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Impact fees provide a jolt

Some say Mayor Iorio was decisive in creating the fees for new development; critics say the move was deceptive.

By JANET ZINK and MICHAEL VAN SICKLER
Published January 10, 2006

TAMPA - Last week, a top official with the Tampa Bay Builders Association met with Mayor Pam Iorio for a routine update on industry issues. Iorio told him there would soon be an announcement on water that might affect builders.

But Joseph Narkiewicz said he was stunned two days later when Iorio announced she had created a $1,500-per-unit impact fee to pay for a $48-million water distribution line for South Tampa.

"Most communities will provide notice of an increase in such fees," Narkiewicz said Monday. "As it is now, there's pure turmoil."

Critics say Iorio misstepped by not bringing builders into the process earlier. Others applaud her for taking a quick and decisive stance.

"I'm glad for once government has turned around and shoved it right into the developers," said Mike Hursey, president of the Gandy Civic Association at Sun Bay South, a neighborhood slated for thousands of new condominiums and houses.

Some City Council members, who were briefed last week on the fee, agreed that steps need to be taken to provide water service to the massive influx of development in South Tampa, and developers should help pay for new water pipes.

But they say they should have been given a heads-up about the policy before hearing about it from newspaper reporters.

"It's not necessarily what you do, it's how you do it," said council member Rose Ferlita. "Everybody likes to feel their input is important. The surprise attack doesn't work. It's not accepted well, it's not digested well."

But Iorio, who has expressed frustration with the slow pace of government, defended the process.

"There are dozens and dozens of affected people," she said. Iorio added that engaging them all in the discussion would have been time-consuming and would have delayed construction projects or prevented the city from charging the fee on major projects now in the works.

Her decision was well researched, she said. Reiss Environmental Inc. spent nine months studying the city's water distribution system in South Tampa. A Tallahassee law firm with expertise on utility rates and fees helped determine the best way to pay for the pipe, said Steve Daignault, the city's administrator for public works and utilities.

But that nine months of study didn't include conversations with developers. Iorio and her staff will take care of that in the coming weeks.

"If any of the technical aspects are wrong, we'll revise accordingly," she said.

The pipe needs to be built, she said, and she didn't want to raise customers' water rates to do it.

"When you have the need for a major distribution line and it's going to cost $48-million and the only reason you need it is because of new projects, then new construction should pay for it," she said.

Still, council members Kevin White and Shawn Harrison said a courtesy call to developers, if not more, would have been prudent.

"I don't agree that we should be able to impose that kind of fee on any entity, citizen or group of individuals, without a public hearing," White said.

According to city code, the water department can establish what it calls a "contribution to aid in construction" if the city can't meet a construction project's water needs with existing infrastructure. The fee doesn't require a public hearing or the City Council's approval.

Harrison said he'll ask the council to consider changing the code.

"I am troubled by the procedure. I didn't know the administration had that type of authority to unilaterally impose an impact fee of this nature," Harrison said. "It's kind of scary."

At least one politician hopes Iorio's action will catch on.

Hillsborough County Commissioner Kathy Castor, who represents South Tampa, has tried without success to get commissionersto raise impact fees on new homes that would help pay for new schools.

"This shows Hillsborough County that other jurisdictions are addressing growth," Castor said. "It's more fair and equitable for new development to pay than for longtime residents to pay. This sends a message that developers need to pay their fair share."

Unlike Tampa, the St. Petersburg mayor can't create a water impact fee without the City Council's permission. The council also would require a public hearing before voting on any new fee, according to City Attorney John Wolfe.

But it's unlikely an impact fee would be necessary in St. Petersburg, at least in the immediate future, said Patricia Anderson, water resources director. The city's water system currently has capacity to pump more than 68-million gallons per day, while use is only at 32-million gallons, Anderson said.

While a developer creating a major new housing project might have to pay to tap into the city's water, there's no need for an overall impact fee to increase the system's capacity, she added.

"There's nothing even in the planning stages like what Tampa's doing," Anderson said.

Narkiewicz said some builders will have to reconfigure their proj-ects now that a water impact fee is in place for most of Tampa south of Dr. Martin Luther King Jr. Boulevard.

"There are contracts that have been signed that have not taken into account the impact fees. There are people who got loans that didn't take into account impact fees," he said.

The fee, for example, will add $3-million to the cost of building 2,000 units in The Heights, a proposed community on the northern edge of downtown. That cost will likely be passed on to home buyers, Narkiewicz said.

Developer Michael McGuinness has already pulled permits on 257 units for the Towers of Channelside, so he will avoid the new fee that would have cost him $385,500. But he's considering another project that will have to pay the fee.

It's just one more burden, he said. "It seems the costs of everything are going up."

While he said it was a "serious flaw" in city code that allowed the fee to get passed without public discussion, McGuinness doesn't expect any political or economic backlash: "It won't haunt the mayor. It won't affect voters. It won't stop developers from investing."

Vicki Pollyea, president of Bayshore Gardens Neighborhood Association, said she respects Iorio's "gut level decision."

"Nobody likes to be told about something after the fact but I think it was almost an emergency situation," Pollyea said. "We are so behind the nation and state in the impact fees we charge and we have so many problems with water."

Construction of the 10-mile pipe from the David L. Tippin Water Treatment Plant on 30th Street near the Hillsborough River through downtown to the Interbay area is scheduled to start in 2007.

[Last modified January 10, 2006, 05:15:55]