Sunday, January 4, 2015

Moving the Urban Service Boundary will cost every taxpayer

Fiscal neutrality at core of yet another 2050-plan dust-up

Published: Saturday, January 3, 2015 at 9:07 p.m.
Last Modified: Saturday, January 3, 2015 at 9:07 p.m.
SARASOTA - Skeptics of Sarasota County’s reshaped 2050 plan say the long-term growth blueprint dilutes protection from overdevelopment in the community’s rural east.
Soon, they may have even more reason to worry.
Consultants are finishing up a first draft of proposals that will determine the methods used by developers to demonstrate that their projects won’t burden taxpayers.
That concept was a key requirement of 2050.
But with a Sarasota County Commission that is now more developer-friendly than at any time in at least a decade, some growth activists worry that 2050’s last remaining policy will get the same treatment as other safeguards that have already been watered-down or repealed.
The measure of a private development’s so-called “fiscal neutrality” is aimed at ensuring that the county can handle the potential money strain on roads, utility lines and emergency services, which all tend to cost more in remote areas east of Interstate 75.
Already, developers are fighting to loosen the requirement. They have spent millions of dollars to prove that their communities are a boon to the economy, and they argue that the tougher regulations will only increase the cost of homes, squeezing out the middle class.
One consultant hired by Sarasota County has proposed gutting the fiscal neutrality condition altogether.
At the same time, there have been whispers among developers and community groups that the county will ultimately propose moving its Urban Service Boundary — a line that dictates where development should be concentrated — farther east, paving the way for more potentially controversial growth.
“Fiscal neutrality is the means to ensure development outside the Urban Service Boundary pays for its infrastructure costs,” said Cathy Antunes, president of Sarasota Citizens for Responsible Government. “Make fiscal neutrality toothless and the Urban Service Boundary is worthless. This is the back-door way to eliminate the Urban Service Boundary.”
She added, “People are very worried about it.”
After developers argued that they were too restricted, county commissioners approved a third and final round of revisions to the 2050 plan in late October.
That policy governs development on some 60,000, mostly rural acres east of I-75. The concept was first crafted more than a decade ago as an alternative to the guidelines of the Urban Service Boundary, which discourages intense development east of the highway.
But developers and pro-business groups rallied for more flexibility and the commissioners ultimately agreed. The changes came despite concerns from some about the impact on the environment, an already chocked road system and spending budgets still recovering from the Great Recession.
The final step of the plan: Determine how the fiscal neutrality of a particular new development is to be calculated.
Sarasota County hired a consulting firm to research the economic benefits of new development — like higher property taxes and collection fees from building permits — and to weigh those against potentially adverse impacts, including the costs of new roads, increased school capacity and the expense of providing public safety for new residents.
As part of 2050, developers must obtain a third-party review for each new building project in the restricted areas to show that it is financially beneficial to the overall population.
A first draft of that methodology report is expected to be complete by AECOM in February, with revisions and public hearings planned before a final decision is made by county commissioners, likely sometime this summer.
“This is a way to just make it clear and have that same set of inputs for development,” said Allen Parsons, long-range planner for Sarasota County. “It really is a technical exercise, and that’s why we needed an economist.”
The county has created a fiscal neutrality page on its website for public feedback.
But already the process has created a backlash with some residents, who have blitzed county officials with emails questioning the transparency of the process.
“All of the public will have the same opportunity for input,” Parsons said.
The new methodology comes in the wake of an earlier report commissioned by Sarasota County to review the fiscal neutrality concept in its entirety.
That analysis by Laffer Associates suggested that “on average, growth does pay for itself.” The report’s overall recommendation was to eliminate the fiscal neutrality requirement from 2050.
“The question of fiscal neutrality is moot in Sarasota County,” the report states. “All that is truly required is to properly specify the impact fees on new development. This would remove many of the negative effects of the fiscal neutrality provision, while still maintaining fiscal neutrality of new development.”
But impact fees have been slashed on all levels to help spur development through the prolonged housing slump.
Sarasota County cut road impact fees in half in January 2011, a reduction from already reduced rates, and then voted in 2013 to extend those discounts to developers for another two years.
The School Board also voted this year to extend a moratorium on impact fees, which were first set aside two years ago, and the city of Sarasota recently adopted new impact fees that undercut the county with a markdown of 57 percent in most cases.
As a result, the impact fees collected by Sarasota County have shrunk from $19.7 million in 2006 to just $9.1 million in 2013. Despite an ongoing economic recovery, Sarasota County’s impact fees remain lower than the $12.1 million collected even at the nadir of the recession in 2008, records show.
Meanwhile, new large-scale development has spiked, especially in rural eastern areas where improvements to county services have not kept pace.
Some growth control advocates now fear that trend will only proliferate with new fiscal neutrality rules, creating problems with traffic, wildlife preservation efforts and public safety.
Some of those impacts already can been seen. Stretches of 32 Sarasota County roads were graded “D” or worse for their report card level of service in 2013. That is nearly half of the roads where traffic is counted, traffic records show.
At least 21 major roads in Sarasota County have slipped below the government’s minimum level of service, which in many cases was a low standard.
To handle new population upticks in the University Parkway corridor, the county has had to tap into reserves to build a new fire station, and major developers have proposed eliminating certain preserve areas to increase density in their projects. A standard fiscal neutrality policy is designed to ensure those needed improvements are covered by developers.
“This will protect everybody, the county and the developers,” Sarasota County Commissioner Christine Robinson said of the new methodology. “It creates a standard that is easy for everyone, and it should take away some of the controversy.”
Local homebuilders say they believe their developments should be financially beneficial to the county.
They just don’t want to have to pay to prove it.
Neal Communities, which is developing one of the two projects approved under Sarasota 2050 so far, has spent about $1.5 million navigating the new public policy. That includes more than $161,000 on fiscal neutrality for one development alone. That is more than $1,000 per home, company founder and CEO Pat Neal said.
That means higher housing prices, carving away an already thin supply for affordable offerings in Southwest Florida, Neal says. It also means less money Neal has to spend on hiring people, and the developer said he suspects it is the same for other builders throughout the region.
With the new rules, Sarasota County becomes one of just six government jurisdictions in the nation that requires developers to track fiscal neutrality for each individual project — from the first home to the last, Neal said.
“Everybody believes growth should pay for itself — that’s public policy in our state,” he said. “And everybody in our business believes what we do is fiscally neutral. We think we are contributing members of the local economy, and we can demonstrate that, but the only place we’re required to do so is in Sarasota.”
“I would haunt my children if they even applied for a Sarasota County 2050 project because it’s just so expensive.”
The core of the fiscal neutrality argument — and many of those surrounding Sarasota 2050 as a whole — relates to restrictions first created with the Urban Service Boundary.
The concept dates back to the early 1980s, when Sarasota County planners generally intended to keep intense development west of the interstate from where the boundary was drawn. Areas east of I-75 were set aside for agriculture, open spaces and nature preserves.
The idea was to create an urban core, so that demand for basic government services could be delivered to the general population more efficiently. The theory is that the more the population is spread out, the more it costs per capita to provide those necessities.
The boundary also has helped prevent the type of “sprawl” found in many other Florida communities.
“The Urban service Boundary has helped concentrate density, preserve open space and create a unique and special place for Sarasota County,” said former county commissioner Jon Thaxton, a longtime proponent of 2050’s measures. “That’s the reality.”
But as population climbed through the years and demand for new housing swelled, builders have petitioned Sarasota County to move the boundary further east, where vacant land was plentiful.
The 2050 plan was ultimately adopted as an alternative.
With that plan now in place, some fear a lax fiscal neutrality policy will further dilute the protections of the Urban Service Boundary. Any decision to move the boundary would require a unanimous 5-0 vote by commissioners.
“That’s what this commission was elected to do,” said Bill Zoller, a representative of community groups who has protested changes to 2050. “They have five votes, if they choose to move it, at this point. This will certainly come up.
“The pressure from developers will build.”

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