The City of Tavares will vote this month on a proposal to raise its municipal impact fees for the first time in nearly two decades, but the new rates would add thousands more to the cost of new homes and businesses.
The proposed fees would be increased 233% to $3,512 per new single-family home from the current impact fees of $1,058, which have not been adjusted since 2006. The fees for apartments and non-residential uses would spike even more, in many cases by more than 300%.
Impact fees are one-time fees charged to newly constructed structures to pay for growth-related capital improvements. While Lake County charges impact fees on new development for transportation and schools, cities charge impact fees to pay for municipal services, such as police, fire and parks.
The City Council scheduled public hearings on the fee hikes for its next two meetings after completing two workshops to review the impact fee study done by Raftelis, a consulting firm in Maitland. The study found the need for the increase based on “extraordinary circumstances” of population growth in the city and increased infrastructure costs to accommodate the growth. The new rates require a super-majority vote for approval.
If the proposed impact fees are implemented, the city would generate an estimated $10.5 million more than if the existing fees stayed in place, according to the study. The new fees would be comparable to those charged by the City of Mount Dora for new homes but well below Clermont, which charges nearly $5,000 per home.
“In last three to five years, there has been a significant rise in costs of construction materials and vehicles, and so that’s putting a burden on the city’s infrastructure needs as people continue to develop here,” Michelle Galvin, a consultant with Raftelis, told the council.
The proposed rate for new apartment complexes would go from $806 per unit to $2,807 — an increase of 248%. So, the cost for a new 300-unit apartment complex would go from $241,800 to $842,100.
The population of Tavares has grown from about 9,000 to 21,400 people in the last 12 years, City Administrator John Drury said at the workshop. The city is approaching 9,000 homes with an average occupancy of 2.4 people.
Galvin broke down each of the existing and proposed impact fees, including police, fire, parks and recreation, and a newly proposed fee for general government. The police impact fee would increase to $635 from $215, and fire fees would increase to $664 from about $403. Parks and recreation fees have the most significant hike, going up more than $1,000 to $1,466 from $440.
The city does not have an existing general government impact fee, but the new proposal includes one for $756.
“This is due largely to investments into these facilities and planned capital improvements,” Galvin said.
For example, the city spent $7.8 million on a new police station in 2021 and $8.3 on a fire station to serve current and future residents and will need to continue hiring new officers and firefighters, she said.
The city has invested $2.3 million into parks and recreation facilities in the last three years, Galvin said. There also are planned capital improvements, including a $1.9 million senior center, $1.8 million in Woodlea Sports Park upgrades, and $1.1 million for recent updates to the Wooton Park splash pad.
The general government impact fee would pay for general government facilities outside of the other three categories, including the city’s new $23 million public works complex and planned capital improvement projects such as a city-wide warehouse facility design and a parking lot for the public works complex.
“Significant increase in construction costs are contributing to funding challenges for meeting the needs of growth,” according to the study.
The proposal also dramatically changes how the city would charge impact fees for non-residential uses. Under the current formula, the city uses a sliding scale to charge lower fees for larger buildings. For example, an office building that’s less than 50,000 square feet would be charged $477 per 1,000 square feet, while one that’s over 100,000 square feet would be charged $370 per 1,000 square feet. And medical office buildings are charged a totally different fee: $574 per 1,000 square feet. Under the new policy, all offices would be charged $1,632 per 1,000 square feet.
All retail buildings would be charged the same impact fee, regardless of whether it’s a hair salon or a Home Depot. Restaurants and bars would all be lumped into a separate category and charged $10,250 per 1,000 square feet. For quality restaurants, that’s a 350% increase.
City leaders indicated that they will approve the impact fees at the public hearings, and they would go into effect after 90 days.
“If we didn’t adopt impact fees, in 2034 we would have to come up with about $7 million, and that would be a burden on the current residents,” said Council Member Troy Singer. “I’m a firm believer that growth needs to pay for growth.”
Council Member Sandy Gamble said he wanted to make clear that the impact fees do not cost current residents anything unless they build new construction or make a major improvement to existing structures like an addition, and that if they are not implemented, it would mean future higher taxes on the residents.
The council members said they were not concerned about the impact fees stifling residential growth because the average cost of a new home in Lake County is $380,000 and the increase is about $2,400, less than 1% of the cost of a new home. However, if it does impact growth in the future, the council can waive or discount the fees to help promote increased development.
“If we don’t do this, we’re going to have to tell taxpayers we’re sorry going to have to raise taxes because we can’t afford to do this, this and this,” he said. “We’re letting people know who live here we’re trying to protect them by this increase. It is not affecting them at all on their taxes.”
He said one complaint he has heard from home builders is that they too have the higher costs, but it is because of the building that the city has to pay for improved infrastructure to accommodate new residents.
Vice Mayor Lori Pfister also pledged to vote for the higher fees.
“That is not unfair of us because we have gone so long, so many years, without touching it,” she said. “Our residents are bearing the brunt of all this building that we need to nip it in the bud right now.”
Pfister also pointed out that no developers or builders were present at the workshops to discuss concerns about the new impact fees.
Resident Gary Santoro, who said he lives in the Royal Harbor neighborhood in Tavares, spoke up in favor of the proposed fees at the first workshop.
“This needs to be done,” Santoro said. “The reason I say that is the essential services — police, fire and also city government — need to keep up with what’s happening here in the city.”
The first reading of the ordinance to raise the impact fees will be held at the next City Council meeting on April 16. The fees can be implemented if the council votes to approve them after the second reading, which will be May 7.
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