The County Commission held an Impact Fee Workshop. The staff presented their findings on the deferred payment of impact fees and Commissioners weighed their options.
Beforehand the County Administrator, Clerk of Circuit Court, Finance Director, Assistant County Administrators for Public Works, Planning and Budgets, Assistant County Attorney, and the Planning Department’s Senior Planner met to discuss the possibility of providing an option of a deferred Payment Plan of Impact Fees.
In reviewing both a long term 10-20 year payment option and a short term 3-4 year option, staff determined that a long term option is not desirable, while a shorter term of 3 to 4 years would be manageable if commissioners chose to go this route. However, the 3 to 4 year option comes with a higher price tag for new home buyers with interest and administrative fees than upfront payment.
They planned to spend the impact fees immediately and then finance the debt. They determined that a long term payment option over a period of 10 – 20 years would not be feasible since it could potentially downgrade the county’s bond rating. Additionally, the county would have to run a county wide referendum and increase the General Fund millage rate to cover the outstanding debt.
The group preferred a short term option of three years that would as Financial Director Amy Gillis explained be , “…Long enough to allow resident to finance the program yet short enough to get our funds in for the recognition of revenue for impact fees.” She went on stating, “We can only recognize the revenue for impact fees when we actually receive it. We can’t spend it until we receive it. The time at which we can start a project is the driving thing behind this.” Impact fees are the main source of revenue for new road construction as well as other capital facilities.
For a short term option deferral, the group specified that an administrative fee as well as interest would be charged on this debt. They indicated that the cost of paying the fee at the time of the building permit would be much less than the total costs accrued while paying through this program.
Dismayed, the commissioners agreed that a deferral plan would probably not be a viable option for many new home buyers.
An interesting part about the three to four year deferral option is that the appraisal of a newly built home would not be affected by the additional impact fee since it would be financed separately. The impact fee is an expense that does not add any value to a home. The amount the new home must appraise for is $5000- $10,000 more when an impact fee is included in what is being financed. Having the option to finance the impact fee separately would be advantageous for individuals whose appraisals are tight.
During the workshop, Brian Malmberg reviewed transportation revenues. For fiscal year 2014, Transportation Services Tax Revenue took in $13,446,772.
Malmberg explained that impact fees are split up into 4 districts each having separate funding available to them as follows:
- NW $803,093
- NE $676,087
- SE $930,373
- Spring Hill proper $4,098,875
In each of these districts, there is not enough funding from impact fees alone to cover current proposed capacity projects.
Malmberg offered the following options for revenues:
- re-instate impact fee
- sales tax
- increase ad-valorem
- additional LOFT 1-5 Gas Tax (only used on gas not diesel)
- estimated to bring in $400,000 per 1 cent
- currently using 2 cents of total 5 cents available
- cents still available would bring in an additional $1.2 million a year for capital projects
- Toll Roads
He emphasized the need for three to four sources of revenue stating that “you don’t want to put all your eggs in one basket.”
Nicholson would like to pursue the sales tax route in 2016. He stated he’d like to explore the option of a separate transportation fund in this year’s upcoming budget. Nicholson remarked that he won’t vote for impact fees to be reinstated this year, maybe next year under a different scenario.
On January 13, commissioners voted to postpone the decision on reinstatement of road impact fees for 60 days. Expect a vote on reinstatement next month as well as a decision on the collection of impact fees for education set for March 10th. On May 9th 2015, education impact fees go back into effect if nothing changes.