Divisions form over impact fee changes

As the city examines its transportation impact fee system — and considers changes — representatives from key business and development associations are warning officials to proceed with caution.

During the past year, the City Commission has shown interest in adjusting the way it accounts for the impact new developments have on public facilities and services. In March, the board approved higher multimodal impact fee rates, increasing the price developers have to pay for how they affect the city’s transportation network.

Now, the city is considering another change. Currently, developers planning a project on a vacant parcel can get a credit toward their multimodal impact fee based on previous uses of that property.

If an earlier structure, now demolished, generated more traffic than the new proposed use, the city will reduce the impact fee requirements. This has caused concern among residents such as Eileen Normile, a member of the resident activist group STOP’s steering committee.

Normile said offering a credit to developers in perpetuity doesn’t properly account for the impact of new projects.

“The road needs may be different; the intersection could be tremendously congested,” Normile said. “You still get credit for the highest possible intensity of what was there 20 years ago.”

On May 1, the City Commission was scheduled to discuss a provision that would adjust the credit system — perhaps gradually reducing the credits offered over a period of time, or eliminating them altogether after enough time had passed.

The commission pulled the item from its agenda after City Attorney Robert Fournier said his office wanted to refine the language in the proposed ordinance. But in its draft form, the changes were subject to fierce opposition.

Christine Robinson, executive director of the Argus Foundation, Kevin Cooper, CEO of the Greater Sarasota Chamber of Commerce, and Jon Mast, CEO of the Manatee-Sarasota Building Industry Association, all spoke at the May 1 commission meeting. All of them warned the board that a misstep in adjusting its impact fee regulations could come with serious consequences.

In Florida, impact fees must meet a “dual rational nexus test.” That means a local government has to show that there is a connection between a development and a need for improved public facilities, and that any fees will go toward improving those public facilities in a way that serves the new growth.

The speakers at the May 1 meeting said the proposed impact fee changes would charge developers for building new projects, irrespective of whether the project’s impact had already been accounted for via previous payments.

“What is being proposed is a redevelopment tax,” Robinson said.

Mast also suggested that the changes would discourage continued growth in the city.

“Regarding home building, this is another example of a job killer,” he said.

Fournier acknowledged the city would need to do additional work to determine an appropriate period of time over which the impact fee credits would fade out.

“I thought it would be preferable, rather than going forward, if we came back with something that provided for the expiration for that credit and come forward with justification and logic for that,” Fournier said.

City staff will examine how other municipalities manage their transportation impact fee system. Fournier hopes to return to the board in June with a revised ordinance for consideration.

Normile encouraged the city to do all the research necessary to draft a legally defensible ordinance that reduces the time period over which developers are allowed credits. She said the proposal wasn’t designed to punish builders or discourage growth, but to properly account for the impact of new projects.

“I think they gain as well by having a good transportation network, which we don’t now,” Normile said.