CEAs and HB 7103 Office of Legal Services and Facilities Services - - PowerPoint PPT Presentation

CEAs and HB 7103

Office of Legal Services and Facilities Services

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May 28, 2020

Agenda

• History of Orange County Approach to School Capacity
• HB 7103 and Affect on Current Process
• Post HB 7103 Approaches to Growth Management and

School Capacity

• Status of Current Post HB 7103 Capacity Determinations
• Discussion

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History of Orange County Approach to School Capacity

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History of Orange County Approach to School Capacity

• School Board and Local Government Role in Growth

Management

• Pre-Martinez Doctrine
• Martinez Doctrine
• 2004 Orange County Charter Amendment
• Interlocal Agreements

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Roles of School Board and Local Government

• The School Board’s Role is to advise Local Government whether

capacity exists for new development.*

• The Local Government’s Role is to weigh the interests of new

development and growth against the School Board’s ability to provide capacity for that development.

• These roles are and have been consistent throughout all of the

various time periods we will discuss.

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*New development is unvested residential units at the time of an application to amend the comp plan or rezone the property to a higher density

History of Orange County Approach to School Capacity

• Pre-Martinez Doctrine
• Local Government approved new development with no input from the School

Board as to whether capacity exists for the new development.

• No mitigation strategy to fund additional required capacity for new

development.

• Created overcrowded schools and led to Martinez Doctrine.

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History of Orange County Approach to School Capacity

• Martinez Doctrine (2000)
• Applied to only Unincorporated Orange County / not municipalities
• County took into consideration whether school capacity existed for new

development.

• Mitigation strategy – Developers paid the actual cost to create capacity at

time of approval by funding new schools (individual developers or consortiums) or funding new wings of schools.

• Smaller developers argued they were shut out because the mitigation strategy

was either too expensive or OCPS could not add individual student stations.

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History of Orange County Approach to School Capacity

• 2004 Orange County Charter Amendment
• Applied to Unincorporated Orange County and all Municipalities
• Approved by 73.9% of voters in Orange County, reapproved by 65.9% of voters in 2012.
• Requires certification by the School Board of whether school capacity exists that school

capacity exists at time of approval for the proposed new development.

• Introduced the “Joint Approval” process to insure all "Significantly Affected Local

Governments" approve new development where the School Board is unable to certify capacity.

(Significantly affected local government is currently defined in the Orange County Code as any local government with more than 10% of the student population of an impacted school.)

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Orange County Charter Amendment

(2004)

Summary of Charter Provision: County and municipal rezonings and comprehensive-plan (comp plan) amendments that increase residential density shall only be effective upon approval by the governing boards of all significantly affected local governments when: The school district cannot certify to the governing boards of all significantly affected local governments that the impacted school(s) can accommodate the additional students that will result from the increase in residential density. (Significantly affected local government is currently defined in the Orange County Code as any local government with more than 10% of the student population of an impacted school.)

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History of Orange County Approach to School Capacity

• 2004 Orange County Charter Amendment (cont’d.)
• Mitigation strategy – Developers pay the actual cost to create capacity

at time of approval by funding new schools (individual developers or consortiums) or funding new wings of schools.

• Smaller developers argued they were shut out because the mitigation

strategy was either too expensive or OCPS could not add individual student stations.

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History of Orange County Approach to School Capacity

• 2008 and 2011 Interlocal Agreements (“ILA”)
• Applicable to Orange County and all participating Municipalities
• Is a contractual agreement between signatories.
• Statutorily mandated for long term school planning and concurrency.

Includes homegrown process for interplay between the School Board and Local Governments to review new development and school capacity to comply with the Orange County Charter.

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History of Orange County Approach to School Capacity

• Interlocal Agreements (“ILA”)
• Mitigation Strategy:
• Capacity Enhancement Process with a fixed, proportional formula for mitigation payment.
• Counts capacity available in three years instead of capacity at time of application.
• Moved timing of mitigation payment to platting for single family (SF) or site plan for multi-

family (MF).

• Created certainty for large and small developers alike as the mitigation payment is based on a

formula.

• Under the Charter and the ILA, in the absence of available capacity within 3 years, the execution of

a CEA by OCPS serves as certification of capacity.

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History of Orange County Approach to School Capacity

• Section 10.7(c) of the Amended & Restated ILA (2011)

(c) If the individual school impacted by the proposed Residential Development fails to meet the adopted Level of Service as of the date of the School Capacity Determination, the mitigation required pursuant to the Capacity Enhancement Agreement shall be used to ensure that the overcrowding existing at the time of the submittal of a complete Development Application shall not be

• aggravated. (Emphasis added)

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Interlocal Agreements (“ILA”) – Mitigation Strategy (Cont’d.)

History of Orange County Approach to School Capacity

• School Capacity Determination as Defined in ILAs
• Available School Capacity = (School Capacity x Adopted Level of Service*) – (October

Enrollment + Reserved Capacity)

• If the Available School Capacity now - or Available Capacity that will be

available within 3 years - is greater than the students generated by “new development”, then the new residential project receives a School Capacity Determination approval letter

• If capacity is not available, the applicant had the opportunity to seek to enter into a

Capacity Enhancement Agreement (CEA)

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*LOS for ES is 110%, MS & HS is 100%

History of Orange County Approach to School Capacity

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Example review of 36 unvested units at the Elementary School level. Available School Capacity = (School Capacity x Adopted Level of Service) – (October Enrollment + Reserved Capacity) As there are 125 available seats, and the proposed project generates 7 students, this project PASSES at the Elementary School level.

History of Orange County Approach to School Capacity

• Capacity Determination Workflow

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Local Jurisdiction Approves or Denies Project

Requires Approval of All Significantly Affected Local Governments

• Capacity Certificate Issued

(Mitigation Not Needed

Capacity Determination Application Submitted OCPS Determines if Capacity is Available? Yes Capacity Approval Issued/ No Mitigation No Applicant May Seek to Enter into CEA Applicant May Still Seek Joint Approval

History of Orange County Approach to School Capacity

• Section 10.6(a) of the Amended & Restated ILA (2011)

(a) The Capital Contribution required shall include a present value calculation of the School Impact Fees anticipated to be due upon permitting of the proposed Residential Units plus any Capacity Enhancement Mitigation required. (emphasis added)

• Section 10.7(b) of the Amended & Restated ILA (2011)

Capacity Enhancement Mitigation = (Development Impact – Vested Students) – Net School Capacity x Total Cost

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Total Cost – Developer pays the credit portion of the impact fee for each student station created that, together with the impact fee, pays the full cost of a student station.

History of Orange County Approach to School Capacity

• Interlocal Agreements (“ILA”) – Mitigation Strategy (Cont’d.)
• Impact Fee and Credit Portion of Impact Fee

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Term Current Total Cost per Student $27,053.00 Revenue Credit per Student $5,988.00 Net Impact per Student $21,065.00

History of Orange County Approach to School Capacity

• Interlocal Agreements (“ILA”) – Mitigation Strategy (Cont’d.)
• What is the Credit Portion of the Impact Fee?
• Credit portion of Impact Fee is based on future revenues expected to fund

capital projects, such as:

• Half Cent Sales Tax
• Capital Improvement Tax (Ad valorem tax)
• Mitigation Payments Received through the CEA process
• Current Credit Portion is $5,988.00

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History of Orange County Approach to School Capacity

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• Developer Mitigation Payments – How is it Spent?
• Also known as “Capital Contribution”
• Can ONLY be spent on new capacity
• Paid to OCPS by developers prior to plat/site plan approval through

CEA process

• Based on the proportionate share cost per student station
• Spent directly on the affected school, not districtwide over-crowding
• Charged only to developers building in over-crowded school zones

History of Orange County Approach to School Capacity

• Interlocal Agreements (“ILA”) – Mitigation Strategy (Cont’d.)
• Issues with current mitigation strategy:
• Cannot immediately build the permanent capacity, must wait for enough students to justify

construction and operation of new school.

• Portion of the mitigation is used to fund temporary student stations, in conjunction with

creating permanent capacity.

• Payment is not received until plat (SF) or site plan (MF) thus delaying ability to fund

construction until units are online, creating a lag in providing capacity.

• Not collecting enough funds or collecting funds early enough in the process to ensure that

current school overcrowding is not aggravated.

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HB 7103 and Affect on Current Process

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HB 7103

(Effective July 1, 2019)

• Pursuant to Section 5 of HB 7103, Section 163.31801, Florida Statutes, was

amended to include the following provision (emphasis added):

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(4) The local government must credit against the collection of the impact fee any contribution, whether identified in a proportionate share agreement or other form of exaction, related to public education facilities, including land dedication, site planning and design, or

• construction. Any contribution must be applied to reduce any

education-based impact fees on a dollar-for dollar basis at fair market value.

HB 7103

• On June 11, 2019, the School Board Chair - with direction from Board - sent

a letter to Governor pointing out the impact of the new law and requesting he veto it.

• During the 2020 Legislative Session, OCPS staff worked with Orange County

staff and members of the development community to offer language to address impacts of HB 7103.

• Although multiple versions of language were proposed, the final version of

the legislation did not create a fix.

• In fact, additional language was added that makes impact fees transferable

between projects.

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HB 7103

• Challenges with Current ILA Provisions -
• Continuing with execution of CEA’s with a 100% credit would have the following

problems:

• OCPS would continue to receive CEA fees dollars for overcrowding relief, however, the

impact fees would be reduced by the amount of CEA fees funds received, thereby eliminating the additional mitigation.

• The CEA is a supposed to be the certification of capacity, but no additional money is being

received to create additional capacity - permanent or temporary.

• In fact, it reduces the amount of impact fee dollars collected, lengthening the time before

there is funding for new permanent capacity.

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Example of Impact Fee Credit One Single-Family Residential Unit - PRE HB

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$8,784 $2,497

$0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 Pre-HB CEA Impact Fee Capital Contribution

$11,281 Total School Cost / Single Family Home

*Scenario contemplates 1 SFR unit from a project that does not have available seats in any school zone

$8,784 Impact Fee

Example of Impact Fee Credit One Single-Family Residential Unit - PRE HB

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$8,784 Impact Fee $2,497 CEA Fee $8,784 Impact Fee $2,497 CEA Fee

• $2,497 Credit

$8,784 Impact Fee (78% Cost) Total Cost / Single Family Home $6,287 Net Impact Fee

Pre HB7103

Impact Fee + CEA = Total Cost of $11,281

$11,281

$2,497 CEA Fee

Post HB7103

CEA Fee + $6,287 Net $8,784 = Impact Fee

Pre HB7103

Roles of School Board and Local Government

• The School Board’s Role is to advise Local Government

whether or not capacity exists for new development.

• The Local Government’s Role is to weigh the interests of new

development and growth against the School Board’s ability to provide capacity for that development.

• These roles are and have been consistent throughout all of

the various time periods we discussed.

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HB 7103

• In summary, there are not available terms under which OCPS

staff will recommend the School Board approve CEAs to certify capacity and therefore alternative options must be considered.

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Post HB 7103 Approaches to Growth Management and School Capacity

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Available Approaches

• The following Approaches can be utilized and are not mutually

exclusive:

• Rely on County Charter Joint Approval Process
• Update School Impact Fees
• Targeted Rezonings
• Borrowing from Capital Renewal Funds

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Charter Joint Approval Process

• Per the Orange County Charter, if a developer is proposing a rezoning or

comprehensive plan amendment which increases unvested residential units, the only role that OCPS has is to certify whether capacity exists.

• Utilizing CEAs as an alternative to satisfy the charter no longer works

because HB 7103 requires impact fee credits to be given (a reduction in impact fees) for the exact amount collected in CEA fees.

• Without a CEA, a project that increases unvested units within school

zones that are overcapacity must proceed through the joint approval process per the Charter. The joint approval process has never been utilized.

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Charter Joint Approval Process

• Capacity Determination Workflow

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Capacity Determination Application Submitted OCPS Determines if Capacity is Available? Yes Capacity Mitigation Not Needed No Applicant May Seek to Enter into CEA Applicant May Seek Joint Approval Local Jurisdiction Approves or Denies Project

All Significantly Affected Local Governments Approve

• r Deny

Charter Joint Approval Process

• This joint-approval process has been available since 2004, however, no

project has elected to utilize this approach.

• Decisions to allow development where no school capacity exists are

ultimately to be made by the local jurisdictions pursuant to the joint- approval process.

• Allows the Charter to work as it was designed and approved by the

voters.

• Orange County has a Comprehensive Plan Policy that would need to be

changed in order to allow the County to exercise the responsibility provided in the Charter

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Impact Fee Review

• Impact fee update is overdue. Last update occurred in 2016.
• Potential consideration of adjusting impact fee to account for CEA mitigation

funding loss.

• OCPS Impact Fees have historically considered the mitigation revenue received in

the fee calculation, which reduces the fee.

• OCPS is working with an Impact Fee consultant to review and quantify additional

costs related to overcrowding of schools and to quantify credits that are unrelated to new residential development.

• This review may result in revisiting the 2018 School Impact Fee Update Study, which

has not proceeded to the County for discussion or adoption.

• Negative to this is that cost of impact fee is increased for all permits and not born

by the developer creating the impact and will not provide enough revenue to eliminate the need for other options.

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Targeted Rezonings

• Addresses short term overcrowding in select schools by rezoning portion of
• vercrowded school to adjacent under-enrolled school.
• Ex:

East River HS – Enrollment: 1,958 / Capacity: 3,002 (-1,044)* Timber Creek HS – Enrollment: 3,436 / Capacity: 2,592 (+844)* Target Rezoning of these two High Schools could alleviate overcrowding conditions without need for relief being required.

• This option does not increase revenue and additional discussion must
• ccur prior to this approach being implemented.

*Source: May 15, 2020 Enrollment Summary

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Borrowing of Capital Renewal Funds

• Potential for borrowing internal Capital Renewal funds to fund relief

schools.

• Reallocated funds are borrowed and must be paid back.
• Option was previously approved by Board Resolution in 2015 and

2017 for relief and renovation projects, but funds were not needed due to funding available for programmed schools.

• Further discussion of this option should occur with Facilities and

Fiscal staff, as well as consultation with COVE, prior to this approach being implemented.

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Status of Current Post HB 7103 Capacity Determinations

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2019-2020 Pending CEAs Since July 1, 2019

• There are 17 pending CEA applications as of May 8, 2020

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Project ID# Jurisdiction Project Name APK-19-018 Apopka 4011 Golden Gem Road APK-20-003 Apopka Clonts Farm Property APK-20-004 Apopka Binion Road Apartments EDW-19-002 Edgewood Holden Avenue PD ETV-20-002 Eatonville Lake Weston Property MTL-20-001 Maitland Gem Lake Water District PD OC-19-054 Orange County Artisan at Forest Summit OC-19-069 Orange County IDI PD OC-19-075 Orange County Nona West OC-19-086 Orange County Taft-Vineland Apts - Orangewood N-9 PD OC-19-091 Orange County Sustany OC-20-001 Orange County Kings Landing PD OC-20-015 Orange County Hoenstein Landing OC-20-016 Orange County J&S Apartments OC-20-020 Orange County Sadler Road Estates OCE-19-006 Ocoee Ocoee Village Center ORL-20-007 Orlando Lake Orlando Land Owner

2019-2020 Passing Projects Since July 1, 2019

Project ID# Jurisdiction Project Name APK-20-005 Apopka Coke Property OC-19-060 Orange County Eastwood PD OC-19-062 Orange County Center Pointe Community Church OC-19-063 Orange County Alta Avalon OC-19-064 Orange County Silverleaf OC-19-065 Orange County Gem Groves PD OC-19-066 Orange County Waterstar Orlando OC-19-078 Orange County First Baptist Church of Windermere OC-19-079 Orange County Avalon Grove OC-19-080 Orange County Hamlin West OC-19-081 Orange County NRP (Village I) OC-19-082 Orange County Golden Keys Condo OC-19-083 Orange County The Little Nest OC-19-085 Orange County Horizon West Village I Cross PD OC-19-089 Orange County Hoffner Park OC-19-090 Orange County Serenade at Ovation OC-19-092 Orange County Chickasaw Creek OC-19-100 Orange County Valencia College Lane PD OC-19-101 Orange County Blue Diamond OC-19-103 Orange County Karr PD OC-20-007 Orange County Thompson Road Residential OCE-19-004 Ocoee VMG Estates ORL-19-030 Orlando 6601 & 6609 Hoffner Avenue Apartments ORL-19-039 Orlando Hoffner Avenue Apartments WG-19-003 Winter Garden Tilden Road PUD 41

• There are 25 passing Capacity

Determinations as of May 8, 2020

2019-2020 All Projects Since July 1, 2019

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Superintendent’s Comments School Board Questions and Discussion

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