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

As I’ve previously stated, I think this is the perfect time for impact fees. Our windfall of revenues due to the rise in property values affords us the ability to ease into impact fees at a level that is fair to all concerned. I think a fair level is 33%, with a plan to review after three to five years from implementation.

From 05-06 to 06-07 expenditures grew from $114 million to almost $151 million (budgeted). (Note: I was promised the revenue side from county officials via email Thursday and have yet to receive it. Not a problem, I understand they are busy.) These additional expenditures are obviously made possible by the huge expansion in property values.

My main point is that on the currently proposed budget our county officials have already figured a way to increase expenditures by $36.5 m. There is some rollover (money that was over budgeted and unused last year) in that amount from the prior year, but there is some of that every year and should be offset at least partially from the prior year rollover.

Including in the proposed 06-07 budget is a total to be spent on roads in the amount of $16.6 million (includes repairs & maintenance), when in the past four years the county has spent $6.5m, $8.5m, $4.9m and $5.9m. (That doesn’t include parkway money as it is figured separately.)

The Sheriff’s department is getting a bump from $12.9m to $16.5m. Detention and correction has gone up $1.8m. This at a time when a July 12th, 2006 Highlands Today article written by Ray Napper reports crime is down across the board. Office of Management and Budget’s funding increased from $328,084 to $573,988. Are they needing to hire new staff to figure a way to spend it all? The budget is fraught with these items to numerous to include in a column.

I point this out because they have the revenue in house to build and maintain roads. They don't need the impact fees for transportation, it is budgeted. I suggested that since they are so awash in cash that the county take some of that money and share ad valorem taxes with the schools. I would never expect them to do so, but wanted to point out that the county is not in as desperate straights as they imply. I used schools as an example as the impact fee committee was shamed and bullied into voting to pass the schools portion immediately.

The point being, a government entity will spend every dime you give them under the guise that we were so far behind in the first place that we desperately already needed those funds.

I would even surmise that the big rush to get the impact fees passed was done so they could be passed before the budgets can be scrutinized. Seriously how can we even vote on impact fees for schools when the school boards first public budget hearing is not scheduled until Tuesday, August 1st?

I suspect the county school board will be receiving record breaking revenue increases due to the rise in the assessed property values this year as well. They are restricted in that only designated funds can be used on capital improvements, but I would surmise that it will be a substantial increase.

If the Property Appraiser assesses next year’s property values at a rate that has already been predicted by county staff, I would surmise we could be looking at a minimum of an additional $35 m. in revenues. My guess would be $40m., but I will be conservative at $35m.

If that happens and these impact fees go in place at 100% implementation before the 07-08 budget (as Mr. Bullard had demanded), we would have grown the government from $114m in 05-06 to an estimated $205m in 07-08. That’s not even including the rise in other revenue sources such as sales tax and gas tax from 06-07. With those additional revenues, we would be approaching a government double the size we had just two years prior.

The Impact Fee committee (made up by a majority of individuals representing agencies who would receive the money) was successfully able to back Mr. Bullard down to implementation of impact fees other than schools to 1/1/07 and now I have heard plans of delaying full implementation for up to 3-years.

People need to think this through. Do we want that much government? Personally, I do not. I want to go on record as saying I think Bob Bullard is a fine man. I think he is just too proud to back down as the windfall of cash has put a kink in the plan.

I have taken a very hard tone with my prior editorial and public comments primarily because the deceptive & misleading manner in which Tindale Oliver (TOA) portrayed many facets of the impact fees, often I feel at the direction of our county officials.

I have called them out on this and one such item was given to the public at the forum at the community college on Thursday. This one showed us as having the 3rd highest impact fees, if passed as proposed, in the state for a 2,000 square foot house. The county in second place instituted them May 1st, 2006 and has already dropped them back down. I talked to their county administrator and his words were that they wanted to make them “more realistic” because they “killed our retailers.” I don’t want to mislead you, he thinks impact fees are completely necessary to fund county wide capital improvements, but even he recognized the need to be affordable.

What the taxpayers need to understand is that TOA was not hired to find out if we need impact fees, they were hired TO implement impact fees. That is a very important distinction. They are cheerleaders more so than consultants. In my opinion, county officials have hidden behind them while virtually saying nothing since this left committee level. For all I know, they may agree with my 33% implantation level. I doubt it.

My main theme here is that if impact fees are necessary, show us why. Don’t use smoke and mirrors and make us look like one of the boys, when we are not. Lay the facts on the table and let’s debate them in a public forum.

The Concurrency Hammer
If anyone has any doubts about the misleading use of Senate Bill 360 as the primary reason for hammering home the need for impact fees, they need to see the presentation Lew Carter has given at two separate public hearings. In brief, he basically explained that 360 is a great planning tool, not the moratorium mallet it was made out to be.

If you still don’t believe it, call State Representative Denise Grimsley and ask her why they saddled us with such a monstrosity.

These fees inordinately tax the lower and middle class. The courts have ruled that there is not much more impact from a 7,500 square foot ($17,507.57 fee) house from a 2,500 square foot house ($15,604.00). In my opinion, I would think it taxes the middle class the hardest, because they buy the majority of new homes.

My previously lengthy column displayed who will carry the burden. We all will.

A July 20th, Lakeland Ledger article shows that Polk County had 1,119 permits pulled in June of 2005 and 571 permits pulled in June of 2006. For the same periods, Lake Wales went from 60 to 4 permits being pulled. Impact fees went in place on December 1, 2005.

Polk County officials are attempting to portray the drop as part of a nationwide drop in new construction, all the while Highlands County went from 106 units in May of 05, to 115 additional units in May of 06. For the year we are up roughly 10% according to the U. S. Census Bureau, the agency that tracks such information.

http://censtats.census.gov/cgi-bin/bldgprmt/bldgdisp.pl

Nationwide the drop was 11.5%, not the nearly 50% seen in Polk County. Did everybody just all of a sudden decide that Polk County was a terrible place to live?

The article is linked to my website if you care to read it for yourself.

The officials in the article speak of a rosy future but the proof will be in the pudding. Will the builders be able to sell the homes at inflated prices?

Not just the Builder’s and Developers
At the last public meeting on Thursday, George Hensley, long-time Mayor of Sebring and impact fee committee member stood up and said, “I am going to pull a John Kerry and say I voted for impact fees before I voted against them.” George Hensley is not some developer making the statement that he thinks the impact fees as proposed are way too high, this is a respected businessman and long-time community leader.

Mr. Hensley again displayed to us why he is one of the most respected leaders in this community.

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: