Commission revisits impact fees for development
By Jake Martin
Posted Feb 19, 2018 at 5:53 AM
Updated Feb 19, 2018 at 5:53 AM
St. Augustine Record
St. Johns County commissioners on Tuesday will hear an update to the impact-fee study that was initially rolled out last summer. The study proposes changes to fees levied on developers to offset the costs of providing additional public services to new developments.
It’s expected there will be an adoption hearing March 6 for a revised impact-fee schedule, which would include fees collected by the county for public education on the school district’s behalf.
The proposed ordinance is based on an updated technical memo prepared for the county Feb. 5 by consultant James C. Nicholas. The memo reflects the most current data and assessments regarding impact fees in the categories of roads, public buildings, law enforcement, fire and rescue, and parks and recreation.
A second memo addresses school impact fees. On Feb. 6, the school board voted to request the county commission to adopt the fee schedule as presented in Nicholas’ memo.
The commission and school board held a joint workshop in August to review Nicholas’ study, commissioned by the county.
Nicholas calculated the environmental cost of new construction on six areas of infrastructure: roads, fire and rescue, law enforcement, public buildings, parks and recreation, and public schools. He recommended impact fees increase in almost all categories except schools — due to other sources of funding available, including the half-cent sales tax passed in 2015 — in order to keep pace with growth.
According to backup materials from the county, changes since the August workshop include expansion of the proposed draft schedule from a six-tier to seven-tier square footage structure for residential homes, maintaining the lowest supported fee for smaller homes and an update to the school impact-fee methodology to include the final construction costs of schools completed in 2017.
There was also an update to the road impact fees using the latest edition of the Institute of Transportation Engineers’ Trip Generation Manual, released in October. This edition had no measurable change on residential rates, but did result in reductions in several non-residential categories as compared to the August draft.
The backup says the updated impact-fee schedule “reflects the highest and legally defensible assessment.”
The board could choose to adopt the fee schedule at the full values reflected in the technical memo; adopt the fee schedule at a reduced amount (by reducing all of the land-use categories by an equal percentage as was done in 2011, when fees were reduced across all categories by 25 percent); or adopt the fee schedule at the full value reflected in the memo and reduce certain land-use categories by supplementing those categories with an alternative funding source.
The backup says if the board wishes to levy impact fees at the full amount supported by the study for residential development, but at reduced amounts for non-residential (commercial) categories, the board could ”‘buy down’ or subsidize select impact-fee categories using other eligible revenue sources to promote a public purpose.”
One example of a public purpose supported by the county’s Comprehensive Plan is the encouragement of “economically desirable development.”
This approach would not be without its complications, however, as some categories saw cost increases and others saw cost decreases. Meanwhile, it is recommended that if the board wants to reduce one category, it should reduce all categories by the same percentage to retain the integrity of the data and analysis.
There are 26 non-residential impact fee categories in six groupings: Industrial, Office, Commercial, Recreational, Institutional and Medical. Some types of development are more prevalent than others.
More than 80 percent of all non-residential impact fees collected in the 2017 fiscal year were for Commercial under 100,000 square feet. According to the update, a reduction of 39.8 percent would be needed to maintain flat fees for this use category.
Some categories saw similar rates of increase, others didn’t. Changing the percentage across the board would result in flat or slightly lower fees for some and slight or modest increases for others.
The update says, based on 2017 activity, the buy-down cost at a rate of 40 percent across all six non-residential groups would be about $725,000, of which about $415,000 is in the road category.
At the joint workshop in August, Commissioner Henry Dean said he would favor lower impact fees for new commercial development in order to encourage more economic development in the region.
Commissioner Jimmy Johns said raising the fees hurts some, but decreasing them hurts others.
“What we’re trying to do is balance these out to have a net positive effect on everybody,” he said at the workshop.
Supposing the recommendations are followed to their full extent, most nonresidential development uses, regardless of magnitude, would see considerable hikes in their impact fees for services provided by the county. These include roads, public buildings, law enforcement, fire and rescue, and, in most cases, parks — but not schools.
Residential fees would be recast from using two size categories — 1,800 square feet and under, and over 1,800 square feet — to six size categories. These new categories break down as follows: under 800 square feet; 801 to 1,250 square feet; 1,251 to 1,800 square feet; 1,801 square feet to 2,500 square feet; 2,501 to 3,750 square feet; 3,751 to 5,000 square feet and over 5,000 square feet.
Most residential developments would likely see an increase in what they contribute toward services provided by the county. Only homes with square footage under 800 square feet would be paying less, with an 11.9 percent decrease overall. Others would see increases ranging from about 3.1 percent (for homes 1,801 to 2,500 square feet) to 68.9 percent (for homes 5,000 square feet and up).
Under the existing fee schedule, homes with 1,800 square feet or less pay $4,017 for schools while homes over 1,800 square feet pay $6,836. The updated impact fee schedule shows homes under 800 square feet paying just $1,435 for schools. Homes of 1,801 square feet to 2,500 square feet, which have to pay $6,836 under the current fee schedule, would only be on the hook for $4,725 under the recommended schedule.
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