Fort Walton Beach Council agenda — 01-23-2007 workshop agenda — reading text

CITY OF FORT WAL TON BEACH City Council Workshop Agenda -;-January 23, 2007 - 5: 30 P.M City Council Chambers 107 Miracle Strip Parkway, SE Fort Walton Beach, FL 32548 CALL TO ORDER PLEDGE OF ALLEGIANCE Mayor Anderson I WORKSHOP AGENDA 1. Discussion on impact fees. ( Utilities Director, CDS Director) ( See Backup) ADJOURN Any person who decides to appeal any decision made with respect to any matter at this meeting will need a record of the proceedings, and for such purpose may need to ensure that a verbatim record of the proceedings is made, which record includes the testimony and evidence upon which the appeal is to be based. (FS286.0105). The City of Fort Walton Beach adheres to the American with Disabilities Act and will make reasonable modifications for access to this meeting upon request. Please call City Clerk Helen Spencer at 850-833- 9509 to make a request. For Hearing Impaired dial the City Hall TDD #850- 833-9925 or 1- 800- 955-8771 ( TDD) or 1- 800-955-8770 (Voice). Requests must be received at least 48 hours in advance of the meeting in order to aI/ow the City time to provide requested service.  CITY COUNCIL WORKSHOP Januar 23, 2007 Workshop Agenda Discussion on Impact Fees Utilities Director, CDS Director) Agenda Item Number: WA- 1  CITY OF FORT WALTON BEACH MEMORANDUM To: Joyce Shanahan, Gty Manager From: John Hofstad,Utilities Director Date: January 5, 2007 Subject: Impact Fees - Council Workshop BACKGROUND: Government agencies are continually tasked with maintaining service levels for those within their needs of the respective jurisdictional boundaries. Maintaining levels of service consistent with the community requires an enormous Much of this ongoing expenditure is financed capital expenditure. through user fees for services such as water and sewer, or by special taxes applicable to those within the panicular jurisdiction. More recently, the trend among government agencies is to lessen the property tax and user fee burden to residents through the assessment of impact fees. fund the Impact fees are one- time charges levied against a developer or builder to proportionate~y cost of providing additional capital infrastructure necessary to support services for new citizens of the community. Prior to the concept of an impact fee, communities were forced to fund the cost of The expanding facilities by either increasing user fees or increasing taxes to existing residents. implementation of impact fees lessens the burden to existing residents by assessing portion the a of cost of expanding facilities on the new residents requiring the expansion. In short, growth should not be the burden of the resident; rather the cost should be borne by the individual existing requiring the expanded facility or service. The use of impact fees to finance new facilities and expanded services came into existence in the State of Florida during the 1960s. As of 2005, there are 114 Florida municipalities, counties, school 1 districts and special districts that levy some type of impact fee for new development. Impact fees may be assessed by local governments for any of the following services: Roads and Transportation Water and Sewer Facilities Parks and Recreational Space Police and Fire Facilities Libraries Schools Public Buildings and Facilities I 2005 Florida Impact Fee Survey, LOR  Ambulatory and Emergency Services Sanitation and Solid Waste Facilities DISCUSSION: of Gty Council adopted Ordinance 1461 on January 8, 2002, authorizing the phased implementation water and sewer impact fees for all new development. Specifically, the Gty adopted through ordinance the following 3- year phased approach for levying impact fees: 1. For the first year effective May 1, 2002: shall be a. Impact fees for water service per equivalent residential connection ( ERq 235. 00 b. Impact fees for sewer service per ERC shall be $ 270. 00 2. For the second year effective May 1, 2003: a. Impact fees for water service per ERC shall be $ 470. 00 b. Impact fees for sewer service per ERC shall be $ 540. 00 3. For the third year effective May 1, 2004: a. Impact fees for water service per ERC shall be $ 700.00 b. Impact fees for sewer service per ERC shall be $ 807. 00 was preferred at According to the Gtis consultant for this project, the phased impact fee schedule the time so as to not unfairly penalize developments currently in review by the Gty. To date, the impact fee rates implemented in 2004 remain in effect. Current Fees Assessed by Local Government Agencies Impact Fees Assessed per ERC - 2006 Water Sewer T obI Fees 5, 830.00 $ 7,380. 00 Gty of Niceville $ 1, 550. 00 $ 2,261. 52 $ 3, 070. 36 Gty of Milton $ 808. 84 $ 2,300. 00 $ 2,925. 00 Gty of Crestview $ 625. 00 $ 845. 00 $ 1, 602.00 $ 2,447. 00 ECUA $ 00 $ 1, 715. 00 Oty of Panama Gty $ 465.00 $ 1,250. 700.00 $ 807.00 $ 1, 507. 00 Otyof FWB $ Okaloosa County $ $ $ Gty of Pensacola $ $ $ Okaloosa County does not currently assess impact fees. However, the County will conduct a workshop on February 27th to discuss implementation of impact fees. In addition, The Gty of Pensacola does not assess impact fees for new development. water and sewer service is provided by another entity, ECUA 2  The Gty of Destin does not assess impact fees for water and sewer service. However, Destin does assess impact fees for the following services: Service Fee Parks $ 159. 99 Public Library $ 107. 84 Police Protection $ 20.53 Roads $ 471.00 Total Fees Assessed per Unit $ 759. 36 The Gty of Destin commissioned a study entitled " Technical Memorandum of the Methods Used to Calculate Public Facility Costs" to determine the units of measure and fees associated with the above impact fee schedule. Destin Water Users provides water and sewer service for the Gty of Destin. DWU does not assess impact fees; however, DWU does assess significantly higher tap fees @ $ 1, 880 for water and $2, 900 for sewer versus $ 400 and $ 600, respectively, in the Gty of Fort Walton Beach. It is important to note when comparing impact fees charged between different entities: The calculation of impact fees are based on the expected total cost of future improvements. Elements of this total cost, such as cost of land, building materials, labor, etc. can vary by Gty, County or region. Costs particular to an entity, such as overhead costs, can vary. Implementation Benefits and Challenges It is evident that the imposition of impact fees can, over time, generate a sufficient revenue stream tofund capital improvements for expanded services to meet the needs of a growing community. Impact fees are a valuable tool for the following reasons: Existing residents are not forced to pay for growth and capacity increases created by new development. Impact fees create a revenue stream specifically for capital infrastructure expansion resulting from population growth attributed to new development. Taxes do not have to be increased to support growth. Existing revenue streams from user fees and taxes do not have to be diverted from daily operation and maintenance needs and renewal and replacement projects in order to fund growth related expenditures Survey data indicates a trend is developing nationally where, as tax revenues fall slightly in proportion to the overall revenue stream, impact fee revenues are experiencing a proportionate mcrease. For every voice in support of impact fees, there are those that are just as strongly opposed to this revenue methodology. These individuals and groups cite the following reasons for their opposition: 3  The practice results in double taXation. Impact fees can lead to stagnant growth and limit economic development. Builders and developers will simply pass on the fee to the buyer, thereby increasing property costs. Impact fees hamper efforts of developers to construct affordable housing. The building industry contends that the imposition of impact fees is merely a political ploy to gain favor with the voting public. Although these fees are not considered taxes, the cost ultimately is passed down to the consumer. Should Additional Impact Fees be Considered The Gty of Fort Walton Beach is one of the oldest municipalities in Okaloosa County. Over time, the community became " land locked" by Choctawhatchee Bay to the east, Hurlburt Field to the west, Santa Rosa Sound to the south, and unincorporated Okaloosa County to the north. This situation limits the Gty's ability to expand resulting in a current growth rate of less than 1 %. In many ways, impact fees are tied to growth and, absent growth, implementing additional impact fees might not generate a sufficient