Collier County
FL

Action Item
10745

Recommendation to approve an Ordinance amending Chapter 74 of the Collier County Code of Laws and Ordinances, which is the Collier County Consolidated Impact Fee Ordinance, providing for the incorporation by reference of two impact fee studies; amending the Road Impact Fee rate schedule and the Water and Wastewater impact fee rate schedule; providing for an effective date of November 25, 2019 for all rate categories that are decreasing and a delayed effective date of March 2, 2020 for all rate categories that are increasing and new/replacement land use categories being added to the fee schedules, in accordance with the 90-day notice requirements set forth in Section 163.31801(3)(d), Florida Statutes; and providing for revised definitions and update of the requirements related to the payment of Road Impact Fees to obtain a Certificate of Adequate Public Facilities (COA) to comply with the new provisions of the Florida Statutes.

Information

Department:Capital Project Planning, Impact Fees, and Program ManagementSponsors:
Category:09 Advertised Public Hearings

Executive Summary

EXECUTIVE SUMMARY

 

Recommendation to adopt an Ordinance amending Chapter 74 of the Collier County Code of Laws and Ordinances, which is the Collier County Consolidated Impact Fee Ordinance, providing for the incorporation by reference of two impact fee studies; amending the Road Impact Fee rate schedule and the Water and Wastewater impact fee rate schedule; providing for an effective date of November 25, 2019 for all rate categories that are decreasing and a delayed effective date of March 2, 2020 for all rate categories that are increasing and new/replacement land use categories being added to the fee schedules, in accordance with the 90-day notice requirements set forth in Section 163.31801(3)(d), Florida Statutes; and providing for revised definitions and update of the requirements related to the payment of Road Impact Fees to obtain a Certificate of Adequate Public Facilities (COA) to comply with the new provisions of the Florida Statutes.

 

 

OBJECTIVE:  To adopt an ordinance amending Chapter 74 of the Collier County Code of Laws and Ordinances (Code) to provide for updates to the Road Impact Fees and Water and Wastewater Impact Fees.  Also included in the proposed Ordinance are needed revisions to the definitions section of the Chapter and an update of the COA provisions to comply with new language in the Florida Statutes.   

 

CONSIDERATIONS:  Impact fees are collected in order to provide a source of revenue to fund the construction or improvement of public facilities necessitated by growth.  As such, Collier County has used impact fees as a funding source for growth-related capital improvements. 

 

Impact fees require development to contribute its fair share to the cost of improvements and additions to infrastructure but may not be charged in excess of the amount anticipated to offset the demand on the respective facility.  The requirement for the update of impact fees is set forth by Section 74-502 of the Code.

 

On October 22, 2019, the Board authorized the County Manager and the County Attorney to advertise this proposed ordinance amendment for future consideration.

 

In accordance with the notice period requirements of Section 163.31801(3)(d) Florida Statutes (The Florida Impact Fee Act) upon adoption by the Board, the proposed impact fee rates will be implemented on two dates.  Based on changes to the statute passed in the 2009 Legislative Session, decreases to or elimination of impact fees are not subject to the 90-day notice requirement.  Therefore, the proposed impact fee rates, which set forth a decrease in a land-use category will become effective on November 25, 2019.  The proposed impact fee rates, which set forth an increase in a land-use category as well as any new/replacement land uses being added to the schedule, will become effective on March 2, 2020, in observance of the notice requirement.

 

WATER AND WASTEWATER IMPACT FEE STUDY: Water and Wastewater Impact Fees have been in place in Collier County since 1978 and are assessed on both residential and commercial construction.  On April 25, 2017, the Board adopted Ordinance No. 2017-13, providing for the adoption of the Water and Wastewater Impact Fee Study for Collier Water-Sewer District, thereby establishing the current Water and Wastewater Impact Fee rates.

 

In keeping with the formal update requirements, the County retained Raftelis, formerly doing business as Public Resources Management Group (PRMG), to complete the Water and Wastewater Impact Fee study.  The report describes the technical and legal framework and the methodology used to update the impact fees.

 

The update utilizes the same approach and methodology used in the preceding updates.  The major elements associated with the study include:

 

Asset inventory

Level of Service

Capital Projects - Growth

Remaining available capacity

Calculated Fee Schedule

 

The Water and Wastewater Impact Fees are designed to recover the pro-rata share of allocated, growth-related capital costs from new customers or from increases in capacity reservations for existing development.  The level of service (LOS) for Water and Wastewater used in this update is 300 gallons per day (gpd) and 200 gpd, respectively (expressed on an average daily flow basis).  This level of service represents a reduction from 325 gpd and 225 gpd for water and wastewater respectively, in line with the Engineering and Financial Bond Feasibility Report which is incorporated in the Report of the Independent Financial Advisor dated April 17, 2019 issued by the county’s financial advisor PFM and will also be updated in the upcoming Utilities Masterplan and the 2020 Annual Update and Inventory Report/Capital Improvement Element.  The total gross Utility Plant in Service System existing assets total $1.4 billion with remaining average daily capacity of approximately 37.64% of water facilities and 45.81% of wastewater treatment and disposal facilities available to serve new growth.  Finally, the capital-related costs for expansion of the permanent northeast utility plant put into service and financed to serve existing and new developments as well as the estimated incremental costs for construction of additional capital infrastructure in a projected time period to serve new development within the Collier County Water-Sewer District are considered.

 

Based on current and projected growth, staff will continue to monitor the need for additional capital projects related to growth and will report back to the Board with changes that would warrant an update study sooner than the required 3-year timeframe. 

 

The proposed Water and Wastewater fee schedule, as shown in Appendix “A” of the attached ordinance amendment is considered by the Consultant to be the most accurate and legally defensible option for the imposition of these impact fees. Additionally, the study has been reviewed by the County’s outside legal counsel, Nabors, Giblin & Nickerson, P.A.  Below is a comparison of several of the current and proposed impact fee rates for Water and Wastewater:

 

WATER

LAND USE

PROPOSED RATE

CURRENT RATE

$ CHANGE

% CHANGE

Residential:

 

Single Family <4000 sf (per unit)

$3,382.00

$2,562.00

$820.00

32%

Non-Residential:

 

1-Inch Meter

$5,647.00

$4,278.00

$1,369.00

32%

2-Inch Meter

$18,026.00

$13,655.00

$4,371.00

32%

 

WASTEWATER

LAND USE

PROPOSED RATE

CURRENT RATE

$ CHANGE

% CHANGE

Residential:

 

Single Family <4000 sf. (per unit)

$3,314.00

$2,701.00

$613.00

22.7%

Non-Residential:

 

1-Inch Meter

$5,534.00

$4,510.00

$1,024.00

22.7%

2-Inch Meter

$17,663.00

$14,396.00

$3,267.00

22.7%

 

ROAD IMPACT FEE UPDATE STUDY: Road Impact Fees have been in place in Collier County since 1985 and are assessed on both residential and commercial construction.  On February 10, 2015, the Board adopted Ordinance No. 2015-17, providing for the adoption of the Road Impact Fee Update Study, and on April 25, 2017, adopted 2017-14 approving the annual indexing calculations and thereby establishing the current Road Impact Fee rates.

 

In keeping with the formal update requirements, the County retained Tindale-Oliver & Associates (TOA), to complete the Road Impact Fee Update Study.  The report describes the technical and legal framework and the methodology used to update the impact fees.

 

The updates utilized the same approach and methodology used in the preceding updates.  The major elements associated with the study include:

 

·              Demand

·              Cost

·              Credit

·              Calculated Fee Schedule

 

Changes in major components include updates to trip data and additions, and deletions of land uses based on new information contained in the Institute of Transportation Engineers (ITE) Trip Generation Manual 10th Edition.   Updates to cost components related to Design, Right of Way, Construction, CEI, Mitigation and Urban Overpasses are also included.  With the exception of Mitigation, costs have increased in all areas since the last study. Specifically, the construction costs being utilized for the study represent local costs, for a total of $3.5 million per lane mile, and a total, local cost per lane mile of more than $6 million.  Data from recent impact fee studies in Florida and/or Florida Department of Transportation were used to validate costs; however, State costs have been removed from inclusion in the calculation as there are currently no plans to advance impact fees for State projects.  Should this change in the future, State costs may be included in a future update. 

 

As detailed in the study, it is important to note that the assessable trip length used in the study for the single-family land use, and related land uses, (5.88 miles) is extremely conservative.  This trip length continues to be utilized based on the direction of the Board.  Recent studies suggest that the average trip length may be closer to 7.28 miles.  More specifically, by geographic area, average trip lengths range from 6.62 miles in the urban area to 11.75 miles in the eastern part of the County.  Increases in trip length have a direct correlation to higher rates.

 

With respect to the credit component, this study includes a credit for funding provided by the Local Option Infrastructure Surtax to the extent that it provides financing for projects that are otherwise impact fee eligible.

 

The proposed Road Impact Fee rate schedule provides both increases and decreases across the land use categories.  Increases are primarily due to increased costs, etc.  Additionally, as provided above, there are land-use additions/replacements and deletions based on new ITE data. Several of the “multi-family” categories (Condo, High-rise Condo, Duplex, Apartments, etc.) will be included in three categories of “Multi-Family Housing” uses, as data suggests that there is limited or no correlation between type of property ownership and travel characteristics/demand.  The Office category is being collapsed to one rate, and Retail categories are being reduced from ten to three.  In addition, the Convenience Store with Gas categories are being modified to also include the square footage of the store as one of the factors used to determine the rate. New land uses are also being added for two types of residential construction over commercial (mixed-use developments). As discussed above, the new/replacement proposed land uses, as well as the definition changes will take effect, if approved, on March 2, 2020, in observance of the notice provisions required by statute.  The categories where the calculated rates are decreasing is mainly related to reduced trip generation rates reflected in ITE.  There is no notice requirement for decreases, and as such, the decreases, if approved, will take effect on November 25, 2019.   

 

The proposed Road fee schedule, as shown in Appendix A of the attached ordinance amendment, is considered by the Consultant to be the most accurate and legally defensible option for the imposition of these impact fees.  Additionally, the study has been reviewed by the County’s outside legal counsel, Nabors, Giblin & Nickerson, P.A.  Below is a comparison of several of the current and proposed impact fee rates for Roads:

 

ROADS

LAND USE

PROPOSED RATE

CURRENT RATE

$ CHANGE

% CHANGE

Residential:

 

Single Family <4000 sf (per unit)

$8,090.00

$7,443.99

$646.01

8.7%

Mobile Home (per unit)

$3,576.00

$3,146.48

$429.52

13.7%

Retirement Community (Attached)  (per unit)

$2,018.00

$2,787.92

($769.92)

(27.6%)

Non-Residential:

 

Church (per seat)

$286.00

$347.96

($61.96)

(17.8%)

General Light Industrial (per 1,000 sf)

$4,584.00

$5,699.95

($1,115.95)

(20%)

Retail < 6,000 sf (per 1,000 sf)

$5,737.00

$5,696.77

$40.23

0.07%

Medical Office >10,000 sf (per 1,000 sf)

$31,444.00

$28,313.05

$3,130.95

11 %

 

The following chart provides the overall changes to the total impact fees:

 

TOTAL IMPACT FEES - WITH INCREASES*

LAND USE

PROPOSED TOTAL

CURRENT TOTAL

OVERALL $ CHANGE

OVERALL % CHANGE

Single Family <4000 sf (per unit)

$30,450.29

$28,371.28

$2,079.01

7.3%

General Light Industrial (10,000 sf)

$67,812.20

$76,578.70

($8,766.50)

(11.5%)

Retail < 6,000 sf (5,900 sf)

$63,723.27

$61,092.91

$2,630.36

4.3%

              * Includes Greater Naples Fire Impact Fees.  1” meter size used to calculate commercial Water and Wastewater Impact Fees.

 

Also included in the proposed Ordinance Amendment is new language to address statutory changes related to timing of payment of impact fees.  On July 1, 2019, new provisions of Section 163.31801, Florida Statutes became law, providing that “Collection of the impact fee may not be required to occur earlier than the date of issuance of the building permit for the property that is subject to the fee.”  Therefore, Section 74-302 of the Code, related to “payment of road impact fees to obtain a certificate of adequate public facilities,” is being amended to comply with the new timing.  The provisions of the Code will remain in place for applications approved prior to July 1, 2019, in order for staff to continue to administer the remaining participants in the (old) Certificate of Adequate Public Facilities (COA) Program.  Applications approved on or after July 1, 2019 will still be required to obtain a COA in accordance with Section 10.02.07 of the Land Development Code (LDC) but will not be required to pay Road Impact Fees to obtain the COA.  The LDC will also be updated in a future cycle to capture the necessary changes.

 

Development Services Advisory Committee (DSAC) Recommendations: The Water and Wastewater Impact Fee Study was reviewed by the DSAC subcommittee and subsequently presented to the DSAC on October 2, 2019. The Committee voted to accept the integrity of the study and methodology and made no recommendation on the fee increases.

 

Staff is working with the DSAC subcommittee for review of the Road Impact Fee Update Study.  The study will be presented to the full DSAC on November 6, 2019.  The final DSAC recommendations will be made available and read into the record at the Adoption Hearing for theses updates, currently scheduled for November 12, 2019.  

 

FISCAL IMPACT:  The fiscal year 2019 collections and the projected change in revenue associated to the fee schedule changes, based upon current permitting activity, is shown below.  However, changes to the volume of building permits, as well as the size and type of units being constructed, will directly affect these incoming revenue streams.   The increase in revenue will not be fully realized in the first year following the increase as permitting activity within the 90-day notice period has historically increased prior to the effective date of an increase in fees, and all permits that are currently “in process” via a complete building permit application are not subject to imposition of an increased rate.  For Water and Wastewater, increased revenue is likely to begin in the fourth quarter of the current Fiscal Year (FY 20) and continue into Fiscal Year 2021, especially as building activity continues in Eastern Collier. Conservative projections indicate potential increases in annual revenue of $1.9 million for Water and $1.4 million for Wastewater, once the fees are fully implemented.

 

For Transportation, several factors indicate a more fiscally neutral position relative to the proposed fee schedule changes.  There are both increases and decreases associated to the study, so types of activity will determine how much, if any, revenue is generated by the updated fees.  Staff will continue to monitor permitting activity that may trigger the need to further evaluate the fee structure.

 

The full effects of the change in timing of payment were not experienced in Fiscal Year 2019, as the provisions went into effect late in the fiscal year.  It is anticipated that this lag in revenue collections will continue well into Fiscal Year 2020 until collections then normalize under the new timing scenario.  The statutory change does not affect the County’s ability to collect impact fees but does shift the timing to later in the process.  As of July 1, 2019, all Collier County Impact Fees are paid prior to the issuance of a Certificate of Occupancy (CO).  Land uses that do not require a Building Permit may be required to pay through another mechanism tied to a final local development order.  Fire Impact Fees for the Independent Districts and impact fees collected by the municipalities, on behalf of Collier County, are collected at issuance of a Building Permit. 

 

GROWTH MANAGEMENT IMPACT:  The adoption of the proposed impact fee updates is consistent with Objective 2 of the Capital Improvement Element (CIE) of the Collier County Growth Management Plan (GMP), which states: “Future development will bear a proportionate cost of facility improvements necessitated by growth.” The methodology used in the studies is consistent with Section 163.31801, Florida Statutes, which is the Florida Impact Fee Act 2006, requiring the most recent and localized data be used in impact fee calculations.

 

The proposed impact fee rates are designed to provide adequate funding for the acquisition of land and the construction of facilities and capital improvements necessitated by growth, however impact fees may not be collected in excess of the amount reasonably anticipated to fund such improvements. The proposed impact fee rates represent accurate assessment of the cost of providing public facilities attributable to new development.

 

The “impact” of impact fees has been studied extensively since the Great Recession.  During that time period, many jurisdictions aggressively reduced or eliminated impact fees, developed incentive programs, and/or implemented different fee structures to avoid the perceived stigma of impact fees.  However, there is still no conclusive data to support that arbitrary reduction/elimination of impact fees increases permitting activity because market factors, such as demand, financials, etc. control activity.  Not all Counties have impact fees, yet the construction slowdown occurred in both impact fee and non-impact fee counties.  Collier County had developers that were paid at 100% + of the largest impact fee but no permits were being pulled.  Additionally, during this time period in Collier County (2010/2011), significant impact fee decreases tied to cost/demand reductions generated no increase in permitting or construction and no evidence of job creation tied the decreases.  The then current Collier County Board of County Commissioners challenged businesses to bring forward job proposals in exchange for further impact fee concessions, however, there were no applicants.  Finally, Collier County, with some of the highest impact fees in the State, even after reductions, recovered faster out of the recession than similar counties with impact fee moratoriums.

 

With respect to affordable housing, Collier County currently offers several different impact fee deferral programs, which have capacity for new applicants.  The proposed impact fee increases will be included into the total amount eligible for deferral.  In addition, there are also impact fee deferral and payment programs available to qualifying businesses, not-for-profits, etc.  Staff continuously monitors the participation levels in these programs and looks for opportunities for improvements, incentives, etc. that may be implemented.

 

LEGAL CONSIDERATIONS:  This item has been reviewed by the County Attorney, is approved as to form and legality, and requires majority vote for approval. -JAK

 

RECOMMENDATION: To adopt an Ordinance amending Chapter 74 of the Collier County Code of Laws and Ordinances, which is the Collier County Consolidated Impact Fee Ordinance, providing for the incorporation by reference of two impact fee studies; amending the Road Impact Fee rate schedule and the Water and Wastewater impact fee rate schedule; providing for an effective date of November 25, 2019 for all rate categories that are decreasing and a delayed effective date of March 2, 2020 for all rate categories that are increasing and new/replacement land use categories being added to the fee schedules, in accordance with the 90-day notice requirements set forth in Section 163.31801(3)(d), Florida Statutes; and providing for revised definitions and update of the requirements related to the payment of Road Impact Fees to obtain a Certificate of Adequate Public Facilities to comply with the new provisions of the Florida Statutes.

             

Prepared by: Amy Patterson, Director,

Capital Project Planning, Impact Fees and Program Management Division

 

 

Discussion