DECEMBER 11, 2007

The Lake County Board of County Commissioners met in regular session on Tuesday, December 11, 2007, at 5:05 p.m., in the Board of County Commissioners’ Meeting Room, Lake County Administration Building, Tavares, Florida.  Commissioners present at the meeting were: Welton G. Cadwell, Chairman; Jennifer Hill, Vice Chairman; Elaine Renick; and Linda Stewart.  Others present were Sanford A. “Sandy” Minkoff, County Attorney; Cindy Hall, County Manager; Wendy Taylor, Executive Office Manager, County Manager’s Office; and Ellie McDonald, Deputy Clerk.  Commissioner Debbie Stivender was absent due to illness.


Commissioner Welton G. Cadwell gave the Invocation and led the Pledge of Allegiance.


            Commr. Cadwell stated that the Board had a workshop last week with the School Board and went through the Impact Fee Ordinance and the supporting documents.  He commented that the Agenda was numbered improperly and that the order would be Tab 1 first; which was a concurrency, not impact fee, issue; Tab 2 is the one which affects the fee which would be discussed last, and Tab 3 would be discussed second, making the order for Public Hearings as Tab 1, Tab 3, and Tab 2.



            Mr. Sandy Minkoff, County Attorney, placed the proposed Ordinance No. 2007-59 on the floor, for its second and final reading, by title only, as follows:


He commented that this is an Interim Concurrency Ordinance which extends this section of the Code until December 31, 2008, at which time hopefully they will have the Concurrency Amendment adopted.

            The Chairman opened the public hearing.

            There being no one present who wished to address the Board, the Chairman closed the public hearing.

            On a motion by Commissioner Hill, seconded by Commr. Stewart, and carried unanimously by a 4-0 vote, the Board approved Ordinance No. 2007-59, Amending Chapter V-A, Entitled Necessary Public Services and Facilities, Section 5A.01.02 Entitled Applicability, to Extend the Expiration Date; Providing for Severability; Providing for Inclusion in the Code; and Providing for an Effective Date.



Mr. Sandy Minkoff, County Attorney, stated that Tab 3 was a public hearing on an Ordinance that will be a final adoption tonight if approved and will be Ordinance No. 2007-60:


He stated that the changes were discussed at the workshop and stated that there are three additional changes they would like to discuss with the Board.

Mr. Minkoff stated that the first change, which is a clarification, was in Chapter 22-14(2) located on page 20 of the Ordinance and adds the word “removal” and the intent of the change is to make it clear that removal of a mobile home and replacement with a new mobile home would still keep the exemption.

He stated that the second change was to 22-16, which substantially reduced the administrative charge for impact fee collection down to a maximum $100 and that at a meeting with several City Managers, it was noted that some cities may have costs in excess of $100.  He stated that this change would allow a municipality to set their own fee as long as it did not exceed the actual cost of collection of the fee.

Commr. Cadwell questioned whether they would have to prove to the Board that was the actual collection cost.

Mr. Minkoff stated that it would not have to be proved to the Board, as the objection would come from whom they collected, so they would be the ones to whom it would have to be proven.

Mr. Minkoff stated that the third change was a technical one.  He stated that the Board would recall that one of the changes in this Ordinance on page 20 was that it required when a home was destroyed or removed from the site that it would have to be built or replaced within six years in order to stay exempt.  He explained that it was pointed out that there were some citizens who had things destroyed or removed recently or within the last couple of years who had been told there was no time limit.  He reported that this change would allow everyone either six years from the time it was destroyed or six years from today to be exempt and thereafter it would only be six years from the date the home or building, if it was a commercial use, was destroyed which provides an additional safe haven for existing citizens who had buildings destroyed in the past.

The Chairman opened the public hearing.

Ms. Jean Kaminski, Executive Director of the Homebuilders Association, questioned the Board regarding Section 22-10 which states that the County Commissioners may choose to allocate interest earned from any impact fee trust account to be used to provide waivers for commercial and industrial development, but that in Section 22-9 that sentence was stricken from residential development.  She questioned if this was an oversight or a legal issue that the interest could be used for commercial and industrial, but not for residential and asked that the Board consider not adding any additional administrative fee.  She stated that since October they have had additional costs that run permits up $500-$600 per house and thought that to add a fee on top of an already large fee was a fairness issue.

            Commr. Cadwell asked Mr. Minkoff about the question Ms. Kaminski raised.  Mr. Minkoff stated that she had a good point and that Section 22-10, on page 16, the sentence starting with the word “however” on line 20, should be deleted.

            There being no further individuals who wished to address the Board, the Chairman closed the public hearing.     

            On a motion by Commr. Hill, seconded by Commr. Stewart, and unanimously carried by a 4-0 vote, the Board approved Ordinance No. 2007-60, Amending Chapter 22, Lake County Code, Impact Fees, with changes including the three items brought forward by Mr. Minkoff today and deletion of the sentence on page 16, line 20, previously mentioned.



            Mr. Sandy Minkoff, County Attorney, placed the proposed Ordinance on the floor, for public hearing, as follows:


            The Chairman opened the public hearing.

            Ms. Heather Wooding, on behalf of all parents from Pine Ridge Elementary, where she has been the SAC Chairman for the past five years, stated that she agreed it was for the children that they were here and that the study has proven that there does need to be an increase of the impact fees, though the School Board differs in the amount of what those should be and felt they should all meet in the middle, stating that $14,000 was too high, but $9,000 was too low and perhaps they should come to a compromise somewhere in the middle.  She stated that good business and good economics cannot be brought in without good schools.

            Mr. Van Church, Political Director for Service Employees International Union, who represent the over 2,000 non-instructional school staff in Lake County, stated that they are in favor of an increased fee.  He commented that they also represent the non-instructional school staff in Glades, Palm Beach and Pinellas Counties and stated that there is no push in Pinellas County for a similar fee because Pinellas County is largely built out, while thousands of home buyers will be moving to Lake County in the future.  He explained that they think the newcomers would be able to afford to pay for the impact they will cause to the schools largely in the South end of the County.  He reported that he had heard some criticism that working families in Lake County might be shutout of affordable housing if the increased fee was passed, stating it was their opinion that the working families of Lake County would be better served by an adequately funded public school system and the ability to build the schools at the pace needed.

            Ms. Michele Bodzioch, from South Lake County where her children attend Pine Ridge Elementary School and a very active volunteer in the system there, stated that she was concerned about how her children would be educated.  She was concerned about where they would attend high school, or if they will be on year-round or double sessions because of what funds would be available.  She stated that she believed the Lake County School Board was doing a very good job and doing the best they could with what they had and asked that everyone focus on the future rather than placing blame on anyone for what has happened.  She explained that creating the best education system in the State takes risks, investing in a possible unknown, and courage.  She commented that if a good school system is built, industry and citizens will move to Lake County.  She requested that the Board approve the entire amount of the impact fee.

            Mr. Bill Calhoun, of Lady Lake’s School Steering Committee, who is planning to build a school to service Fruitland Park, Lady Lake and Beverly Shores, stated that having the money available will be very important and that construction costs are going up.  He commented that the impact fee would be the only way to raise money for schools.  He explained the difference between the $9,000 and the $14,000 figures is the $5,000 - $6,000 interest which will be paid on the money borrowed and expressed the need for the interest to be added into the fee.  He stated that the money is needed.

            Mr. Choice Edwards, from Clermont, stated that he is for commercial growth but does not want to pay for it.  He expressed his gratitude to the School Board and Board of County Commissioners for the courage to stand up against the opposition for quality education of Lake County students, stating the children need the Boards’ courage as never before.  He stated that in Orange County the homebuilders supported the recent impact fee increase.  He commented that high-end employers are attracted by high quality schools and realtors use that as a selling benefit.  He expressed the need for quality schools by funding them to the extent needed.  He mentioned that the infrastructure takes upfront money and should be paid by those who cause it, not by those adversely affected by the impact it brings, which would be unfair taxation.  He expressed the need for interest costs to be figured into the equation.  He stated that if the Commissioners fail to increase the impact fees at the level the consultant recommended, they will either further under fund schools, or shift a tax burden to the innocent.

            Ms. Nancy Fullerton, a retired school teacher and guidance counselor, supports those who wish to increase the impact fees including the costs of financing and would like to see the higher costs in the different categories.  She stated that the developer may have to cut profits, or stop building until the market catches up.  She believed the order of impact fee payment should be first and foremost by the residential developer and then the payment by the new homeowner, but there should be no payment from the existing residents or raising of taxes.

            Mr. Carl Ludecke, of Charlie Johnson Builders, addressed the Board stating that he had visited about 100 elementary school classrooms in the north end of the County together with an American Legion project and every one of those classrooms had an average of 19 students.  From a construction standpoint, he suggested turning two classrooms into three because of the large square footage of these rooms, explaining the classrooms could be increased by fifty percent by reconfiguring and redesigning the rooms.  He believed that there were alternative ways to increase capacity in school rooms other than raising the impact fee.

            Mr. Keith Schue, of Sorrento, hoped that the Board would support the entire $14,000 impact fee requested by the School Board in order to provide the children of Lake County with a good education.  He reported that Lake County schools are at the bottom of the barrel for the State in terms of providing education and the funds necessary to support it.  He commented that he was disturbed that the $9,000 suggested had been described as a compromise and that it presents about one-third of what the School Board needs.  He commented that he did not feel charging for the interest was illegal.  He mentioned that if the school system is inadequate, it is reflected in a way that not only impacts the economy, but the home building industry as well.

            Mr. Mike Baker stated that if the impact fee is raised, thousands of people will stop coming to Lake County.  He stated that he was speaking for the “we the people” and suggested that if the fat were trimmed from the existing budget, more funds would be available for schools and that there could be a rollback of impact fees.  He expressed that there should be a rollback.

            Mr. Bob Funk, a retired airline pilot, stated that when his industry was deregulated and there was chaos many years ago, the airline industry did not come before the Board asking to be subsidized by the taxpayers of Lake County.  He reported that the building industry’s problem was a national problem, and that the current homeowners did not cause those problems, nor should they be expected to solve them.  He noted that there is now an expertly exposed impact fee schedule that does not require growth to pay for itself; instead it forces current homeowners to pay for much of the impact caused by the homebuyers.  He stated that the fees must be calculated by the expert to relieve the homeowners of the unfair taxation.  He commented that those who cause the impact should pay for the impact, and asked the Board to raise the fees.

            Mr. Frank Wood, a veteran teacher from Eustis, who teaches Economics in Mt. Dora High School, stated that he comes before the Board as a parent, homeowner, and taxpayer and that tonight there is an opportunity to build a better community by building Lake County schools and hopes that they weigh the long-term needs of the community when considering the adjustment of the School Impact Fee to the level determined by the School Board.  He urged the Board to consider two important facts, stating that according to the U. S. Census Bureau, Florida is 45th among the 50 States in per people funding; and according to the Florida Department of Education, Lake County has plunged to 65th among the 67 counties in per people funding.  He stated that an upward adjustment of the new construction impact fee is the logical and reasonable choice.  He believes that growth, not the current residents, should pay for its immediate impact to the general infrastructure and schools.  He urged the Board to say yes to the proposed School Impact Fee.

            Mr. Dan Robuck asked that the Board listen closely to new information that Mr. Don Magruder would present.  He commented that the economy was worse than he had ever seen it, and they are asking the Board not to make the situation worse by instituting the second highest impact fee in the nation.  He referred to a recent article in The Wall Street Journal which stated that in areas with lower taxes and fees, the people are prospering, but in areas where the taxes and fees are higher, the individuals are not prospering.

            Mr. Bob Foley, of Montverde, stated that his son attended year-round school beginning in 1996 for a period of three years and commented that nothing has really changed to date, explaining that the schools were overcrowded then as well as now.  He mentioned that portables are used all over the County because residential units built from 1996 to 2004 did not pay anything towards new classrooms and that cost was burdened by all taxpayers, not just those moving into the County.  He reported that in 2004 the BCC approved an impact fee to create new funding for new student stations, but it did not provide funding for the interest costs.  He urged the to Board approve the impact fee on behalf of all the parents in the County.

            Reverend David Johnson, a minister of 27 years, stated that both sides must be considered noting the fact that better schools are needed, but at the same time they need to realize where it is taken from, where it is being put, what will it be for, and whether it would weaken or strengthen the economy.  He suggested this issue should be a matter of prayer as it is very crucial and believes there is a way through God’s help to get the schools built.

            Mr. Brett DeGarmo, a Lake County resident of two years, chose to move to Lake County after having lived in 18 states, moved 35 times, lived in over 20 counties and had built homes in seven other states, commented that only one State other than Florida had an impact fee.  He reported that the other states’ impact fees were for water, sewers and roads.  He commented that he stands for the businesses and economic growth in the County, but was concerned about the justification of where the impact fees would be going.  He explained that he knew what effect impact fees have had on other counties and the states in which he has lived and it did not promote growth or help in recruiting.  He stated that if the County were going to try to recruit businesses and establish healthy economic growth, large impact fees would deter people, including middle management and executives, from coming into the County.  He explained that he would be willing to keep impact fees, but that the fees should not be increased.

            Ms. Carol Saviak, Executive Director of the Coalition for Property Rights, stated that she was disappointed that they were discussing this issue at all and that when the economy is hurting, taxes should not be raised.  She commented that impact fees are narrowly based taxes levied on a few thousand people and was amazed that a Commission that would struggle at raising utility fees by $20 does not hesitate to tax 3,000-4,000 property owners $7,500.  She stated that impact fees have a great effect on those who can least afford it, emphasizing that impact fees will not build a better community or school system.  She commented that if they make Lake County unaffordable for the average person to come here, then Lake County will be stripped of its heart.  She asked the Board to put politics aside and consider the average person who would like the opportunity to purchase a home in Lake County.

            Mr. Ron Boddicker, of Tavares, addressed the Board stating that one of the most revealing aspects of the national real estate downturn had been to note the reduction in prices of developer’s new homes, and thinks that gives insight into the kinds of profits involved.  He believed that even with the absorption of the interest of the impact fees, the developer would still make a fair profit on each home.  He commented that the developer could choose to absorb some or all of the costs, and he would like to see those who are building mansions charged a higher  impact fee which would go into a fund to assist affordable housing.  He stated that there are other solutions and suggested that the County needs the entire impact fee.

            Ms. Jeanne Etter, of Sorrento, reported to the Board that she had two daughters who obtained excellent educations in another State due to impact fees there.  She stated that she is for the impact fee due to the fact that she, and others like her, are on fixed incomes and cannot afford to pick up the additional amount of money if the whole impact fee is not passed.  She asked that the Board consider people who are on fixed incomes when making their decision.

            Mr. Robert G. Buckert, stated that he felt strongly about having quality schools built, because without them quality education would be lacking.  He commented that he was in favor of the impact fee.

            Ms. Terry Godts commented that a school impact fee would not work against business interests, and commented that it would be the best thing for business, noting that excellent schools attract excellent business.  She relayed an experience in St. Cloud where improvements were made to make the city attractive to business, but when the Mayor of St. Cloud took a potential businessman who planned to move his business there, he was very impressed with the improvements of the town until they visited the high school, which was old and run down with many portable buildings, and the businessman stated that was all he needed to see.  She stated that the lack of good schools was the deal breaker, and commented that excellent schools attract excellent business opportunities, and that Lake County’s economy would be less dependent on the home building industry.

            Mr. Greg Gruetzmacher stated that he is opposed to the impact fees and that by imposing the fees, the County is blocking out the younger generation because they would not be able to afford a new home.

            Mr. Mark Keller, of Clermont, stated that the County has a very narrowly defined impact tax for growth which had been used improperly in the past for ongoing operations and not building for the future.  He commented that now they are going to make people moving into the County carry the entire tax burden.  He stated that the fee should be a burden shared by all and not concentrated on a few thousand.

            Mr. Mike Archer stated that for the past five years he has been a teacher, and by spending any time in the schools overcrowding could be seen, and there would be an awareness of the education budget’s lack of funds to solve this problem.  He reported that the schools are financially broke, and it would not be fair to cram children into the classes as this does not promote good learning skills.  He stated that the leaders in Tallahassee had dropped the ball and were unwilling to do anything about this.  He mentioned that all five members of the School Board set aside their differences and united in a unanimous appeal to the Board for support of the impact fee increase.

            Mr. Andrew Arvesen, of Clermont, voiced his opinion that builders and developers as pavers and profiteers were destroying Lake County.  He felt it was unreasonable that the builders and developers should ask for government assistance.  He commented that they have done nothing to improve his quality of life or that of any other permanent resident, but rather they have bulldozed the trees and hills that made Lake County beautiful.  He asked that the Board support the impact fee.


            At 6:20 p.m. Commr. Cadwell announced that the Board would recess for 10 minutes.

            PUBLIC HEARING (CONT’D.)

            Ms. Sherry Boam expressed the importance of quality education and asked the Board to approve the increase in impact fees.  She stated those coming into the County should contribute to the school system, because good schools sell homes and bring businesses here.  She stated that one of the nation’s prominent home builders, Lennar Homes, produced the flyer distributed to the Board showcasing the three schools around their development because good schools sell good homes.  She asked the Board do what is necessary to help the children of Lake County.

            Mr. Gerry Suarez, Senior Vice President of Thomas Mortgage, stated the he was not concerned with things of the past and stated that the issue at hand is funding future growth and the needs it creates.  He commented that people would be priced out-of-the market if the impact fee is increased; stating that now is not the time, and requested finding solutions.

            Mr. Jim Kehrig stated that the majority of people coming into the County are buying used homes, and that the retirees and elderly are buying most of the new homes and neither group would pay impact fees.  He expressed concern with what had been done with the tax increase money due to the number of people coming into the County as well as what happened to the State lotto fund for schools.  He mentioned that he had noticed all the schools being built or renovated were done so in a high-end manner and that children cannot be taught any better in a Cadillac than in a Chevy.

            Ms. Vicki Zaneis, a former realtor, stated that fact, not emotions, should determine the decision of impact fees stating that the taxpayers of Lake County do not owe a subsidy to the development community due to hard times.  She commented that with overcrowded schools it was hard to attract industry, commerce or a qualified workforce which hurts everyone in the County.  She stated that adjustments in economic hard times are to be expected and should be planned for by all.  She explained that the issue of impact fees relative to affordable homes was being overblown.  She stated that it was her hope that new land development regulations would help address the impact fee issues.  She mentioned that she felt confident the School Board had gone through the proper steps in reaching a unanimous conclusion and that it would not disturb her if Lake County had the second highest school impact fees in the nation, stating that would send a message that the County was serious about fixing the problems that exist.  She asked that the Board make the right choice for the children, citizens and voters and for the future of Lake County.

            Ms. Arlene Sunderlage, former teacher and President of the PTO at Sawgrass Bay Elementary, stated that her neighborhood in Clermont had gone through a tremendous growth period.  She stated that educating the children needs to be first and foremost and that the impact fee was needed to fund that.  She urged the Board to take heart of what was needed for the future of Lake County and make the best decision possible.

            Ms. Jean Kaminski, a longtime resident of Lake County, addressed the Board stating that she wanted her children, grandchildren and their friends to be able to live and work in Lake County, and commented that the cost of housing that the impact fees would represent would not permit them to do this.  She stated that buildings do not make a quality education, it comes from teachers and parents who care enough to spend time with their children.  She urged the Board to vote against the increased impact fee.

            Ms. Therese Tucker moved to Leesburg approximately one year ago and was excited to be in the County, stating that her concerns for Lake County were very strong.  She expressed that Lake County had studies showing that growth would pay for itself, but was concerned that if impact fees were so powerful and could do so much for schools, why Lake County was not currently doing better.  She thought the answer was not the fact of the impact fees, but how much the County and the School Board were spending for relative expenses.  She stated that she believed when there was a reduction in funding, they must look to the causes and how to make the budget work.  She was concerned that administrative expenditures in the School Board had gone up very high, but growth has not justified those expenditures and has slowed down.  She urged the Board not to pass the impact fee.

            Ms. Kitty Ireland asked that the Board approve the impact fees. Her daughter, Annie Ireland, addressed the Board and stated that the money the impact fees brought in was needed for schools.  She mentioned that her younger brother attends public school with 30 children in his class, while she attends private school and had only 9 children in her class.  She stated that with fewer children in the class she gets more individual attention and the classroom is less chaotic.  She stated everyone cannot attend private school and that more schools should be built.

            Ms. Dawn McNulty, a contractor, realtor and mother residing in Lake County, addressed the Board stating she had five children in the Lake County public school system today and that she was very happy with the education they are receiving.  She stated she understood the concerns, but that Lake County could not sustain an impact fee increase on new housing at this time.  She commented that building permits have decreased since last year and are continuing to decrease.  She opined that in order to acquire the money being sought, there needs to be another solution.  She noted that the people coming into the County will search for housing accommodations such as foreclosures, auctions and other homes on the market rather than building or buying a new home with the new impact fee, and the County will not have the money from these sales.  She commented that there must be another solution and challenged the Board to find an alternative, and stated that at this time the impact fee is not the answer.

            Mr. Alan Parrow, CEO and President of Pringle Development, addressed the Board stating that from a personal point of view and from the point of view of his company they would be better off if they raised the fee to the levels being proposed.  He explained that Pringle Development generates over 98 percent of its earnings from developing and building homes for active adults 55 and older, and HUD authorized communities where no one under the age of 18 can live and therefore, their buyers are not charged an impact fee.  However, he urged the Board not to support the proposed increase stating it was ill-conceived.  He commented that the argument before the Board was how to fund schools, not whether having good schools is good or not.  He opined that if the increase were passed all new home sales would stop other than those in the active adult market place and those will do nothing to fund schools.  He reiterated his request not to pass the school impact fee.

            Mr. Vance Jochim stated that one of the reasons he moved to Lake County from California was because they had impact fees as well as personal income tax.  He reported that the schools in California were very good and did not remember them having a problem with overcrowding.  He thought that from what he had seen in Lake County impact fees are needed, but as an auditor for many years he would like to see better analysis of the details leading up to the calculations of the values given to the Board.

            Ms. Sue Jantz commented that there had been a suggestion earlier that two classrooms could be reconfigured into three in order to save money and challenged them to reconfigure the homes now being used as two homes to three homes; thereby they could spread the cost of the building.  She opined that people responsible for developing in new areas should fund the impact and does not think the school system was asking for funding for existing schools.

            Mr. Dale Sands stated that the proponents of the impact fee have some very valid points in theory, and he was 100 percent for good schools.  However, he remarked that raising impact fees would not generate more money for the school district at this time because there are so few houses being constructed right now, and by eliminating even more potential buyers, they would end up with less revenue.  Secondly, he stated that even if there were a large volume of work going on and the impact fee did not hamper the sales of homes, the poor spending accountability of the School Board has to be considered a lot more than the impact fees.  He commented that if the impact fee would really generate funds and accountability was restored, he suggested bringing it back when the economy is better.

            Mr. Bill Edgington stated that the Board should think through the impact fee issue from an economic situation.  He commented that money is not going to make the difference, that it comes down to teachers, administrators, and using the funds in a proper way.

            Commr. Cadwell stated there were some organizations that asked to speak and then the discussion would be brought back to the Board for a vote.

            Mr. Robert Johnson representing the Chamber Alliance, which was made up of eight Chambers of Commerce in Lake County representing about 32 businesses, stated that they deal with a diverse group of individuals who have diverse opinions on this issue and they are here tonight representing them all.   He commented that they are committed as businesses in the community to the school system and to affordable housing.  He explained that they had looked at the actual study and the fact is that impact fees are for new growth.   He stated that Florida laws mandate a valid study to support impact fees or they are subject to being stricken down by the courts.  He reported that the Alliance was concerned that the data in the study was two years old and therefore the projections were incorrect.  Mr. Johnson also noted that the student population in the study is overestimated by around 2,600 students and that the capital needs are overestimated by $117 million in the study.  He thought that over the next five years, there would be $100 million of projected excess revenue that could go towards the construction of some of the schools that are needed.  He suggested that a current study should be one that would be more reflective of the data he was presenting.  He specified that in the letter written to the Board they commented that they thought the position of the Impact Review represented a decent compromise.  He also noted that the Impact Review Committee, without the benefit of counsel on that issue, made a decision that the interest was not a valid item, and they believed that the Impact Review Committee did an honorable job in looking at the data and the choices that were before them in recommending the approximately $9,000 impact fee in lieu of the proposed $14,000 fee.

            Mr. Don Magruder, Chairman, Florida Building Material Association, stated he would like to discuss facts and fairness, two aspects that have been missing from the discussion.  He opined that builders and businesses do pay their fair share for growth with high sales tax, ad valorem taxes and excessive county fees.  He thought that the problem of Lake County schools was not an impact fee issue, but an overspending issue.  He stated that 85 percent of the school jurisdiction in America have no impact fees and that according to the National Impact Fee Study of 2007, released three months ago by Duncan Associates, Lake County’s current impact fee of $7,055 is the 8th highest in the nation and 54 percent higher than the Florida State average, which he thought was too high and should be rolled back.  He also felt that impact fees are incongruent with economic development, and that economic development cannot be had without growth.  He pointed out that if these impact fees are increased to $14,656, Lake County would have the second highest impact fee in America and it would be 220 percent above the average fee in Florida, resulting in thousands of the citizens relocating to earn gainful employment.  He also felt that  the Lake County School Board has been on a massive overspending spree, including the remodeling of  high schools, many of which he felt did not need to be remodeled.  He opined that the study used to justify the impact fee was outdated and did not follow State guidelines.  He felt that the reason they did not wish to update the study was that the numbers would not support their desired conclusion, and the study was primarily based on information from November 2005 or earlier when the local economy was better, but that during the last two years unemployment numbers for Lake County have gone from 3.5 percent to 4.4 percent; a 25.7 percent increase in unemployment.  He noted that according to the Florida Inventory of School Houses (FISH) report, Lake County has 50,109 student stations, and the district has three schools under construction which will add 2,414 more student stations resulting in a total of 52,523 student stations.  He related that current enrollment in Lake County Schools is 40,625, which means there is a 29.2 percent over supply of student stations, and that this year Lake County Schools will pick up only 171 more students.  He closed by stating that the facts were clear that increasing the school impact fee was not justified, nor fair, and it was time to force the Lake County School Board to become good stewards of the peoples’ money.

            Mr. Bill Deese, representing the Greater Lake County Association of Realtors (GLCAR), stated that  Lake County’s economy was in great trouble and it would be ludicrous to double the impact fees at this time.  He explained that in reference to the comment that there was plenty of business due to the number of homes on the market, he stated the missing factor in that equation was buyers.  He mentioned that there were no buyers because they cannot afford to live here due to price of homes, taxes and insurance, and that by adding an additional $7,000 to the price of a house would move those prices up and another 3,000 people would be moved out of the affordable housing category.  He specified that there are 6,000 homes on the market today in Lake County, up from the 1,800 two years ago, and that four developers have gone out of business in the last several months, leaving thousands of their employees unemployed.  He stated that the GLCAR was totally against the impact fees.

            Mr. Rob Kelly, representing the Citizens Coalition as President, addressed the Board and stated that the core issue was whether or not the County Commission includes the cost of borrowing in the school impact fees or shifts that cost to taxpayers, including retirees in age restricted communities.  He reported that according to the School Board’s Development Tracking System on December 3, 104,000 units had been approved but not yet built in Lake County and its cities, and that does not include age restricted communities or parcels outside of PUDs.  He commented that at 2.5 people per household, this represents about 250,000 people who will be coming to Lake County in the future, which is double the County’s population.  He explained that of the 104,000 units, 68,555 are subject to school concurrency and would have to pay the full impact to schools which is currently defined as $14,646, and includes borrowing costs.   He stated that 55 percent of the County’s taxes for school fees are going to borrowing costs and that now is the time, before the County gets further behind, to approve fees with the borrowing costs.

            Mr. Jim Bible, representing the Home Builders Association of Lake County, stated that he was here to discuss whether the Henderson Young & Company (HY) School Impact Fee Report dated June 28, 2007, justifies Lake County assessing the highest impact fees in the State of Florida and the second highest in the country.  He commented that in 2003 the school impact fee was tripled from $1,200 to $3,489; in 2005, at the request of the School Board, the Board of County Commissioners doubled the school impact fee from $3,489 to over $7,000.  He stated that the County decided that the study’s original recommendation of $17,500 was not in compliance with the Interlocal Agreement, so the consultant changed the fee to $14,646, which the School Board has recommended to the Board for adoption.  He then submitted for the record a presentation, with thirteen exhibits and additional supporting documents and data, referring to the latest school impact fees, some of which will not go into effect until next year.  He reported that Seminole, Brevard and Palm Beach counties have some of the highest rated schools in the State and that their impact fees are less than the existing Lake County impact fee and a third of the proposed impact fee.  He stated that they believe the methodology developed by HY is not legally defensible and that borrowing costs must be eliminated from the impact fee calculations.  For the record, Mr. Bible submitted a copy of the Palm Beach Impact fee study, a copy of Dr. James Nicholas’ memorandum eliminating interest costs from the calculations and a copy of the Brevard County Superintendents’ Mark of Excellence Letter to Parents, all of which appear as Exhibits 2, 4, and 3, respectively, within the Home Builders Association of Lake County Presentation mentioned hereinabove.  He also pointed out that the HY Impact Fee Study includes the cost of meeting State mandated class-size reductions and the Constitutional Amendment specifically states payment of the costs associated with reducing class size to meet these requirements is the responsibility of the State and not of the local school districts.

            Mr. Bible stated there were three significant issues with the HY Impact Fee Study which were  the inclusion of borrowing costs in the calculation of the impact fees, the inclusion of costs to pay for the State Mandated Class-Size Reductions, and the fact that the Henderson Young study used outdated data from 2004 and 2005 to project student populations, revenue and expenses.  Mr. Bible explained how a failure to use the most recent data combined with a poor methodology resulted in an impact fee calculation which was not believable and that the study overstated enrollment and understated revenue.  He commented that the Henderson Young methodology with the correct data would show that no impact fee amount would be justified.  He stated this comparison demonstrates that the study by HY should be discarded and a new study commissioned using legally defensible data and methodology.

            He stated that the School Board has not tackled the funding of existing deficiencies by fully evaluating alternative funding sources, but has selected impact fees because they tax only new homes and had historically been a safe political decision.  He submitted a copy of a letter from an attorney which provides a legal opinion that the inclusion of borrowing costs in the impact fees is illegal, that the inclusion of costs related to the State Mandated Class-Size Reductions in the calculation of impact fees is illegal, that the exclusion of credits in the calculation of the impact fees are illegal and that non-compliance with the 2006 Florida Impact Fee Act requirement to use the most recent and localized data is illegal.  Mr. Bible urged the Board to reject this Impact Fee Study and not to vote for the highest impact fee in the State of Florida.

            Mr. Randy Young, of Henderson Young & Company, responded to Mr. Bible’s remarks by stating that HYs report had been on the record for months and everyone has had an opportunity to put it under the microscope.  He pointed out that the excess revenue of the School Board that was shown as actually borrowed money.  Mr. Young commented that a judge in Polk County ruled that it is legal for school boards to use local resources to match the class size amendment notwithstanding the constitutional amendment that says the State is to pay.  He stated that the only thing from Dr. Nickolas’ methodology that he used was the interest calculation methodology.  He continued by stating there were other errors in the previous report and that he used a court approved methodology endorsed by one of the principal economists of the State and did so using a method that is accepted by a court in Polk and Osceola counties.

                        Mr. Young mentioned that much has been made about the fact that the data in the study goes back to 2005, but the five year plan for the district that was included covers up to 2010, so there is still some future left.  He stated that no one had raised the point that if they redo the study and revise the enrollment forecast, they would also need to revise the revenue forecast.  He commented that the School Board relies heavily on property taxes and sales taxes to pay for its capital improvements, both of which are in the same downward spiral as the rest of the economy.  If they were going to upgrade the enrollment forecast he would insist that they update the School Board’s five year plan revenue forecast to reflect not only the decline in property values that have already occurred, but also the possible increase in decline in tax base depending on the voters’ decision January 29 with tax reform.

            Mr. Larry Metz, Chairman of the Lake County School Board, stated that one of the reasons there was an issue that seems divisive was that they have a funding system for school capital facilities that leaves a gap in funding at the School Board level, which forced them to look into imposing an impact fee designed to close the gap in capital funding so that there would be no deficiency in their capital plan.  He stated that they have a list of unfunded capital projects that have been there since he has been on the School Board, and the object to have an adequate impact fee was to make sure as new residential units come on line that generates students they must have the ability to generate enough student stations to avoid a situation resulting in overcrowded schools.  They commissioned an impact fee study conducted by a qualified expert in accordance with established case law precedence to determine what the impact fee should be.  He stated that the School Board instructed the consultant to have the study be data driven, and based on student stations, likewise to consider revenue streams that Tallahassee had imposed on all school districts and the proper financial management given with their financial advisors not to go too far in debt.  He explained that in 2004 when the study was done and the Commission made its decision, the cost of financing capital facilities was not included, but in order to build the schools they have to borrow and pay market interest rates.  He also pointed out that there was nothing to indicate that they were not able to include that, especially since there are other districts in Florida that have included in their impact fees the borrowing and have not been challenged.  He commented that one of the reasons Lake County’s impact fees were higher than other counties was that the tax base was not diverse, noting that other counties with lower impact fees have a well developed diversified economy.  He asked the Board to approve the impact fee request for the full amount.

            Ms. Kyleen Fischer, representing District 5 of the Lake County School Board, asked the Board to make a declaration in support of public education, teaching professionals, and support staff working in overcrowded conditions in the Lake County School System.  She explained that the students in the South Lake area are in classrooms which are not conducive to great learning and noted that the Board was doing an outstanding job with the help of staff providing quality education.  She added that in that area there are floating teachers working from serving carts and support staff working countless hours in such cramped areas they cannot clean in the evening, if the impact fee is not supported, the 40,000 students will be crammed even closer together and impacted even more negatively.  She mentioned that the School Board had received accreditation for the entire county and has outstanding teachers and principals, but that they have facility needs.  She stated that the teachers cannot care for the children if they do not have facilities conducive for education.  She again asked for a declaration statement.

            Ms. Cindy Barrow, representing District 3 of the Lake County School Board, stated that part of the School Board’s ability to ensure that new student stations can be built was an accurate impact fee which reflects the true cost of providing new schools.  She stated that the County Commission helped the School Board ensure that Lake County had a quality school system which would attract new industry to Lake County.  She commented that the study given to the Board gives the entire cost of a new student station.  In response to a statement previously made about declining enrollment in the school district she explained that there were two new elementary schools in District 3, both of which were projected to be at 80 percent capacity this year, and at the end of the first two weeks of school they were at 100 percent capacity.  She specified that Lost Lake Elementary School, a school that was just rezoned to be taken down to 80 percent capacity, was now over 112 percent capacity.  She stated that whether growth is fast or slow, or whether or not the housing industry is booming or in a slump, the cost of building a new student station remains the same and that growth, not current residents, should pay for growth.  She stated that if the Board did not approve the true cost of building new student stations including the costs of the District for borrowing money to build new schools, they would allow the costs to be shifted to taxpayers through an even longer line of interest payments that all residents, including retirees and age restricted communities, are paying for through their school property taxes.  Ms. Barrow asked that the Board fully fund the cost to build new student stations, and if they lose the interest payment the 35,853 homes that are vested and not subject to school concurrency will cost their District $191 million, which was the delta between the recommended fee and the borrowing costs.

            Mr. Scott Strong, representing District 2 of the Lake County School Board, stated that he supported the impact fees and the inclusion of interest in the calculation.  He asked that the Board review and analyze the facts before them.  He stated that a quality school system would provide the growth and diversified economy needed in Lake County and urged the Board to support the impact fees including the interest.

            Mr. Jimmy Connor, representing District 4 of the Lake County School Board, stated that since 2001 the School Board has undertaken 27 major construction projects in the Lake County community.  He stated that the funding of every high school project was provided by way of a sales tax voted on by a referendum of the citizens of Lake County.  He stated that the School Board had borrowed their maximum limit and they cannot borrow more and that they have gone from 29,000 to 40,000 students in the last five years.  He reported that some corrections needed to be made with regard to statements made earlier that the School Board has been financially imprudent, explaining that the projects they have built are below the per square foot State average.  He commented that when the State had the school Infrastructure Thrift Fund they received millions of dollars back from the State for building frugal schools, including $2 million for building East Ridge High School $4 million under the State average.  He stated that current residents have subsidized growth for a long time.  He commented that they have challenged opponents of the impact fees to come forward with another alternative because the School Board’s financial resources are limited.

            There being no further individuals who wished to address the Board, the Chairman closed the public hearing.


            At 8:40 p.m., the Chairman announced that the Board would take a 10 minute break.



Commr. Cadwell stated that a spokesman for Lennar Homes wished to inform everyone  that their brochure was not a public endorsement of impact fees.

Commr. Cadwell explained that they have worked closely with the School Board concurrency and will continue to work through this process.  He commented that he was concerned that they do not have a legal opinion that the interest is valid.  He stated that two years ago they prevented the legislature from taking away their ability to impose impact fees, but the legislature continues to try to remove that option. He explained that he was not comfortable with the full amount of the requested impact fee, but felt comfortable with the $9,324 figure, which excludes the interest fee and thought it was defendable.  He specified that there was no case law saying the interest fee is illegal, but there was no case law saying it is legal, since at the present time they cannot obtain a legal opinion saying it is valid.

Commr. Hill stated that the Impact Fee Committee has worked long and hard on this and there were a lot of very close votes when they talked about the fees.  She commented that she felt the study should be legally justifiable, all the numbers should be correct, and there should be no reason to question the numbers.  She explained that she knew there was no legal opinion and stated she was more comfortable adopting the study without the interest fee component and setting the fee at the $9,000+ figure.

Commr. Stewart stated that she had listened to everything that had been said tonight and noted there were some good points made.  She stated that our schools are in a crisis, these are very difficult economic times, and that the decision being made tonight would have a huge impact on this County.  She reported that the life of a school teacher, even when conditions are perfect, includes the responsibility of preparing our country’s children to become educated, productive citizens who will be able to compete in the global market.  She stated that on a daily basis, teachers are required to meet the needs of every single student in their rooms including the bright ones, the not so bright ones, the behavior problems, the handicapped and even the hungry and tired students who do not receive the nurturing they need at home.  She reported that the County had a tax base of 80 percent residential and 20 percent commercial, and the residential does not pay for itself.  She stated that even with increased taxes and fees, citizens have had to unfairly pay to keep up with the uncontrolled growth, and there still was not enough money to pay for the schools. She explained that Lake County’s economy could not sustain an 80/20 tax base and that the 80 percent must be reduced and the 20 percent must be raised and they must find a way to start diversifying the economy, which would bring money and jobs to the County.  She mentioned that the first thing the high paying employers seek when considering moving to Lake County is an educated workforce.  She expressed that if Lake County would like a healthy, growing and strong economy, they must take care of the schools and that impact fees help accomplish this.  She stated Lake County must plan for the future even though it hurts at the present time and must not compare itself to other counties without an 80/20 tax base.  She explained that they must start today to provide the ground work to attract jobs and money the County needs.

Commr. Renick explained that the issue comes down to the borrowing fees, and they did not include any of the borrowing costs the last time, which put the School Board farther behind.  She related that there have been other counties who had included this and she was willing to take the risk of adding in the borrowing cost.  She commented that the basic issue that everyone agrees on is increasing impact fees, but she felt that who shoulders the burden should be part of the picture.

Commr. Stewart agreed that if the schools were not fully funded, they would still be behind.

Commr. Renick stated that as far as whether or not they collected the fee, that interest is a big part of their expense and she felt they would end up right where they were before if that was not included.

Commr. Hill stated that it was a legal issue and she did not like putting it to the cost of the actual student stations as she felt they were two separate costs.  She commented that because they have a financial management decision as to how to get that station, they were adding it on and stated that the student station and the cost is one fee, the interest is another fee and she did not see putting them together on an impact fee.  She commented that  what is different this time that they did not have last time was an Interlocal Agreement stating they have proportionate share requiring that the developer come in with proportionate share over and above the impact fee if they do not meet capacity in that area.

Commr. Cadwell stated the School Board would have to agree with concurrency and would have to agree that this would be what it would cost if they wanted to build in this area.

Commr. Cadwell felt that if they stay at a stalemate, the impact fees would stay the same, and that a 2/2 vote is a no vote.

On a motion by Commr. Hill, seconded by Commr. Cadwell, and carried unanimously by a 4-0 vote, the Board approved the adoption of the School Impact Fee Study without the interest fee component setting the fee of single family homes at $9,324, multi-family homes at $5,689, and mobile homes at $3,297.


There being no further business to be brought to the attention of the Board, the meeting was adjourned at 9:15 p.m.




                                                                        WELTON G. CADWELL, CHAIRMAN