TO: Honorable Mayor & Members of the North Port Commission
FROM: Peter D. Lear, CPA, CGMA, City Manager
TITLE: Discussion of Impact Fees, Deferrals, and Waivers Best Practices and Economic Fiscal Impacts
Recommended Action
Discussion and possible action on Impact Fee Deferral best practices.
Background Information
At the June 11, 2019 Commission meeting, the direction was given to staff to provide a process for impact fee deferrals. The process required the Economic Development Division, the Economic Development Board, and the Chamber of Commerce to discuss and help staff define criteria for deferment of 100% of impact fees.
Staff research highlighted a current practice that is in line with the City of North Port’s goals for commercial impact fees. This practice detailed in the attachments, allows for various ranges of deferral reductions depending on multiple variables, which provides for more diversity in the businesses that may qualify for the deferrals.
On October 14, 2019, staff met with the Chamber of Commerce and discussed suggestions for how to design and implement a comprehensive system of commercial impact fee deferrals for future developments within the City. Three benefits to the public were established through this discussion:
1. Economic Impact
2. Workforce Attraction
3. Quality of Life Enhancement
During the November 4, 2019 City Commission Workshop, Commission directed staff, to use Cape Coral (Attachment 1) as a guide for impact fee deferrals and work with the Economic Development Division to bring a list of targeted industries to the Commission.
Planning staff researched economic development in the state of Florida with the assistance of the City’s Economic Development Division. Using research done by Enterprise Florida, Inc. (EFI), staff highlighted targeted industries that would be of interest to the City of North Port. The targeted industries were broken down into two main categories: manufacturing, processing, fabrication, etc.; and delivery services, personal and professional services, etc. A second draft retained the same spirit of each category but included more detailed business types specific to Florida. Category One includes aviation & aerospace, life sciences, manufacturing, and defense and homeland security. Category Two includes information technologies, financial & professional services, logistics and distribution, cleantech, and headquarters. These industries were selected as the best prospects for Florida cities and should be attainable for the City of North Port. To ensure that the application of the impact fee deferral program ends up with the right end users, staff drafted definitions of these categories (Attachment 2).
In the same meeting, Commission directed staff to address the use of “stackable” deferrals through the following consensus:
“Bring back more information regarding the stacking of deferrals for existing businesses.”
Staff also researched the best practices for deferring impact fee payments to existing businesses for purposes of expansion. Research on the subject showed that allowing deferrals to be stacked concurrently allowed for the same fiscal benefits while still offering the City security through the deferral’s own contract. Stacking deferrals allows for business growth and buyouts to use the benefits that come with deferrals without losing the ability to use deferrals on future projects.
Staff also included examples that were created using a program from Information DataSource that can assist in assessing future impact fees by breaking down financial impacts locally and throughout the county. The primary example (North Port IDS Demo - Summary Report, North Port IDS Demo - Detailed Report, and Copy of North Port IDS Data) was done using a business model that was previously proposed to economic development. The other examples (IDS Conservative Project Allman and IDS Conservative Project Rolling Stone) were developed from businesses that were proposed to Sarasota County.
Strategic Plan
Update the Unified Land Development Code and City code to reflect best practices, current priorities, and legal compliance.
Financial Impact
N/A
Procurement
N/A
Attachments:
1. Cape Coral Deferral Program
2. Definitions for Impact Fee Business Categories
3. Memo - Impact Fee Deferral Economic Impact
4. PowerPoint: Impact Fee Deferral
Prepared by: Carl Benge, Planner
Mel Thomas, Economic Development Manager
Department Director: Frank Miles, MPA, Director, Neighborhood Development Services