DFS City Council places moratorium on impact/tap fees, mayor cautions veto; citizens’ comments limited
By ASHLEY AMASON
At the May 23 meeting of the DeFuniak Springs City Council, Mayor Pro-Tempore Henry Ennis raised the motion to place a moratorium on impact fees, tap fees, and survey requirements for one year. Councilman Ron Kelley gave a second to the first two motions, stating, “I campaigned on this issue….”
Ennis addressed each in a separate motion, declaring first, “I move to place a moratorium of assessments and collections of all impact fees that come due on or from June 1 forward for a period of one year from June 1, .”
Sara Bowers stated, “Just as the finance director, I want the Council to be aware, I talked to Joann with rural development. We have $1 million pledged to use our impact fee monies, which we’ll still use those and we have those funds available to use. But had we not had that million dollars we would’ve added on a yearly basis to our debt service $45, 930 and that’s on a 40-year bond at three and three-eighths percent.”
Councilman Mac Work replied, “I believe though to get new businesses in here, we’ve got to do something, and this is one of the steps to getting it started.”
“That’s my motive for making the motion,” Ennis said.
Mayor Harold Carpenter added, “You know gentleman, whenever you do away with fees, you have to do something to be able to continue with the infrastructure…and if you do away with impact fees and we have some need, then we’re [going to] have to raise rates to be able to offset some of this. [It’s a] strong possibility.”
This reporter [Ashley Amason] questioned whether the moratorium would increase water and sewer rates, to which Carpenter replied, “Well not at this point…if you do away with some fees, at some later date it could increase the rates.” Ennis and Councilman Kermit Wright shook their heads in disagreement.
City Attorney Clayton Adkinson remarked, “If I could address that just briefly from a legal standpoint, Mayor. Impact fees cannot be used but for specific purposes and rates are for putting in lines. Impact fees do not allow us to just go put in a new line, and impact fees would definitely not allow us to go repair old, existing lines. So from the standpoint of what impact fees do, they can help in certain instances but they have to be very specific and we have to be very careful about how we spend that money…that’s how the ordinances are drawn…so to say that impact fees would seriously impact us operating our system, I’m not sure is really a true statement because we operate our system from revenues generated from the monthly rate. That’s what we’ve pledged. We don’t pledge impact fees…to pay the bonds. They’re not pledged on any bond or debt we have to rural development…impact fees are for a limited and restricted purpose.”
Carpenter replied, “Mr. Adkinson I agree with you entirely, but I just want to make sure that this Council has looked at the impact this could have on our city as well as our citizens, and not come back at the next meeting and say ‘Whoa, we made a mistake, we’ve got to retract this, [which] is what we’ve been doing in the past few Council meetings’.”
Kelley added, “My problem with impact fees is that…I thought impact fees sort of all went into a big pot and then wherever you needed to do some expansion projects, you just went to that pot and pulled the money out, but of course that’s not how it works. And I believe I’m correct in saying [that] impact fee money will account for about 25 percent of our new water project…and that is a huge multi-million dollar project. So the restrictions that go along with impact fees, very tight. I wish we could take them and go downtown and fix the deplorable pipes and infrastructure we’ve got there, but we just can’t do that by law and that’s the way the Legislature intended. So given the limitations on it…I understand that it can help, but for me…in weighing it, I find the idea that in this particular rural community it’s more of a business killer than it is a help. So for that reason I am sort of in favor of Councilman Ennis’s moratorium .”
The water project Kelley referenced is a $6 million project, of which Bowers said impact fees account for 20 percent.
Adkinson added, “That [moratorium] is only for one year, at the end of that year if you haven’t done something, they’re going to go back in place.”
Former Mayor Pro-Tempore James Huffman addressed the Council. “I believe there’s money already in place to do the water pipes downtown, so that’s not an issue. I think before you go and do this, I don’t think most of the people out here know what impact fees are. I think they need to understand, I think all of you need to understand there is maybe one other city in all of northwest Florida, the state of Florida maybe, that [doesn’t] have some form of impact fees because every business that comes in this town impacts in some way. And as far as the attorney, I don’t think those impact fees are set for a specific location, they’re by departments aren’t they?”
Adkinson answered, “Water impact fees are spent for the water department and sewer is spent for sewer.”
“But they don’t have to be in a certain area, they could be spent anywhere in town,” Huffman said.
“No,” Adkinson answered. “It depends on if that area; if you can justify the spending [in] that area in relation to where you collected them…Your impact fees have to be spent for whatever growth impacted a certain area, then we need to justify…that we needed that expansion and that’s how you can use the impact fees…It’s got to be new expansion…it’s for a restricted purpose.”
“But that’s not my point,” Huffman said, “When impact fees are collected, they’re collected by departments, and that department can use those impact fees anywhere in the city where there is an impact, and you need to explain to the audience that if those fees are not used they’re returned back to the person [who paid].”
“If that growth…has impacted our system then we can justify the use of the impact fees…but we would have to establish that the use for a certain area was a result of the growth that we incurred,” Adkinson said. “Do you disagree with that, [Ms. Bowers]?”
“No, I do not,” Bowers answered.
Huffman encouraged the Council to create a dialogue with the audience on the definition and use of impact fees, as only one person in the overcrowded Council room confirmed she knew what impact fees were….
Read the full story in the May 26, 2011 edition of the Herald Breeze.