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• • • Indian River County 1 Impact Fee Update Study In Florida, legal requirements related to impact fees have primarily been established through case law since the 1980's. Generally speaking, impact fees must comply with the "dual rational nexus" test, which requires that they: • Be supported by a study demonstrating that the fees are proportionate in amount to the need created by new development paying the fee; and • Be spent in a manner that directs a proportionate benefit to new development, typically accomplished through a list of capacity -adding projects included in the County's Capital Improvement Plan, Capital Improvement Element, or another planning document/Master Plan. In addition, one of the requirements of the 2006, Florida Impact,Fee,Act is that the studies be based on most recent and localized data, This technical report has been prepared to support legal compliance with existing case law and statutory requirements. Although the Florida courts` have yet to expressly address the methodology underpinning the Affordable;Growth Strategy, this aspect of the report is based on the long-standing legal standards described in this report. The technical report also documents the. methodology components for each �f the impact fee areas, including an " evaluation of the inventory, service area, I,evel-of-service (LOS), cost, credit, and demand components. Information supporting this analysis was obtained from the County and other sources, as -=indicated. The.report includes results for all program areas, with the exception of educational facilities. Because the initial•_results have not yet been reviewed by the Indian River County School-Board;.this section isnot included in this report. Three primary factors affected 'the County's impact fee levels: • Since 2005, the County built additional infrastructure and increased the capital asset inventory significantly'in most program areas. This results in an increased asset value, which in turn, increases the impact fee. • In most infrastructure areas, the County used or is still using other revenue sources to supplement impact fees, such as optional sales tax revenues, ad valorem tax revenues, and other revenues. Depending on the program area and the level of on- going investment, this results in an increase in the credit component for some program areas, which in turn reduces the impact fee. In others, if the investment was made in earlier years and are not projected to continue at the same levels, the Tindale -Oliver & Associates, Inc. Indian River County January 2014 ES -2 Impact Fee Update Study