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Business Observer Thursday, Dec. 24, 2009 10 years ago

Fee Change

Another way of charging new development for transportation impacts to replace today's much-maligned concurrency system are broad-based, costlier mobility fees. These are making waves with the development community, economists and government folks.
by: Jay Brady Government Editor

What. Mobility fees may replace transportation concurrency system.
Issue. Can multiple government agencies agree on regional mobility plans, equitable fees, share revenues optimally and avoid litigation without harming economic recovery?
Impact. How about a $39,752 mobility fee for a house in Wimauma?

A new development fee that may take the place of transportation impact fees raised lots of questions and eyebrows at a recent Hillsborough County mobility fee public policy forum.

The concept would broaden road impact fees to allow government agencies to spend the money on “mobility” — meaning that in addition to roads, things like buses, light rail, commuter rail, sidewalks, bike lanes and perhaps recreational trails would be charged to new construction.

And what about multi-billion dollar high-speed rail? No one knows that answer yet.

Catching a fair share of the attention at the forum was one of two dozen slides showing the calculation for a mobility fee for a single-family home in Wimauma, a semi-rural area of southeast Hillsborough outside the county's urban service area.

The fee: $39,752.

And that doesn't include costs for bus systems or planned passenger rail lines. Currently, the total transportation fee for a Wimauma house: $472 a unit.

“I can't get over it,” was traffic consultant Robert Pergolizzi's reaction after letting it sink in for a few minutes at the Dec. 15 meeting at County Center in Tampa. Pergolizzi is a principal with Gulfcoast Engineering Consulting in Clearwater.

Developer Chris Day, another forum attendee, criticizes the fees as “a heck of a lot of seed money that someone will Impact. have to come up with that will stifle development.”

For Lutz, an area of north Hillsborough inside the growth boundary, the fee for a single family home comes out to $15,464 per unit. There, the current fee per home is $1,100.29.

The stunning difference in the fee changes for Wimauma and Lutz is due to the mobility fee's focus on trip lengths — the average distance a resident in rural Wimauma would drive for employment and the staples of life compared to the typical distance a more urban Lutz resident would drive.

The goal is to push development into the urban areas and make sprawl prohibitively expensive. That goal is a result of Gov. Charlie Crist's climate change initiatives to reduce greenhouse gas emissions in part by reducing vehicle miles traveled.

But that strategy, according to some economists, means cutting economic growth because increases in gross domestic product tracks the growth in what planners call vehicle miles traveled — a measurement in the mobility formula. Think construction vehicles during the building boom.

House Bill 697, adopted by the 2008 Legislature, requires local governments to adopt new land use, housing, transportation and conservation policies and programs to reduce travel miles and thus greenhouse gases.

And this year's Senate Bill 360 calls for a study of mobility fees as a means to replace transportation concurrency systems that critics, including Florida Department of Community Affairs Secretary Tom Pelham, argue promote urban sprawl.

That study, issued Dec. 1, and the legislation are what led Hillsborough County to move forward ahead of the report's publication to start coming up with a mobility fee plan and fee schedule for local policymakers to consider. The study was prepared by community affairs and the department of transportation working with groups of stakeholders and technical advisers, including several representatives from the Gulf Coast.

Sticker-shock system
Peter Aluotto, the county's director of planning and growth management led the mobility fee forum and sees the need to reform the transportation concurrency process.

As it works now, the capacity of the roadway is reserved for new development for a period of time — first come, first served. New developments are required to mitigate their impacts (i.e. spend lots of money on road widening, turn lanes, signalization, etc.) only when the roadway capacity is exceeded in the area of the project.

But a mobility fee would be paid by all new development based on the consumption of transportation infrastructure (roads, buses, rail, bicycle facilities, etc.) and the location of the development. When the location is Wimauma, the trip lengths are much longer than say downtown Tampa — and the cost per vehicle mile traveled adds up fast.

But Aluotto views the current system as the culprit for developments taking way too long to get approved.

Time is money for both the public and private sector, and Aluotto says he doesn't have the staff to get transportation concurrency reviews done quickly. He says it's due to all the back and forth negotiations that comes with a sticker-shock system that overly penalizes a developer whose project happens to be the one to put traffic counts over a set limit.

And he wants to get moving on it, explaining, “The system we have right now is not working,” and adding, “Let's get started on this because we don't know what the state's going to do.”

“They've got years to figure this thing out,” counters Jeff Hills, a civil engineer with Atwell-Hicks in Hillsborough. “They're getting way ahead of themselves. They haven't considered the legal aspects.”

He may be right.

For one, County Attorney Adam Gormly has yet to consider a number of legal issues brought up at the forum. “This is a very broad based fee that could arguably be considered a tax,” says St. Petersburg land use and impact fees attorney Deborah Martohue.

There are so many questions and moving parts to implementing mobility fees (see sidebar) it appears it will take more than a committed planner to make it happen — and besides legislators weighing-in, probably a lot of lawyers and judges will be dragging out implementation for perhaps years.

Nevertheless, Hills won't be taking any chances. He predicts that most people will got out and vest their land in development rights under the old system.

The study recommends a county-wide or regional governance meaning counties, cities, transit systems, rail authorities and even the Florida Department of Transportation might all be competing for mobility fee revenue if indeed they can somehow agree to divvy it
up and spend it fairly.

Whole new regional transportation bureaucracies are a possibility, according to Aluotto.

But if such an agency were to try to fund transportation backlogs by evolving into a transportation utility, there would be legal problems. Sarasota County Administrator Jim Ley, a member of the mobility fee stakeholders, who says the creation of transportation utilities was discussed early on, notes, “It was ruled unconstitutional. I pointed it out to them.”

Funding backlogs with other revenue sources besides mobility fees or impact fees could be a key issue because of the perceived inequity of charging new development a new fee without a means for current residents to pay for existing capacity deficiencies in transportation systems.

Ley, a former city planner, refers to the backlog problem as “a sticky issue.” He notes much of growth in vehicle miles traveled the past decade is not from new development, but from existing residents driving more. And he points out that the gas tax revenue derived from drivers is mostly going to maintenance, not new capacity.

Another issue that pops up is a proposal to include operating costs of transit in the mobility fees, not just the capital costs as has
been the legal framework of road impact fees.

“There's got to be legislative authorization,” says Jim Nicholas, professor emeritus at the University of Florida college of law, an economist and well-known expert on transportation funding.

Not going away
But that hasn't stopped Broward County from blending transit costs into what they call a “concurrency assessment” according to Elliot Auerhahn, strategic planning director for the county's environmental protection and growth management department.

The county was including the first three years of operating costs for new transit routes into the assessment, but now, only because no new routes are planned due to budget cuts, the county has halted the practice.

Asked what legislative or statutory authority the county relies on for charging new development a fee for operating expenses, Auerhahn says, “I'm not a lawyer; I'm not going to try to tell you that.” But then he adds, “When charging for an actual new service we were being conservative as far as case law was concerned. That's my non-lawyer view of it.”

Nicholas says it's very unlikely, particularly in an election year, that the Legislature would act to authorize what Broward was doing. And asked if such a practice increases mobility fees, Nicholas says, “If you broaden the scope to include transit, it's got to go up.”

That means all the fees discussed at the Tampa meeting may be higher still because those costs aren't part of the equation yet. One example from a technical report prepared by USF's Center for Urban Transportation Research puts the added cost for transit at $1,058 per single family home. The method used to calculate the fee was developed by Nicholas for the city of Aventura.

Nicholas, however, thinks that the one-cent sales tax for transit to be voted on in November would have to be credited against the fee and be enough to offset the added operating costs. “But without credit it could be expensive,” he adds.

Nevertheless, Nicholas says, “While I don't anticipate state actions, I don't' see it going away.”

But Ley takes the opposite view, saying, “All in all it's a fairly frustrating effort. I don't think it's going to go anywhere.”

Ultimately that will be up to the Legislature, who will consider the mobility study's three “Legislation Options”:
• Mobility would be fee required statewide.
• Mobility would be fees required only in dense urban land area counties and conditionally authorized statewide as a local option.
• Mobility fees would be authorized in pilot counties, with a report back to Legislature for further action.

Another option, of course, is always the do-nothing option, or punt it to the post-election 2011 Legislature, as Nicholas thinks likely.

State Sen. Mike Bennett, R-Bradenton, chairman of the community affairs committee and the sponsor of the bill calling for the mobility fees study, knows there are many questions and issues that would have to be worked out for the fees to get legislative authorization.

“We have a long, long, long way to go before there will be any legislation on mobility fees,” he says.

In the meantime, legislators may want to consider the wisdom of Oregon economist Randall Pozdena, president of QuantEcon who supports time-of-day pricing for road users. He has done extensive research on travel schemes and maintains that mobility fees are wrong and don't work because “the person who is going to pay for that is the owner of the land.”

Pozdena adds, “ ... levying a high, flat (travel) charge simply to retard (travel) lacks economic justification. Unlike congestion-linked pricing, it has no essential economic justification. Rather, it likely would impair economic well-being and create a pattern of responses that is justified neither by congestion nor carbon emissions economics.”

Outstanding issues for Hillsborough County mobility fees
Once the fee is adopted, the County's Public Works Department and HART will be responsible for constructing the necessary capacity improvements. Public Works may not have the necessary manpower to take on the responsibilities. A manpower assessment will be required by the Public Works Department to determine the resources needed to implement the additional improvements.

Will the funds be used only in the planning area where they are collected? If that's the case, construction of projects will take even longer.

The mobility fee would not address improvements required for site access and operational improvements needed for safety.

The implementation of the mobility fee may eliminate the option of long-term development agreements and the certainty in the development process associated with land entitlements.

The mobility fee is designed only to address the impacts associated with new development. Funding of the backlog and roadway maintenance will need to come from other sources.

Source: Draft Hillsborough
County Mobility Fee Concept, 9/3/09.

To see the HILLSBOROUGH COUNTY PROPOSED MOBILITY FEES MAKING WAVES by the numbers, download it here. GovernmentByTheNumbers.pdf

Jay Brady covers state and local government issues. He can be reached at [email protected], or at 941-362-4848.

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