Educational Impact Fees

Alternative Impact Fee Analysis for

55 WestThe Paramount

Verde

Why are we here? The Orange County Educational Impact

Fee ordinance allows a property owner to calculate an alternate impact fee if the fees being charged are in excess of the impacts generated by the project

Impact fees MUST bear a rational nexus to the impacts created by the project or else be deemed to be an illegal tax-They must meet the dual rational nexus test

What is the dual rational nexus test? It must make rational-or common-sense There must be a “nexus” – or connection

1. Between the need for additional school capacity and the growth and population generated by the project that is paying the fees

and

2. Between the money to be collected and the benefits accruing to the project paying the

money

Official Response to PetitionsFrom OCPS:

Contrary to Florida case law and State Constitution Potential exists for conversion of impact fee to a user fee There are no legal restrictions prohibiting future students from

residing in units Results in higher impact fees for other users

From Orange County: Adopts OCPS position Alternative fee calculations not analyzed on a county wide basis

What are they?

55 West Under construction on Church Street405 condo units32 stories with structured parkingRetail uses on ground floor$1.4 million in Educational Impact Fees paid

55 West

What are they?

The ParamountUnder construction on Central Avenue313 condo units16 stories with structured parkingPublix grocery store on ground floor$1.2 million in Educational Impact Fees

paid

The Paramount

What are they?

VerdeTo be constructed on North Orange Avenue484 rental units35 stories with structured parkingRetail uses on ground floorNo Educational Impact Fees paid yet

Verde

Common Characteristics

Densities are all approximately 200 DU/A All projects are high rise structures ranging

from 16 to 35 stories All projects have structured parking All projects have ground floor retail uses There are no family amenities in any project

What this case is NOT about This case is NOT about establishing a new

land use category for impact fees This case is NOT about whether any of

these projects received incentives or bonuses from the City of Orlando

This case is NOT about the proposed increase in impact fees

This case is NOT about the needs of OCPS for funding their budget

This case is NOT about imposing a restriction against children for each structure

So what is this case about?

Whether the impact fee fairly represents the cost to the school system due to the impacts of the projects

Whether the OCPS interpretation of your ordinance can be supported by the law

What the “permanent physical characteristics” of a structure might be to constitute grounds for using an alternative impact fee

What the appropriate amount of fee should be

Permanent Physical Characteristics

Why is that phrase in the Ordinance?Effort was made by developers to ask

Orange County to establish a separate category for high rise structures

Orange County made the decision not to establish a separate category

Compromise was language in ordinance that would allow high rise developers to prove their position on a case by case basis

Our Analysis We did not attack or question any component of

OCPS methodology calculations EXCEPT for student generation rate

We took actual information from OCPS as to the present and historical facts regarding actual school impacts

Actual facts from school board unquestionably shows that actual impacts of ALL high rise structures is far less than what the school board would calculate

The Question to be Decided… How much lower should the fee be in such circumstances? Projects analysis reflects a fee of $922 per unit based upon a

conservative student generation rate (“SGR”)OCPS SGR .248 students/unitActual SGR* .017 students/unitActual SGR** .001 students/unitProposed SGR .060 students/unit

* Units built within last 5 years

**Units built more than 5 years ago

Comparison of Rates

Student Comparisons by Project

7 6 9

Total Student Comparisons

Fiscal Results of Analysis The Paramount

Amount Paid=$1,191,591 Amount Proposed=$288,586 Amount of Refund=$903,005

55 West Amount Paid=$1, 381,941 Amount Proposed=$373,410 Amount of Refund=$1,008,531

Verde Amount Paid=0 Amount Proposed=$446,248 Amount of Refund=NA

How we got there

Ordinance allows any one of three different methods of calculating alternative fee

Applicants used ALL three methods All methods showed a much reduced

impact on the school system by buildings having the characteristics of the applicants

So what did OCPS say? Kept insisting that applicants wanted a

new category of rates and that was a policy decision by the BCC

Our Response: No we don’t! That we needed to undertake a County

wide study instead of one concentrated in downtown Orlando

Our Response: This land use category only exists in downtown Orlando. Moreover, this case is about individual buildings and not about establishing a County wide category

What did OCPS say? That our study was “just a snapshot in

time” and was therefore inadequate Our Response: All such studies,

including the OCPS study itself, are “just snapshots in time”

That in the future, more families could move into the “permanent structure”

Our Response: Historically that is not true in Orange County. Common sense (as well as the facts) would dictate that these structures will, during their economic life, never result in the impact calculated by OCPS

What did OCPS say? Kept arguing that only way to effect a

limitation on impact was a child restriction

Our Response: This issue deals with permanent physical characteristics of the structure

Details of Our Study

Section 23-144-Alternative Impact Fee Calculations(b) The alternative school impact fee calculations shall be

calculated…

(1) based on the data, information and assumptions contained in the Ordinance and Henderson Young Impact Fee {2000 Census comparison}; or

(2) based on an independent source that is a generally accepted standard source of demographic and education planning {EASI Analysis}; or

(3) based on a local study supported by a database adequate for the conclusion contained in the study performed to a generally accepted methodology of education planning {DDB Study}

What is the downside of a denial to Orange County and OCPS? To be valid, school impact fee

ordinance MUST contain a meaningful alternative impact fee methodology

Orange County’s ordinance, on its face, has at least three problem provisions impacting its validity:1. Requirement that maximum possible impact be used

2. Requirement for a county wide analysis

3. Total lack of guidelines and standards for alternative study

What is the downside of a denial to Orange County and OCPS?Orange County’s application of the

alternative impact fee calculation must be reasonable Suggestions that petitioner’s 3 forms of analysis are wrong

without providing meaningful direction is unreasonable

{Note that OCPS has ALL the data and has never

provided any facts on high rise student generation rates to the contrary}

Requirement that maximum impact be presumed over the fullness of time makes any alternative impact fee impossible

What is the downside of a denial to Orange County and OCPS?

Meaningful alternative impact fee opportunity is an absolute requirement of a valid ordinance

Severability clause does not save an ordinance where an integral component is found invalid

Real possibility that all school impact fees collected under an invalid ordinance must be refunded to all

We have proven our case! The impacts from these three specific

high rise projects, all of which have structured parking with densities of approximately 200 DU/A, are substantially less than the school impact fee presumes

So, either accept the $922 per unit calculated by applicant OR find a different fee based upon competent substantial evidence