At a workshop held on March 7, 2023, Hernando County commissioners discussed impact fees in order to give direction for an Impact Fee Update. The consensus by the board is to review current building classifications, and consider an overall fee increase up to 50 percent over a 4-year period beginning in 2024.
Impact fees are calculated based on the type of commercial space, plus square footage, or per square footage of floor space in a single family unit.
Currently, the impact fee for a single-family home is $5,757. From this fee, several components are funded; Fire / EMS ($235), Public Buildings ($466), Correctional Facilities ($6.99), Law enforcement ($86), Library Facilities ($107), Parks and Recreation ($411), Education ($3,176), and Transportation ($1,269).
Impact fees apply only to new construction.
Each component has a maximum amount that can be collected, which is set by the board. Currently, Transportation is at 22.04% of the total impact fee, and Education is at 55.17%.
Other allocations of the total impact fee for a single-family home:
8.09% Public Buildings
0.12% Correctional Facilities
1.49% Law Enforcement
1.86% Library Facilities
7.14% Parks & Recreation
4.08% Fire EMS
By the end of the discussion, commissioners leaned toward increases in fee revenue for the Transportation component, as well as Parks and Recreation and Education. The guiding principle is that a 50% increase in one component means others cannot be increased.
Multi-Modal Mobility fees were first introduced to the board by Commissioner Jerry Campbell at the February 16th workshop. This structure, used by Pasco County is reported to incentivize infill projects. This model tiers impact fees according to location, rather than structure type.
County Administrator Jeff Rogers noted that bills currently in legislation could change the laws that govern impact fee increases as early as June, causing the county to re-evaluate their position should they pass. If a Mobility Fee structure is implemented, the Transportation category could be placed in that category, allowing for increases in other categories.
In a future presentation, County Attorney Jon Jouben will address what can and cannot be done with a Mobility Fee specifically for this county.
The board also mentioned future discussions on partnering with the school board (HCSD) on a one-half-cent sales tax. During comments at the end of the workshop, HCSD member Shannon Rodriguez said to commissioners, “We are in a dire need for schools … We’re trying to get a plan together for our next school and how to make that happen. But without you behind us and without your input, without all of you helping us, we will never be able to achieve that.”
A rise in impact fees will not pay for new school construction, but can be used for planning.
Building classifications will be reviewed to determine if extenuating circumstances warrant higher impact fees. The review should take two to three months to complete.
The latest impact fee study was completed in April 2022 by Benesch, a consulting firm that assists local governments. According to the study, Hernando County is on the trajectory to see a 25 percent increase (52,000 permanent residents) in population by 2045.
The main focus of the board is balancing how the county keeps up with growth while keeping costs of new development attractive.
The greatest needs for the county right now are public building financing, expansion and maintenance of parks, and roadway expansion. Collected Impact fees may only be used for Capital Improvement Projects (CIP), equipment and facilities. Fees may also be used to pay debt service to facilitate CIPs.
Commissioners first discussed how impact fees are determined and discussed possible changes to the classification system. Adding some humor to the conversation, Chairman John Allocco added that storage units and car washes should be reviewed, as these types of businesses have been constructed throughout the county at a high frequency in recent years. But it wasn’t merely a joke.
Referring to an Institute of Transportation Engineers (ITE) Report, Commissioner Jerry Campbell noted that currently drive-through restaurants pay $44,855 in impact fees whereas self-service car washes pay $4,220. “How is a car wash not a drive-through?” The ITE is the agency involved in conducting such studies and releasing the subsequent reports used in determining transportation impact fees.
Allocco added that a self-serve car wash is not a drive-through car wash, but there is currently only one category containing both.
“I request we look into this because I don’t think we’re categorizing (drive-through car washes) properly … it’s a drive through. It might not be a drive through restaurant … but it is not a self-serve where you drive your car in and spend 15 minutes spraying down your own car. You don’t have a lot of traffic with a self-serve car wash.
County Administrator Jeff Rogers announced that he and his staff will reach out to the county’s consultants to review the current classifications that may qualify for an exception, and possibly a new study that could affect change in the ITE manual.
Commissioners then discussed future increases to impact fees, and how they should occur. In recent years, state legislation (House Bill 337 and Senate Bill 750) has changed the limit on fee increases. Fees cannot increase by more than 12.5 percent per year, and cannot be increased more than 50 percent of the existing rate over four years. The exception to this rule is a demonstration of extraordinary circumstances in the past 12 months. This type of increase would require a discussion in two public workshops, and would need to be approved by two-thirds of the BOCC.
At this time, commissioners are not seeking to increase impact fees more than 50 percent over the four year period.
However, there is concern that inflation, with the county’s potential growth may qualify as “extraordinary circumstances.” But the commissioners seek balance in providing services that come with new construction, and remaining an attractive location, particularly for new business.
Champion is not in favor of raising the impact fees at all, firstly because he is concerned about the faltering of current and future growth. “Growth is not guaranteed, and it’s not happening right now,” Champion said, citing a slowdown in building permits and reports from builders. Champion’s view is that if impact fees prevent new construction, future tax revenue would be flat.
Allocco disagreed, based on the number and size of housing developments that are moving into the area. Impact fees are on the agenda for the March 30th interlocal meeting between the city, county and school board.