Impact fee explanation greeted with skepticism

Wednesday, July 17, 2002

By LARRY HANNAN, ljhannan@naplesnews.com

No one was carrying torches and pitchforks Tuesday afternoon at the North Naples Regional Library.

But during a public presentation at the library, the local development industry still registered its displeasure over Collier County government's plan to raise road impact fees.

A study commissioned by Collier officials has recommended raising road impact fees by an average of 228 percent.

About 90 people, most of whom were affiliated with the development industry, attended Tuesday's meeting to express reservations about the study.

Impact fees are assessed for each new home and business built in the county and aren't limited to transportation. The fees initially are paid by developers, who typically pass them on to consumers in the form of higher prices.

Phil Tindall, Collier County's impact fee coordinator, said the No. 1 reason for the impact fee increase is that the cost of purchasing right of way for building and widening roads has significantly increased.

Right of way costs are going up because land prices have increased, Tindall said.

County officials also say purchasing right of way can be more expensive than purchasing land at market value.

Collier County Transportation Administrator Norman Feder said the cost of building one lane of road over a mile has increased in the past two years from $1.6 million to $3.8 million. The main reason for that increase is the cost of right of way. Other items that have gone up include design, moving utilities, construction and mitigation for environmental effects, Feder said.

Most of those attending expressed doubt that impact fees need to be raised as high as was recommended in the study, which was conducted by URS Consultants of Tampa.

"The cost for purchasing right of way disturbs me," said Ross McIntosh, a local real estate broker.

McIntosh said the county appeared to be paying above market value for most of the land it purchased.

"I don't understand how the county got these numbers," McIntosh said.

Feder said the county probably is paying more than market value but said purchasing right of way can be difficult.

"Right of way prices might seem high but we don't have much flexibility in what we can buy," Feder said. "The cost also includes condemnation fees and legal fees in most cases."

David Ellis, director of the Collier Building Industry Association, said there are still a lot of unanswered questions on how the impact fee increase was calculated. He wondered if the construction projects planned in the next five years need all the right of way the county plans to purchase.

"I'm worried that impact fees are being inflated by purchasing right of way that isn't needed," Ellis said.

The county is planning to widen portions of Immokalee Road and Goodlette-Frank Road from two to four lanes within the next five years.

Ellis said the county is planning to purchase enough right of way for six lanes on those roadways because they expect to widen both roads up to six lanes at some future time.

If the county would just plan to purchase enough right of way land to four-lane the roads instead of six-laning them, the impact fee increase wouldn't be as large, Ellis said.

Feder said it was possible that Ellis is correct and said that issue would be looked at prior to the County Commission meeting.

Ellis said this was an example of why the county shouldn't go forward with an impact fee increase at its July 30 meeting. He wants the commissioners to wait until September before any final decisions are made.

"I discovered the issue with those two roads just by looking over the study," Ellis said. "I'm not an engineer. Who knows what mistakes someone who is qualified in this area might discover."

CBIA has hired its own consultant to examine the study and look for flaws in how it was done.

Ginny Blaine, a broker at Downing-Frye Realty Inc. in Naples, said she was concerned the impact fee increase would drive middle class homeowners out of Collier County.

"I am very concerned that middle-class people will have no place to go because of this," Blaine said. "Working people aren't going to be able to afford to live here."

Blaine used teachers in the Collier County school system making about $30,000 a year as an example of people who couldn't afford to live in the area.

Impact fees for residential homes of less than 1,500 square feet would increase from $1,825 to $5,655, a 210 percent increase, if the study's recommendations are approved.

Residential homes from 1,501 to 2,499 square feet would increase from $2,433 to $7,536 and residential homes over 2,500 feet would have an impact fee increase from $2,871 to $8,990. Both of those increases are also 210 percent.

Ellis also made the point that impact fees are excessive.

"No one will argue that land prices have gone up," he said. "But they haven't tripled or quadrupled. That makes me wonder if this impact fee is appropriate."

Todd Gates of Gates McVey Builders Inc. wondered why the cost of building one lane of road over a mile has increased in the past two years from $1.6 million to $3.8 million.

"I see Lee County only has a cost of about $1.8 million a mile," Gates said. "That makes me wonder why we're going up so much."

Feder said Lee County was going raise its impact fees in the near future and said its estimate on the cost of building one lane of road per mile would also probably increase significantly.

Joe Schmitt, head of Collier County Community Development and Environmental Services, said the county staff doesn't plan to make any major changes to the impact fee study before the July 30 commission meeting.

The county staff will attempt to determine how the impact fee increase will impact low-income housing in the county before July 30. But Schmitt said it would be up to commissioners to determine if the impact fee rate recommended in the study would be damaging to Collier County residents.

"The bottom line is that the commissioners are going to have a tough decision to make," Schmitt said.

Schmitt rejected CBIA claims that the impact fee study inflated impact fees beyond where they should be.

"There is a perception that the figures (in the study) are arbitrary," Schmitt said. "I can tell you that is not true."

Tindall said all of the impact fee increases had been calculated based on reliable data and said the recommended impact fee increase is legal under Florida law

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