Impact Fee: With a decision made, it’s time to move forward

The article below ran in the Citrus Chronicle on Sunday, 1/25/2015

It is my hope that this article will clear up any confusion about the recent school impact fee issue.

On Jan. 13^th, 2015, the Board of County Commissioners voted to temporarily suspend all impact fees (including school impact fees) for a period of two years beginning Feb. 1^st, 2015. On Feb 17^th, 2015, the BOCC will have a workshop to review the 2014 Duncan and Associates Impact Fee study. At this time they may– and I hope do– vote to approve the study. But, the Feb. 17^th, 2015 BOCC workshop as I understand it, is not intended for the purpose of addressing the temporary suspension of impact fees.

I greatly appreciated that Commissioner Dennis Damato and Commissioner Ron Kitchen voted against suspending all impact fees, in particular school impact fees, at the Jan. 13^th, 2015 BOCC meeting. I feel it is also important to thank Commissioner Scott Carnahan for his effort to reach out to the school district and meet with Superintendent Himmel, our Executive staff, the Director of Planning & Growth, and me. It is important to understand that Commissioner Carnahan and the School District did not meet for the purpose of agreeing on anything with impact fees as only the County Commission and the School Board as entities can make an agreement. What did take place at the meeting was a respectful understanding of each other’s concerns and I believe, a desire by Commissioner Carnahan to find a way to mitigate some of the School District’s concerns regarding a moratorium on impact fees. I appreciate that Commissioner Carnahan on his own sat down to talk to the School District. Commissioner Carnahan expressed understanding the school district’s concerns about meeting the school district’s required capital needs for the future. I felt Commissioner Carnahan values the Citrus County School District and the role it plays in attracting residents to Citrus County. I felt we agreed that each of us desired improving Citrus County’s economy; we just have differences about how we may be able to help achieve that improvement.

As a result of Commissioner Carnahan’s meeting with the school district at the Jan. 13^th, 2015, BOCC meeting, Commissioner Carnahan modified his initial proposal for a three year moratorium to a two year suspension of Impact fees. In addition, while the public hearing provisions did not provide for a formal vote, Commissioner Carnahan further suggested an annual review of the impact fee suspension to see its effect and if it needs to be reinstituted. He suggested that a metric be used in determining if an early reinstitution of impact fees is needed and for that metric to be a joint collaboration of the BOCC, CCSB and the two cities’ (Crystal River and Inverness) staff. Lastly, Commissioner Carnahan suggested when revising the Citrus County Impact Fee Ordinance that the spending time frame be changed from 7 years to 10 years. This would be much more agreeable as it would allow the school district to better plan for the use of Impact Fee fundable projects– for example, the anticipated future elementary school in the Pine Ridge area.

Since the implementation of School Impact Fees the Citrus County School Board has unanimously supported School Impact Fees as a part of a multi-funding mechanism. This position was unanimously affirmed at our most recent school board meeting on Jan. 13^th, 2015. From 2003-2014, $13,799,065 in School Impact Fee dollars have funded capacity-increasing capital expenses. The majority of that was in capacity-increasing improvements and building expansions and not simply new schools. (Click here for detailed list.) Due to funding and planning, many times building expansions and capacity-increasing improvements have been made far after an increase in student enrollment was realized. For nearly every impact fee fundable project, every impact fee funded dollar was one less dollar that ad valorem tax dollars (property tax dollars) needed to be paid out and/or one more dollar that could be used elsewhere for our students and schools. In 2007, due to the available capital funding in part provided by impact fees, the Citrus County School Board was able to reduce the millage rate collected for Capital Improvements.

It is most important to understand that at this time Citrus County Schools has one of the State’s lowest allowable millage cap rates for Capital Improvements of 1.5 mils. Previously the State allowed the millage cap rates for Capital Improvements of 2.0 mils. In 2008, the State lowered the allowable millage cap rates for Capital Improvements to 1.75 mils. In 2012, Citrus’s allowable millage cap rate for Capital Improvements was reduced to 1.5 mils. In comparison, Marion County collects the State allowable 1.5 mils and in November 2014 the Marion County Voter’s supported an additional 1.0 mils for schools bring the total allowable millage cap rates for Capital Improvements in Marion County to 2.5 mils. This is in addition to the pending re-instatement of school impact fees in Marion and Hernando Counties.

It is further important to understand that when determining the amount of school taxes collected (e.g. the Local Required Effort) for funding public education, it is the Florida Legislature and NOT the local school board that sets the millage rate. This is due to Florida’s educational funding equalization laws that are in both state constitution and statute. This ensures that a student can receive the same quality of education whether they live in Palm Beach County or Citrus County, who currently has approximately 69% economically disadvantaged (a.k.a. free and reduced lunch) students. The state sets the annual per student base funding for public school students. The state then takes the number of students enrolled in public school and multiplies that by the annual per student base funding. The Legislature then uses a complex formula to determine the necessary Local Required Effort and thus the school millage rate. The Citrus School District then may only levy up to the 1.5 mils in capital stated previously and up to 0.746 mils in general discretionary. As has been stated in the past, Citrus Schools over the last five years had state reductions in educational funding of approximately $10 million dollars. This is in addition to the reduced State allowed millage cap rates for Capital Improvements along with the declining property tax values. This differs from the BOCC who have the ability to increase millage rates to offset for increase budgeting needs or reduced property tax values.

I strongly believe that School Impact Fees should be determined primarily by the School Board. The BOCC has state constitutional budget control over 7 out of the 8 areas funded by Impact Fees: Roads, Parks, Library, Fire, EMS, Law, and County Public Buildings. The School Impact Fees are the only impact fee area that the BOCC DOES NOT have state constitutional budget control over; only the School Board does. Therefore, any consequences resulting from the BOCC’s suspensions (or reductions) of School Impact Fees would not have any effect on the BOCC’s budgets but would affect the School Board’s budget and planning. This is why on Feb. 11^th, 2014 (almost one year ago) the School Board voted unanimously for “the Duncan and Associates impact fee report to transmit to the Planning and Development Commission and the Board of County Commissioners for review and implementation”.

The decision on impact fees has been made by the BOCC, and it is time to move forward. It is my hope that in the near future the BOCC and the CCSB will have a joint meeting so that we may together address the challenges each board faces in their respective governing. The School Board will also be having workshops in the future about school impact fees. It is my hope that at these workshops the public will learn more about the benefits the district has received from school impact fee funding.

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