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Agenda 02/26/2008 Item #10D Agenda Item No. 10D February 26, 2008 Page 1 of 9 EXECUTIVE SUMMARY Recommendation that the Board of County Commissioners provide direction to the County Attorney and the County Manager, or his designee, related to desired changes to the Charitable Organization Impact Fee Deferral Program OBJECTIVE: That the Board of County Commissioners provide direction to the County Attorney and the County Manager, or his designee, related to desired changes to the Charitable Organization Impact Fee Deferral Program. CONSIDERATIONS: On October 9,2001, the Board adopted Ordinance No. 2001-54, amending Chapter 74 of the Collier County Code of Laws and Ordinances (Code), to establish a program authorizing waivers from payments of impact fees for specified tax exempted, not-for-profit, charitable entities that provide specified services of substantial benefit to low income residents of Collier County (Charitable Organization Waiver Program). On June 28, 2005, the Board adopted Ordinance No. 2005-31, amending Section 74- 203(i) of the Code, to provide an increase in the maximum waiver for which an applicant is eligible as well as the annual budget for the program. These provisions allowed for an impact fee waiver for qualitying applicants of an amount not-to-excced $100,000 per applicant. The cumulative total of waivers that may be granted per fiscal year is limited to $200,000. On April 10, 2007, the Board considered a request by Collier Health Services, Incorporated to participate in the Charitable Organization Waiver Program (Item lOA). During the discussion related to the item, the Board directed the County Manager (or his designee) in coordination with the County Attorney's Office to revise Section 74-203(i) of the Code, changing the waiver program to a deferral program for specified charitable organizations. The directed changes would allow the applicable impact fees to be deferred so long as the Charitable Entity utilizes the subject premises in the manner set forth in the application. Should the stated use end or should the Charitable Entity lose its status which qualified it for eligibility under the Charitable Organization Impact Fee Deferral Program, then the deferral period would end, and the full impact fees would be due and owing. In accordance with the direction above, the Board adopted Ordinance No. 2007-57 on June 26, 2007, which incorporated the specified changes to the program. The Ordinance has a delayed effective date of January], 2008, however, each Charitable Organization that applies for the program is advised that their applicable impact fees will be deferred, if approved by the Board, rather than waived. The agreement prepared by the County Attorney's Office also reflects a deferral of impact fees as well as the terms required to - maintain the deferral. ,~_.....- Agenda Item NO.1 OD February 26, 2008 Page 2 of 9 On September 25, 2007 during the consideration of item 100, which was a request for a Charitable Organization Impact Fee Deferral by Fun Time Early Childhood Academy, Incorporated, the Board discussed developing a strategy for repayment of the deferrals. The Board specified that options developed for the repayment should not adversely effect the organization and directed the County Manager to have staff prepare alternatives for the Board's future consideration. This direction was further reiterated on October 9, 2007 during the discussions on item 6C related to the St. Matthew's House Wolfe Apartments. During the regular Board of County Commissioners meeting on November II, 2007, the Board directed that the proposed changes to the Charitable Organization Impact Fee Deferral Progranl be reviewed by the Productivity Committee and their recommendations be provided to the Board. The Productivity Committee assigned a sub-committee to review this matter which met on December 6, 2007. This issue was also discussed by the full Productivity Committee at their regular meeting on December 12, 2007. Staff and the County Attorney's Office have identified the following alternatives that provide changes to Charitable Organization Impact Fee Deferral Program for the Board's ,,-, consideration. The Productivity Committee's recommendations are also included for each Issue. Each of the Committee's recommendations below was approved unanimously. Eligibility Background: The original Executive Summary that was presented to establish the Charitable Organization Impact Fee Waiver Program (October 9, 2001) specified that the program was not available to entities that are operated for religious, scientific, literary or educational purposes, those for the purpose of fostering sports competitions, prevention of cruelty to animals, testing for public safety and local labor associations. While the provisions of the Code do not specifically preclude these organizations, staff has followed the prior direction of the Board and has not accepted applications for the program from such organizations. Alternatives: 1) Continue as previously directed, excluding the above referenced organizations, and amend Chapter 74 of the Code to accurately reflect the entities that are not eligible to participate. By keeping with this policy organizations like The Salvation Army, St. Matthew's House, The Humane Society, Ave Maria University and Hodges University are prohibited from participating because of their affiliation or the nature of the services provided. - -.. Agenda Item No. 100 February 26, 2008 Page 3 of 9 2) Expand the allowed participants to include entities such as non-profit religiously affiliated organizations that provide human services of a substantial public benefit (homeless shelters, soup kitchens, day care, social services, ctc.); non-profit animal welfare organizations that provide free or low-cost community services such as free or reduced spays or neuters, vaccinations, sheltering, etc.; and non-profit educational facilities that provide free or reduced cost educational progranls. Other allowable categories of participants could also be added at the Board's direction. 3) Productivitv Committee Recommendation: The deferral program should continue with the original intent to provide services of substantial benefit to very low and low income residents of Collier County at no charge or at reasonable, reduced rates. However, the Productivity Committee also recommended that religiously-af1iliated organizations be allowed to participate provided that the services provided target indigent or low income residents and that such services are provided in a non- discriminatory manner. Impact Fee Tvpes Elil!ible for Deferral Background: Currently the Code precludes Educational Facilities Impact Fees and Fire Impact Fees from the deferral program. The County Attorney's Office has previously opined that Water and Sewer Impact Fees should be similarly precluded due to the nature and limitations of the funding sources available to the Collier County Water and Sewer District. Alternatives: l) Amend the Code to include Water and Sewer Impact Fees with those other impact fees not available to be deferred under this program. 2) Provide a designated funding source to pay for water and sewer impact fees under this program. Similar to the fund set up to pay for the water and sewer impact fees for qualified participants in the County-wide Impact Fee Deferral Program, the water and sewer impact fee trust funds would be paid by the designated funding source. The funding source would then be repaid either as detailed below if the Board should elect to adopt changes to the program or, as currently required, when the property ceases to be utilized in its charitable capacity. 3) Productivitv Committee Recommendation: Water and Sewer Impact Fees should be deferred as part of the Charitable Organization Impact Fee Deferral. Because the Program is capped at $200,000 per fiscal year the potential loss in revenue to the Water and Sewer Impact Fee Funds is limited. .."".. .."-~,~ Agenda Item No.1 OD February 26, 2008 Page 4 of 9 4) Staff Comments and Recommendations: The County Attorney's Office has previously opined that Water and Sewer Impact Fees should be precluded from straight deferrals due to the nature and limitations of the funding sources available to the Collier County Water and Sewer District (District). ln order for the District to provide impact fee deferrals, the revenue lost during the term of the deferral must be passed on to the rate payers within the District, as the District does not receive additional ad valorem funding. This policy creates a disproportionate burden on the rate payers of the District. Based on these circumstances, staff recommends that the Board exempt the District from participation in the Charitable Organization Impact Fee Deferral Program (Above - Alternative I) or establish a revolving fund to reimburse the Water-Sewer District, similar to the County-wide Impact Fee Deferral Program in which a budgeted revolving fund is utilized to pay the Water and Sewer Impact Fees (Above - Alternative 2). Repavment Background: As detailed above, the current program provides for the deferral of impact fees so long as the Charitable Entity utilizes the subject premises in the manner set forth in the application. Should the stated use end or should the Charitable Entity lose its status which qualified it for eligibility under the Charitable Organization Impact Fee DefelTal Program, then the deferral period would end, and the full impact fees would be due and owing. The Program does not currently require the payment of interest at the termination of the deferral. The program is limited to a cumulative total of $200,000 per fiscal year and the maximum amount an applicant may receive is $100,000. Alternatives: I) Provide for the deferral of impact fees for a specified time period and at the completion of the term of the deferral allow for the repayment of the impact fees over a specified time period. For example: provide for a 10 year deferral and a 10 year repayment schedule. 2) Provide for a straight defelTal for a specified time period with the total impact fees due at the completion of the term. This approach is similar to the current rental deferral program which allows for the deferral of impact fees for 6 years and 9 months before the impact fees become due and payable. The program also requires that the units remain affordable for fifteen years. A similar commitment could be required in that the charitable organization continue to operate in the stated capacity for a specified time period. 3) Provide a designated funding source to impact fees under this program. -- The impact fee trust funds would be paid by the designated funding source Agenda Item No.1 00 February 26, 2008 Page 5 of 9 and the funding source would then be repaid either, as cWTently required, when the property ceases to be utilized in its charitable capacity or at a specified time, as described above. This alternative was also described for the payment of water and sewer impact fees. 4) Related to the requirement for the payment of interest, this provision could be implemented by requiring interest to be paid in addition to the amount of impact fees being repaid annually, as a set amount if the impact fees are paid at a specified point in time or, as required by the County- wide Impact Fee Deferral Program, interest is computed at a set amount per year (5%) with a maximum cumulative amount of interest that may be assessed (25% of the deferred amount). These alternatives provide a financial offset to the impact fee trust funds for the revenue lost during the tenn of the deferral agreement. 5) Productivitv Committee Recommendation: The deferral should be provided for a fixed term without interest. The term of the deferral should be at the discretion of the Board and subject to renewal. The recipient should provide a yearly affidavit affmning the entity's eligibility for the program at the specified location and allowing for the County to conduct a site visit for compliance. The deferral should be secured with a lien on thc property. Additionally, other funding soW'ces should be considered to fund or offset the program. Residencv Background: The current Charitable Organization Impact Fee Deferral Program provisions do not include requirements related to legal residency. The affordable housing impact fee deferral programs require that the program participants are either legal residents pem1anently residing in the United States or citizens of the United States. Alternatives: I) Require the organization to limit services to U.S. CItIzens or legal residents in order to qualify to participate in the program. However, this may be problematic for some of the types of organizations that utilize this program. For example, medical organizations (Collier Health Services, Neighborhood Health Clinic, Naples Community Hospital, etc.) provide a large amount of indigent/uninsured care which provides a valuable service to the community but also probably includes a percentage of people that are not legal citizens or residents. The inclusion of residency requirements in order to qualify for use of the program may serve to make the program more restrictive and may result in fewer applicants qualifying for assistance. Agenda Item NO.1 OD February 26, 2008 Page 6 of 9 2) Require the organization to limit services to U.S. cll1zens or legal residents in order to qualify to participate in the program unless the entity is legally required to provide care regardless of the residency status of the person receiving the services. Hospitals are required to provide care to anyone with a life-threatening condition. Therefore, hospitals and other similar organizations that provide indigent care and/or emergency services could be allowed to apply for the program but their legal responsibility to provide care to such illegal persons would be presented to the Board for discussion, consideration and approval or disapproval as to the entity's participation in the program. 3) Productivitv Committee Recommendation: The Program should give priority to those organizations that primarily serve citizens and legal residents. If the Board elects to direct changes be made to the Charitable Organization Impact Fee Deferral Program, the County Attorney and staff will prepare an amendment to Chapter 74 of the Code to reflect the changes. The amendment will require a legal advertisement and will be presented to the Board at a future meeting as an advertised public hearing for consideration and approval. An additional recommendation was provided by the Productivity Committee related to the impact fees for various types of small businesses and changes of use. During the Staff and Commissioner General Communications section (Item ] 5) of the regular meeting of the Board of County Commissioners, the Board discussed various issues related to the impact fees assessed for different types of uses. The discussion focused specifically on tenants that may be exploring the possibility of occupying space in existing buildings for which the impact fees have already been paid, but the new use requires the payment of additional impact fees. Recently, there have been several situations where the contemplated business is not a category on the current impact fee schedule (i.e. dance studio, karate studio, gymnastics, single physician offices, etc.). Therefore, based on the requirements of the Code, the "closest applicable" category is used to calculate the additional impact fees for the new use. Based on the Board's concern, staff has researched various remedies for this issue, with a focus on the fair and equitable assessment of any applicable impact fees. Staff and the Productivity Sub- Committee discussed this matter in detail at the December 6, 2007 Sub-Committee meeting and recommend that staff work with the County's impact fee consultant to develop additional rates for these types of land use categorics. After the additional rates are prepared, the expanded categories would also require a legal advertisement and would be presented to the Board at a future meeting as an advertised public hearing for consideration and approval. Additionally, in accordance with Section] 63.3] 801, Florida Statutes, any change to the impact fee rate schedules also requires a minimum 90-day notice between the final adoption of the ordinance and implementation of the fee. ..~, Agenda Item r"o. 100 February 26, 2008 Page 7 of 9 FISCAL IMPACT: If the Board of County Commissioners elects to defer impact fees, the fiscal impact to the County would be the loss of this prospective income to the impact fee trust funds for the period of time that the Charitable Entity remains eligible for the program or for the term of the deferral agreement should the Board elect to require repayment at a specified point in time. GROWTH MANAGEMENT IMPACT: The proposed alternatives for changes to the Charitable Organization Impact Fee Deferral Program are consistent with Objective 4 (Nonprofit and Civic Organizations and Local Groups/Programs) of the Economic Element of Collier County's Growth Management Plan which states: "Collier County will support the economic development goals, efforts and community involvement of nonprofit organizations, civic associations and local groups and programs." LEGAL CONSIDERATIONS: Each of the proposed alternatives to provide changes to the Charitable Organization Impact Fee Deferral Program is legally sufficient for Board consideration. RECOMMENDATION: That the Board of County Commissioners provide direction to the County Attorney and the County Manager, or his designee, related to desired changes to the Charitable Organization Impact Fee Deferral Program and direct staff to work with the County's impact fee consultant regarding the development of additional rate .- categories for specified small businesses; such changes will be presented to the Board at a future meeting(s) for consideration and approval via an advertised public hearing. Prepared by: Amy Patterson, Impact Fee and Economic Development Manager Business Management and Budget Office, CDES ..- Page lof2 Agenda Item NO.1 OD February 26, 2008 Page 8 of 9 r"' COLLIER COUNTY BOARD OF COUNTY COMMISSIONERS Item Number: 10D Item Summary: Recommendation that the Board of County Commissioners provIde direction to the County Attorney and the County Managec or his designee, related to desired changes to the Charitable Organization Impact Fee Deferral Program (Amy Patterson. Impact Fee, EDC Manager, CDES) Meeting Date: 2126/2008 900:00 AM Prepared By Amy Patterson Impact Fee Manager Date Community Development & Environmental Services Financial Admin. & Housing 21112008 1 :14:51 PM Approved By Jeff Klatzkow Assistant County Attorney Date County Attorney County Attorney Office 2/1/20083:27 PM Approved By Norm E. Feder, AICP Transportation Division Administrator Date Transportation Services Transportation Services Admin. 2/1120083:59 PM _.. Approved By Nick Casalanguida MPO Director Date Transportation Services Transportation Planning 2/5/20088:01 AM Approved By Judy Puig Operations Analyst Date Community Development & Community Development & Environmental Services Environmental Services Admin. 2/5/20089:19 AM Approved By James W. Delony Public Utilities Administrator Date Public Utilities Public Utilities Administration 215/20089:35 AM Approved By Thomas Wi des Operations Director Date Public Utilities Public Utilities Operations 217120088:31 PM Approved By Garrett Mullee Financial Operations Manager Date Community Development & Environmental Services Financial Admin. & Housing 211212008 1 :35 PM .- , Approved By Community Development & file://C:\AgendaTest\Export\1 0 I-February%2026,%202008\ I 0.%20COUNTY%20MANAG... 2/20/2008 ---". Page 2 of2 Agenda Item No.1 OD February 26, 2008 Page 9 of 9 Joseph K. Schmitt Environmental Services Adminstrator Date Community Development & Community Development & Environmental Services Environmental Services Admin. 2/13/2008 11 :49 AM Approved By OMS Coordinator Applications Analyst Date Administrative Services Information Technology 2113120084:02 PM Approved By Susan Usher Senior Management/Budget Analyst Date County Manager's Office Office of Management & Budget 2/15/2008 1: 53 PM Approved By James V. Mudd County Manager Date Board of County Commissioners County Manager's Office 2116/2008 10:43 AM -. file://C:\AgendaTest\Export\1 0 l-February%2026, %202008\ 1 0.%20COUNTY%20MANAG... 2/20/2008 ..,..~.~ '"--- .. ----~.~..~-.. _.._~._---"-_....