The Board of County Commissioners of Brevard County, Florida, met in special session on February 1, 1995, at 1:10 p.m. in the Government Center Multipurpose Room, Building C, 2725 St. Johns Street, Melbourne, Florida. Present were: Chairman Nancy Higgs, Commissioners Truman Scarborough, Randy O'Brien, Mark Cook and Scott Ellis, County Manager Tom Jenkins, and County Attorney Scott Knox.

DISCUSSION, RE: IMPACT FEES

Growth Management Director Gary Ridenour stated staff distributed a white paper for informational purposes to the Board members; the impact fees and the Comprehensive Plan basically was to show the Board that there were significant numbers of sections in the Growth Management Act dealing with public services and facilities, the need to fund them, and how concurrency relates to that; there is also a section that encourages local governments to use impact fees for funding public services and facilities. He noted regarding the case law and impact fees, County Attorney Scott Knox has freshened up some of the segments in the white paper; the impact fee rate equation components explains how the rates are developed; the municipality interlocal agreements was included to show the Board exactly what kind of relationship the County has with the cities with respect to administration of impact fees; and the consultant selection efforts was also included in the white paper as the Board has selected a consultant. Mr. Ridenour stated staff is presently on the verge of beginning negotiations with the consultant; it needs Board direction on that; and Board options were also included in the white paper. He noted Section 163.3202(3) in the Growth Management Act deals specifically with impact fees; and this Section shall be construed to encourage the use of innovative land development regulations which include provisions such as transfer of development rights, incentive and inclusionary zoning, planned unit development, impact fees, and performance zoning, etc.

Mr. Ridenour stated the reason he put that first is because the County has followed with that as a whole series of sections, primarily that focus on the need of local governments as an allocated land use through the Future Land Use Element of the Comprehensive Plan; and that land allocation take into consideration the ability to serve those land use densities and intensities with public facilities and services so that those locations will be served in a timely manner. He noted timely manner becomes extremely important because the County has the concurrency rule; and this comes into play because it is important that local government maintain an appropriate revenue flow to sustain public services and facilities support. He advised the concurrency section states, "It is the intent of the Legislature that public facilities and services needed to support development shall be available concurrent with the impacts of such development. In meeting this intent, public facility and service availability shall be deemed sufficient if the public facilities and services for a development are phased, or the development is phased, so that public facilities and those related services which are deemed necessary by the local government to operate the facilities necessitated by that development are available concurrent with the impacts of the development. The public facilities and services, unless already available, are to be consistent with the capital improvements element of the local government comprehensive plan or guaranteed in an enforceable development agreement."

Mr. Ridenour stated it becomes important as the facilities begin show up with deficiencies and the County begins to program those into its Capital Improvement Program, that revenue sources be available to support those; and impact fees are simply one of those funding mechanisms that local government can use. He noted regarding Section 163.3180(11)(d), the Legislature sent up a provision by which local government could actually approve a development that would have a negative impact upon a facility which was deficient; however, it set aside several factors. He stated one factor which is important as it relates to impact fees is that local government has provided a means by which the landowner will be assessed a fair share of the cost of providing the transportation facilities necessary to serve the proposed development; his understanding is that there has to be some type of fair assessment program available which an impact fee program would be or some type of equivalent; and without an impact fee program the County would not have an ability to provide that type of relief to property owners.

Mr. Ridenour stated the whole focus here is that the County, as local government, is allocating land uses throughout the County and certain densities and intensities; the State Legislature is telling the County it has to be ready and able financially to provide public services and facilities to those lands in a timely manner; if Brevard County does not do its job, it is confronted with the possibility that landowners will not be able to be given development orders and proceed with the use of their properties; and that is one of the main thrusts of the Growth Management Act.

County Attorney Scott Knox stated he provided the Board with a memorandum which basically outlines legal basis for impact fees; it goes back to 1976 in the case that came out with the City of Dunedin and has been expanded as time has gone on with several other cases. He noted the original Dunedin impact fee case was a sewer and water case; it has gone onto park impact fees, transportation impact fees, and school impact fees; and they have all been recognized by the courts. He noted perhaps the more interesting issue from the standpoint of Brevard County is the issue of exemptions since the Board dealt with the issue of industrial exemptions a few meeting ago; the exemption of industrial uses as it applies to the Transportation Impact Fee Ordinance is probably a valid provision if the County were to do by ordinance; he is not saying what the Board did before is improper, but it needs to afford now with an ordinance that will make this a part of the impact fee program; what the Board did in terms of exempting industrial impact fees is legitimate; and what it needs to do to make it a legally defensible posture is to put it in the ordinance.

Attorney Knox stated there is also some discussion as to what the impact of removing impact fees or eliminating impact fees all together, either individually or as a group, would have on municipalities that the County has interlocal agreements with; every municipality has the same ability that the County does to enact an impact fee ordinance; and all they have to do is do the appropriate studies and enact the ordinances. He noted the County has a Countywide impact fee to the extent that governments want to participate in; and staff based its study on that kind of an approach. He noted if the County were to eliminate all impact fees or any particular impact fee, the municipalities would have a problem continuing to levy the impact fee within the cities based upon the study that was Countywide as its basis; so if the County decided to eliminate a particular impact fee or the impact fees as a whole, the municipalities would have to look at doing their own for that particular kind of fee or in the case the County eliminated them all, it would have to look through its ordinances for all of them; and that is the basic summary of legal issues.

Mr. Ridenour stated staff would recommend that the Board help it develop some criteria about how the County is going to determine what types of industry would get these type of breaks because there are a lot of land uses in the industrial category that probably would not meet the intent of what the Board is trying to do.

Commissioner Ellis inquired what about other uses that are not industrial. Attorney Knox responded the only thing the Board has to do in order to either reduce or eliminate impact fees for any particular use is identify the purpose it is trying to accomplish and have staff show it that that is a legitimate way to get to that purpose; and that is really all it has to do. He noted in the case of industrial it was pretty easy to identify what the purpose was which was try to lure industry into the County because it is losing industry; reducing the cost to the industry to come into the County through eliminating impact fees for industrial purposes is a legitimate way to get there; and it may not be so clear when dealing with commercial or residential.

Commissioner Ellis noted he believes there are some problems in the whole way that the impact fee is assessed; he wants to look at the whole thing; the trip rate number is not the relevant factor; and what is relevant is trip rate on which road. He stated what the County should have is an incentive for people if they build an existing corridor where there is a good level of service on the road; it should have a much lower impact fee; and he thinks that is fully justified. Attorney Knox stated he has not seen any ordinances that have done that, but it is probably a very valid concept.

Commissioner Scarborough stated what he would like to do is tie all of the job incentive issues together; get with the ad valorem issue and the impact fee from which classifications; and then define in a totally new and broader scope, issues such as churches and where everyone else is going to come up because no one has sat down and talked about this.

Planner II Steve Swanke stated there are a number of variables that go into the impact fee equation, including trip rate, capacity of the roadway, and cost of constructing new roadways; and there are a number of credits that actually are factored in to reduce the impact fee. He noted based on discussions he has had, the consultant the County has selected has defined certain areas they wish to encourage redevelopment, and through an analysis, demonstrated that no impact fees are needed or should be applied; and there are areas in Brevard County where that might provide the kind of incentive that the County would want to take. He stated specifically the County did not write that into the scope of services that the Board approved earlier, but it is something that can be done and has been done in other communities.

Commissioner Cook stated he would like the Board to look broadly at all the impact fees; he does not see any problem looking at a whole broad spectrum of a tax that the County is assessing through the County; some of these items such as the industrial are policy decisions; and those are areas the Board may want to address first and then look at how these fees are being assessed in other areas too to make sure they are appropriate and fair.

Chairman Higgs stated she asked Mr. Ridenour how the County derives the fundamental idea that a new structure causes an impact and how does it assess those costs; and she wants to know what those buildings are costing as opposed to the general existing building that is already there. She noted she wants to know what growth costs and how to assess that and pay for it.

Mr. Ridenour stated the Board can give the consultant whatever type of policy direction it chooses to do; in the scope of services, the County has asked the consultant to look at the possibility of lowering, if not completely eliminating, impact fees in the current existing urban areas, because that is where it wants new growth to take place; and it wants to encourage redevelopment and the recycling of land. He noted there are a lot of policy issues that the Board could give the consultant in terms of direction where this program should go. He stated there are a lot of administrative problems with the way the program is set up; and there are a whole myriad of issues that need to be addressed and updated.

Commissioner Scarborough stated he believes the Board is interested in the job where someone is manufacturing something that is leaving the area and is creating a higher wage level; and County Manager Tom Jenkins, Mr. Ridenour and Lynda Weatherman can define that. He noted the next thing is can the County define it an easy manner, or does it take going back and redefining some of the basic zoning categories; and the community needs to have a rationale on what the County is doing and Ms. Weatherman needs a clear-cut definition of where the impact fee lies.

Ms. Weatherman stated the County does not want to get it too complex; and it might want to look at the S.I.C. Code.

Chairman Higgs stated the County needs to have a system that can survive.

Commissioner O'Brien stated Page 4 of the white paper refers to concurrency provision; the County needs to start with this definition and work its way from there to help it attain the goals it wants to; and concurrently be able to eliminate a lot of these classifications. He noted the S.I.C. Code method may be the best way to do it; but development to him also means developers might have a concurrent impact upon the County; and it needs to look at that as well as they create jobs.

Commissioner O'Brien inquired how much money is generated by impact fees per year; with Mr. Jenkins responding $4 million. Commissioner O'Brien stated that is less than 1% of all revenues for impact fees; such fees do not come even close to paying for impact in the first place; the County is burdening other industries; and $4 million to this County is worth nothing compared to $100 million plus of revenue.

Chairman Higgs suggested the Board look at fundamentally what development costs and then a logical way to assess those costs.

Commissioner Cook stated he had a restaurant owner recently tell him that they wanted to expand their restaurant because they had been successful; and the impact fee prevented them from expanding their business because they could not pay to have the expansion done and pay the impact fee. He inquired is it costing the County more when business cannot expand because they cannot hire people and they cannot generate revenue.

Chairman Higgs noted in order to make up for the $4 million, the County needs to come up with it some place; and inquired does it add another cent to the gas tax. Commissioner Ellis stated the County can cut the budget.

Commissioner O'Brien stated the County can look at a nine-cent sales tax, the local government infrastructure sales surtax of one-cent; and he would like to see a referendum for new jails. He noted the nine-cent gas tax could be used for schools rather than capital improvements. Commissioner Ellis stated by law it can only be used for roads. Chairman Higgs stated the sales surtax could be used for schools. Commissioner O'Brien noted he believes the public would look pretty fondly upon a one-cent sales tax for a period of two years if it is only for a jail.

Chairman Higgs stated what she hears the Board saying is it wants to go at the whole concept of impact fees; and inquired does it want to put it on the agenda.

Commissioner Scarborough noted he is still under the impression that the Board needs to dispose of its action of the previous evening and make it legitimate. He stated if it wants to talk about abolishing all impact fees and making that work, he would ask that it patiently work through this year's budget and see where it is going to cut the funds from. He noted it cut the budget last year; he is sure it can be cut; but when you cut budgets, you cut things that people have been accustomed to receiving in government services; and it does not need to put itself in a box. He stated if the Board wants to eliminate impact fees before it goes through budget discussion, he cannot support it as it needs to go through such discussion first.

Commissioner Cook stated the County needs to make cuts in government; and it needs to look at the whole spectrum of impact fees.

Board discussion ensued on the County budget, personnel costs, part-time employees, health care benefit costs, the cost of growth, and other financial issues.

Mr. Ridenour stated he would like to meet with Attorney Knox and Ms. Weatherman to try and come up with what the definition of industry is because there are going to be a lot of people coming in defining themselves as industry.

Motion by Commissioner Scarborough, seconded by Commissioner O'Brien, to direct the County Attorney to work with the Growth Management staff and EDC Executive Director Lynda Weatherman on an ordinance regarding impact fees with a broad scope so the Board can consider exempting job-creating entities, reducing the impact fees, or abolishing same. Motion carried and ordered; Commissioner Higgs voted nay.

Chairman Higgs stated she wants to know how much it is going to cost people 20 years from now not to live at gridlock on the roads; it is very important; if the cost to get there takes the gas tax or whatever and people are willing to go there, then she can vote for it; but she is not willing to do irresponsible growth.

Commissioner Cook noted no one on the Board is suggesting that the average taxpayer pay for development; he would be happy to look at those costs; and other places in the country have made significant reductions in their governments and still provide a very high and effective level of service to the taxpayers.

Chairman Higgs stated she believes the County can make significant cuts without endangering its services; but it also has to be careful.

Chairman Higgs stated the Board needs to discuss the scope of work for the impact fee consultant and what it wants to do with that; and the actual hearing of the ordinance will be in March, 1995 to abolish impact fees.

Mr. Jenkins inquired does the Board have other economic issues it wants to talk about; with Commissioner Ellis responding ad valorem. Mr. Jenkins stated Mr. Lugar and Ms. Weatherman have compiled a list of incentives and disincentives that government does; and the Board may want to consider that as well.

Ms. Weatherman introduced members of different businesses present at the meeting regarding the impact fee issue.

Chairman Higgs stated the Board needs to talk about the impact of what it has done on the cities; and there is a representative from the City of Melbourne.

The meeting recessed at 2:30 p.m.

The meeting reconvened at 2:55 p.m.

Amy Elliott, Finance Director of the City of Melbourne, stated she is hardened to see that the Board has taken action to examine the basis for the impact fee exemption; one of the City's concerns is that there be a rational basis for exemption for the industrial category; it had the same concern about mini-warehouses and any other types of use that might be in the general industry category; it would not want to discourage any kind of business that is going to obviously provide an economic benefit to the County; and the City wants to look at who it is that is being exempted. She noted she is also concerned regarding the S.I.C. Codes and that the County look at the size of the business activity as opposed to just the nature of the activity to determine the economic benefit that is going to be derived. She noted the City wants to make sure there is a rational basis for granting an exemption or abolishment of the fee for a particular category.

Commissioner O'Brien stated Ms. Elliott's concerns are well taken; and perhaps the Board can look at scaling impact fees.

Commissioner Cook noted he would not want to punish the small business person to the exclusion of the big firms; abolishing the impact fee is the selling point; if Brevard County says there is no impact fee here for this type of thing, that is going to be real attractive; if it starts hitting the scales and all of that, he is worried it is not going to be an effective tool.

Chairman Higgs stated approximately 18% of the County's employment base is in manufacturing; 8% is the state average; what bothers her is the issue of fairness; and the County is just taking one category and doing it. Commissioner Cook responded the Board wants to look at all of them.

Commissioner Scarborough noted one of the problems with government is it is complex; there is not a clean clear cut answer; the City of Titusville abolished impact fees; and he shares Chairman Higgs' concern about the capacity to make long-range plans. He stated the Board needs to talk about 20-year time frames and funding mechanisms; history has shown that the County could do every negative thing in the world and it would still grow; and there is nothing it can do to stop growth in Brevard County. He noted his concern is that the County have a long-range plan that it continually monitors and makes sure it is funded.

Commissioner Cook stated his concern is the fairness of the impact fees in general; and that is the reason he would like to look at all of them.

Mr. Jenkins stated it is in everybody's best interest to come up with a system that does not require a lot of people to administer it; if there are a lot of rules, red tape and calculations, it takes an army of people to administer it; that is what the County wants to get away from; and it wants simplicity if the County does not want people there regulating.

The Board directed staff to provide information on where impact fees would be applied, what projects would be deferred or have to be funded elsewhere, which ones are scheduled for each Benefit District, what projects have been done, what needs exist, and the cost of development; provide information on the 9th cent gas tax and what it can be spent on; and report back to the Board in 30 days.

Mr. Ridenour stated one of the things staff is looking for is some readjustment of the entire administrative process; it has a very limited list of land uses from which it has to work with on a day to day basis; it has Benefit Districts where the boundaries should be redrawn; it has some philosophies it would like to see instituted, including looking at eliminating impact fees in the highly urbanized areas; it has also talked about the economic development issues in terms of providing credits to certain types of industries and businesses that actually bring new money to the County; and it has a whole array of things it wants review.

Commissioner Scarborough stated the County does not have to impose an impact fee; nothing says it has to do that; it has a moral obligation to not let the road system fall apart and become gridlocked; and if the Board says there is not need for an impact fee, he does not want to have a consultant sitting across the table from him trying to talk him into it so he can get $100,000 out of Brevard County. He noted he would prefer to talk here first at the Board level and look at the numbers.

Mr. Ridenour stated there is one thing he has not talked about that drove the purpose of impact fees originally, and that is because the power curve that government is always behind in terms of collecting its ad valorem tax.

Motion by Commissioner O'Brien, seconded by Commissioner Scarborough, to clarify that warehouses and mini-warehouses are not exempt from impact fees, unless they are part of the manufacturing process. Motion carried and ordered; Commissioner Ellis voted nay.

Chairman Higgs inquired what needs to be done on the ad valorem issues; with Commissioner Ellis responding the Board has to decide how long and how much.

Commissioner Cook stated the referendum passed at 100% and he would not want to see the County play with that.

Commissioner Ellis noted he has the list of the different millages in other counties in the State of Florida; in the rural counties, homestead values are below so they do not pay any taxes; and the people that do not pay taxes are all for tax increases.

Chairman Higgs stated the average person's largest investment is their home; there are things the County does that decrease the value of that investment for the individual; and she is concerned about that.

Attorney Knox stated the Ordinance as it is currently structured is a procedure for qualifying to get to the point where the Board will grant the ad valorem tax exemption; each exemption has to be granted by a separate ordinance; and the amount of the exemption is set in that ordinance on a case by case basis, unless the Board wants to put an absolute cap in the procedures.

Motion by Commissioner Ellis, seconded for discussion by Commissioner O'Brien, to take the original Ordinance and put an absolute 50% cap on the amount of ad valorem exemption that any entity can receive. Motion did not carry. Commissioner Ellis voted aye, Commissioners Scarborough, O'Brien, Higgs and Cook voted nay.

Chairman Higgs noted the County is going to go 100%.

Chairman Higgs inquired regarding the issue of the percentages, sliding scale and all those criteria, what is the status of that.

Ms. Weatherman stated she provided the Board with a set of guidelines that would be used; it was presented to the community at up to 100%; and there are certain guidelines that the Economic Development Commission (EDC) as a screening committee would go by to look at that.

Chairman Higgs noted the EDC is going to use those criteria first; then it will send it forward to the Board with recommendations based on the criteria; and the Board can accept or not accept what the EDC has sent.

Motion by Commissioner Ellis, seconded by Commissioner Scarborough, to approve having County staff make final recommendations for the Board on companies receiving tax abatement, using information provided by the Economic Development Council. Motion carried and ordered unanimously.

Upon motion and vote, the meeting adjourned at 4:10 p.m.

NANCY N. HIGGS, CHAIRMAN
BOARD OF COUNTY COMMISSIONERS
BREVARD COUNTY, FLORIDA

ATTEST:
SANDY CRAWFORD, CLERK
S E A L)