Sincerely, Meda11ion,zne. Bemff. enclosure. P.S. On a personal note, I d like to wish you a Happy Thanksgiving and Holiday Season.

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1 MEDALLION HME November 25, 2015 IA]], The Honorable Besty Benac 1112 Manatee Avenue W, 9th Floor Bradenton, FL Hand-Delivered oard of County Co rjdndl Co Re: Impact Fee Resolution Dear Commissioner Benac: It s unfortunate that as a community we re trying to solve problems with old methods; increasing impact fees. This method is unfair because it is a targeted tax against an industry that creates high paying jobs, and is the primary cause of increases in County tax rolls. New home sales boast average sales prices in excess of residential resales, and are most often the catalysts behind real estate market appreciation. This of course increases the County tax rolls without any change to the mileage rate. As evidence of this and according to MetroStudy s 2015 Year to Date report, our local MSA has an average sales price for resale homes of $301,618 and new homes of $353,947. The recent studies, workshops and public hearings regarding the Manatee County Impact Fee Ordinance and Study by TischlerBise caused us to analyze the fiscal impact that the sale of our new homes create in the local economy. A fiscal impact pertains to those revenues and expenses directly received by the local government as a result of a particular project/job/property. As such, we retained Fishkind & Associates to study at what price point a new home sale becomes fiscally neutral in Manatee County. We asked them to analyze these points of fiscal neutrality at both the current Impact Fee rates, as well as those being proposed. As you can see in the attached study, under the current Impact Fee amounts a new home sale that closes at a sales price of $289,000 is fiscally neutral. In other words, a new home that closes at $289,000 has zero fiscal impact on Manatee County because the revenues it creates to the benefit of the County cancel out the expenses incurred by the County as a result of this household formation. Currently, 9 1.4% of Medallion Home Manatee County sales exceed $289,000 and are thus creating net revenue increases for the County; not draining the County fiscally as some would have you believe. We also asked Dr. Fishkind to determine the price point of fiscal neutrality for a new home sale under the proposed higher Impact Fees. As you can see, that number is $226,000. The average sales price of all combined home sales in our MSA, according to MetroStudy 2015 Year to Date, is $292,873. Currently, 100% of Medallion Home Manatee County sales exceed $226,000. Thus every Medallion Home sale is creating net revenue increases for the County, should the Impact Fees proposed be adopted. CORPORATE OFFICE: 1651 WI-IITFIELD AVENUE SARASOTA, FL FAX

2 In both cases, Medallion Home new home sales are creating net positive fiscal transactions for Manatee County. The TischlerBise study only provides credit toward capital facilities when accounting for debt financing. The study fails to take into account fiscal surpluses to the County s operating budget, generated by higher valued new home sales; which funds can be used for capital purposes. So in both cases, essentially Medallion buyers are being taxed twice. Once on the Impact Fee side and once in the way of other tax revenues generated by new household formations. This is inequitable and while the County is striving to attract a vibrant work force, double taxation pushes many in that demographic elsewhere due to affordability. We would like to propose a solution to this inequity. We suggest that Impact Fee assessments stay at the current levels and the County require a true-up for new homes that close for less than $289,000. A chart could be easily identified that would demonstrate the true up amount based on sales prices of new homes in $5,000 increments. The purchase price could easily be verified using the closing statement for each home. With computers today, it would be pretty simplistic to track as well. Simply create a calendared reminder for six (6) months following the issuance of a Certificate of Occupancy (CO) to verif receipt of the closing statement from the builder along with a true up check, if applicable. If the items are not provided to the County, it would have two means of enforcement. In the first case, the County would retain lien rights for the true up amount against the property owner. In the second case, the County would retain the right to refuse to issue pennits to builders that do not comply with the true up procedure. This gives the County the ability to ensure they mitigate against new home sales that do not carry their own fiscal weight, and provide for punitive measures in dealing with non-compliant builders. We believe that County leadership should continue to encourage outside of the box thinking, focusing on resolutions with the input of all stakeholders. As a home builder, I know that our industry is an economic driver for the County. We want to continue to be good corporate citizens. Our sales increase tax rolls. Our buyers don t have the initial benefit of the homestead exemption to keep their assessed values capped. We believe the numbers speak for themselves and look forward to your consideration of an equitable solution to an age-old problem. Sincerely, Meda11ion,zne Bemff enclosure P.S. On a personal note, I d like to wish you a Happy Thanksgiving and Holiday Season.

3 The Fiscal Impacts of a a breakeven study FISHKIND Single-Family Home in Manatee County... & ASSOCIATES FCONOMIC consullawrs November 12, 2015 Prepared by Fishkind & Associates, Inc Corporate Boulevard Orlando, Florida fishkind.com

4 1.0 Introduction 1.1 Project Description Fishkind & Associates, Inc ( the Consultant ) has contracted with Medallion Homes ( Client ) to conduct a fiscal impact analysis of a typical single-family home and find the breakeven point at which it has a neutral fiscal impact on Manatee County. The following report provides a detailed analysis of both the operating and capital impact of the home on County revenues and expenditures. 1.2 Executive Summary The sales price at which a single-family household has a neutral fiscal impact on the Manatee County operating budget is $226,000 (taxable value of $153,400). The sales price at which a single-family household has a neutral fiscal impact on the Manatee County capital budget is $226,000, assuming that the updated impact fees are adopted. The sales price at which a single-family household has a neutral fiscal impact on the Manatee County capital budget is $289,000, if the existing impact fees are not changed (taxable value of $178,400). 2.0 Fiscal Impacts of a Single-family Home 2.1 Introduction A fiscal impact pertains to those revenues and expenditures directly received by the local government as a result of a Project s operations. In this study the fiscal impacts refer to the county revenues generated by a household and the expenditures made by the county on behalf of the household. Fiscal impact revenues include ad valorem taxes, gas taxes, sales taxes, charges for service, and other revenues received. Fiscal impact expenditures include items such as general government expenses, law enforcement, roads, fire department, and others. In other words, fiscal impacts directly impact the budget revenues and expenditures. The focus of the remainder of this report is to quantify the revenues and expenditures generated by one household on Manatee County and the Manatee County School District. FI(It Page 1 of 7 kl

5 2.2 Taxable Property Values Table 1 provides the sales value and the projected breakeven total taxable value of a single family home. Using the current operating budget, the breakeven sales price for a single family home is $226,000. Assuming that this is valued at 90 percent of sales price and that the Homestead Exemption is applied yields a net taxable value of $153,400. Table I Single-Family Break-Even Price Development Impact Summary (End of Year Totals) 2016 SF Households I Resident Population 2.36 Full-Time Equivalent Population 2.21 Manatee County 2016 Sales Value: Single-Family $226,000 Taxable Value: Single-Family($50K Homestead) r $153,400 Total Operating Revenues Generated $1,801 Total Operating Expenditures Generated $1,797 Net Fiscal Impact of Operations $4 2.3 Fiscal Impacts Manatee County Table 2 provides the overall operating fiscal impacts of the development on Manatee County. This table shows that the ad valorem taxes generated by the breakeven single-family home will be $1,080 under the current budget. The household will generate additional tax revenue from purchases of gas, utilities, goods and services. These revenues, combined with the ad valorem, total $1,801. The general government expenditures made on behalf of the single-family household total $1,797, essentially breakeven with a net neutral fiscal impact on County operations. LLL Page 2 of 7

6 Table 2 Single-Family Break-Even Price Fiscal Impact Detail Revenues 2016 Ad Valorem Taxes $1,080 Local Option Fuel Taxes $103 Utility Taxes $23 Licenses & Permits $27 Federal Grants $1 State Revenue Sharing Proceeds $118 Sales Tax - Half Cent $160 Gas Tax - Constitutional & County $27 Charges for Serces $182 Court Related Renues $12 Judgments, Fines and Forfeitures $5 Interest and Other Earnings $3 Rents and Royalties $11 Miscellaneous Renues $19 lnterftind Transfers $30 Total Revenues $1,801 Expenditures General Goemment $259 Executi $2 Financial and Administratie $1 1 Legal Counsel $13 Comprehensive Planning $13 Other General Goemment $3 Law Enforcement $655 Fire Control $89 Detention/Corrections $39 Protectie Inspections $12 Emergency and Disaster Relief $3 Other Public Safety $45 Flood Control/Stormwater Control $16 Other Physical EnAronment $12 Road/Street Facilities $171 Mass Transit $36 Industry DeIopment $37 Community/Neighborhood Services $164 Parks/Recreation $29 Cultural SenAces $69 lnterftnd Transfers Out (debt payments) $76 Clerk of Court & Court Administration $42 Total Expenditures $1,797 Net Fiscal Impact $4 FQf Page 3 of 7

7 2.4 Manatee County Capital Facility Impacts Manatee County charges impact fees for roads, law enforcement, fire protection and parks development. It does not have a library impact fee at this time. Under the existing impact fee schedule, a single-family home is projected to pay approximately $6,249 in total impact fees (Table 3). The County hired TischlerBise to update their impact fees and include a fee for libraries. These fees are scheduled to be heard by the County Commission in December, The recalculated fees are also given in Table 3. Assuming that the new impact fees show the net cost of the capital impacts, the single-family home imposes a capital cost of $9,982 on the County. Until or unless the County adopts the new impact fees, a single-family home will generate $3,733 in capital costs that are not covered by impact fees. Table 3 Single-Family Break-Even Price Capital Impacts Current Updated Net Fiscal Capital Revenues Impact Fee Impact Fee Impact Roads $3,946 $7,304 -$3,358 Law Enforcement $572 $596 -$24 Fire/EMS $304 $321 -$17 Parks $1,427 $1,442 -$15 Library $0 $319 -$319 Total Impact Fee Revenue $6,249 $9,982 -$3,733 The breakeven point of the single-family house will remain at $226,000 if the County adopts the new impact fee schedule. The breakeven point of a new single-family house will increase to $289,000 if the old impact fee schedule is retained. In this scenario, the excess ad valorem from the additional $63,000 in taxable value will cover the $3,733 capital deficit over time (present value over 20 years). 2.5 Fiscal Impacts Manatee County School District The single-family home will generate property taxes and sales taxes that will benefit the School District. The actual taxable value of the house is greater for the School millage because the Homestead Exemption is reduced to $25,000. This makes the taxable value of the $226,000 LL L Page 4of 7

8 breakeven house equal to $178,400. revenue of $1,029 (Table 4). The operating millage will generate The capital millage will generate $268 each year. The local infrastructure sales tax generates another $206 and the impact fee will generate $6,475 for a total of $6,950. A single-family home will generate, on average, public school students (TischlerBise, 2015 Impact Fee Update). The student station cost is $6,475. Table 4 Single-Family Break-Even Price Fiscal Impact Detail - School District 2016 Elementary School Students (1) Middle School Students (1) High School Students (1) Total Students (FTE) Operating Ad Valorem Revenue $1,029 Capital Revenues Ad Valorem - Capital Improvement $268 State Sources - Capital Projects $2 Local Sales Tax-School Capital $206 Total Annual Capital Revenues $475 Impact Fee Capital Revenue $6,475 Total Capital Revenue $6,950 Capital Expenditures Capital Expenditures Elementary School Student Stations (1) $2,047 Middle School Student Stations (1) $1,648 High School Student Stations (1) $2,780 Cost of Student Stations Required $6,475 Net Capital Revenue (Expenditure) $475 (1) TischlerBise Impact Fee Study 2015 FsIa Page 5 of 7

9 3.0 Fiscal Impact Model Methodologies 3.1 Modified Per Capita Methodology A variety of methods exist for quantifying the revenue impacts flowing from a development opportunity such as the one presented here. The approach used in this report is the modified per capita approach. The per capita approach involves the calculation of revenues using the latest published financial reports for the appropriate population basis (i.e. per person, per employee, per person and employee, etc.). Ad valorem and some other fees and tax revenues for the Project are usually estimated directly. From an economic perspective, the per capita approach is equivalent to assuming that average revenue generation applies to the particular situation being evaluated. This is a reasonable assumption in most cases for two reasons. First, local governments must run balanced budgets, so that current costs and current revenues balance and are appropriate for current circumstances. Second, assuming that long-term averages are predictive also means that any excess capacity is maintained in the various systems and not allocated to the project. Furthermore, there is nothing peculiar about the location or the type of project that indicates that per capita parameters estimated from the latest budgets would not be reflective of actual costs and revenues. 3.2 County Fiscal Impact Calculations Property taxes are calculated based upon the taxable property value and the current Millage rate. Mi Ilage General Fund Transportation Library& Childrens. MSTU G.O. Bonds Mills Mills Mills Mills Mills The Budget revenues and expenditures from the County s General Fund, Transportation Trust Fund, Library Fund, Children s Services Fund, and Unincorporated Services Fund were divided by the FTE County population, the FTE County employment, and when appropriate, the FTE visitors to provide the per capita amount used for each new resident. L L h Page 6 of 7

10 Fire Districts establish their own budgets and set the appropriate millage rate to balance their budget. As such, it was assumed that the singlefamily house would pay its fair share no matter in which Fire District it was located. Therefore, no Fire District revenues or expenditures were included in this analysis. Similarly, the Building Services Fund millage rate is set to provide a balanced budget. This was not included in the breakeven analysis. Enterprise funds and Utilities are able to regulate their fees and charges to cover their expenses. It was assumed that these funds were already charging breakeven fees and were not included in this analysis. Most other revenues and expenditures in this analysis were made from the per capita methodology using the County Budget funds listed above. The per capita numbers used are the full-time equivalents (FTE) residents, employees and, when appropriate, FTE visitors. The residential FTE is based upon the number of people per household using the BEBR average of 2.36 people per household and multiply by the equivalent factor of percent. The employee FTE cajculation is based upon the number of workers and the percentage of time they spend at work (40 hours per every 168-hour week). The FTE visitor number is calculated by the projected average occupancy and average people per room. The revenues and expenditures are calculated by multiplying the FTE residents and/or employees and/or visitors by the per capita amounts from the County Budget. 3.3 School District Impact Calculation The ad valorem School Board revenues were calculated by multiplying the taxable value times the operating and capital millage rates. The student generation rates, cost of student station data and impact fee for singlefamily homes was taken from the TischlerBise Manatee County School Impact Fee Study dated November 3, Manatee County Fiscal Impact Breakevendocx Page 7 of 7 L.L L