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BCC Minutes 06/04/2013 W (Impact Fees & Economic Development Incentives)BCC WORKSHOP MEETING MINUTES JUNE 4.2013 June 4, 2013 MINUTES OF THE COLLIER COUNTY BOARD OF COUNTY COMMISSIONERS WORKSHOP MEETING Naples, Florida, June 4, 2013 LET IT BE REMEMBERED the Board of County Commissioners in and for the County of Collier, having conducted business herein, met on this date at 1:00 P.M. in WORKSHOP SESSION in Building "F" of the Government Complex, Naples, Florida with the following members present: Vice-Chairman: Tom Henning Georgia Hiller (excused) Donna Fiala Fred Coyle (excused) Tim Nance ALSO PRESENT: Leo Ochs, County Manager Jeff Klatzkow, County Attorney Mike Sheffield, Business Operations— CMO Mark Isaacson, Director of Corporate Finance Troy Miller, Communications & Customer Relations 1 COLLIER COUNTY Board of County Commissioners WORKSHOP AGENDA Board of County Commission Chambers Collier County Government Center 3299 Tamiami Trail East, 3rd Floor Naples FL 34112 June 4, 2013 1:00 P.M. Georgia Hiller - BCC Chairwoman; BCC Commissioner, District 2 Tom Henning - BCC Vice - Chairman; BCC Commissioner, District 3 Donna Fiala - BCC Commissioner, District 1; CRAB Vice- Chairman Fred W. Coyle - BCC Commissioner, District 4 Tim Nance - BCC Commissioner, District 5; CRAB Chairman 1. Pledge of Allegiance 2. Impact Fees 3. Economic Development Incentives 4. Public Comment 5. Adjourn Notice: All persons wishing to speak must turn in a speaker slip. Speakers will receive three (3) minutes. Collier County Ordinance No. 2003 -53 as amended by Ordinance 2004 -05 and 2007 -24, requires that all lobbyists shall, before engaging in any lobbying activities (including but not limited to, addressing the Board of County Commissioners), register with the Clerk to the Board at the Board Minutes and Records Department. June 4, 2013 Any persons in need of the verbatim record of the meeting may request a copy of the video recording from the Collier County Communications and Customer Relations Department or view online. 1. Pledge of Allegiance Vice-Chairman Henning called the meeting to order at 1:00 p.m. The Pledge of Allegiance was recited. 2. Impact Fees Amy Patterson, Impact Fee Manager presented the slideshow "Impact Fee Presentation - 5/28/13" which provided information and trends for impact fees in Florida counties, other states, historical Collier County information, revenue stream and impacts to the annual budget and an analysis on the economic impact of the reduction of impact fees. The report provided the following conclusions: 1. Documented results for counties in Florida that have eliminated or reduced impact fees, based on the assumption that such action would stimulate local development, have proven inconclusive at best. In fact, factors such as market demand, access to capital and financing and availability of infrastructure capacity have proven to have more of a direct impact on the rate of growth. 2. Historically in Collier County impact fees have not been found to be a primary deterrent to growth and development. In fact, in the early and mid-2000's, Collier County experienced one of the fastest growth rates in the country while assessing impact fess that were among the highest in the state. 3. Without new revenue to off-set reductions and/or eliminate impact fees that are currently being applied to long term debt service obligations, additional general fund dollars currently used for other programs and services would be needed to pay for the substantial reduction in reserves. This would cause the aggregate general fund loan balance to impact fee debt to increase to well above $70M. 4. Timing doesn't appear to be right. New development activity is up substantially in Collier County compared to the peak of the recent recession and the economy is forecasted to continue to improve in the future. Why cut fees now, especially with current impact fee debt service challenges and the potential need for added capacity to serve new developments? 5. As an alternative to arbitrary impact fee reductions, the Board may want to consider adjusting the time of payments from when building permits are issued to when a certificate of occupancy is granted. Under Commission Member Discussion, the following was noted: Commissioner Fiala • Even with the recent surge in commercial activity, many companies indicate quality employees and other factors influence business expansion or relocation more than impact fees. 2 June 4, 2013 • Impact fees allow the county to develop high quality infrastructure, a primary factor when company officials make a determination of starting up, relocating or expanding a business. Commissioner Nance • Expressed concern on the reliance of impact fees as a source of revenue because it places greater pressure on the general fund during times of declining revenue. • Expressed concern that impact fees pay for construction of infrastructure, however future maintenance costs are shouldered by the general fund. • More research is needed to ensure adequate funding is available for both the construction and maintenance of infrastructure, without unnecessarily burdening the general fund. • It is advantageous to expand the commercial tax base to ensure there are no unreasonable deterrents for expansion. Studies indicate, $1.20 is required to service a residential development's $1.00 of tax revenue while only $0.29 is required to service commercial properties per $1.00 of tax revenue. Speakers Robert Murray, Mort Williams and Robert Naegele provided the slideshow"The Collier Communities Economic Recovery Task Force"—Presented to the Board of County Commissioner's Workshop: June 4, 2013. " The presentation outlined a proposal for a 75%reduction of transportation and utility impact fees—for commercial only—for a period of two (2) years, with a study performed at the end of the first year to determine what extent economic recovery could be attributed to the reduction. Tom Lykos spoke in support of the proposal. Kathleen Curatolo, CBIA spoke in support of the proposal. Ray Allain, CBIA spoke in support of the proposal. Marvin Rabe,Jr. expressed concern for a negative effect on residential impact fees and future home building. Tim Hancock, Davidson Engineering spoke in support of the proposal and recommended consideration should be given to a county wide tax increment finance program for commercial uses. Bob Krasowski supports proposals to reduce impact fees for change of use applications to promote the infill of vacant space. In addition, requiring impact fees for oil drilling activities should also be considered. Janet Vasey opposed the proposal noting studies indicate impact fees and taxes are not as much of a high priority when parties locate businesses as are efficient infrastructure, skilled labor force, and public goods and services including schools and emergency services. 3 June 4, 2013 Discussion occurred on Hertz's decision to build a business in Lee County versus Collier County. Lower impact fees in Lee County may have played a major role in that decision. Commissioner Henning reported it was his understanding Collier County did not have a suitable site available for immediate consideration by Hertz, which was a major factor in the decision. He noted if a program of this nature is considered, you may also need to address status and impact to any parties who have already paid fees. Commissioner Henning requested staff 1. Bring forth an action item for consideration to the Board of County Commissioners for collection of impact fees at the time of issuance of a Certificate of Occupancy. 2. Provide a report on the feasibility of implementing a county wide tax increment financing program for commercial uses. Break: 2:42 p.m. Reconvened: 2.55p.m. 3. Economic Development Incentives Bruce Register,Director of Business and Economic Development presented the slideshow "Collier County BCC Workshop—June 4, 2013" that outlined a proposed economic incentive program based on 3 platforms: First Platform—Basic Industry Promotion • Basic Industry—Quality export jobs though below QTI (qualified target industry) wage thresholds. • Award $1,500 per job, with a$500 bonus for applicants with green products or processes. • 10 target industry jobs with wages meeting or exceeding the corresponding Collier County specific industry average wage. • Four years of equal annual payments after performance compliance is verified. Second Platform—Florida Qualified Target Industry Tax Refund Program (QTI) • Target Industries • Local funding participation 20%; State 80% • Awards of$3,000— 5,000 based on wages with bonuses of$2,500 for brownfields and $3,000 for enterprise zones • Tax refunds paid over 4-years of compliance with annual performance monitoring. 4 June 4, 2013 Third Platform—Advanced Long Term Productivity Strategy (ALPS) • Premium Target Industries • Create at least 25 jobs with an average wage over 150% of Collier's average ($59,958). • Bonus incentive payments based on a percentage of annual payroll for 4-years, when minimum thresholds of average wage and jobs created are maintained. • 1% of payroll annually for 150% avg. wage. • 1.063% of payroll annually for 200% avg. wage. Speakers Marvin Courtright expressed concern on recent business closures or relocations at the Immokalee Airport facilities. Janet Vasey expressed concern on the amount of funds and sources necessary to implement a program. Bob Krasowski recommended the program identify key industries to target. It was noted industries to be targeted are not specific by type, but are those industries with higher paying wages. The amount of funding is estimated at $700K— 800K. 4. Public Comment None There being no further business for the good of the County,the meeting was adjourned by order of the Chair at 3:35 P.M. COLLIER COUNTY BOARD OF COUNTY COMMISSIONERS .t. Vice-Chairman,Tom Henni g Of ATTEST r� t t Ak IGHTE:B ' F` ^ LERK Attests to Cjiiirmarl's signature * /� These minute�,agpsoved by the Board on Jl.(yl.Q e9S, 20'3 as presented V or as amended 5