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Impact fee cuts could cost Hernando schools $630,000

BROOKSVILLE — To the majority of School Board members, giving up some impact fee money is a worthy sacrifice for the good of the county's economy.

Now, with some sense of the actual cost, board members have to decide whether the County Commission's idea of an economic stimulus is still palatable.

Commissioners agreed unanimously Tuesday to craft an ordinance that would lower impact fees for residential, commercial and industrial construction to 2001 levels for 12 months. The move came at the urging of local builders, who said lower fees would be the incentive many hesitant property owners need to start building.

Rolling back residential impact fees to 2001 levels — essentially cutting them in half — would mean a hit to the school district of about $630,000 this fiscal year, according to figures from the district's facilities department.

The impact would be about the same next year and start to increase slightly in 2011-12 as growth returns, bringing the possible loss in revenue to at least $3 million if the reduction remains until 2013-14, according to district estimates.

The fees are one-time costs imposed on new buildings to offset the costs of government services that construction brings. The school district collects only residential fees, but that still accounts for $4,266 of the current $9,200 fee.

The County Commission's plan would bring the total impact fee to $4,800.

The commission took the action with the backing of the School Board, which has no control over impact fee amounts. The board voted 4-1 in October to throw its support behind a reduction, though board members did not specify how much and stopped short of supporting a full moratorium.

The School Board is slated to discuss the county's proposed ordinance during a 2 p.m. workshop Tuesday.

"I think we can put up with that for a year or two," board member Sandra Nicholson said of the plan. "I'm not sure it wouldn't be better for the whole community to have at least a partial reduction."

• • •

But there are other considerations that warrant caution, school officials say. Mainly this: On the district's shoestring budget and lack of reserves, $630,000 is a lot of money.

"I do have some concerns," interim superintendent Sonya Jackson said. "The budget is tight, and we really want to try to make sure that this whole process works out for what will be in the best interest of the district."

Revenue from impact fees has already declined because of the brutal housing market. The district's impact fee fund balance, which stands this year at $5.7 million, would go into the red by the 2011-12 budget year if the impact fee reduction were extended until then, according to figures from a presentation prepared for the board's meeting.

That fund includes $1.2 million set aside this year — and still available — for land acquisition and $500,000 budgeted in the following three years. The district does not have a "land bank" of parcels to build on to meet future growth needs, facilities director Bo Bavota said.

More concerning, officials say, is that the district had also planned to put impact fee money toward a nearly $1.9 million annual debt service payment for capital projects for at least the next four years.

If impact fee money disappears, the debt service payment will have to be paid using the land acquisition money and capital improvement funding collected from a 1.5-mill property tax levy, officials said.

"There will be no money to buy land, that's for sure," Bavota said.

The tax levy funds are already tight because they are committed to capital debt service and to maintaining the district's facilities, said chief financial officer Desiree Henegar.

"What concerns me — and I will be the first to tell the board — is you're shifting the funding need from one fund to another, which dries up some of your resources," Henegar said. "We have to look at our currently funded projects, and something's going to have to give."

Henegar compared the district to a consumer with maxed-out credit cards.

"We're pretty much leveraged," she said. "We can't borrow any money."

Henegar also worries about the specter of cuts by the state to per-student funding this year and in future years due to possible revenue shortfalls. That has an impact on the general fund, which has only a $1 million rainy-day balance.

"We live each day not knowing what's going to happen at the state level," she said.

• • •

There is a legal concern, too.

Florida's concurrency law requires school districts to plan for the future by establishing and maintaining adequate facilities for the projected enrollment.

The district has a five-year plan and an interlocal agreement with the county and the city of Brooksville to meet student capacity requirements by the 2013-14 school year.

Even with planned construction projects, nearly every elementary school is projected to be at 100 percent capacity by then, said Amber Wheeler, the district's manager of growth planning.

"If you keep cutting funding, we may not be able to meet that level of service," Wheeler said.

Board member Pat Fagan supported a reduction in impact fees, though he said Thursday he still needed to review the backup material for Tuesday's meeting.

Still, Fagan said he's willing to sacrifice at least some money for the economy.

"I just feel like we need to do our share, and if it calls for cutting back on building at the moment until we know times have changed, then we need to do it," Fagan said.

He said he does have concerns about a proposed provision that would allow the fees to be paid when the building's certificate of occupancy is issued rather than when the building permit is pulled, as is the current practice. That, Fagan said, could decrease the likelihood of receiving the funding in a timely manner.

Board member Dianne Bonfield was the lone vote against a reduction. Bonfield has said she feels a need to put the district's finances first.

Board member James Yant said he doubts the district will wind up sacrificing much money. He called projections for impact fee revenue for the next few years optimistic at best.

Young people don't want to live here because there are few jobs, and older would-be residents are scared away by high taxes, Yant said.

"I don't think people are going to come to build houses," he said.

Tony Marrero can be reached at or (352) 848-1431.

"I think we can put up with that for a year or two. I'm not sure it wouldn't be better for the whole community to have at least a partial reduction."

Sandra Nicholson, School Board member

"I do have some concerns. The budget is tight, and we really want to try to make sure that this whole process works out for what will be in the best interest of the district."

Sonya Jackson, interim superintendent

Impact fee cuts could cost Hernando schools $630,000 10/31/09 [Last modified: Saturday, October 31, 2009 1:22pm]
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