Submitted by Suanne Z. Thamm
Reporter – News Analyst
Fernandina Beach’s Deputy City Manager Marshall McCrary led a half-hour workshop for city commissioners and the public to provide a broad overview on impact fees, what they are, how they are set and how they can be used. This workshop was the first of three meetings held on September 17, 2013, and attracted only a handful of interested parties.
Impact fees are one-time only charges, not taxes, that are intended to raise revenue for the construction or expansion of capital facilities that will serve the new development. They are most commonly used to raise revenue for water, sewer, roads, schools, libraries, police/fire protection and parks/recreation. They are determined based on the cost of providing certain services and calculating the proportionate share of that cost among the population served. The funds collected are restricted for use only for the purposes for which they were collected. They cannot be used to maintain or replace existing capital facilities; but they may be used to expand such facilities to accommodate growth.
If there were no impact fees, the city’s ability to expand capital facilities could result in reductions in levels of service for existing as well as future residents and businesses. According to McCrary, “Impact fees provide an up-front mechanism to tie a new development to the costs the City will bear to serve that new development, while maintaining a consistent level of service to all residents.”
While the state of Florida has no specific enabling legislation authorizing the collection of impact fees, it has adopted what is called the Florida Impact Fee Act (F.S. 163.31801), acknowledging their importance to local government funding and providing basic ground rules for their formulation and adoption. Their legitimacy has been determined by the courts, which have also recognized them as being within City and County home rule authority.
The City of Fernandina Beach adopted Ordinance 2005-02 establishing the city’s impact fees based upon legislative findings that set forth “a reasonable methodology and analysis for the determination of the impact of new development on the need for and costs for additional fire protection, police protection, parks and recreation and public buildings in the city.” The ordinance was adopted after two public readings on March 1, 2005 by the FBCC whose members at the time included: Mayor Greg Roland, Vice Mayor Beano Roberts, John Crow, Michael Lamb and Ken Walker.
Appended to the ordinance was an extensive report compiled by Dr. James C. Nicholas of the University of Florida entitled “Technical Memorandum on the Calculation of Parks & Recreation, Fire & Rescue, Police Protection and Public Facilities Impact Fees.” Both the ordinance and Dr. Nicholas’ report may be found via search of the city’s records. McCrary reported that Nicholas’ methodology has been adopted by other Florida cities and has been upheld by the courts. The ordinance also allows the rates to be adjusted in accordance with Consumer Price Index changes.
McCrary provided an example to the FBCC to demonstrate the current cost of impact fees to a new home or business. Note that only new residences are assessed impact fees for parks and recreation:
New home with 2,451 heated square feet
¤ Police – 2,451 x .145 = $355.40
¤ Fire – 2,451 x .291 = $713.24
¤ Public Facilities – 2,451 x .395 = $968.15
¤ Parks & Rec – 2,451x 1.95 = $4,779.45
Total Municipal Impact Fees = $6,816.24
New business with 2,451 square feet floor area
¤ Police – 2,451 x .145 = $355.40
¤ Fire – 2,451 x .291 = $713.24
¤ Public Facilities – 2,451 x .395 = $968.15
Total Municipal Impact Fees = $2,036.79
Using McCrary’s example, Commissioner Pat Gass asked what the water and sewer impact fees would be. City Attorney Tammi Bach replied that the fee would be $1,931 for sewer and $1,500 for water.
McCrary briefly spoke to two additional types of impact fees: those associated with providing water and sewer; and those intended to improve transportation. Sewer and water impact fees are collected prior to connection to service for new or expanded service. The last category, which is imposed by the county, has not been collected for several years. Pending action by the Nassau County Board of County Commissioners it may return in 12-18 months as a mobility fee.
The city also collects another mandated impact fee on new construction that is merely passed through to the Nassau County School District.
In response to a question from Commissioner Arlene Filkoff, McCrary replied that there is no state-imposed requirement to review fees after a set period of time, but that a 10-year time frame would be appropriate. City Manager Joe Gerrity said that a new rate study would cost about $10,000. McCrary added that any fee schedule changes must be data driven. Filkoff expressed her desire to conduct such a review.
Mayor Sarah Pelican opted to take public comment. Gary Higgins asked if there was any study to show how Fernandina Beach stacks up statewide. McCrary responded that there is great diversity throughout the state because the communities are so different. He allowed that he had not done a comparative analysis. Higgins said that he did not see a benefit of 70% of the impact fees going to parks and recreation.
With respect to Commissioner Pat Gass’ question regarding the county’s distribution of any reimposed transportation impact fee as a Mobility Fee, Gerrity responded that those fees were used in the past for county improvements within the district in which the fees were generated.
McCrary said that the city’s obligations regarding impact fees are four:
¨ Consistent and equitable collection
¨ Adherence to restrictions for use of funds received
¨ Capital planning for use of funds
¨ Periodic assessment of the data providing the basis for the fee amounts.
September 18, 2013 4:24 p.m.