Craig Richardson

2011 FAPA Conference, Palm Beach, FL

Impact Fees: Moving Forward

Introduction

Introduction

Background

Current Environment

Relationship of Fees and Growth/Development

Conclusions

Background

1970s: Growth in Florida places tremendous pressures on demand for public facilities State and local government structure for funding public facilities Local political conditions

Late 1970s: Handful of local governments explore use of impact fees to fund public facilities, and adopt ordinances Palm Beach and Broward counties lead the way Impact fees untested in courts

Early 1980s: Palm Beach and Broward county ordinances challenged in courts

Background

Early 1980s: Broward and Palm Beach counties successfully defend local governments use of impact fees

Early 1980s: Cases established fundamental ground rules for local government use of impact fees Local government powers to adopt impact fees emanate for state

constitutional home rule powers

Background

Early 1980s: Cases established fundamental ground rules (cont.) Compliance with dual rational nexus standard required… the

local government must demonstrate a reasonable connection, or rational nexus, between the need for additional capital facilities and the growth in population generated by the subdivision. In addition, the government must show a reasonable connection, or rational nexus between the expenditure of the funds collected and the benefits accruing to the subdivision. In order to satisfy this later requirement, the ordinance must specifically earmark the funds collected for use in acquiring capital facilities to benefit the new residents.” Hollywood, Inc.

General presumption of validity

Background

Balance of 1980s: Significant expansion of local government use of impact fees, extending into 1990s Heaviest use in coastal communities in southeast and southwest

Florida Use expanded to include a number of additional public facilities:

Roads Parks Water/Sewage Police Fire/EMS Schools Other (Solid Wastes, Libraries, Government Buildings)

Background Balance of 1980s into 90s:Limited litigation over

impact fees during these years, with one exception Local governments authority and right to adopt school fees

upheld by Florida Supreme Court in St Johns County v. Northeast Florida Homebuilders

Justice Grimes, who wrote the appellate court opinion in Dunedin, wrote the opinion for the court

Reaffirmed rational nexus standard applies to impact fees, while establishing additional parameters for school fees

Decision opened the door even more for local governments use of impact fees

At this point question was whether or if state legislature would step in and attempt to place limits on the imposition of fees – which they did not

Background Balance of 1990s into 2000s: Local governments

continued to expand the use of impact fees By 2007, 42 counties had adopted e fee programs Many local governments updated and added fees In most instances updates resulted in increases in fee amounts

(especially as costs and housing prices continued to rise) Not unusua, by the early 2000s in many counties for the total

fees to be over $15,000 Resulted in some litigation

School fees Primary issue -- whether calculations complied with

rational nexus standard In mid 2000s several local governments adopted affordable

housing fee programs

Current Environment Great Recession and Aftermath

Substantial economic downturn and decrease in home values In many communities, substantial inventory of housing Dramatic decrease in building Political attitude about imposition of fees changed Fee suspensions, reductions, and in limited instances

abolishment State legislature shifts burden to local governments to

demonstrate compliance with rational nexus standards Continued limitations on local government capacity to raise

revenue for capital public facilities Significant amendments to growth management laws, including

general loss of concurrency mandate (even though can still impose requirements)

Conclusions While economic and legislative climate toward

growth management has changed, much has not with respect to impact fees When growth and development picks up, there will be a need for

funding for capital facilities to accommodate Limited state funding Continued legal limitations on local government ability

to raise revenue Local political considerations

Impact fees still a viable source of funding for capital public facilities

The concept that growth should pay for itself is alive and well, and impact fees are a way to ensure it does

Conclusions While economic and legislative climate toward

growth management has changed, much has not with respect to impact fees (cont.) Even with the shifting of burden to local government to

demonstrate compliance with rational nexus standard, standard for adoption has not changed

Good local government support studies met this burden Important to remember burden has shifted, and support

studies must use professionally accepted methods and reasonable/sound information to calculate fees

Good news: methods are available; sound information can be found

Authority to adopt fees emanates from state constitution Some local governments might rely more on assessments

QUESTIONS