Impact fees major concern, stalling economic growth in Walton County

In an unprecedented move, Walton County commissioners voted unanimously Tuesday night to add the county to the state roster supporting a roll back of state and local impact fees.

Their vote follows similar action taken by the Walton County School district on Jan. 20.

Impact fees are collected from developers for the state and county budgets.

When building was booming and housing doubling in value overnight, developers could anticipate a profit upon completion of their project, which helped offset the cost of the many fees needed to begin their projects.

With building all but shut down in South Walton, some developers are on the verge of losing their development order (county approval to move forward) due to high fees set at the state and county levels.

Such loss of critical approval for a development, results in lost employment and possible company relocation, or worse, company failure.

"If impact fees, recreational fees and the other costs involved are stopping development it's counter productive. In these times we must address this problem," said Commissioner Scott Brannon during the Jan. 13 Walton County board of county commissioners meeting.

The board of commissioners agreed to look at creating a resolution to take to the Florida Legislature to have fees suspended, or eliminated, as a solution to the current problem.

"I certainly agree with, and favor, the commissioners for this creative solution. We (legislators) are meeting next week to look at eliminating (certain) concurrency requirements across the state, and to extend existing development orders," commented Sen. Don Gaetz.

A vote is soon to follow, possibly before the Legislative session in March, Gaetz stated.

Gaetz said he will support the commissioners in a vote to suspend fees.

"We've petitioned the state to give us at least a 12 month hiatus of these fees, and we're hopeful for getting up to 3-years," said Commissioner, Sara Comander.

During the regular Walton County Board of Commissioners meeting Jan. 27 the final resolution was voted on and passed unanimously.

Commissioner Kenneth Prigden delivered the resolution to Tallahassee Jan. 28.

This is the first step in sustaining growth through construction.

This won't fix every economic issue, according to Gaetz, however it is a good beginning to keep from losing more business in Walton County.

Brannon believes the intent of impact fees is good for controlling growth, such as water and sewer fees for system improvements and upgrades to existing utilities, however, some of the impact fees set for sustainable growth are causing economic conditions to worsen in Walton County, said Brannon.

Traffic concurrency is one such fee set by state statute to control growth across Florida and applies to all 67 counties.

This particular fee is where the "bridge began sliding down the slope," according to Brannon.

"We (Walton County) aren't the same as say, Pinellas County, where they have an overpopulation problem," he said. "That is where the legislature set this (traffic concurrency fees) in motion and Walton County isn't comparable."

Brannon believes in theory this is a sound practice, but lacks checks in reality.

"Having a ‘one-size-fits-all' fee doesn't work," he said. "I don't believe this matches the fundamental test for Walton County."

The formula used to calculate fees is an ongoing concern of developer's.

Some of the fees are based on land value, which, according Brannon, reflect an artificial value in today's market.

With property values down, the amount a developer needs to pay to move forward is sometimes more than the value of the property he intends to build on.

Property values are consistently declining across Walton County by about 0.8 percent per month according to Patrick Pilcher, Walton County property appraiser.

"The formula used to appraise homes for tax purposes shouldn't be used to assess fees," Pilcher said. "Property values are assessed in arrears, which works for property taxes, not for setting fees."

Some developers are losing their plats since they can't afford to pay fees based on property values set in previous years.

"Developers are in a hard spot for determining values," Pilcher said. "We work values based on the previous year. We don't assess the development until it's completed. In the past, those developers hoped the value would go up so they would realize a profit."

With housing sales and building permits down, the future value has gone down.

In 2004, Walton County issued 1,637 single family home permits as compared to 2008 when only 412 permits were issued. That represents a 25% decline over that four-year period.

In 2008, a total of 8,310 building inspections were done, as compared to 20,786 in 2004, representing a decrease of 40 percent.

Commercial permits are down as well from 2007 (when the county began tracking commercial) by more than 65 percent.

Determining an exact value isn't likely, according to Pilcher, since sales of homes aren't the only indicator of value.

"In order to estimate current market value we need to hear from people who haven't been able to sell their homes as well," he said. "The market as a whole is down and without all the information we can't conclusively set a true value of property and fees are out of line with what is happening in today's market."

It has been suggested by several developer's that an independent Florida certified appraiser review properties for development, just as they would prior to a home being sold for true market value.

Pilcher agrees and the board of county commissioners is looking into this as an alternative.