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

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 Impact Fees Require Periodic Review -Updates for all Impact Fees due 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 Impact Fee Collection

Impact Fee Reduction Impact Fee Collection

Impact Fee Reduction Impact Fee Collection

Impact Fee Reduction Impact Fee Collection

Impact Fee Reduction Impact Fee Collection

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, 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 $57.0M $6.7M Actual Projected

Impact Fee Reduction CIP Impact (cont.) Projected Impact Fee Revenue 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

CIP Impact (cont.) Law Enforcement20% Reduction $73,361 Costs* - Vehicle and Equipment:$29,700 - Basic Officer’s Equipment:$ 3,900 *Cost to equip single officer

Impact Fee Reduction CIP Impact (cont.) Fire/Rescue20% Reduction $106,479 Costs - Fire Station Construction:$4.0M* - Fire Truck/Rescue Unit:$560,000 - Equipment for Apparatus:$190,000 *Excludes Land Costs

Impact Fee Reduction CIP Impact (cont.) Parks and Recreation20% Reduction $317,285 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 CIP Impact (cont.) Schools 20% Reduction $3,734,069 Costs* - Elementary School$16M - Middle School$26M - High School$72M *Excludes Land Costs

Impact Fee Reduction Survey of Other Jurisdictions JurisdictionSuspended BrevardTransportation LakeTransportation SeminoleN/A PolkAll (Except Schools) OsceolaTransportation (non- residential) Potential 10% Reduction VolusiaN/A

Impact Fee Reduction Survey of Other Jurisdictions (cont.) JurisdictionSuspended OrlandoDeferred Update Change of Use HillsboroughN/A (Except for No Fee Zones) Palm BeachN/A (2005 Rates) PinellasN/A SarasotaTransportation 50% Schools

Impact Fee Reduction Survey of Other Jurisdictions (cont.) JurisdictionSuspended CharlotteAll Except Transportation Indian RiverFire, Law, Corrections, Public Buildings, Solid Waste LeeStudy Update 2011 Change of Use PascoFire, Parks, Library, Hurricane Preparedness St. Johns25% 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

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 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 (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

Action Requested Board Action on how to proceed?

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