Craig Richardson Since the 1980s, impact fees have been an important tool to fund infrastructure needs created by development. The landscape for local governments use of impact fees in Florida has changed over the past several years. There has been an economic downturn. Legislative and state referenda have limited local government’s ability to generate revenue to fund infrastructure. Given these new circumstances, does the use of impact fees need to be rethought, and if so how? Given the changing climate in Florida, this session will provide planners and planning lawyers the tools to rethink their use of this critical infrastructure funding tool.

1. Impact Fees: Moving Forward
2011 FAPA Conference, Palm Beach, FL
Craig Richardson

2. Introduction
 Introduction
 Background
 Current Environment
 Relationship of Fees and Growth/Development
 Conclusions

3. Background
 1970s: Growth in Florida places tremendous
pressures on demand for public facilities
 State and local government structure for funding public facilities
 Local political conditions
 Late 1970s: Handful of local governments explore
use of impact fees to fund public facilities, and adopt
ordinances
 Palm Beach and Broward counties lead the way
 Impact fees untested in courts
 Early 1980s: Palm Beach and Broward county
ordinances challenged in courts

4. Background
 Early 1980s: Broward and Palm Beach counties
successfully defend local governments use of
impact fees
 Early 1980s: Cases established fundamental
ground rules for local government use of impact fees
 Local government powers to adopt impact fees emanate for state
constitutional home rule powers

5. Background
 Early 1980s: Cases established fundamental
ground rules (cont.)
 Compliance with dual rational nexus standard required… the
local government must demonstrate a reasonable connection, or
rational nexus, between the need for additional capital facilities
and the growth in population generated by the subdivision. In
addition, the government must show a reasonable connection, or
rational nexus between the expenditure of the funds collected
and the benefits accruing to the subdivision. In order to satisfy
this later requirement, the ordinance must specifically earmark
the funds collected for use in acquiring capital facilities to benefit
the new residents.” Hollywood, Inc.
 General presumption of validity

6. Background
 Balance of 1980s: Significant expansion of local
government use of impact fees, extending into
1990s
 Heaviest use in coastal communities in southeast and southwest
Florida
 Use expanded to include a number of additional public facilities:
 Roads
 Parks
 Water/Sewage
 Police
 Fire/EMS
 Schools
 Other (Solid Wastes, Libraries, Government Buildings)

7. Background
 Balance of 1980s into 90s:Limited litigation over
impact fees during these years, with one exception
 Local governments authority and right to adopt school fees
upheld by Florida Supreme Court in St Johns County v.
Northeast Florida Homebuilders
 Justice Grimes, who wrote the appellate court opinion in
Dunedin, wrote the opinion for the court
 Reaffirmed rational nexus standard applies to impact fees, while
establishing additional parameters for school fees
 Decision opened the door even more for local governments use
of impact fees
 At this point question was whether or if state legislature would
step in and attempt to place limits on the imposition of fees –
which they did not

8. Background
 Balance of 1990s into 2000s: Local governments
continued to expand the use of impact fees
 By 2007, 42 counties had adopted e fee programs
 Many local governments updated and added fees
 In most instances updates resulted in increases in fee amounts
(especially as costs and housing prices continued to rise)
 Not unusua, by the early 2000s in many counties for the total fees
to be over $15,000
 Resulted in some litigation
 School fees
 Primary issue -- whether calculations complied with
rational nexus standard
 In mid 2000s several local governments adopted affordable
housing fee programs

9. Current Environment
 Great Recession and Aftermath
 Substantial economic downturn and decrease in home values
 In many communities, substantial inventory of housing
 Dramatic decrease in building
 Political attitude about imposition of fees changed
 Fee suspensions, reductions, and in limited instances
abolishment
 State legislature shifts burden to local governments to
demonstrate compliance with rational nexus standards
 Continued limitations on local government capacity to raise
revenue for capital public facilities
 Significant amendments to growth management laws, including
general loss of concurrency mandate (even though can still
impose requirements)

10. Conclusions
 While economic and legislative climate toward
growth management has changed, much has not
with respect to impact fees
 When growth and development picks up, there will be a need for
funding for capital facilities to accommodate
 Limited state funding
 Continued legal limitations on local government ability
to raise revenue
 Local political considerations
 Impact fees still a viable source of funding for capital public
facilities
 The concept that growth should pay for itself is alive and
well, and impact fees are a way to ensure it does

11. Conclusions
 While economic and legislative climate toward
growth management has changed, much has not
with respect to impact fees (cont.)
 Even with the shifting of burden to local government to
demonstrate compliance with rational nexus standard, standard
for adoption has not changed
 Good local government support studies met this burden
 Important to remember burden has shifted, and support
studies must use professionally accepted methods and
reasonable/sound information to calculate fees
 Good news: methods are available; sound information
can be found
 Authority to adopt fees emanates from state constitution
 Some local governments might rely more on assessments

12. QUESTIONS