CDK Group, Inc.

CONTACT:
Charles D. Kidd
CDK Group Inc
Phone Number: 863-385-5149
Cell Phone: 863-381-4240
Fax: l863-382-9136
Email:ckidd@cdkgroup.biz

KIDD QUESTIONS NEED FOR IMPACT FEES, SUGGESTS THAT IF ANY ARE IMPLEMENT, THAT THE IMPACT FEES BE IMPLEMENTED AT 33% ACROSS THE BOARD ONLY IF THERE IS A DOLLAR FOR DOLLAR REDUCTION IN AD VALORUM TAXES

Sebring, FL –July 17, 2006 – I just wanted to go on record that I can not support Impact Fees imposed at the levels proposed by Bob Bullard and the County Commission.

It is preposterous that in a year that our county property tax base increases revenues by $40 million (as stated in the July 16, 2006 News Sun) that our commissioners would ask for an ADDITIONAL $20 million per year tax increase under the guise of making everyone pay their own share. They must take us citizens for simpletons.

The above numbers came from a News Sun quote by Mr. Rick Helms, assistant county administrator. “The real property tax base grew about 40 percent over 2005, assistant county administrator Rick Helms said Monday. “That is a significant increase,” Helms said, explaining that last year the base grew about 20 percent. He further states that county residents can expect another year or two of similar increases because “the growth tax base lags behind the market,”

So where is this dramatic need for more money? If our spending is increasing by amounts larger than 40 percent or $40 million then something is amiss. Why are we having another $20 million dollar tax increase burden pushed upon us? And does anyone think that property taxes will be reduced dollar for dollar if this piece of legislation passes?

The presenters of this proposal have categorically stated that in no instances have impact fees slowed growth. I take issue with how they can make that statement when virtually none of our peer counties even have impact fees. I think most would agree that we have very little in common with the Hillsborough and Palm Beach Counties (each with over 1,000,000 in population). Those two counties happen to be the two counties Mr. Bullard was quoted as using as an example of impact fees not affecting growth. Mr. Bullard stated in the June 9th Highlands Today that “fears of higher impact fees hurting development among residents of Palm Beach and Hillsborough counties proved fruitless. Bullard said both counties instead grew at much faster rates.””

“I have attached a copy of each county’s impact fee schedule to this statement, not to embarrass Mr. Bullard, but to show how utterly absurd that example is and how little research was put into this proposal if that is the best comparison we can make.”

Hillsborough’s highest impact fee (including all impact fees) for a 5 Bedroom house is $3,080. The highest impact fee in the Town of Palm Beach, where impact fees could easily be absorbed is $11,368.00. The proposal submitted to the taxpayers of Highlands County for a similar home is $17,507.57.

It should be noted however, that on May 16th, per the St. Pete times, Hillsborough County voted to raise the Educational portion from $196 to $4,000), which would still make the total fee for Hillsborough County less than 40% of the total proposed fee for Highlands County. In addition, the educational fee proposed for Highlands County at $6,292 is 58% higher than the new Hillsborough County Educational fee. I just question these numbers. Why are we so high? And how can we use two counties with such low Impact Fee Schedules and huge populations as examples?

I understand why the committee, staff and even members of the County Commission would support this proposal. It would make the budgeting process incredibly easier. Under our current system, due to a finite amount of funds, our commissioners and staff must wrestle with great difficulty which projects to fund. In my opinion, that is a good thing, not a negative. In theory under these transportation impact fees, all you would need to do is add a project to your wish list and boom, it gets funded under this proposal. No more prioritizing or haggling about millage or sales tax whenever raising money becomes necessary. But taxpayers elect officials to make hard decisions. In my opinion, this is taking the easy way out at taxpayer expense.

When discussing the possibility that future arrivals may bypass Highlands County for a lower cost house someplace else, at the June 13th public workshop Mr. Bullard bluntly stated that if “they don’t want to pay the fee, they don’t have to come.” Anyone that has a business dependent on the growth in this county should be deeply alarmed when a public official makes such an outlandish statement. If we find out later that this legislation was over the top, the damage will already have been done. We will not be able to undo the damage.

It should be noted that our main peer counties (Hardee/Desoto/Okeechobee/ Glades) have no or limited impact fees. Polk County has six times our population (not to mention I-4) and should not be considered a peer county.

I can see why our seasoned citizens have been mostly quiet over this issue. Being on fixed incomes they exhale when talk begins about someone else paying the taxes. They have been a core group that has consistently impeded the county from enacting other types of taxes, now which the counties states as a reason for “needing” impact fees. I just want to warn that large segment of our citizenry that they are naïve and uniformed if they think this tax bypasses them. The doctor that builds an office will pass it on to them. A restaurant with less competition will have lines of customers and thus raise prices to drive down demand and those that pay them will also pass it on. A nurse that has to pay 15 to 20% more for a house will move elsewhere or demand more money. A mobile home park with a set number of spaces will see lot rent prices skyrocket if nothing else can be built as competition.

I just don’t believe that the people building new homes or small businesses are not the enemy to push the tax burden onto. They are our friends, neighbors, business associates and often our own families. I should think we would want to encourage new hospitals, retirement centers, mobile home parks and even alternative schools. The builders and developers aren’t the guys in black hats here. They are not going to be the ones paying this. They will pass it on to the consumer or they will move where they can make a decent living.

As citizens, we all depend on our elected officials to make rational, sound and informed judgments in the best interests of ALL our citizens, not just in the best interest of county staff. It is frustrating to see such legislation forced upon the citizenry with such disregard to the interests of ALL citizens. Highlands County citizens have REPEATEDLY said NO to new taxes. Yet, here our politicos come with another end run.

These taxes come with the threat from politicos that due to increased State Concurrency laws, moratoriums on building because of inadequate schools and transportation could POSSIBLY be instituted without user fees. I could use stronger language, but lets just say I have a hard time swallowing that. If we are that much worse off than our peers, we need to re-elect new Commissioners and fire the entire county management staff immediately for being incompetent. None of our peers have impact fees nonetheless impact fees of this magnitude. Many larger counties that have user fees have them at MUCH lower levels than us. I would appreciate it if Mr. Bullard would quit trying to bully, intimidate and scare people with threats of impending doom. Personally, even if such threats were true, I’d prefer death at some one else’s hand than to suicide. I’d make the state shut me down before committing my county to fiscal death.

As an aside, Mr. Steve Tindale, listed as President of Tindale-Oliver & Associates on the that companies website (the firm that was commissioned to provide the Highlands County impact fee study) stated in the September, 2004 New Mexico Business Weekly that “One third is a common ratio of impact fees to the overall cost, the range is typically 15 to 80 percent. I have ONE County where there are no taxes and 100 percent impact fees.” I read this and can’t help but wonder what could our leaders possibly be thinking?

Mr. Bullard has stated that he wants to be the leader in the implementation of impact fees. I personally like to suggest that he go be a leader some place else. The entire community is in an uproar about the possible implementation of this and there is still no one talking about reducing these numbers to happy medium. They are still only talking about delaying implementation. In my mind, the entire county commission should be removed. Mr. Bullard, Mrs. Stewart and Mr. Jackson for driving this fiasco and Mr. Maxcy and Mr. Stokes for not showing enough leadership to stand up and tell them they are wrong. I hope somebody stands up to be counted.

I also want to state that at the June 14th public workshop, I asked Mr. Bullard if in the hundreds of pages of documents that Tindale-Oliver provided, if there was a report summarizing all user fees as compared to other counties. His response to my amazement was that such a report was not necessary and unimportant. He further stated that the important thing was how much revenue needed to be created, not how we compared to other counties. I disagreed so much that I compiled a list from impactfees.com and have included it for review of concerned citizens. I will let you decide if it is important reading. My gut tells me that when you read this list, you will not only find it important but amazed that it hasn’t been discussed before. I further surmise that it wasn’t left off the report on purpose.

I just want to state again that I cannot in good conscience endorse a plan that will impact the future growth of our county in such a destructive manner and negatively impact such a large number of resident’s livelihood. The truth is, I feel for Highlands County to properly accommodate growth, we need revenue sources, but there is a level of financial naiveté or deception of some of our county leaders to demand that we have no money to support future growth when we have the largest property tax increase in the history of the county.

The appropriate level of funding via impact fees should be a lengthy discussion. If funding for capital improvements are extracted from developers (I. E. – the consumer) in the dollar amounts thus far presented, there will not be any need to fund new roads and schools on behalf of growth. That is because there will not be any growth. It is possible that limiting growth may be the unstated goal of anyone supporting this proposal, but I have not heard anyone state that as a goal. If it is, I would like that stated as such and let the citizens voice their opinions on that subject.

At most, in order to establish a system for allocating some of the future capital projects burden to growth, I suggest a 33% implementation of all impact fees across the board; and then, only if there is a dollar for dollar reduction in property taxes. The remaining 67% needs to come from alternative sources of revenue, just as they always have and are being done in the majority of the other counties in this state.

Even then, we are only stalling the acceleration of taxation because the millage rates for ad valorem taxes will gradually move right back to where they currently stand as the county finds more “needs” for funding.

Charlie Kidd is the President of the CDK Group Inc., a small property management business which owns and manages warehouses, office buildings and a small apartment building in Highlands County. Mr. Kidd moved to Sebring in 1972. Further schedules and support documentation can be found at cdkgroup.biz. Questions and comments can be e-mailed to Mr. Kidd at ckidd@cdkgroup.biz.

Helpful Links:
Polk Permits Tumble in June
http://censtats.census.gov/cgi-bin/bldgprmt/bldgdisp.pl
Impact fees could be phased in over several years
Impact fees phase-in options
Impact fees: ‘Too soon’
Transportation fee on hold until Monday
Fee proposal gives credit for taxes paid
Impact fee committee readies recommendations for council
www.impactfees.com
http://impactfees.com/2006survey.pdf
http://www.walzandcompany.com

Proponents of impact fees have made the claim that impact fees raise the price of surrounding houses up to the cost of a house plus impact fees. In rising markets, I agree. The cost just gets tacked on top and the buyer pays more or the original land owner gets less.

However, just like anything else, when markets correct themselves, it does so without regards to what prior amounts of fees were paid. It corrects to actual value as compared to something else more or less desirable.

The proponents who push impact fees as a fair way of paying for growth fail to mention one important concept.

That a person who owns the vacant land that some one wants to build on has been faithfully and probably unfairly paying taxes on that property while basically receiving limited services throughout its history.

Grove owners have consistently asked that question. What do I get for my taxes? Well, it is likely they get more than someone who owns one lot.

I would submit that vacant land has very little impact. Yet it is the owner of land who will profit less once the impact fee is figured into the sales price.

Impact fees are basically a surtax on vacant properties.

How much of an impact do businesses really cause?

How many businesses have you seen lately spring up in Desoto City? Not many is my guess.

Businesses build towards people, not the other way around. Businesses build in places where their owners hope their convenience make them a more attractive venue for someone to shop.

I would argue that a new McDonalds, for example, actually has an impact neutral or negative impact. People now don’t have to drive as far to get their product. If someone stops by on the way by, did they really impact the county roads system that much? If they weren’t there, folks would have still went to Wendy’s to get that

Same concept for a totally new business to the county. If a new Cracker Barrel comes to town, now you don’t have to drive to Polk County to get good home style cooking.

Now I’m not really suggesting that businesses should get off the hook for impact fees. As long as impact fees have been around, this concept has probably already been challenged in court.

FOR IMMEDIATE RELEASE: