Miscellaneous
MEMORANDUM
DATE:
TO:
December 17, 1991
Mark Rosch, Capital Improvements Coordinator
Monroe County
Martin L. Leitner and Susan P. Schoettle
Freilich, Leitner, Carlisle & Shortlidge
Impact Fee Fund Balances and Refunding Requirements
FROM:
SUBJECT:
1. Background
Monroe County, Florida currently imposes and collects impact fees for roads, parks, libraries,
solid waste and police facilities. Monroe County adopted the existing impact fee ordinances on February
28, 1986 as part of the Land Development Regulations (LOR's) of the County. The effective date for the
ordinances was apparently September 15, 1986; however, Ordinance No. 33-1986 which confirmed the
adoption of the LOR's may have modified the effective date. Thus, Monroe County has until September
15, 1992 or later before the refunding requirements in Article X of the LOR's apply to any existing
impact fee funds. The exact date of the initial collection of funds in each impact fee district must be
identified to determine the actual remaining time the County has to spend or encumber impact fees
collected in 1986. For each of the five (5) existing impact fees, there are three (3) unincorporated
County impact fee districts plus a Key Colony Beach district. Thus, there are twenty (20) impact fee
accounts. Each district has a separate impact fee account for the fees collected within that district, and
the funds within an account, with certain exceptions, must be expended within the district where they are
collected.
To date, Monroe County has spent no road or solid waste impact fee funds and has spent varying
amounts of park, library and police impact fee funds. The specific ordinance provisions applicable to
refunding and the time period for expending impact fee funds are discussed in Part n, below. Past
collections and expenditures and the amount of impact fee funds potentially subject to refund in 1992 are
analyzed in Part ill of this memorandum, while the steps that should be taken by the County to avoid the
necessity of refunding any impact fees are presented in Part IV.
N7477
II. Existimr ImDact Fee Ordinance Provisions on Refunding
Pursuant to the existing LOR's, Monroe County "shall" refund any impact fees not "spent or
encumbered within six (6) years from the date the fees were paid" if a refund application is submitted
within one (1) year following the end of the sixth year from the date the fee was paid.1 See ~
~ 9.5-492(f)(4)a and c. A number of administrative issues are raised by inconsistencies and lack of
clarity in the existing ordinances. The ordinance language for the road fee (~ 9.5-491(i)(3)g) and the
solid waste fee (~ 9.5-494(g)(3)c) allows the County six (6) years plus one calendar quarter from the date
the fees were paid to expend the fees,2 although the "right" to submit a refund application accrues after
the six year time limit has expired. Each of the impact fee ordinances provides for a one year period
following the end of the sixth year after payment for the submittal of a refund application to the County.
An application by the fee payor is required to trigger the refund requirement.
The impact fee ordinances for parks, libraries and police facilities indicate that refunds should be
paid to the fee payer (see. ~ ~ 9.5-493(f)(4)a, "shall be returned to the fee payer..."); however, the
presence of slightly different provisions in the road and solid waste ordinances create confusion on this
point. For example, the "present owner" must petition for a refund of unspent/unencumbered solid waste
fees (see ~ 9.5-494(g)(3)a) and for a refund of road impact fees due to noncommencement of a land
development activity. (Note that it is unlikely that a present owner other than the original fee payor
would submit a petition or have the required documentation and that it is generally the fee payor, not the
refund applicant, that has the right to appeal refund application decisions by the County Planning Director
under the existing LOR's.) Additional discrepancies in the refund provisions of the impact fee
ordinances relate to the inclusion of interest on the refunded fees (6% interest per annum required only
on road and solid waste fee refunds, ~ 9.5 491(i)(3)g and ~ 9.5-494(g)(3)c)) and to the specific
information required to be submitted in the refund application. There seems to be no rational explanation
1 Refunds must also be made if a land development activity for which impact fees have been paid
is canceled due to the noncommencement of construction if the impact fee funds have not previously
been spent or encumbered by Monroe County. See Le.. ~ 9.5-491(i)(3)c. However, the focus of this
memorandum is on refunding required because impact fee funds are not spent or encumbered within
six (6) years of the date of payment.
2 The parallel subsection in the other three impact fee ordinances refers only to a six (6) year
period. See ~ 9.5-492(f)(4)e; ~ 9.5-493(f)(4)e; ~ 9.5-495(g)(4)e; (Note that each of sections cited in
this footnote also contains an apparent typographical error and references the beginning of the six year
period as the date the fees were "encumbered" instead of the date they were paid).
H4TI
2
for the inconsistencies and ambiguities in the respective impact fee ordinances. However, they can (and
should) be eliminated.3 The existing refund provisions in the LOR's should not pose an immediate
problem if Monroe County successfully focuses its efforts on identifying the portion of collected impact
fee funds with the shortest time frame for spending or encumbering to avoid refunding.
ill. Impact Fee Funds Potentially Subiect to Refundinsz in 1992
In order to determine the amount of impact fee funds that may be subject to refunding after
September 15, 1992, we must do an accounting of current impact fee fund balances, expenditures to date,
funds subject to refunding in 1992 and funds subject to refunding in 1993 (Le.. impact fees collected in
1987). Because the accounting of impact fee funds is on a "fIrst in - fIrst out" basis (see. ~ ~ 9.5-
492(t)(4)a, Park Fee),4 identifying the amount of impact fees collected in 1986 less the total expenditures
to date will highlight the scope of the potential problem. Attachment 1, Monroe County Impact Fee
Funds - Revenues/ExpenditureslRefunds Analvsis. summarizes relevant data based on information
provided in "Sununary of Impact Fees, Effective September 30, 1991.'" The chart identifies the
following information for each impact fee district fund:
1) Current Fund Balance;
2) Expenditures to Date; and
3) Reference Date for Refunds6 - including the amount of money potentially subject
to refunding in 1992 (reference date 1986), the amount of money subject to
refunding in 1993 (reference date 1987), and the amount of funds subject to any
later reference dates.
3 The Impact Fee Procedural Ordinance, which we are authorized to prepare pursuant to our
Consulting Services Agreement with the County, will eliminate these inconsistencies by providing
uniform procedures for all impact fees.
4 "First in - first out" is the standard methodology for impact fee accounting and, although not
specified in every one of the Monroe County Impact Fee Ordinances, it should be applied to all
impact fee funds.
, This document is referenced as item #21 in the November 19, 1991 Memorandum from MarktRosch, Capital Improvements Coordinator to Martin Leitner, Impact Fee Consultant.
6 The reference date is the assumed year of collection of the impact fees. The date of each
balance was assumed to be at the end of the fIscal year; thus, the FY 1991 balance was as of
September 30, 1991.
'477
3
legislation introduced in the Florida Senate in 1991, but not passed, defmed "encumber" as "to legally
obligate by contract or otherwise commit to use by appropriation of a local government." Section 1(3),
S.B. 1522, Florida Senate - 1991. Thus, Monroe County could encumber funds by appropriation for
specific capital costs or by execution of a contract incorporating a provision that payment is to be from
impact fee funds.
v. Conclusion
Although Monroe County currently has substantial fund balances in each of its impact fee
accounts, the portion of funds potentially subject to refunding in late 1992 or early 1993 is significantly
smaller than the total fund balances. The County should, however, develop a capital improvements
program geared to expenditure of impact fees, by facility and by district, for the next five years, keeping
in mind the "reference dates" for possible refunding. If the County finds it difficult to identify
appropriate capital projects, the County should investigate the possibility of reimbursing other County
accounts for past capital expenditures attributable to new growth since 1986. In addition, the County can
allocate funds toward planning, design, engineering and other studies necessary to implement the impact
fee methodology, thereby gaining additional time for identification of capital projects.
"74n
5
The County data did not provide separate fund balances for FY 1986 and, given the short time period
between the effective date of the impact fee ordinances and the end of the fiscal year on September 30,
1986, it is possible that no fees were actually collected in FY 86. The calendar date of the initial impact
fee collections must be identified in order to accurately determine the precise date on which impact fee
funds may become subject to refunding.
Attachment 1 shows that all of the library fees and all of the police facilities fees collected in
1986 in all unincorporated County districts have been expended in compliance with the six year
expenditure requirement Thus, the County should focus on the road, park and solid waste impact fees.
Note also that Key Colony Beach has not expended any impact fees collected to date and, therefore,
should be advised to develop capital improvements plans by the end of 1992 to guide expenditures.
The funds which require immediate attention are:
Funds Subject to
Impact Fee & District Refunding in 1992
1) Road Fee District 1 $306,659.65
2) Road Fee District 2 $111,555.57
3) Road Fee District 3 $227,289.09
4) Park Fee District 1 $ 26,339.93
5) Park Fee District 2 $ 8,177.88
6) Park Fee District 3 $ 9,569.20
7) Solid Waste Fee District 1 $ 14,515.23
8) Solid Waste Fee District 2 $ 4,571.99
9) Solid Waste Fee District 3 $ 10,444.82
IV. Reauirement to Spend or Encumber Impact Fee Funds
In order to avoid the possibility of refunding impact fees, the County must spend or encumber
impact fees within six years of the date of collection. Unfortunately, the Monroe County LDR's do not
contain specific definitions for terms used in Article X - Impact Fees. Arguably the actual expenditure or
payment of funds constitutes "spending" of impact fees; however, the actions that would qualify as
"encumbering" funds are not as clear. Some guidance on the meaning of "encumber" can be derived
from extraneous sources. Webster's Third New International Dictionary (1971) defmes "encumber" as
follows: "to burden, impede or obstruct or to load with debts or other legal claims." Impact fee
7477
4
ATTACHMENT
Fee Funds - Revenues/ExDenditure/Refunds Analvsis
(as of September 10, 1991)
Monroe Count
Refunds
Reference Date for
1986
Expenditures to Date
Current Fund Balance
for Next Annual
Expenditures
(balance)
Reference Date
Balance After
~~:~~;:::::~:~:::~:::::~::nd r~:::;:~::
(funds subject to
refun,:~~:~g::~:~::::~::;:;,:~l
........................................................,'.
$477,816.12
$320,997.69
$576,817.61
$3,253.22
1987
1987
1987
1987
:rmrmmmmmmmmm}~~rm~m~m~mmm~fmrmfmmm~t~tt~~mm~m~~t~
$306,659.65
$111,555.57
$227,289.09
$0.00
t~ttmmmmmmmrrrff;~;~j~;~;~;~j~~~;~;~m~;~j;;i
$0.00
$0.00
$0.00
$0.00
t;tmmmmmmmrftnmmrmr~;~)ffft1tmmmmmm~;r~ffnmmm~
$2,225,591.67
$1,261,207.74
$2,522,357.90
$71,955.01
~tmtmmmmmm~tffftm~rj~;tmm~~~~~m~t{t
~~~tt~~~~ttttttt~~~t~tt~~t~~~~~: ~~~~~~~~~~~~~~~~~~~~~~~t~~~~~~~~tj~~~~j~~
Road Fee Funds
District 1
District 2
District 3
...... ..... ... ...... .... .~~.Y..9.~I~.~.y'. .~~.~~~.
~jtf~~~~~~~~~i~~~;mij~j;~;~;~;~;j;j;;;j;j;~1~;j;~tj;j;~;j;~j;;;~~tf:;;f~;~;j;~j;;~;;1;jt;jjj;~;;;;;;j~
Park Fee Funds
$38,286.37
$20,441.35
$44,468.00
$259.46
........................
.........................
........................
.........................
........................
.........................
................................................,
........................
1987
1987
1987
1987
$26,339.93
$8,177.88
$9,569.20
$0.00
.:.:.:.:.:.
:::::::::::
$0.00
$0.00
$7,540.00
$183,770.65
$91,285.31
$177,005.88
$6,247.43
~Itrrf~~~Jt~~~~~~~r~tmrm~trt~~rfrff~r~~~~i1~~~~t~1t~ji~~~
$7,628.93
$17,720.62
$41,633.12
$384.48
;.;.;.;.;.;.:.:.:.;.;.:.;.;.:.;.;.;.:.;.:.;.:.;.:.;.:.:
...........................
............................
.-.....................................................',
............................
............................
1987
1988
1988
1987
.,
::
$0.00
$0.00
$0.00
$0.00
.:.:.:.:.:
;.:.:.:.:.
$20,784.54
$22,476.17
$73,998.29
$130.91
..................
.:.;.:.;.;.:.:.:.:
1987
1987
1987
1987
t~~it~~~~tt~~~f~~~~iiti~~t~~~~~~tt:
$14,515.23
$4,571.99
$10,444.82
$0.00
;.:~:::::::::::::::.
$83,651.32
$41,328.75
$99,421.63
$0.00
~~i~~tr~~r~r~:~:~:~:~r~~ttf~~}~:~f:~~r~/~trrr~~~tf~~tfItffff
$0.00
$0.00
$0.00
$0.00
....................
:.:.:.:.;.:.;.:.:.:.:.:.:.:.:.:.:.:.;.:.;
:::::::::;:::::::::::;:;:;:;:;:;:;::::::'
$184,147.25
$58,274.15
$171,838.42
$15,172.05
m~~mfmmmmmmmmf{~~~i~~ji~~tlmtm1m~;~:;:;:~;~;~;~:ffrfff[Jtmmtmrf~
District 1
District 2
District 3
Key Colony Beach
!tt~~~r1t~rmri1~~~mml~1~f1~;~~j~~~ji11~1~1~1~~~1m~~j~~@~1~1~*~fjl1~~~1~jj1~1~*~1j[~[~
Library Fee Funds
District 1
District 2
District 3
$107,012.22
$75,989.58
$184,799.85
$3,200.90
~~t~~t~~~;i~i~~~1i~t~i11~1~~~~ijij~~~1ffttiitttrr~rr~~rr~~~
$12,928.54
$19,087.34
$37,143.41
$207 nQ
........
1987
1988
1987
1987
$0.00
$0.00
$0.00
$0.00
$40,844.72
$40,882.75
$155,383.97
$0.00
$115,345.41
$46,679.89
$155,383.97
$50,007.47
ulstrict 1
District 2
District 3
Key Colony Beach
~~~~i~~~~~l~1~1~t1~~~l1~~~~~~~j~~~1~~~~~~~~~~1~~;~1~j*~~~~~~~~~~~1;~~1jl~~~~~j~j~~~ili~t~~t~~1~1~~~1~1~~~~~~~~~
Funds
strict 1
strict 2
strict 3
'~~~mmfmi
991
o
December
Carlisle and Shortlidge
Freilich. Leitner,
::::::::::::::,:,:::~;:~:::f,~::~:~:r::::~;ach