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Hernando Today

County Rejects Impact Fee Cut

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By MICHAEL D. BATES

Hernando Today

Published: August 6, 2008

BROOKSVILLE - County commissioners on Tuesday rejected a proposal to reduce impact fees 25 percent, delivering a blow to builders, Realtors and business people who believed it would spur home ownership and construction.
Instead, the board voted unanimously to explore an alternative stimulus proposal that targets rehabilitation of lower-valued homes and enhances incentives for relocating businesses.
For weeks, the business community lobbied hard for commissioners to take advantage of a state appropriations bill that sets aside $20 million statewide in nonrecurring funds to provide down payment assistance to first-time homebuyers.
To qualify, commissioners needed to reduce impact fees by at least 25 percent for a minimum 18 months.
Commissioner David Russell, the only board member to vote for the proposal, said the county had nothing to lose and everything to gain by lowering the fees and providing an incentive for potential homebuyers.
If it didn't work out, the county had the option of dropping out of the program and reestablishing previous rates.
But the support from his colleagues was not there.
The major fear was that the county would lose an estimated $3.6 million in impact fee revenue that would put a big dent on the county's ability to fund adopted capital improvement projects.
Commissioner Diane Rowden said there is already a glut of existing homes on the market and did not foresee a flood of new home construction by dropping the fees.
She also did not buy the argument that a reduction in fees would lead to an increase in new business construction. She cited the vast number of empty strip malls already peppered throughout the county.
About three dozen people, mainly in support of the impact fee reduction, showed up at Tuesday's meeting.
But despite Russell's hard lobbying efforts and an equally persuasive presentation from an economist Tuesday, the board believed the negatives were too great.
While Russell said the new stimulus plan is not his first choice, it is still a strategy he supports.
"Something's better than nothing," he said. "While I would have preferred to have the stimulus package that was being supported by the business community, this was something to move forward with."
The new approved stimulus plan is multilayered and relies heavily on a proposal by Commissioner Jeff Stabins. Under the plan, people whose homes are valued at less than $30,000 could apply for zero-percent loans from the county's State Housing Initiative Partnership (SHIP) program.
Stabins hopes local builders will contact the housing authority to participate in the rehabilitation of five or six houses per month with a cap of $35,000 per house.
Commissioners tweaked Stabins' plan slightly by asking staffers to explore the possibility of seeking state legislative permission to abate property taxes for qualified homeowners who meet the parameters of the plan.
That would ensure that these homeowners whose property is improved are not pushed into a category where they would end up paying high taxes.
Donald Singer, executive director of the housing authority, said there is $1.8 million available for home rehabilitation.
SunTrust officials Erika Alves and John Coleman outlined existing loan programs available through the Florida Housing Finance Corporation (FHFC) available to first-time homebuyers and those needing down payment assistance.
Those programs total up to $20 million for qualified people.
Stabins said it was unfortunate these existing programs were not well-publicized before.
The debate also steered into the realm of stimulating economic development in Hernando County, which commissioners hope will have a direct effect on housing.
Michael McHugh, director of the Office of Business Development, will report back to commissioners with a plan that includes possible revisions to the 2003 county Industrial Promotion ordinance.
That ordinance allows the county to give companies impact fee abatements and other incentives if they pay wages that are equal to, or exceed 115 percent of Hernando County's average wage -- roughly $35,000.
The purpose of the incentive is to encourage companies to locate here and promote the county as a place that encourages high-wage businesses.
Commissioners agreed to consider lowering that wage threshold to attract more businesses.
Even jobs that pay $10 to $12 an hour could entice more companies to Hernando County and possibly persuade workers who now commute to Tampa or St. Petersburg to consider staying in-county, Stabins said.
County Commissioner Rose Rocco said it is vital the county work to bring industry to Hernando County and create jobs that will spur housing growth and the local economy.
"If you have employment, the housing will sustain itself," Rocco said.
Tuesday's three-and-a-half-hour debate featured a presentation from Kirk Sorenson, an economist with Government Solutions, who said any loss of revenue from impact fees would be offset by gains in new home construction and new business creation.
The reduction of fees, used in conjunction with existing homeowner assistance programs, would help stimulate the economy and improve the fiscal picture of the county, Sorenson said.
Counties in Florida that have reduced impact fees have shown a subsequent increase in new home construction and business expansion, he added
Sorenson stressed that a reduction in impact fees would not lead to an immediate rush of existing home buying.
Instead, it will probably lead to an increase in commercial activity.
"As that increases, more and more of an opportunity to provide housing to those workers who will come for those jobs," he said.
Sorenson called Hernando County's existing impact fee scheduled "antiquated" and doesn't take into account current economic conditions.
Rocco said the existing homes on the market are starting to sell because they are priced at more realistic levels.
But Sorenson said homes are priced so low that it is likely attracting investors, which led to the housing market decline in the first place.
"It's about the economy, it s not about building new homes," said Dudley Hampton Jr., president of the Hernando Builders Association (HBA).
Reducing impact fees is another tool to help sell homes and provide a stimulus, he said.
"This proposal would help prime the pump of Hernando County's economic engine," he said.

Also Tuesday, county commissioners:

Unanimously approved a request from County Fire Rescue Chief Michael Nickerson to reduce his 2009 EMS Municipal Service Taxing Unit budget by $138,000, which is the estimated annual revenue expected from a recent hike in EMS transport rates.
Voted 5-0 to approve a revised harassment and discrimination policy for county government employees.

Reporter Michael D. Bates can be reached at 352-544-5290 or mbates@hernandotoday.com.

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