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BCC Minutes 07/17/1978 W , --.-.... Naples, F1oriua, July 17, 1978 LET IS BE REMEMBERED, that the Board of County Comminsioners in and fo_ the County of Co~liQr met in WORK SESSION in Building "F" of the Courthouse Complex, Naples, Florida at 9:08 A.M. on this date with the following members present: CHAIRMAN: John A. Piator C. R. "Russ" Wimer Thomas P. Archer Clifford Wenzel ABSENT: David C. Brown ALSO PRESENT: William J. Reagan, Clerk, Edna Brenneman, Oep- uty Clerk; Irving Berzon, Utility Director, and, representative from the Collier County School Board, and the City Of Naples. BOARD OF COUNTY COMMISSIONERS W 0 R K S HOP A a END A . July J. 7, J.978 " , ' 9:00 A.H. A. Propos ed School Impact Fee Ordinance \p' <.1 z. -50 B. Discussion and report of resolution which would initiate a $10,000,000 Revenue Bond (5th & 6ih cent) Secondary Road Construction Program--LBarksdal~ TRIBUTE TO WALTER M. FISCHER - LOCAL CIVIC LEADER Chairman Pistor requested a period of silence in tribute to \~alter M. Fischer, local civic leader, who passed away the previous . day - July 16, 1978. DISCUSSION OF PROPOSED SCHOOL IMPACT FEE ORDINANCE - ACTION TO DE TAKEN AT REGULAR BOARD SESSION JULY 18, 1978 Chairman Pis tor called upon Collier County School District nAIJ .". 'A 9-1 bJOK 04.2 fm42Z I' July 17, 1978 Planning Director Dr. James McGee to make a presentation to the Board and those of the public attending the Session of the rea- Hons for the proposed Impact Fe, and what will be accomplished if the proposed ordinance is adopted. Dr. McG~e explained, by the use of a slide projection and the distribution of cnmpi~~d data, the need for funds for school ccnstruction, noting the population figures charted for previous years and for the next five years which illustrates the require- ment of $11,000,000 in the next five years at the current cost figures. He said that the State funds for capital outlay pro- jects will be less than $1,000,000 for the 78-79 school year to offset the $11,000,000 requirement over the next five years which will result in a deficit. Dr. McGee also summarized the major poin~s in the proposed ordinance, noting the units which would be liable for the Impact Fee, the exclusions, the restrictions which would be placed on the use of the funds collect~d, and the like. Dr. McGee said that the fees would be separately calculated in each of the three service areas and, based on the most recent calculations, the area Impact Fee will be $249 per dwelling unit in the Naples-Harco service area, $922 per unit in the Immoka1ee area, and $398 per unit in the Everglades-Ochopee area. He referred to a map provided to locate the boundaries of the subject areas. Dr. McGee continued by reviewing briefly the "Commonly Ad- dressed Questions" concerning the Impact Fee concluding with the Llternatives which are available to the School Board if the Impact F~e is not adopted - i.e. Double Sessions, Year-Around Schools with ~andatory Summer Attendance, and a Bond Referendum. , Referring to Dr. McGee's observation that the facilities in existence are sufficient to meet the current needs, Commissioner Wenzel suggested that to tax the people further who are living here at present would be unfair - the new residents coming into .... " ..J July 17, 1978 the area should be the ones to be affected. Further, said the Commis!,ioner, the fee could be applied on the dwelling units sold and, for those residing in the area, an exemption could be given. Commissioner Archer concurred with Commissioner Wenzel, adding that, although he favors an ordinance which is , equitable, enfor.ceable, and which can provide the services ~nd funds n~eded, in his opinion the ordinance under ~iscussion is inequitable and unworkable and a bad piece of legislation. Dr. McGee observed that he met with the County's staff and the opinion is that an Impact Fee as opposed to a transfer tax is much more defensible in the event the matter is tested in court. Further, said Dr. McGee, the fee would stand a better chance of surviving a court test if it is assessed in service areas rather than district-wide. Commissioner Wimor voiced the opinion that he does not like such fees as are being discussed; however, the alternatives are less desirable. Dr. McGee stated that the only viable alternative is the Bond Issue noting that the local people would be more ~f- fected by that alternative than by an Impact Fee. Chairman Pistor questioned ,.hy the actual County growth fig- ures could not be used rather than the State projections, and also, the actual figures concerning the costs for construction. Dr. McGee responded that there are two reasons for using the State figures - the County-wide figure would not be available for the year in which construction would tak& place, and, also, the cost figure represents the spread in cost state-wide and is a good baro- meter. Mr. Richard Fallon, Vice-Chairman of Collier County School Board, expanded on the source of the capital outlay funds avail- able to the School Board, explaining that of the $144,000,000 allocated for the 1978-79 year by the Legislature in Capital Out- lay Funds, when the funds for specific projects designated by the b:lO~ 042 f~~r 424 July 17, 1978 Legislature are deducted, there is a balance of $67,000,000 left to be divided between the 67 counties. Mr. Fallon stated that also available are District school bonds which must be approved by a referendum with the minimum interest at the time of 5-3/4%. He said that the millage can be increased from eight to ten mills for a period of two years if such increase is approvea by referen- dum - at the end of two years the millage must revert back to eight mills if the desire is to participate in State funding for general expenses. In many counties, he continued, special funds are available, namely the so-called racetrack funds; however, h~ said that a previous Commission retained those funds for its own use and are therefore not available to the School Board. He said that among the alternatives considered to make up the deficit in capital outlay funds is the Impact Fee which, in his opinion, is less inflationary than other alternatives and carries with it the philosophy that growth will pay for growth and is fairest to all residents. In response to Chairman Pistor, Mr. Fallon said that the teacher-to-pupil ratio in the County is 27~ and that the admi~iu- trator-to-teacher ratio is approximately 18 to 1 which is well over the State average. He pointed out that they are running a $32,000,000 business and that it cannot be done for "peanuts". Ms. Gerri Kalvin, Chairman of the Collier County School Board, commented that there is support for an Impact Fee from many area civic associations whereby growt~ should pay for growth. She asked the questions "Should the existing community pay for school expan- sioll to serve the needs of new citizens?" and, "Is it fair or equitable to expect the same taxpayers to pay again and again to provide adequate, facilities for. newcomers?" She said that the prin- , ..,-A July 17, 1978 ciple behind the Impact Pee is that those creating the need should contrirJte more towards m~eting those needs. RECESS: 10:00 A.M. until 10:10 A.M. Mayor Roland B. Anderson, City of Naples, :tated that the City Council has not taken a position on or discussed the proposed, ordin- , ance, although the Council members have copies of it. He said ~hat the ordinance "reads good" to him basically, adding the thought that there is no such thing as a perfect or~inance to effect the desired results. City Councilman Wade Schroeder suggested that the Impact Fee not be placed on the builder at the time a building permit is re- ~eived, but rather at the time the construction is ready for occu- pancy since the impact does not occur until ~hat time. In this way, said Mr.Schroeder, it will relieve the builder of supplying the "front money" until such time as he is ready to make the sale. An- other suggestion made by Mr. Schroeder was that the type of fee un- der discussion should be levied for all types of construction of permanent facilities such as parks, roads, public buildings, and the like, rather than limiting the Impact Fee for the benefit of schools. Dr. Allison J. Be~lin, Moorings Property OWners Association, stated that the Association represents 1,500 families and that it is on record as supporting a proper Impact Fee. Mr. Joe Kingsley, Voters League, stated that his organization would like to see the proposed ordinance passed. Mr. George T. Derby, Naples Civic Organization, stated that the comments he was prepared to make have been covered by the pre- vious speakers. Mr. Jack Conroy, Naples area resident, stated that it is his opinion that the Impact Fee is neither equitable nor the least ex- F,'~( 042 Pf,~t 425 BOOK 042 N.~E 426 July 17, 1978 pensiv0. way to raiso funds for capital improvements. He said that the alternative previously mentioned, that being a Bond Issue, is a more equitable way although ~here is a risk involved - that being that the taxpayers will not pass a Bond Issue. He said that the County's record in this regard has been reasonably good. He ex- plained the reasons for :ds support of a Bond Issue, among them the fact that a Bond Issue will raise the same number of dollars but at a substantial smaller interest expense, and the fact that the large open areas of Collier County will contribute towards the school sys- tem since there are thousands of acres of ~roperty owned by taxpayers allover the world who pay taxes and would be contributing toward the school system as opposed to the small ~umber of persons coming into the County. Mr. James T. Humphrey, Jr., Attorney, representing the County Builders and Contractors Association, stated that he has been asked to address the matter expressing their opposition and their concerns over the legality of such an ordinance as is being proposed. It was his opinion that Collier County, a political subdivision of the State, would be without the legal authority to adopt such an ordinance per- taining to the schools without enabling statute. Further, said Mr. Humphrey, there is no direct and substantial benefit to all of the taxpayers, that it cannot be considered an assessment, but rather amounts to a tax which counties are prOhibited from imposing except as authorized by general law or by the Florida Constitution. It would, in fact, said Mr. Humphrey, be an impermissible double tax, adding that it would be monies extracted from a limited class to help the general public. He suggested that a more equitable method can be determined and that the ordinance be carefully examined be- cause a court test would be expensive. Chairman Pis tor inquired if the matter was put to a vote and passed by referendum if that would overcome some of the legal hurdles mentioned by Mr. Humphrey. The re~~onse from Mr. Humphrey was that .--.11 .. July 17, 1978 he would be concerned that it still would not comply with the en'. abling requirements of the Constitution and the Statutes as they re- late to political subdivisions and their powers. However, he said that a referendum would solve some of the other problems such as assessment, the tax, the equitable part, and the like, and t~en if \ the enabling issue could be resolved, the enactment of a valid ordi. nance is a possibility. Mr. William Shearston, Contractors Association of Collier Count read a letter from the Association to the Commissioners Opyosing the adoption of the Impact Fee ordinance and stating that the assoc- iation will lend its support to the Naples Board of Realtors in any attempt made by them to prove the fee to be unethical, unlawful, and needless. Mr. William Barton, resident, stated his belief that an Impact Fee is logi.cal, reasonable, and, if properly written, can do the "job" with respect to providing capital outlay funds. Commissioner Archer observed that the proposed ordinance could be modified very easily to make it more equitable and a m~re evenly- distributed impact, adding the comment that, in his opinion, it does not make any sense to enact legislation of the sort being discussed knowing that it stands a good chance of being tested in court. He said that even though the School Board will stand the expense the funds for such litigation still comes from his pocket as a taxpayer. Hr. Lloyd Sarty, Naples Civic Association, urged that, although it may not be a perfect o~dinance, that it be adopted. Mr. James Smith, resident of Collier County, stated that he represents the Naples Board of Realtors and that the position of the board has been made very clear in previous statements, noting his pleasure that such statements have obviously been read and notice taken of them. He took exception to some of the statements made during the discussion among them the fact that adding on the proposed r.~rx 042 pr:.,:4.17 o.)IJ~ 042 PI:,: 428 July 17, 1978 Impact Fee to the selling price of an older residence is not prac- tical, that there are decisions on the books that such an ordinance is patcntly illcgal and that the citizens should not be called upon to pay any more litigation expenses for a case which will fail. Continuing, Mr. Smith stated that in the proposed ordinance there j,s a provision that wOl..ld allow a contribution of land by developers as an offset, noting that such contributions are already allowed for in the regional impact surveys wherein the County can legally "tap" developers which would offset the cost of schools. He said that in the ordinance, ncw residents are not being "hit" but rather new res- idences, noting that there is a broad difference between the two. Commissioner Wimer took exception to the statements made by Mr. Smith regarding the fdct that every new resident, if the figures men- t10ned are correct, generates excess funds and that taxes go down every year, stating that it is a fallacy, suggesting that figures can be made to reflect whatever goal is desired. He reiterated the fact that he still does not like an Impact Fee but can see no altern- ative; however, he said that there have been a lot of good points made regarding the Bond Issue. Mr. Smith responded by stating that ~he figures he mentioned were provided by the State Controller, add- ing that if figures can be provided which proves that there is a dcficit he would be happy to look at them. Commissioner Wenzel observed that there is no area in the coun- try where growth has taken place where the taxes have not increased, adding that growth causes taxes to go up, it requires more services, and the fact must be faced. \Mr. Egon Hill, former member of the now-dissolved Fiscal Advis- " ory Council, stated that the Council studied the problem for many months, calling in witnesses on both sides of the issue of an Im- pact Fee. The conclusion was reached, said Mr. Hill, that the pro- posal is bad for the community. He said that some of the former speakers have mentioned and confirmed that it is inflationary, a \,_....JA July 17, 1978 form of double taxation and regressive, which is everything, he said, a new law ~hould not be. He ~aid that the best way to handle the problem, in his opinion, is by the passage of a Bond Issue. Mr. lIill also expressed concern over the differences in the proposed Impact Fees for the thrp.~ service areas - it is all one community and should be treated the same. Mr. Jay S. Bishop, Naples Area Board of Realtors, referred to specific court cases which resulted in a sewer impact fee being de- clared legal due to the fact that a new us~r of the utility is affected; however, with regard to the School Impact Fee, this is not the case since other persons will be involved who are not users of the schools and will not derive benefits therefrom. He said that al~-:iOugh he is not representing the Naples Area Board of Realtors, he is a member, and that it is possible that the aforesaid board may support a bond referendum if proposed. Hr. Fallon addressed the mntter of the legality of the ordi- nance stating that more than one opinion was sought including the opinion of an expert, namely, Professor Julian Juergensmeyer of the University of Florida, who researched the entire matter regarding legality, and it was his opinion that the proposed ordinance is a legal way to recover money expended in capital funds. Mr. Matteo Ruzzo concurred with Commissioner Archer's comments concerning the fact that the dwelling itself does not impact the schools but rather the children living in them, and suggested that the ordinan~A be deferred until some of the inequities can be ironed out. Mr. Fallon pointed out that to apply a f~e based on the admit- tance of children into a school would amount to charging tuition which is not permitted except for non-residents and defined the term "non-resident". Discussion followed concerning changes to the ordinance which r.""''II nA? ...-A?Q b)\)~ 042 Pt.~c 430 July l7, 1978 could make it more equitable. Responding to the question of whether or not the stnff has recommended adoption of the ordinance, County MnnJg~r Norman replied that ~t would not be appropriate to state that the staff is recommending passage of the ordinance; however, he snid that, as a result of the meeting held several weeks ago with Dr. NcGee and County At;torney Pickworth, it is appropt'iate to sny that given the context of the Impact Fee as it had been proposed to be paid at the time of the building permit, and given the formula as to how the amount of the fee was arrived at, the procedure set forth in the ordinance was workable. Specific changes to the proposed ordinance were discussed with Commissioner ^rcher suggesting that ~~ction Six should be modified to state that the Impact Fee, if it is paid, should be paid at the time that the Occupancy Permit is issued. Following discussion, it 1- was the consensus that this change would be satisfactory if it states that the payment of the fee be made optional in that it can be paid ahead of time or at the time the Certificate of Occupancy is issued, at the discretion of the builder. It was pointed out that the sug- gestions being made are to amend the ordinance prior to the ~ullic hearing on the matter to be held July 18, 1978 in Regular Session. Commissioner Wenzel suggested that the wording could include the provisiol'" that all dwelling units sold in the County to new residents of the County shall pay an Impact Fee, new residents to be interpreted as persons living in the County less than a year, and the Impact fee to be paid at the closing of the Sale. The matter making the fee a County-wide Impact Fee rather than by t~ree service districts was agidn brought up for rtiscussion with "- the comment being made that one district paying almost $l,OOO in fees whereas another district would pay only $249 is unfair. Mr. Fallon explained that the cost of education in ImmOKalee is approx- July l7, 1978 imately $700 per child higher than in the Naples area due, in part, to the Civil Rights Act of 1964 which appears to have more effect in the Immokalee area and, also, due to the higher density in that district. Mr. Ed Kreidor, Five County Builders and Contractors Association, observed that the approach being discu88ed i8 not proper in that the people do not have a chance to voice their opinion under the free enterprise system of government. County Attorney Pickworth, having arrived at the meeting, was asked to comment on whether or not the legality of the ordinance would be adversely affected if the fee was County-wide rather than being assessed by district. Mr. Pickworth advised that it is his npinion that the ordinance would be more legally defensible if the area was broken down into service areas. In this way, said Mr. Pickworth, a fee is being developed which can be identifiable with a projected future cost being levied on the people in the area who will benefit from it, which is one objection to this type of ordi- nance - that being the benefit to be derived. He commented that it would be acceptable to him either waY1 however, he would prefer the three service areas. Concerning the possibility of a tax imposed on all dwelling units sold, Mr. Pickworth stated that the only tax auth- orized by Statute is t.hq levying of ad-valorem property taxeb - a tr~nsfer tax on real property is not authorized. Concerning wheth~r or not holding a referondum which, if passed, would make the ordinance legal, Mr. Pickworth replied in the negative commenting that a referendum might have its merits regarding public feeling but that it would not acquire any more standing because it was voted upon. Mr. Pickworth stated that impact fees are subject to a lot of legal questions, that there is some authority for imposing this type baOK 042 f't.~c 431 bjDK 042 ~ 43l July 17, 1978 of feel howevor, it must bo based on impact and it is necessary to have backup figures in this regard. Dr. McGee stated that there is no problem in compiling these figures and explained how they could be provided. In conclusion, Chairman Pistor commented that the ordinance will be coming before tbe Board the next day for action and suggested that if anyone has ideas for improving the ordinance and making it more palatable they should come forward with such suggestions. . . * * * * * The meeting was adjourned at 12115 P.M. * * * * * * * . ,.-