Item No: 5J.
Meeting Date: May 13, 2013
From: Raymond S. Sharp, Interim City Manager
Subject: Discussion Item – Extension of Impact Fee Waivers
Staff will take further action based upon Commission direction.
On April 26, 2010, the City Commission waived impact fees for a one year period up to a maximum amount of $100,000 per project. The waiver was extended for a second year on May 23, 2011, and for a third time on May 29, 2012.
Impact fees are a necessary and vital instrument employed by cities to mitigate the financial impact of new development on city resources. The absence of impact fees means that all current residents (and in the case of utility impact fees, all current customers) of the city subsidize growth through increases in their rates. Leesburg’s impact fees are designed to make growth pay for itself, or at least with regard to their impact on water, wastewater, police, fire, and parks and recreation resources.
It is important to note there are consequences to impact fee waivers. The obvious impact is that funds are not available to construct additional facilities (i.e.: Fountain Lake Trail or Canal Street Wastewater plant expansion). However, the utilities also use a portion of impact fees collected to off-set debt service for capacity improvements that have already been constructed. Without any impact fees, the entirety of the debt service must be shouldered by our ratepayers, possibly accelerating future rate increases.
1. At this time, there seem to be three alternatives:
a) Allow the impact fee waivers to lapse, and implement impact fees immediately.
b) Extend impact fee waivers for one more year.
c) As a more reasoned approach – extend the impact fee waiver through September 30, 2013 and implement the fees effective October 1, 2013. Concurrently, provide an option that will allow impact fees to be negotiated for significant economic development opportunities.
2. Such alternative action as the Commission may deem appropriate.
As noted, the lack of impact fee collections has a negative fiscal impact. This will eventually create a negative impact on each of the impact fee areas and our users.
Prepared by: R. Sharp
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