TO: Honorable Mayor & Members of the North Port Commission
FROM: A. Jerome Fletcher II, ICMA-CM, MPA, City Manager
TITLE: Discussion and Possible Direction Regarding Amendments to Chapter 58, Code of the City of North Port, Florida, to Provide Affordable Housing Impact Fee Exemption or Reduction, Government Use Impact Fee Exemption, Amend the Impact Fee Deferral Program, and Process Improvements.
Recommended Action
Option 1: Direct staff to prepare an ordinance for City Commission consideration, including specific direction and consensus regarding the following areas of concern to be included in a draft ordinance:
Option 1A: Include an affordable housing impact fee waiver or reduction based on Sarasota County’s model.
Option 1B: Include a government use impact fee exemption.
Option 1C: Include the proposed updated deferral program eligibility and refined program requirements.
Option 1D: Include the proposed process improvements.
City Commission Options
Option 1: Direct staff to prepare an ordinance for City Commission consideration, including specific direction regarding the following areas of concern to be included in a draft ordinance.
• Pros: Addresses impact fee areas of concern that have been under discussion for over five years.
• Cons: Investment of staff time to finalize and present the ordinance.
Option 1A: Include an affordable housing impact fee waiver or reduction based on Sarasota County’s model.
• Pros:
o Encourages the development of affordable housing, expanding housing options for persons of varying socio-economic status consistent with the Comprehensive Plan.
o The City is not required to utilize other revenue sources to offset the effect on the impact fee revenue funds.
• Cons:
o Reduced impact fee revenue for future capacity improvements across all impact fee generating departments and districts.
o Impact fee rates for non-exempt developments may not be manipulated to offset the effect on the impact fee revenue funds.
Option 1B: Include a government use impact fee exemption.
• Pros:
o Eliminates that which is effectively double taxation on citizens for construction of public facilities.
o Reduces overall construction costs for government projects.
o Liberates funds from being restricted for use to only impact fee fund capital improvements.
o The City is not required to utilize other revenue sources to offset the effect on the impact fee revenue funds.
o Impact fees will be due and payable if the facility ever ceases being used for government purposes.
• Cons:
o Reduced impact fee revenue for future capacity improvements across all impact fee generating departments and districts.
o Impact fee rates for non-exempt developments may not be manipulated to offset the effect on the impact fee revenue funds.
Option 1C: Include the proposed updated deferral program eligibility and refined program requirements.
• Pros:
o Improves a never-utilized program adding a tool to the City’s Economic Development toolbox.
o May ease the burden of a business relocating to or expanding in North Port.
o Expands the eligible development types and bases the eligibility on building size versus capital investment.
o Allows security in the form of a performance bond.
o Extends the deferral timeframe from 3 years to 5 years.
• Cons: Delays the receipt of impact fee revenues.
Option 1D: Include the proposed process improvements.
• Pros: Ensures consistent application of regulations.
• Cons: There are no identifiable disadvantages to including the proposed process improvements.
Option 2: Direct staff to prepare an ordinance for City Commission consideration, including specific direction and consensus regarding the following areas of concern to be included in a draft ordinance.
o Pros: Addresses impact fee areas of concern that have been under discussion for over five years.
• Cons: Investment of staff time to finalize and present the ordinance.
Option 2A: Include an affordable housing impact fee waiver or reduction based on a Commission directed model or formula.
• Pros:
o May encourage the development of affordable housing, expanding housing options for persons of varying socio-economic status. consistent with the Comprehensive Plan.
o The City is not required to utilize other revenue sources to offset the effect on the impact fee revenue funds.
• Cons:
o Reduced impact fee revenue for future capacity improvements across all impact fee generating departments and districts.
o Impact fee rates for non-exempt developments may not be manipulated to offset the effect on the impact fee revenue funds.
Option 2B: Include a government use impact fee exemption.
• Pros:
o Eliminates that which is effectively double taxation on citizens for construction of public facilities.
o Reduces overall construction costs for government projects.
o Liberates funds from being restricted for use to only impact fee fund capital improvements.
o The City is not required to utilize other revenue sources to offset the effect on the impact fee revenue funds.
• Cons:
o Reduced impact fee revenue for future capacity improvements across all impact fee generating departments and districts.
o Impact fee rates for non-exempt developments may not be manipulated to offset the effect on the impact fee revenue funds.
Option 2C: Include the proposed updated deferral program eligibility and refined program requirements, but do not change the deferral timeframe.
• Pros:
o Improves a never-utilized program adding a tool to the City’s Economic Development toolbox.
o May ease the burden of a business relocating to or expanding in North Port.
o Expands the eligible development types and bases the eligibility on building size versus capital investment.
o Allows security in the form of a performance bond.
• Cons: Delays the receipt of impact fee revenues.
Option 2D: Include the proposed process improvements.
• Pros: Ensures consistent application of regulations.
• Cons: There are no identifiable disadvantages to including the proposed process improvements.
Option 3: Direct staff to prepare an ordinance for City Commission consideration eliminating the impact fee deferral program and including the government use exemption and process improvements.
• Pros:
o Eliminates the current ineffective and unutilized impact fee deferral program.
o Eliminates that which is effectively double taxation on citizens for construction of public facilities.
o Reduces overall construction costs for government projects.
o Liberates funds from being restricted for use to only impact fee fund capital improvements.
o The City is not required to utilize other revenue sources to offset the effect on the impact fee revenue funds.
o Includes process improvement to ensure consistent application of regulations.
• Cons:
o Fails to address all the impact fee areas of concern that have been under discussion for over five years.
o Removes a tool from the Economic Development toolbox.
o Investment of staff time to finalize and present the ordinance.
o Reduced impact fee revenue for future capacity improvements across all impact fee generating departments and districts.
o Impact fee rates for non-exempt developments may not be manipulated to offset the effect on the impact fee revenue funds.
Option 4: Decline proceeding with an ordinance amending Chapter 58 of the Code of the City of North Port.
• Pros: Staff can focus efforts on other projects.
• Cons: Fails to address impact fee areas of concern that have been under discussion for over five years.
Background Information
Amendments to Chapter 58 of the Code of the City of North Port have long been contemplated to provide an incentive program and to improve the impact fee deferral program. A brief history is provided below.
Ø April 28, 2020: The Commission provided feedback at its Regular Meeting regarding Impact Fee deferrals.
Ø March 7, 2022: The Commission held a Workshop to discuss an Impact Fee Incentive Program.
Ø September 5, 2023: At a Commission Workshop, staff presented the current Impact Fee strategy and received direction, including combining the deferral and incentive programs into one ordinance and determining exemption levels for affordable housing developments.
Ø April 15, 2025: The Community Economic Development Advisory Board reviewed the proposed ordinance (2025-11) and voted unanimously to recommend its adoption by the City Commission.
Ø May 13, 2025: During the first reading of Ordinance No. 2025-11, there was significant discussion regarding at what rate affordable housing would be incentivized. The City Commission also asked the following questions regarding affordable housing reductions. The responses were provided as part of the staff summary for the ordinance second reading:
Question 3: Can Commission adjust the affordable housing Impact Fee reductions as outlined in Sec.58.7(f)?
Response 3: The percentages relating to impact fee reductions for affordable housing can be adjusted as a policy matter by Commission. It is recommended that the record reflect the discussion behind the policy that is to be set by Commission.
Question 4: Must the City offset the reductions relating to affordable housing projects as outlined in Sec.58.7(f)?
Response 4: Per Florida Statute 163.31801(11) “If a county, municipality, or special district provides such an exception or waiver [for affordable housing], it is not required to use any revenues to offset the impact.”
Ø May 27, 2025: The City Commission, on second reading, denied proposed Ordinance No. 2025-11 which proposed creating the Targeted Industry Incentive Program and Amending the Impact Fee Deferral Program. The denial was largely based on the City Commission’s reluctance to incentivize targeted industry businesses as the City would have to make the impact fee funds whole with other revenue streams. Like the May 13 meeting, discussion continued as to how to determine the appropriate level of reduction/exemption for affordable housing. Information regarding other local government exempt/reduce impact fees for affordable housing is included with this agenda item.
Ø Ongoing: For at least the past four years, there have been continued conversation regarding the imposition of impact fees on government uses. With no clear statutory exemption, the City has always assessed impact fees on government uses, including its own City facilities. Development Services staff conducted research and developed a Government Use Exemption from Impact Fees Summary to develop a framework for support to exempt those uses from impact fees. That summary was provided to the City Attorney’s Office via legal request. The response to legal request memo specifies that the City may exempt government uses from impact fees, subject to an approved amendment to Chapter 58.
Strategic Plan
Economic Development and Growth Management
Financial Impact
Not applicable.
Procurement
Not applicable.
Attachments:
1. Other Local Government Impact Fee Reductions on Affordable Housing
2. Government Use Exemption from Impact Fees Summary
3. Response to Legal Request - Impact Fee Exemption for Government Use (2846)
4. Draft Impact Fee Deferral Program
5. Staff Presentation
Prepared by: Lori Barnes, AICP, CPM, Deputy Director, Development Services
Department Director: Alaina Ray, AICP, Development Services Director