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Home My WebLink About5/18/1995SPECIAL MEETING Thursday, May 18, 1995 The Board of County Commissioners of Indian River County, Florida, met in Special Session at the County Commission Chambers, 1840 25th Street, Vero Beach, Florida, on Thursday, May 18, 1995, at 9:00 a.m. Present were Kenneth R. Macht, Chairman; Fran B. Adams, Vice Chairman; Richard N. Bird; Carolyn K. Eggert; and John W. Tippin. Also present were James E. Chandler, County Administrator; Charles P. Vitunac, County Attorney; and Barbara Bonnah, Deputy Clerk. Chairman Macht called the meeting to order and turned it over to Commissioner Eggert, coordinator of the policies and incentives workshop, who presented today's agenda: Board of County Commissioners Agenda Special Meeting/Workshop Ma1s, 1995 T:00 a.m. I Introduction - Eggert II Utility Policies in Comprehensive Plan - Pinto 30-45 min. A. Review of Policies 1. Capacity - Planning & Building for B. Incentives for Economic Development & Affordable Housing 30 min. 1. Paying Impact Fees at Building Permit (long form) 2. Base Facility Charges - when start 3. Use of Franchise Fees or other means to a. Lower impact fees b. Alternatives to utility deposit 4. Increased Use of Water Use Study to lower impact fees - affordable housing - elderly BREAK - 10 min. MAY 189 1995 1 BOOK U5 pg;E j 0 BOOK 95 PAGE 111 III Strategy Plan - Eggert, Keating, Rohani _ A. Review of Strategic Actions 30 min. B. Review of County Comparisons 10 min. C. Incentives for Economic Development & Affordable Housing (For Discussion and Possih1 P F4i7-t-har 1. State Incentives 10 min. * a. Sales and Use Tax Exemption b. Training Programs c. Streamlines Permitting d. Transportation Grants or Matching Funds e. Pollution Control Incentives f. Corporate Headquarters Location Tax Incentive * g. Target Industry Cluster Job Creation Tax Incentive 2. Transportation - Eggert, Davis, Keating 25 min. * a. Impact Fee Payment over 5 or 10 years b. Reimbursement for Overcapacity Road Building c. Lowering of impact fees 1) Establish capital fund a) Current budget funds b):- 5 -cent gas tax c) bonding or other means d. Increased use of traffic studies to lower impact fees - affordable. housing - elderly e. Citrus Road 3. Local Incentives 25 min. * a. Tax Abatement or Refund * b. Job Grants Program (over 20 jobs) $1,000 ea. c. Weekend Inspections d. Relocation Assistance * e. Employee Relocation Package f. Spouse Employment Program g. List of Teachers who are Foreign Language Speakers h. Capital Venture Resource List i. Small Business Lending Pool j. Sales and Use Tax Exemption - Personal Property Tangible Tax 4. Other Matters _ 5 min. a. System for public to repay SHIP funds monthly * fiscal impact possible UTILITY POLICIES IN COMPREHENSIVE PLAN Review of Policies Utilities Director Terry Pinto reviewed the policies for planning and building for capacity requirements with regard to collection and distribution facilities and plant capacity. He noted that, all in all,.Indian River County is in very good shape as far as utilities are concerned. 2 MAY 189 1995 Objective 1 - Service Concurrent with Development By 1991, the county will have adopted land development regulations requiring potable water service to be provided concurrent with development. Level of Service Standards • Equivalent Residential Unit of Capacity = 250 GPD • Wellfreld capacity shall be the average daily use plus the largest well being out of service. • Storage tank capacity shall be at least 1/2 of the average daily consumption volume. • High service pump capacity shall at least be equal to the maximum daily demand. • Pressures of the high service pumps for the county plants shall be a minimum of 40 PSI delivery pressures. • At fire flow conditions the system shall be able to provide delivery pressures of 20 PSI. • Water quality shall at least meet EPA and State of Florida safe drinking water requirements. Comprehensive Plan Requirements Objective 2 - Water Distribution System Water Sub -Element - Objective 2 By 1995, 30% of the existing residential units and 50% of the existing non-residential establishments within the 1995 potable water service area shown in Fig. 3. B.8 of the sub - element will be connected to a regional potable water system. ■ Objective 2 - Policy 2.3 The list of subdivisions having undersized lots - within the service area designated as requiring potable water service due to public health threats shall be updated annually - and shall be given priority for the provision of public water over a new development requesting service at the same time. Comprehensive Plan Requirements Objective 2- Sewer Collection Facilities Sewer Sub -Element - Objective 2 • By 1995, 40% of the existing residential units and 60% of the existing non-residential units within the 1995 wastewater service area shown in Fig. 3.A.9 of the sub -element will be connected to a regional sanitary sewer system. ■ Objective 2 - Policy 2.3 • The list of subdivisions having undersized lots - within the service area designated as requiring'sanitary sewer service due to public health threats shall be updated annually - and shall be given priority for the provision of public sanitary sewer services over a new development requesting service at the same time. 3 MAY 189 1995 BOOK 95 PA. LE i12? I BOOK 95 PA�-L 113 omp rehensive Plan Requirements - lant Capacity _ Water and Sewer Policy 5.3 - Design for additional capacity for regional facilities shall begin when a facility is at 50% of its capacity,. and construction of additional its capacity shall begin when a facility is at capacity in order to guarantee provision of more than the minimum level of service. All future expansions will be based on the committed and projected future demand. Department of Environmental Protection- zpansion Requirements When 3 month average daily flow for the most recent three consecutive months exceeds 50% of the permitted capacity of the treatment plant the permittee shall submit to the Department a capacity analysis report. If capacity report documents that the permitted capacity will be equaled or exceeded within the next three years, the permittee shall submit a complete construction permit application to the Department within 30 days of submittal of the capacity analysis report. Department of Utility Services Investment in Plant to Achieve Goals Water and Wastewater Plant $117 $120 $100 $80 $60 $40 $20 $0 MAY 189 1995 M 1984 1989 1994 4 ■$ M M Department of Utility Services - Water Plant Capacity ■ Current Water Treatment Plant Capacity 0.420 mgd 0.850 mgd Plant Current Average Maximum DEP Location CapacityM Daily Flow Daily Flow Permitted GD MGD MGD Capacity South Co. 8.570 3.670 5.056 .6.23 RO Plant North Bch. 1.000. 0.348 0.447 0.554 RO Plant North Co. 1.845 RO Pit. (In Design 3MGD) Totals 9.570 4.018 5.503 8.630 Department of Utility. Services Wastewater Treatment Capacity Regional Plant Current AV. Daily Max. Daily DEP Permitted Capacity Flow IFlow Capacity West Regional 1.0 mgd 0.740 mgd 0.975 mgd 1.448 mgd Central Regional 1.0,mgd 0.410 mgd 0.583 mgd 1.184 mgd South Regional 0.450 mgd 0.277 mgd 0.420 mgd 0.850 mgd North Regional 1.000 mgd 0.537 mgd 0.651 mgd 1.434 mgd North Beach Pit. 0.210 mgd 0.087 mgd 0.161 mgd 0.461 mgd i Totals 3.670 mgd 2.051 - mgd 2.790 mgd 5.378 mgd )epartment of Utility Services nalysis of Water Service to Undersized Lots Total Subdivisions (SD) W/ Under -Sized Lots* 162 Less SD's in Incorporated Areas --25 Balance 137 Subdivisions Served With Water From List 64 . Balance 73 Additional Subdivisions (Not on List) With Undersized -84 Lots That Have Been Served Water Total SD's WAMdersized Lots Served 148 *Table 3.A.3 From Comprehensive Plan 5 MAY 189 1995 M 95 FAUE 114 V BOOK 95 PA;r 115 Department of -Utility Services - Assessment Projects Summary of Assessment Projects -1985-1995 Total Assessnv7ts * $176M Total Collected(4/95) *Incls all appiowed gjeds to be completed by end of 94/95. $102M $ 7.4 M 8,158 Department of Utility Services Water and Wastewater Facilities Investment To Serve Commercial & Industrial Areas AREA 1-95/CR512 OS 1/Roseland Rd. 1-95/RT. 60 Amount $ 686,228 $1,135,769 $ 725,641 1-95/Oslo Rd. $1,254,452 Total $3,802,090 Department ' of Utility Service Water and Wastewater Five Year Growth ■ Water and Wastewater % Increase Previous Five years 350% 300% 250% 200% 150% 100% 50% 0% MAY 189 1995 Usage #ERUS #Bills 6 M M M M Department of Utility Services Explanation of Rate Components and Fees Impact Fee - The fee charged by the County to real property owners to fund the capital cost incurred by the water and wastewater utility to serve new utility customers. Eui lent Residential Unit (ERU) - The amount of water used or wastewater produced by a typical residential unit, which water use ranges from 0 to 300 gallons on a maximum day basis or 250 gallons per day on a maximum month basis. ■ BCharge_- The charge imposed by the County for recovery of expenses associated with billing, collecting and accounting services. ■ Base Facilities Charge-- The charge imposed by the County for each ERU that represents the fixed costs to the County of having the system available to serve that ERU without regard to volume used. ■ Volume barae -- The charge imposed by the County for the monthly volume. used to recover the associated expense's for the production and/or treatment of the service provided. II. B. Incentives for Economic Development & Affordable Housing Paying Imp -act Fees at Building Permit - Cu -rent Policy : Ordinance 91- 9, Section 201.09.- Impact fee imposed. An impact fee shall be imposed on each ERU responsible for creating the need for additional system expansion based on the equitable portion of the cost of funding the extension of the County's sewer and water systems. The obligation to pap the impact fee shall occur at the earliest of the following dates. when the capacity is reserved, when a water or sewer permit is granted, or when a building permit is issued. ■ .Base Facility Charles - when start - Current Policy: Ordinance 91-9 - Section 201.09 B. - The charge shall apply to every connected ERU and to each ERU reserved for future use in -a development. For _ developments that have entered into an agreement with the County for reserving capacity, the fee shall commence upon certification by the Department that County transmission, collection, and distribution lines are ready for use. 11. B. Incentives for Economic Development & Affordable Housing (Cont'd). Use of Franchise Fees orother r meansower impacf fees. • The Department of Utility Services projects franchise fees income in the amount of $708, 000 for the 94M budget year (based on first 6 months actual). • (b) Alternatives to utility deposit. Current Policy: Ordinance 91-9, Section 201.08, Section H. - The County shall require a deposit for each water and sewer account opened, transferred to another name, or reconnected to the system based on the number of ERUs. The deposit will be retained in an interest bearing account, the intertest on which will be paid to the customer upon refund of the deposit. ; ■ Increased Use of Water Use Study ft Lower Impact Fees affordablehousing - elderly. The County's present impact fee is based on a 0 to 250 gallon per day consumption per ERU. The DEP uses a 350 gallon per day consumption per ERC/ERU. The County has already effectively reduced the requirement by 100 gallons per day. MAY 189 1995 7 BOOK 90' PALE IJ6 BOOK 95 PA,UE 117 Incentives for Economia Development & Affordable Housing Director Pinto believed that payment of impact fees at the time you reserve capacity works very well, and would not recommend changing it to payment at the time the building permit is issued. Commissioner Eggert wanted to find out what triggers other counties in Florida in having the impact fees paid at the time the building permit is issued. Director Pinto emphasized that it is a matter of what risk the County is willing to take with regard to committing capacity to someone without them paying for it. The base facility charge pays for the operation of the plant which provides the capacity. He stressed that there is not much risk in our county in not being able to provide capacity. Commissioner Eggert understood then that there is room to do something about when impact fees are payable. Director Pinto emphasized that the DEP tells us that we have to be able to provide a certain amount of capacity. Discussion ensued about the possibility of waiving the franchise fee, and Director Pinto explained that the franchise fees, which amount to 6% of customer billing, go into the M.S.T.U. general fund which results in lower taxes somewhere else.* If the franchise fee was waived, the County would have to find another source for that money. Commissioner Eggert felt that we should consider the following items in looking at the Comp Plan policies regarding utility incentives: ... infilling the areas and providing certain subdivisions. ... urban service road. ... lowering design capacities in Comp Plan to match State design capacity requirements. ... Collection of impact fees at building permit time. ... Further coordination between Utilities and Planning Departments with regard to urban service areas and continuing to infill. Commissioner Eggert opened the meeting up to public comments and questions. Ed Nelson, resident of Countryside Park North, referred to Page 17 in Ordinance 91-9, Section 201.09: E. Refund of impact fees. Any customer whose monthly water use or sewage flow remains below the amount corresponding to the number of ERUs assigned to such customer for a period of 24 months 8 MAY 189 1995 M and for which impact fees have been paid, may make application to the Department to reduce the number of ERUs assigned and seek corresponding reimbursement of impact fees paid. In no case will less than one ERU per living unit be assigned. The County may refund impact fees actually paid, without interest, based on the impact fee schedule in effect at the time of original payment, provided the Department has resold such ERUs. Subsequent water use or sewage flow in excess of flows corresponding to customer's number of assigned ERUs will be subject to the excess volume surcharge stipulated in Section 8. Since most residents of Countryside North do not use a full ERU, Mr. Nelson suggested the wording be changed to read, "In no case will less than one-half ERU per living unit be assigned." If that was changed, he would be the first one to come in and pay the impact fees. He believed many others would also. Mr. Nelson emphasized that they believe in paying their bills -- no more, no less. Deb Robinson of Laurel Homes, Inc. made the following comments and suggestions: 1) Operation of running the plants at very low rate of flow. 2) Base facility charge has increased from 1.681 minimum a month to over $28.00 a month. There is no control of these monthly fees and that factor could successfully stop construction or seriously slow it down. 3) Interpret the statement that capacity is available now. This county has imaginary gallons of flow that may not be needed for years. 4) Possible use of the DEP short form application for construction to avoid having to commit capacity. Peter Robinson of Laurel Homes noted that the current wastewater capacity is 1 -million gallons a day, but the DEP permitted capacity is 1.448 million. That is 448,000 gallons, or approximately 1700 ERUs, and at $15 a month that is $25,000 a month being paid by people who are not using the plant. So, in this case the developer is subsidizing the user. It gives capacity by flows, but it doesn't give any actual ERUs that are paid for. Commissioner Eggert inquired about phantom capacity, and Director Pinto emphasized that no one is paying early before cost is incurred. Jeff Meehan, developer of Indian River Apartments, made a few observances on building affordable housing in IRC: MAY 189 1995 9 BOOK 95 PnE 118 BOOK 95 PAGE i19 ... Aging urban housing units is a problem facing the County in the near future. ... Infrastructure costs have tremendous impact on builders of affordable housing. Mr. Meehan advised that in their new affordable housing development, roughly 15% of the cost is fees to Indian River County for water, sewer, and transportation impact fees. Some areas in Florida waive those along with impact fee credits. Mr. Meehan suggested more lobbying by the smaller counties in Florida to get a bigger share of the State's allocation of funds for low income counties. By telling our legislators that we have unique problems, such as future aging of housing units even though we are not the urban core, we might be able to get a bigger portion of the pie which are our tax dollars. Indian River County is called a "difficult to development area", which is a nomenclature provided by the Department of Housing and Urban Development. The State recognizes it, and it is caused by some of the things we have talked about today, i.e. low incomes, development costs for water and sewer, etc. More lobbying at the State level might give us additional scoring points for more of the programs such as SHIP programs, and the low income tax program. Tim Zorc of Richard Zorc & Sons advised that with regard to base facility charges, it is very difficult for builders of affordable housing units to convince lenders that they can control and monitor their expenses and operating costs. Mr. Zorc disagreed with Mr. Pinto's statement that in water and sewer costs, impact fees are the same as on-site wells and septic tanks. He flat out disagreed with the numbers there. In the new Vero Beach Highlands water project, they are paying over $3,000 for the base water meter charge when they could replace it with a well system for about $1,000. So, you are looking at an increase of over $2,000 to the cost of housing. There are 600-700. new units going on line in that project that have increased a minimum of $2,000 each. Mr. Zorc wondered how the calculations were working out for expansion in the Sebastian Highlands when that utility is taken over by the County. Mr. Zorc stressed that even though the lenders say that financing is fine when there is a line construction charge or intent to lien on a piece of property, they want it cleared up and paid out of closing proceeds on the closing of the construction loan. So, the lenders are not comfortable with the financing ability that the County has. At present with the single-family home, the builders get the pay-off fee and the title company cuts 10 MAY 189 1995 i ability that the County has. At present with the single-family home, the builders get the pay-off fee and the title company cuts them a check. It would be better if it could be rolled to the end, but it doesn't seem to work out that way. With regard to prepayment capacity, Mr. Zorc knew there are many people who have 25, 50, 100 or more prepaid water and sewer credits for projects that probably will never happen and their only option is to sell those credits back to Utilities. He suggested that perhaps that could be corrected or fine-tuned a little bit. He wondered why all these people have gone out and extended themselves to commit to capacity if the prepayment of impact fees is so flexible. Mr. Zorc also suggested that SWDD fees be averaged out somehow and collected at the building permit time. He felt that would streamline the process a bit. STRATEGIC PLAN Review of Strategic Actions Community Development Director Robert Keating reviewed the following memo dated 9/3/93: TO: The Members of the Affordable Housing Advisory Committee THRU: Robert M. Keating, AICP AM K Community Development Director FROM: Christopher D. Rison Senior Planner, Long -Ran Planning DATE: September 3, 1993 SUBJECT: Consideration of Impact Fees It is requested that the data herein presented be given formal consideration by the Affordable Housing Advisory Committee at its regularly scheduled meeting of September 9, 1993. DESCRIPTION AND CONDITIONS: Residents of all communities create a need for public facilities to support and protect their health, safety and general welfare. These facilities vary from the more obvious needs of police and fire protection, to the basic needs for roadways and utility systems. In response to the needs of community residents, governments act to provide these facilities to the greatest extent possible. While government is responsible for providing such facilities, an important issue is how those facilities will be paid for. The funding of public facilities is further compounded by growth. As a community grows and the number of residents increases, the government must expand existing facilities to meet the needs of both the existing residents and new residents. 11 1 MAY 189 1995 BOOK 95 PAGE 12® BOOK 95 PA 1121 In providing public services and facilities, governments must consider who is requiring and utilizing the service. As a community grows, new residents increase the demand for facilities. Government must then determine how improvements or expansions of the existing facilities will be funded in order to serve the new growth. In so doing, government must determine if the existing community will bear any or all of the costs to expand existing facilities to accommodate new residents. Typically, charging existing residents to fund facility expansions for new residents is discouraged. Instead, many communities prefer the concept that new growth should pay for itself. In response to this concept, many communities- assess special fees for new developments which will increase the demand for public facilities. These special fees are known as impact fees, and they are used to fund expansions of capital facilities to accommodate new growth. Using impact fees, a community avoids charging existing residents for the full cost of facility improvements necessitated by new residents. • Impact Fees Generally Impact fees may be defined as.single, one-time payments required from developers at the time of obtaining project development approval, which are calculated to be the proportionate share of the capital cost of providing public facilities for the development project. In relation to housing, a 1,000 square foot single-family home is typically charged the same impact fee as a 5,000 square foot single-family home, since the facility impact is the same for both and the impact is not affected by the size of the home. Consequently, impact fees differ from taxes, because the amount of a tax does not need not relate to the level of government services received. Generally, impact fees are assessed against new development, as well as expansions of existing developments; usually, impact fees are payable at the time building permits are issued. For this reason, impact fees assessed on housing effectively become part of the upfront costs which are included in, or added to, the purchase price of a housing unit. This "additional cost" has created a substantial amount of controversy in relation to the need for affordable housing. In 1992, the Florida Legislature adopted the William Sadowski Affordable Housing Act which established the State Housing Initiatives Partnership (SHIP) Program. In compliance with the SHIP Program, participating counties, including Indian River County, were required to establish Affordable Housing Advisory Committees which would examine impact fees in their jurisdictions and, where warranted, make recommendations, concerning the modification of impact fee requirements, including reductions or waivers of fees and alternative methods of payment. The Committee, however, may recommend that the existing impact fee program remain with no change. The Committee's final recommendation will then be included in the Local Housing Incentive Plan to be prepared by the Committee for presentation to the local government. • Impact Fees in Florida In the State of Florida, a number of local governments, both cities and counties, assess impact fees for new development or expansions of existing development. According to the Florida Advisory Council on Intergovernmental Relations (FACIR) 1991 Florida Impact' Fee Report, Margate, Florida assessed the first impact fee in Florida in December 1971. By 1991, 33 of Florida's 67 counties were assessing at least one type of impact fee, and two other counties were preparing to establish impact fees. Of the counties surrounding Indian River -County, Brevard, St. Lucie, and Osceola 12 MAY 189 1995 counties all reported assessing at least one type of impact fee. Only Okeechobee County did not report assessing an impact fee. Furthermore, of Florida's approximately 319 -municipalities, 92 were assessing at least one type of impact fee in 1991. Because impact fees are necessary in high growth areas, it is not surprising that a substantial number of counties in the state do not assess impact fees. Many of the counties without impact fees are like Holmes County, which had a 1980-1990 growth rate of only 7.2%. In contrast, twenty-nine of the 33 counties assessing impact fees experienced population growth of over 25% between 1980 and 1990. Of the 29, 10 experienced population growth of over 50% and three experienced population growth of over 100%. Of the 33 counties with growth over 50%, the average number of impact fee types assessed -was 2.77, ranging from 1 to 5 impact fee types. Of all the county and city governments which reported assessing impact fees, the number of impact fees assessed also varied widely as shown in the following chart: Minimum Number of Impact Fees Assessed: 1 2 3 4 5 6 7+ ---------------------------------- Counties 10 3 9 5 5 1 0 Municipalities 50 24 6 8 2 1 1 c.��--�aa��oaaaaaa�o��a�aaaaaaaa�eaaanoaa=aaa�aaa��.aa Total 60 25 18 13 7 2 'l The communities also reported a variety of assessment manners. St. Johns County assesses a single impact fee which is divided among various facilities, while other communities assess individual impact fees, each for a specific facility. Generally, impact fees may categories: Impact Fee Category 1. Transportation be divided into the following Description of Activities Funded by Imvact Fee Road " improvements; public transportation; right-of-way acquisition 2. Utilities Water or sewer plant construction, expansion or upgrading; water or sewer line construction; solid waste facility (landfill) construction, expansion or upgrading; electric power plant construction, expansion or upgrading 3. Recreation/Culture Park acquisition, development and expansion; recreation facility construction and expansion (e.g. bikepaths); library construction or expansion; cultural facility development or expansion 4. Public Safety Police, fire, EMS or correctional facility construction or expansion, law enforcement program expansion 13 MAY 189 1995 BOOK 95 PAGE 122 BOOK 95 PAE 123 5. Physical Environment _ River/water management= conservation land acquisition; stormwater and drainage system improvement; environmental beautification and maintenance 6. Other Public -Facilities School construction, expansion or upgrading; public administrative buildings construction, expansion or upgrading Each government which elects to assess impact fees must establish through its local regulations the basis upon which it will calculate and assess the fees. Unlike general zoning regulations, which governments are authorized by the State to enact, no specific impact fee enabling legislation has been enacted by the State of Florida. Instead, the ability of local governments to assess impact fees is based upon judicial case law. Through various decisions, courts have determined that impact fees may be assessed by local governments in order to fund facility expansion needed to accommodate new growth, provided a rational and equitable manner is used in assessing the fees. As noted, facility expansions are based upon the need to meet the demands of a growing community and to maintain a minimum level of service desired by the community. The concept of a minimum level of service is a principle incorporated in the State of Florida's Comprehensive Planning Act. The Comprehensive Planning Act requires each government in the state to adopt minimum levels of service for various facilities. A level of service is an indicator of the extent or degree of service provided by a facility based on and related to the operational characteristics of the facility. The level of service indicates the capacity per unit of demand for a facility. Examples of level of service measurements are Average Annual Daily Trips (AADTs) which measure vehicular traffic or gallons per day (gpd) which measure water or sewer flows. Under the Comprehensive Planning Act, communities are prohibited from approving new development if the levels of service adopted for their public facilities cannot be maintained. This requirement is titled concurrency, as it effectively requires that the public facilities necessary to serve new development be in-place concurrent with the impacts of new development. • Indian River County Growth Indian River County, like other communities throughout Florida, has experienced, and is continuing to experience, increases in growth. Indian River County's growth in the early 1980s occurred at a fast pace; however, with the 1990s, the County's growth rate has declined. This is shown in the following table: Indian River County Estimated Population and Annual Change MAY 189 1995 M M M Estimated % Change Over Year Population Previous Year 1980 594,900 ---- 1981 63,300 +5.7 1982 67,200 +6.2 1983 69,900 +4.0 1984 721,800 +4.1 1985 75,000 +3.0 1986 77,700 +3.6 1987 80,200 +3.2 1988 83,700 +4.3 1989 86,800 +3.7 1990 90,200 +3.9 1991 92,400 +2.4 1992 94,100 +1.8 1993 95,600 +1.6 14 MAY 189 1995 M M M The County's average annual growth rate for the 1980 - 1993 period was 3.7%. For the next twenty years, however, projections reflect a reduced average growth rate. These projections are listed in the following table, and they indicate that the County's growth is expected to continue: Indian River County Estimated Population Projections and Effective Annual Change Estimated % Annual Change Year Population Over Previous Years 1995 102,200 +3.4 2000 114,500 +2.3 2005 126,600 +2.0 2010 137,200 +1.6 2015 148,200 +1.6 2020 1581100 +1.3 • Facility Needs With the county's existing population and its anticipated new growth, the demand for facilities will increase. This increase in county population can be related to increases in facility demands. The population/facility demand relationship can be illustrated by considering the impact of constructing new housing units. Generally, a housing unit or household is comprised of an approximate average of 2 to 2.5 persons. For each housing unit, a specific amount of facility demand may then be anticipated. By understanding the facility demand and its relationship to housing units, the demands of growth may be understood. The following descriptions provide a picture of the relationship of households to Transportation, Water and Sewer facilities: Transportation Each new housing unit may be expected to require 0.003 major road (arterial and collector) lane miles. This means that, for every 333 housing units constructed, the County must then construct one full lane mile of major roadway. It costs the County approximately $500,000.00 to construct one full lane mile of major roadway. This County construction cost equals approximately $1,501.50 per housing unit. Since the County's traffic impact fee rates average $1,113.22 per unit, it is evident that traffic impact fees do not cover the entire cost of necessary transportation system expansion. The County, therefore, must makeup the cost difference through other revenue sources. Water Each new housing unit is estimated to require 250 gallons of water per day (gpd). For every 1000 housing units connected to a water plant, 250,000 gpd of water treatment plant capacity will be required to serve the units. Water treatment plants produce water at a millions -of -gallons -of -water -per -day rate (mgd). For a 1 mgd plant, 1000 households would use 258 of the plant's capacity. To accommodate and connect more housing units, the County must expand the production capacity of the water plant to replace the capacity to be used by.the connected housing units. It costs the County approximately $3.00 per gpd capacity to construct or expand a water treatment plant. This construction cost equals approximately $750 per household. However, it is more effective for the County to expand water treatment plants in capacity increments of 0.5 mgd. Furthermore, the cited expansion cost is limited solely to plant construction. The cost does not include related -construction costs such as property acquisition or 15 MAY 189 1995 sooK 95 PAGE 124 I transmission line construction expensive than the actual plant County's assessed water impact plant capacity expansion cost costs, the County must rely on the remaining uncovered costs. BOOK 95 PAGE .1.25 which are substantially more construction cost. While the fee of $10750.00 may cover the and a portion of the related other revenue sources to fund Sewer Each new housing unit requires 250 gallons of wastewater treatment per day (gpd). For every 1000 housing units connected to a wastewater treatment plant, 250,000 gpd of wastewater treatment plant capacity will be required to serve the units. Wastewater treatment plants handle wastewater at a millions -of -gallons -of -wastewater -per -day rate (mgd). For a 1 mgd wastewater treatment plant, 1000 households would use 25% of the plant's capacity. To accommodate and connect the new units, the County must construct additional treatment capacity to replace the capacity to be used by the connected units. It costs the County approximately $2.75 per gpd capacity to construct or expand a wastewater treatment plant. This County construction cost equals approximately $687.50 per household. However, it is more effective for the County to expand wastewater treatment plants in capacity increments of 0.5 mgd. Furthermore, as with water treatment plant improvements, the cited expansion cost is limited solely to plant construction. ' The cost does not include related construction costs such as property acquisition,•force main and pumping station construction, or effluent disposal facilities which are substantially more expensive than the plant construction cost. While the County's assessed sewer impact fee of $2,551.00 may cover the plant capacity expansion cost and a substantial portion of the related costs, the County must rely on other revenue sources to fund the remaining uncovered costs. With respect to water and sewer facilities, it is not just new growth that creates demand. As an area grows and densities - increase due to in -fill development or redevelopment, *he Anna t^ unable to safely accommodate the use of on-site well and septic facilities. Consequently, new water and sewer plants and related facilities must be built to accommodate the demand of existing units abandoning wells and septic tanks to connect to centralized public facilities. Facility Costs Growth creates the need to expand facilities and, thereby, creates a cost. There are, however, two other general types of costs associated with public facilities: general operating/maintenance costs and replacement costs. General operating costs cannot be funded with impact fees. These costs must be funded through the community's general budget or through the rates charged to customers using the facilities. Replacement costs must be funded in the same manner as general maintenance costs. • Impact Fees and the Local Community Indian River County, through its regulations and Comprehensive Plan, has effectively established a local policy that the existing community must not bear the sole burden of expanding public facilities to meet the demands of new growth. With this policy that growth must pay for itself, the County assesses the following types of impact fees for development: 1. Transportation _Impact Fee (TIF) 2. Water Impact Fee 3. Sewer Impact Fee 16 MAY 189 1995 M I M The City of 'Vero Beach has also effectively adopted the policy that growth should pay for itself. Therefore, it assesses impact fees for the following public facilities: 1. Water Impact Fee 2. Sewer Impact Fee 3. Electric Impact Fee For both Indian River County and the City of Vero Beach, all new development must, prior to receiving some form of final development approval, pay any of the above impact fees which are applicable to the development project. This requirement applies to housing development projects, as well as commercial development projects. Impact Fee Characteristics In Indian River County, new housing development may be assessed a combination of Transportation, Water, Sewer or Electric Impact Fees. The specific fees imposed depend upon the location of the development. Each of these fee types, whether assessed by the County or the City of Vero Beach, relate to the anticipated needs of the County or City to provide the public facilities to serve new housing development. The following descriptions of each impact fee type are provided to present an overview: • Transportation Indian River County is the sole government agency responsible for imposing a Transportation Impact Fee (TIF) in the County. The County implemented its TIF assessment program in 1986. The TIF program assesses a TIF on all development within the County, including the County's municipalities: City of Vero Beach, Town of Indian River Shores, City of Sebastian, Town of Orchid, City of Fellsmere. It should be noted that, when the County established its TIF program, the County elected to discount all TIF amounts by fifteen percent (15%). The discount is intended to encourage a developer to pay the fee based on the County's general rate schedule. Alternatively, a developer may complete a fiscal impact study to determine the specific TIF costs of a project; however, if the developer opts to do a special impact study, the developer must pay loot of the impact cost determined by the prepared study as the fifteen percent (15%) fee discount will not apply. The County further adjusted its T.IF program by dividing the County into nine (9) Impact Fee Districts, each of which assesses different TIF rates for each identified use type. TIF funds may be spent only in the District from which the funds are collected. The only exception to this provision is that funds from the Districts may be used for improvements to the bridges, and their associated roadways, which connect the mainland to the barrier island. The County TIF program also included a provision noting that collected TIF funds which were not spent within six years would, at the request of the developer who paid the TIF, be refunded to the developer. Given the current rate of expenditure for collected TIF funds, however, no developer has requested or received such a TIF refund at this time. Additionally, a developer may request a refund of the impact fees at any time, in the event that the developer does not proceed with developing the project for which the TIF was paid. As noted, Transportation Impact Fee funds have been collected since 1986. Since that time, a substantial amount has been collected; however, as the following table indicates, the funds have. been .spent or encumbered at a substantial rate. MAY 189 1995 17 600K 95 Fa,UE 126 BOOK 95 FnE 127 Transportation Impact Fee Funds Cumulative Revenues and Expenses (in dollars) Transportation MWWt Interest $xpenditures E anc" Fund Balance Impact Fee Fee and other 13,525,000.00 (CuTently lees RKpensas District AevennM 6 Upensw committed Lunde) a 3naum1rancss -----------------------: 1 ---------_�� 1,307 302.73 418 168.40 I 149 775.66 366,837.80 1,208,857.67 2 1,154,760.93 373,338.25 327,277.63 700,000.00 500,741.55 3 3,332.233.00 1,073,828.79 465,930.35 2,758,710.38 1,181,421.05 4 661,472.60 743,956.19 1,168,821.16 179,050.00 57,557.11 5 1,719,843.28 172,453.65 1,352,274.40 155,000.00 385,022.53 6 1,936,204.39 760,739.08 902,200.69 943,107.67 651,634.91 7 245,824.91 48,340.27 31,365.48 100,000.00 162,799.70 6 1,277,516.32 234,518.55 491,739.70 862,371.01 137,924.16 9 320,947.69 41,689.97 267,366.06 166,093.31 - 72,821.71 11,956,125.85 3,866,933.15 5,156,751.85 6,253,170.17 4,413,136.98 The County Transportation Capital Improvements Program (TCIP) identifies transportation projects, and their estimated cost, that must be completed in order to accommodate the projected growth of the County and maintain the County's transportation facilities adopted level of service. The improvements identified by the TCIP include new roadway development, intersection improvements, roadway widening and secondary improvements such as right-of-way acquisition for future physical improvements. The TCIP identifies the total expenditures anticipated for the next ten years as follows for each impact fee district: Projected Transportation Capital Improvements Expenditures for 1993 - 2003 (in dollars) Transportation Impact Projected Fee District $xpenditures 1 3,997,000.00 2 850,000.00 3 13,525,000.00 4 13,115,000.00 5 5,970,000.00 6 15,005,000.00 7 9,350,000.00 8 4,560,000.00 9 1,350,000.00 Total 67,722,000.00 In comparing the totals of the two transportation tables above, it is evident that the amount of funds available from impact fees are less than that which will be required to complete the necessary improvements. The County, therefore, must rely on other income sources to complete the necessary transportation capital improvements. The first funds to be used for this purpose are. those dedicated for transportation activities. These revenues are generated by one of the following gas taxes, levied by either the State of Florida or the County: 1. Constitutional Gas Tax - levied by the State of Florida and distributed to the county by the State. 2. County Gas Tax - levied by the State of Florida and distributed to the county by the State. 3. Local Option Gas Tax - optional tax which may be levied by the County; Indian River County does levy this tax. 4. One -Cent Voted Gas Tax - optional tax which may be levied by the County with voter approval; Indian River County does not levy this tax. Like impact fees, these transportation related however, these revenue MAY 189 1995 dedicated revenues may be spent only on activities. Unlike traffic impact fees, sources are not restricted to capacity is � ® r producing capital improvements. In fact, some of this revenue is restricted for roadway maintenance activities rather than for general transportation improvements. Since the County currently maintains approximately 650 miles of paved and unpaved roadways and approximately 85 bridges, the county expends a substantial sum for transportation related maintenance activities. Due to the large number of roads and bridges that must be maintained, the County tends to spend all of its gas tax revenue for maintenance, with little or none left for capital facilities expansions. Since gas tax revenues are used primarily for maintenance activities, that leave impact fees as the principal source of capital expansion funding for roads. Without impact fees, transportation capital improvements would need to be funded from other sources such as the County's General Revenue Fund, an account which receives money through a number of methods. The most substantial method of funding the County's General Fund is the levying of ad -valorem property taxes, a source which contributes approximately forty percent (40%) of the county's total revenues. Some roadway improvements may be funded by the state using federal transportation funds. These funds, however, are limited and cannot meet all of the county's needs. Since impact fees are the county's principal source of funds for transportation capital improvements, any elimination or reduction of traffic impact fees will require more reliance on the County's other general revenue funding, unless the impact fee funds are replaced or somehow paid by another source. • Water & Sewer Impact Fees As noted, both Indian River County and the City of Vero Beach assess water and sewer impact fees for new development. The County implemented its water and sewer impact fee charges in 1981, and the City of Vero Beach implemented its water impact fee in 1981 and its sewer impact fee in 1987. Both the Indian River County'Utilities Department and the City of Vero Beach Utilities Department are established as enterprise funds which must operate- as financially self-sufficient entities, separate from "their respective governments. As such, the departments cannot. receive general funding from their governments' respective General Revenue Funds. Instead, the two departments must rely on their revenue stream to fund operations and capital improvements. o Indian River County The County Utilities Department is effectively divided into separate water and sewer operations, and their related. improvements must be funded by the respective utility operations. Impact fees are collected from developers constructing projects in the County's water and sewer service areas when the project will be connecting to a county water or sewer facility. As with Transportation Impact Fees, water and sewer impact fees may be refunded to developers, should the developer not complete the project for which the impact fees were paid. Once a project has been completed and connected to the water or sewer facility, however, the impact fees paid will not be refunded. Between 1981 and 1991, the County Utilities Department collected a total of $20,132,884.00 in water and sewer impact fees. From the collected fees, however, some refunds were issued. The remaining fees have effectively been spent by the Utilities Department in order to fund the Utilities Department's ongoing capacity improvement programs. Furthermore, the Utilities Department's capital improvements plan identifies ;120,778,000.00 in anticipated water and sewer system capacity improvements to accommodate the County's projected growth through the year 2002. Since the 19 MAY 189 1995 BOOK 95 FACE 128 I1 BOOK 95 PacE 199 County's collected water and sewer impact fees are being spent substantially at the rate they are taken in, and the per unit cost for facility expansions exceeds the assessed impact fee rates as noted previously, the Utilities Department must rely on other revenue sources to fund necessary capital expansions. Since the Utilities Department is an enterprise operation, only two funding methods are available for use. The first is using bond financing, and the second is charging current utility customers through their utility service rates. The Utilities Department has primarily relied upon bond financing to fund its expansion activities. The bond financing method pledges the Department's impact fees revenues as the re -payment source for the issued bonds. This allows the county to fund its expansion activities with the impact fees revenues it receives. The second method of charging the current utility customers for the cost of the system's capacity expansions is discouraged under the policy that growth should pay for itself, and it is this policy which leads to the bond financing programs. Generally, charges to existing customers are made only to cover the general operating and maintenance expenses and capital replacement costs which will be encountered in operating the utility facilities. Bond financing allows the Utilities Department to avoid raising its utility rates in order to fund facility expansions. O City of Vero Beach The City of Vero Beach Utilities Department is operated similar to the County Utilities Department. The City, like the County, collects a water impact fee from all development which is connecting to water service. The City, however, collects a sewer impact fee only from development located within its service area but outside the city limits. The City does not assess a sewer impact fee for development within the city limits. The City has collected $6,310,125 in water impact fees.since 1981 and ;1,080,038 in sewer impact fees since 1987. City Utilities, like the County, has effectively spent the impact fee funds it has collected on its current ongoing facility expansion programs. Furthermore, the City's capital improvements plan for the 1993 to 1998 period identifies $16,674,884.00 in anticipated expenditures to complete the capacity improvements necessary to accommodate its anticipated service area growth. Since the City's impact fee funds are spent substantially as they are collected, and the City's assessed impact fees are less than the County's assessed impact fees, the City must rely on other funding sources to complete facility expansions. Since the City Utilities Department is an enterprise fund operation, it is also limited to using bond financing programs or additional rate charges to its existing customers to fund facility expansions. The City, observing the policy that growth must pay for itself, has also focused on the use of bond financing to fund facility expansions. Like the County, the City has pledged its anticipated impact fee revenues as the source of re -payment for bonds which were issued to fund facility expansions. By using bond financing, the City charges its existing customers for operation, maintenance and capital replacement costs, while avoiding the need to charge its existing customers for facility expansions. • Electric Impact Fees The City of Vero Beach is the only government agency which offers electric facility service in Indian River County. The City implemented its electric impact fee 1987. This electric impact fee is collected from all development which connects to the City's electric service within the City's electric service area. The City has collected $1,724,536 in electric impact fees since their inception in 1987. These electric impact fees, however, have 20 MAY 189 1995 M M M M M effectively been spent with the City's current ongoing facility expansion program. Furthermore, the City's capital improvements plan for the 1993 to 1998 period identifies ;7,819,500 in anticipated expenditures to satisfy the expected capacity needs for future growth within its electric service area. As the City's electric impact fee funds have effectively been spent, the City must rely on other funding sources to complete future facility expansions. Since City Electric is an enterprise fund operation, it is also limited to using bond financing programs or additional rate charges to its existing customers to fund facility expansions. And again, observing the policy that growth must pay for itself, City Electric has focused on the use of bond financing to fund facility expansions. The City has pledged its anticipated impact fee revenues as the source of re -payment for bonds which were issued to fund facility expansions. By using bond financing, City electric charges its existing customers for operation, maintenance and capital replacement costs, while avoiding the need to charge its existing customers for facility expansion costs. Depending upon the location of a housing unit and the availability of facilities for the housing unit, a developer may be required to pay up to four separate impact fees (Transportation, Water, Sewer, Electric). These impact fee costs do affect the cost of housing, and it is the Affordable Housing Advisory Committee's task to consider the effects of these impact fees on affordable housing. ANALYSIS: Community growth requires the expansion of public facilities to meet the needs of that growth. The expansion of public facilities, however, requires funding through the government. Governments faced with needed facility expansions must choose how the expansions will be funded. Impact fees are one funding mechanism available for governments to use in funding facility expansions. As with any funding question, however, a government considering using impact fees to fund public facilities expansions must weigh the advantages and disadvantages of impact foes. Impact Fee Advantages: Impact fees provide substantial advantages for governments which must expand their public facilities. First, impact fees provide a dedicated, alternative funding source from the standard funding mechanisms which are available to government (e.g. property taxes, sales taxes). By using impact fees, government is able to reduce its dependence on these other funding mechanisms, and this reduced dependence may be crucial when the funding mechanism is not a stable income source (e.g. sales taxes). Additionally, impact fees allow governments to charge those creating the facility need for the cost of providing the facility; if no development occurs and no demand is created, an impact fee is not going to be paid. The policy of growth paying for itself is often preferred by government and residents, since existing residents must incur costs if new growth does not pay its way. Finally, since impact fees are assessed using standardized rates, the amount of an impact fee for a project or housing unit is firmly established, and the fee charged directly corresponds to the impact created. • Impact Fee Disadvantages: One disadvantage of impact fees is that the fees are considered regressive in that they are not related to the size or value of a development project. Small inexpensive projects are typically required to pay the same impact fees that larger more expensive projects are required to pay. An example is that a ;3,000 impact fee must be paid for a $60,,000 home and a $250,,000 home; the impact fee represents 5% of the less expensive unit's cost but only 1.28 21 MAY 189 1995 BOOK 95 PAGE 130 BOOK 95 PA;E 131 of the more expensive unit's cost. The second disadvantage is that impact fees must be paid in full prior to receiving development approval. This need for upfront payment may create financing difficulties for developers. In the case of housing, the need to pay impact fees upfront may significantly increase the amount of money which must be obtained or financed in order to complete a housing unit. The disadvantages noted, especially the second disadvantage concerning upfront payment, create much of the controversy concerning impact fees, as those fees relate to the provision of affordable housing. It is argued that impact fee costs imposed on housing are added to the price of housing which makes it difficult for persons with very low-, low- or moderate -incomes to obtain housing. With this claim in mind, it is often recommended that local governments provide impact fee alternatives for affordable housing. These alternatives generally take one of two forms: the elimination/reduction of impact fees or the subsidization of impact fees. O Impact Fee Elimination/Reduction The elimination or reduction of impact fees for affordable housing would have an immediate effect, as the amount eliminated or reduced would be eliminated from the housing cost. However, the facility demand created by the housing unit will not be eliminated or reduced. Therefore, the government is faced with obtaining funds for the necessary facility expansion through some other means. In many cases, funds may be obtained through increased tax levies (e.g. property, sales) or through increases in utility rates. The government may also seek alternative methods to fund the necessary expansions. In some cases, the financial impact of an alternative may be just as great as, if not greater than, the financial impact of'the impact fee which would have been charged. As examples of impact fee elimination or reductions for affordable housing, the City of Orlando provides an impact fee exemption for affordable housing, while Orange County provides an -impact fee reduction for affordable housing. The exemption and reduction are provided for in each government's respective impact fee regulations; however, each government must compensate the respective impact fee funds through its other revenue sources. The compensating action of the government is classified as having the government paying the impact fee on behalf of the affordable housing unit, rather than actually eliminating or reducing the impact fee. Another suggested variation on eliminating or reducing impact fees for affordable housing is shifting the impact fee liability to other uses. This would involve recalculating impact fee rates with the amount of the waived affordable housing impac* fee revenue charged to other uses. This concept is inappropriatef as provisions to shift costs may invalidate an impact fee ordinance. Developers would be paying both their own proportionate share of capital costs as well as the share for another project. Legally, this would not conform to the proportionate share concept upon which impact fees are based. 0 Impact Fee Subsidization The subsidization of impact .fees on behalf of affordable housing, in which the government specifically identifies monies which may be used to pay all or a part of the impact fees for affordable housing, is the second impact fee alternative for affordable housing. This alternative is similar to the concept of eliminating or reducing impact fees for affordable housing. The subsidization alternative serves as a_method of formally recognizing that, while the affordable housing unit developer is not paying all or a part of an impact fee, the funds must still be provided to compensate for the demand that the affordable housing unit will create. The decisions to be made when the subsidization alternative is used are 22 MAY 18, 1995 what source of funds will be used to pay the affordable housing unit's corresponding impact fees, and how such a subsidization program will operate. It should be noted that a government which elects to conduct a subsidy program will encounter additional costs beyond those associated with paying the affordable housing unit's impacts. The subsidy program will also require funds to administer the program, along with other funds to monitor the affordable housing unit or its residents for compliance with any subsidy program imposed requirements. Examples of two subsidy programs are the City of Orlando's impact fee grant program and Indian River County's Local Housing Assistance Program. The City of Orlando established a line item fund in its annual budget to fund the payment of impact fees for affordable housing. Indian River County's Assistance Program uses state supplied funds to serve as the source of funds for the payment of impact fees for affordable housing. By paying the affordable housing unit's corresponding impact fees, both the City of Orlando and Indian River County recognize that each affordable housing unit will still create facility demand which must be funded. The Orlando subsidy program has been in operation since early 1993; however, it has not been utilized to a large extent at this time. Indian River County's subsidy program has not yet commenced at this time; however, from the extent of interest, it appears that the County program may be quite successful. As noted, using either one of the two impact fee alternatives to provide impact fee relief for affordable housing units does not eliminate the facility demand and associated facility expansion costs created by affordable housing units. However, selecting the subsidy program alternative allows a local government,to publicly recognize and point out to the community that impact fees for development are needed and these fees must be Said, regardless of who pays the impact fees. • Summary In order to meet the demand created by growth, governments must expand their facilities, and this expansion must be funded in some manner. One alternative of funding facility expansion'is through impact fees. By collecting impact fees, governments create a designated funding source for the necessary capital improvements while ensuring the existing community that new growth is paying the cost of growth necessitated facility expansions. These impact fees, however, do affect the price of housing, and their effect on affordable housing, in particular, can be significant. Because, Indian River County is implementing an assistance program which provides for an impact fee subsidy to for affordable housing, any additional action relating to impact fees would be premature and unnecessary at this time. It is staff's position that the County's impact fee subsidy effort is the most appropriate step the for the County at this time. Therefore, staff recommends that the Affordable Housing Advisory Committee make no formal recommendations to change the county's impact fee structure at this time. RECOMMENDATION: Staff recommends that the Affordable Housing Advisory Committee recognize that Indian River County is implementing an impact fee subsidy program and determine that no further action is required by Indian River County at this time. 23 MAY 189 1995 BOOK 95 PAGE :39 BOOK 95 Ftt rE133 County Comparisons Commissioner Eggert commented that she is tired of hearing that the only thing this county has to offer is the quality of life and she wanted to see us put together a brochure on county comparisons to show people why they should come to. Indian River County: COUNTY COMPARISON For economic development purposes, it is advantageous to compare Indian River County to other counties located close by. Since these other counties constitute Indian River's competition for economic development prospects, such comparison provides a means to assess the competition. The purpose of this report is to compare Indian River County with other counties in the Space Coast and Treasure Coast area with respect to factors affecting economic development in each of these counties. Additional comparison information is included in the county's recently completed Economic Base Study. Population, income, and other economic development related characteristics of Indian River, St. Lucie, Martin, Palm Beach, Brevard, Oseola, and Polk counties are indicated on attached -Tables I -VI. Only by considering these characteristics as a whole can an accurate perspective of the county's relative position be provided. • POPULATION As indicated in Table I, Indian River County is the smallest county in the region, and Palm Beach County is the largest. More than 98% of the population growth in Indian River and Martin counties is due to immigration, with the growth of these two counties primarily due to a large influx of retirees. This is one reason why both Indian River and Martin counties' percentage of the 65 years and older population segment is increasing. In 1990, both counties had more than 27% of their respective populations in the 65 years and older category. For the most part, the 65 years and older population is no longer in the workforce. A majority of these retirees, however, are relatively affluent, providing an increased market demand for goods and services. 0 INCOME AND LABOR FORCE PARTICIPATION Martin County has the highest per capita income in the region followed by Palm Beach, Indian River, Brevard, St. Lucie, Polk, and Osceola counties. Palm Beach County, however, has the highest household and family median income followed by Martin, Brevard, Indian River, St. Lucie, Osceola, and Polk counties. Polk County has the highest percentage of people below the poverty level, followed by St. Lucie, Osceola, Brevard, Palm Beach, Indian River, and Martin counties. Indian River and Martin counties have the -lowest labor force participation percentage (about 51%), and Osceola County has the highest percentage (about 66%). 24 MAY 189 1995 PRICE LEVEL INDEX AND BUYING POWER The price level index is based on the cost of 117 items and services, ranging from bread to prescription glasses, and men's business shirts to homeowner's insurance. The index measures relative price levels across counties from year to year. As indicated in Table II, Palm Beach County had the highest price level index in the region in 1993, followed by Martin, Indian River, St. Lucie, Brevard, Osceola, and Polk Counties. Also, a County state's s shown in Table II, Palm Beach County ranked 4th, Martin ranked 5th, and Indian River County ranked 11th among the 67 counties, regarding the price level index. Another important consideration is buying power. A county's buying power is based on two factors. These are per capita income, including all sources, and the cost of living index. In the region, Palm Beach County has the highest buying power, followed by Martin, Indian River, Brevard, Polk, St.. Lucie, and Osceola counties. Among Florida's 67*counties, Palm Beach County ranked 1st, Martin County ranked 2nd, Indian River County ranked 5th, and St. Lucie County ranked 38th in terms of buying power. MILLAGE RATE Millage rate is the rate at which ad valorem property, taxes are assessed. One mill equals one dollar of tax per. one thousand dollars of property value. On Table III, the millage' rate includes millage for county government, millage for school board district, and millage for special districts. Millage,.levied for debt service has been included to more accurately reflect the total millage levied for ad valorem taxes. As indicated on Table III, Indian River County had the lowest millage rate in the region in 1989 and 1991, followed by Brevard, Martin, Polk, Osceola, Palm Beach, and St. Lucie counties. Among the 67 counties in the state, Indian River County was the 11th lowest in terms of millage rate, while St. Lucie County was 60th on a lowest to highest ranking. In 1994, St. Lucie County had the highest millage rate in the region, followed by Palm Beach, Indian River, Polk, Osceola, Martin, and Brevard counties. The millage rate for Indian River County in 1994 was higher than the 1991 rate due to debt service for a school district construction bond as well as the added millage for the newly created county emergency management service district. According to state requirements, all property assessments must be uniform throughout the state, and assessment must be done at 100% of the property value. For this reason, it should be possible to compare millage rates among counties. To ensure consistency, the 2 25 MAY 189 1995 BOOK 95 P'AE 134 BOOK 95 FAGS 1:35 state certifies each county tax roll. To do that, the state performs random checks and examines assessed value in relation to sale prices. For statistical purposes only, a county's assessment roll is considered to be accurate and the tax roll will be certified if assessed values are 858 or more of sale prices. • LOCAL OPTION GAS TAX. During its 1993 session, the Florida legislature made two important changes to the state's local option gas tax laws. As part of the ELMS (Environmental Lands Management Study) Act, these two changes were designed to' provide local governments with the ability to generate more revenue to implement local comprehensive plans. One of these changes involved the establishment of a new local option gas tax. Ranging from one to five cents, this tax may be approved either by voter referendum or by a majority plus one vote of the applicable county's governing body. The other legislative change affected the ninth -cent gas tax (formerly called the voted gas tax). As a result of legislative action, this tax may now be imposed by any county in the state either by voter referendum or by extraordinary vote of the governing body. Because of these changes in state law, counties may, with just a majority plus one vote of the governing body, impose up to 6 cents of additional local option gas tax. In Indian River County, the imposition of an additional 6 cents of local option gas tax would raise approximately $3,199,000 countywide per year. If the additional gas tax were to be adopted by the county, the money raised could be used to reduce traffic impact fees, to subsidize traffic impact fees, to eliminate traffic impact fees, or used for maintenance and replacement of county bridges which must be substantially repaired or replaced (the cost of such work substantially exceeds available funding). Table III indicates which local governments have adopted the additional Local Option Gas Tax and at what rate. • IMPACT FEES As indicated in Table IV, six of the counties in the region collect impact fees at the time of building permit issuance. The only county which collects impact fees at the time of Certificate of Occupancy is Brevard County. All counties charge traffic impact fees. including Martin, Brevard, and Palm Beach, different impact fees. This is indicated in water and sewer are concerned, most counties some counties do not call them impact fees. 3 26 MAY 189 1995 . Several counties, impose five to eight Table IV. As far as have fees; however., Impact fee amounts vary from county to county. As indicated in the traffic impact fee sample of Table IV, several counties in the region charge higher rates than Indian River County. Several municipalities within each county also have their own impact fee charges, above and beyond countywide impact fees. In some cases, private utility companies have additional charges to cover capital improvement costs associated with their facilities. • ECONOMIC DEVELOPMENT INCENTIVES Table V indicates the direct economic development incentives provided by each county in the region. Indirect incentives, such as availability of water and sewer for commercial/ industrial lands, quality of life, and others, are not shown on the table. The three counties providing some direct economic development incentives are St. Lucie County, Palm Beach County and Brevard County. NUMBER OF JOBS LOST OR GAINED Table VI indicates the number of jobs lost or gained in the county for each year between 1990-94. This information is provided by industry total and by major sector. In 1990, 1991, and 1992, the county lost jobs, mainly due to the overall national economy. Since 1993, however, the county has gained jobs in almost all of the categories. • SUMMARY There are many characteristics that together establish a county's profile. To accurately reflect a county's financial structure, these characteristics must be considered together. As indicated in the attached tables, Indian River County ranks high in the income and buying power categories, an indication of the county's affluence. At the same time, the county has a competitive millage rate and below average impact fees. At present, the county does not offer economic development incentives. In that respect, the county is at a competitive disadvantage with several of the -counties in the region. u\v\s\repor.cty 4 27 MAY 189 1995 BOOK 95 PAGE 136 I BOOK 95 PAGE 137 Director Keating pointed out that Indian River County has the fewest number of impact fees and that our impact fees are not the highest. Incentives for Economic Development G Affordable Housing State incentives Alan Campbell of Council of 100 stressed that the State has been dragging its feet on traffic impact fee waivers for targeted industries and the creation of tax incentives. He suggested that the County allow payment of traffic impact fees over a period of years like we do the utilities impact fees and give money back for oversizing improvements. Commissioner Eggert asked why can't we pay the traffic impact fee over 5-10 years, the way we do utility impact fees, and reimburse them for over building. Director Keating noted that if we did implement the financing of impact fees over 5-10 years, it probably would be structured along the lines of water and sewer impact fees. Financing of impact fees might have some benefits to the applications. We know it has a cost to the County. We know it would require a lien on the property, and Tim Zorc made a reference to the effect of the debt on developers' financing. On the up side, a finance plan could reduce the upfront cost and allow payment over time. On the down side, it could reduce the amount of financing that the applicant can obtain, which is why we are not sure of the degree to which it would be used if it were put in place. Director Keating explained that the big difference between financing traffic impact fees and utility impact fees is that we have a lot of existing residents who are financing utility impact fees. When somebody owns a single-family home and the County - brings in water and sewer, they can decide to hook up and pay their impact fees at that time. That is not the case with traffic impact fees. You can expand your house, or do anything to an existing single-family house, without getting an increase in traffic impact fees. The only time you are going to get hit with a traf f ic. impact fee is when you are building a new house. Director Keating pointed out some of the potential costs of establishing a traffic impact fee financing program. It would reduce the amount of traffic impact fees that we collect on an annual basis. People -would be paying an interest rate, but it would be coming in incrementally. Instead of getting money in 28 MAY 189 1995- bigger chunks, we would get it in smaller increments over a period of time. That may have the disadvantage of lengthening the time to do the projects. One way to avoid that would be to bond impact fees, but bond issuance costs raise the entire cost of everything. It is also difficult to finance impact fees because of some of the unknowns with impact fees. Another cost to the County would be the administrative cost of servicing the loans, and there is the risk of default even though we would have a lien securing the impact fees amount. Director Keating stressed that staff's question is whether the overall benefits outweigh the costs. Transportation Public Works Director Jim Davis advised that the financing of impact fees would limit the cash flow in the road building funds. At the present time, we try to project cash flow on a yearly basis and when a cash flow is diminished by lesser impact fees received in the beginning years, we try to make that up with local option gas tax revenues and that is split with the Constitutionals. So, there is some immediacy in the county for using that money for arterial and collector roads. Many large and even smaller developments are taking advantage of traffic impact fee credit agreements. Credit agreements are written in cases where people are donating right-of-way in lieu of paying impact fees. 'A change 4 0 would diminish our ability to pay for that impact fees over a number of years. Commissioner Bird didn't see us enacting an additional gas tax unless it proves to be necessary in the future to meet our future transportation needs. OPTIONAL GAS TAX GAS TAX PER .01 $518,264 MULTIPLY BY 6 6 TOTAL $3,109.594 MAY 189 1995 29 Boos 95 PnE 138 INDIAN RIVER INDIAN TOTAL COUNTY VERO RIVER COUNTYWIDE UNINCORP. BEACH SEBASTIAN SHORES FELLSMERE PERCENT OF GAS TAX 100.0000% 67.5703% 19.4239% 9.9052% 1.1435% 1.9571% BEIM5 DOLLAR AMOUNT 1 $3,109,584 1 $2,101,155 1 $604,002 $308,011 $35,558 $60 858 MAY 189 1995 29 Boos 95 PnE 138 BOOK 95 Pbr,E 139 Costs Capital 20 years $181,000,000 Operation & Maintenance 20 years $172,000,000 8,600,00 Total Cost for 20 years $353,000,000 Revenues (20 years based on current funding levels and growth rates) Constitutional Gas Tax $29,000,000 County Gas Tax $10,000,000 Local Option Gas Tax $43,000,000 Traffic Impact Fees $33,000,000 State & Federal $85,000,000 MSTU $65,000,000 General Fund $43,000,000 1 -cent local option sales tax $13,000,000 TOTAL $321,000,000 Discussion ensued regarding increased use of traffic studies to lower impact fees for affordable housing, especially housing for the elderly. Community Development Director Robert Keating advised that we always tell people their option is to show that their projects would generate less traffic than projected. We will be looking at that in the transportation study, but it is available right now. Citrus Road . On June 13 staff will be bringing Comp Plan amendments to the Board that will specifically put the citrus road on the County's Thoroughfare Plan. In August the MPO priority projects will be brought forth, which is our opportunity to get the citrus road on DOT's 5 -year program. Director Davis advised that the citrus road is a 3 -county effort and all 3 counties will have to do the best job they can in order to have the DOT prioritize the project. The big question is how are we going to prioritize it with all of our other projects. Local Incentives Discussion ensued regarding tax abatements or refunds, job grants program, weekend inspections, relocation assistance, employee relocation package, spouse employment program, list of teachers who are foreign language speakers, capital venture resource list, small business lending pool and sales and use tax exemption - personal property tangible tax. 30 MAY 189 1995 TAB EXAMPLES M Value Taxes Without Exemption Taxes with Exemption Land value $20,000 $20,000 $1 -million Improvements Value $20,000 $12,000 $1 -million ------------------------------------------------------------- TOTAL $40,000 $32,000 Commissioner Eggert asked if the Board would like the Economic Development Council to develop information for tax abatement and applications for job grants. Commissioner Bird wanted to see it come back because it is an opportunity to compete with other counties. Commissioner Eggert was excited about the potential of developing our SWDD industrial park. Commissioner Tippin commended staff for their tremendous efforts in bringing this very informative presentation to the Board, and Commissioner Eggert noted that it doesn't cost the taxpayers anything for us to study the issues. The Board next discussed finding a way for people to pay back SHIP funds, possibly at the time the property is sold or the owner dies. Another alternative would be to pay it back monthly, capital plus interest, over the years. It would require substantial administration, but staff will look into it. Director Keating reported that Indian River County is expected to receive $573,000 in grants for next year. He noted that 110 families have been assisted by this program. Tim Zorc, current president of the Treasure Coast Builders Association, asked if there was a double charge in the calculations for trip generations for industry, and Director Keating explained the formula for arriving at trips and emphasized that there is no double charge in calculating impact fees. Mr. Zorc, using the example of the additional vehicles on the road from the U.S. Post Office and the citrus industry, suggested that the collection of traffic impact fees be tied to Certificates 31 MAY 189 1995 Boa 95 PnEx.40 I BOOK 95 wa 141 of Occupancy rather than being paid up front. He noted that the DeBartolo project had .to pay a franchise fee to the City of Vero Beach for electricity. If Florida Power & Light had been allowed to cross SR -60 at that location, DeBartolo would not have had to pay anything. Mr. Zorc supported a gas tax user fee. Alan Campbell of the Chamber of Commerce stressed that a change in the times for payment of impact fees would help sway the decision makers in bringing industry to our county. He also stressed the competitiveness in job grant programs in other counties. Deb Robinson, president of the Chamber of Commerce, believed we lose positive industry for several reasons: 1) We don't have available parcels in the areas where businesses want to go. 2) Tax abatement and incentives are greater in other counties. 3) Our LDRs are not user friendly. There being no others who wished to speak, Commissioner Eggert expressed the Board's appreciation for everyone's patience during this 3 -hour workshop which she felt was very educational and very much needed. She advised that everything discussed here this morning will be brought forward and gone into at greater depth. Chairman Macht thereby adjourned the meeting at 12:20 p.m. ATTEST: tee& J. K. Barton, Clerk Kenneth R. Macht, Chairma Minutes approved &0 -.�;)o-9-1 32 MAY 189 1995