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City Orders Impact Fee Study On New Data

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By RICH SHOPES, The Tampa Tribune

Published: December 22, 2007

TAMPA - The city is considering increasing for the first time in 18 years the fees it charges on new construction to offset the ballooning cost of roads.

The Tampa City Council voted Thursday to spend $220,000 on a six-month study to look at transportation impact fees and whether the fees charged on new houses, condominiums, restaurants, banks and other structures should be raised and, if so, by how much.

For years, officials have dodged the politically sensitive issue of increasing the fees. First approved in 1986 and last updated three years later, the one-time fees were established to offset road costs created by growth. The fees usually get passed on to homebuyers.

Backers say impact fees help pay for the costs associated with growth. Opponents, including builders, say the fees are a form of double taxation and warn they can hurt low-income homebuyers.

"If you're talking about another $1,000 to $2,000 and $3,000, that can price the first-time buyer right out of the market," said Joe Narkiewicz, executive vice president of the Tampa Bay Builders Association.

There's no word yet on how high Tampa wants to raise its transportation impact fees. Compared with other Bay area governments, Tampa's fees are on the low end.

For someone building a 1,500-square-foot house inside the city limits in North Tampa, for example, the city charges $1,344. That compares with $1,786 for a house in Brandon, outside the city limits in Hillsborough County; $2,066 in Pinellas County; and $6,820 in Pasco.

Road Costs Soaring

However, as Tampa goes through the exercise of studying its fees and debating their effect on growth, a process that could stretch to a year, it risks falling farther behind. That's because road costs keep rising.

Since 2003, the price of asphalt has risen nearly 80 percent and structural concrete has gone up 42 percent, according to a Department of Transportation report released this spring.

Rising prices for oil, a chief component of asphalt, are the main culprit but also contributing is the increasing demand worldwide for concrete and structural steel. That's boosting prices for the materials back home.

City officials tried to begin the study last year but had to delay when they couldn't agree on its parameters, such as whether all six impact fee zones should be included. Some zones, such as South Tampa's, have less growth than others.

Even before last year, politicians were slow to tackle the fees.

Steve Daignault, administrator for public works and utilities, said officials have tended to hand off the issue over the years because no one wanted to hinder growth.

"It's one of those things. When growth and development are going good, you don't want to increase things and then create an impediment to growth. And when things are slow, you don't want to increase the fees and stifle growth," he said.

Narkiewicz said it's never a good time to talk about raising impact fees, but doing so during a housing slump is a particularly bad time. "Why don't you wait until you see signs of recovery and then start your study," he said.

Fee Increase Not Imminent

City officials counter that they won't increase fees right away - they're only studying them for now - and that other governments in Florida have much higher fees.

Last year, Hillsborough County increased its school impact fees from $196 on a new three-bedroom house to $4,000.

This past October, Pasco raised its transportation impact fees on a variety of levels. For a 1,500-square-foot house, the fee jumped from $4,230 to $6,820. For a 2,500-square-foot house, it rose nearly 150 percent to $10,500.

Tampa could see similar increases if it uses the same methodology Pasco used.

Michele Baker, Pasco's chief assistant administrator, said its impact fee study relied on 2006 data for real estate and right-of-way acquisition, and pricing data from the Department of Transportation's District 7, the same district that encompasses Tampa.

"Between 2003 and 2006, total construction costs have increased by 300 percent," Baker said. "Tampa is relying on data that hasn't changed in 18 years. No wonder they're so low."

Councilwoman Linda Saul-Sena said she wants the study to include sidewalk costs and whether a fleet of downtown shuttle buses could be funded by fees. Tindale-Oliver & Associates, the firm that studied Pasco's impact fees, was selected for Tampa's study.

"I want them to look at not just the fees, but how they can be spent," she said.

In the 2006 fiscal year, the fees helped pay for the widening of Manhattan Avenue, the reconstruction of 40th Street and intersection improvements in the central business district, among other projects. The total funneled toward road projects was $6.4 million. In the last fiscal year, which ended Sept. 30, that figure was $5.7 million.

"I don't think the city is trying to be a harsh environment for developers, but I think it's appropriate that development pay for itself," Councilman John Dingfelder said.

WHAT'S NEXT

In six months, consultant Tindale-Oliver will present a study of Tampa's transportation impact fees. At that point the administration and Tampa City Council will debate whether to increase the fees for the first time in 18 years.

Reporter Rich Shopes can be reached at (813) 259-7633 or at rshopes@tampatrib.com.

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