”
Impact fees cannot be used for operational costs, such as salaries, and any county moratorium would affect only the fees imposed in the non-incoporated areas of Lee county.
Kiker said he talked to acting County Manager Doug Meuer about the issue and the response was that the county could absorb two years without impact fees.
“The big deal is that we have almost 50,000 people who are either out of work or underemployed right now. That’s only the ones that we know about,” he said.
If suspension is approved, Kiker says there should be some tracked measurements put together to see its effectiveness.
“We have 21 counties across Florida that have tried this method, and we have a Senate bill that may stress a moratorium on impact fees across the state for the next three years,” he said. “So this point might be mute.”
Commissioner John Manning, who brought the moratorium proposal forward, said after the meeting that he believes the two newest members of the board, Kiker and Pendergrass, simply wanted more information before they vote.
“I think, perhaps, the new commissioners want to make sure they are comfortable with either a significant reduction or a moratorium,” Manning said, adding the month gives them that time.
“I think they will probably ask some very good questions; hopefully they will get some very good answers,” he said.
The idea to revisit impact fees with an eye toward either reducing them or waiving them for some period of time has been on-going, Manning added.
“This issue is not new,” he said. “As a matter of fact, I have documents going back to early spring, late fall.
One of those documents was prepared by the Horizon Council’s Business Issues Task Force in February of 2012. The recommendation made a year ago was for a suspension of the fees.
“What I’m trying to do is give the construction industry some momentum,” Manning said of why he has proposed the moratorium. “There are projects in the pipeline.”
Projects include two that are medical-related, one that is industrial- related and one that is a hotel, he said.