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OVERVIEW Purpose of the Policy Summary • Introduce the concept of impact fees to the elected officials in IRC . • Summarize the legal requirements for imposing impact fees . • Discuss impact fee level of service considerations . • Discuss impact fee revenues and their effect on current capital funding of impact fee program areas . LEGAL REQUIREMENTS FOR IMPACT FEES Impact Fee Definition • An impact fee is a one-time capital charge levied against new development . • An impact fee is designed to cover the portion of the capital costs of infrastructure capacity consumed by new development . • The principle purpose of an impact fee is to assist in funding the implementation of projects identified in the Capital Improvements Element (CIE) and other capital improvement programs for the respective facility/service categories . Impact Fee vs . Tax • An impact fee is a regulatory function established as a condition for improving property and is not established for the purpose of generating revenue . • An impact fee must convey a proportional benefit to the fee payer. • An impact fee must be tied to a proportional need for infrastructure created by development . Legal Framework for Imposing Impact Fees • Legal standards and criteria have been established through state case law decisions that : o support local government authority to impose impact fees . o require that fees comply with state and federal constitutional requirements . Authority to Impose Impact Fees in IRC • IRC is a non-charter county . o A non-charter county derives its authority from the state constitution and statutory sources ; o A non-charter county may adopt ordinances that are not inconsistent with general law ; and Tindale-Oliver & Associates, Inc . Indian River County February 2005 I -3 Impact Fee Study