How do impact fees impact urban Palm Beach County?

Tony Doris of The Palm Beach Post covered an issue that is extremely important to municipalities in Palm Beach County: Transportation impact fees. Story is below.

Here is a list of points I think policymakers should be thinking about as we move forward. There is a lot to unpack here so consider this a starting place for discussions.

    • Traffic counts are going down in and around downtown WPB while residential population has increased dramatically. [Article]. This is the power of good urbanism for transportation: As neighborhoods develop a mixture of uses and destinations in a walkable vicinity, trip length and trip frequency declines.


    • Even if the streets were congested, which they aren’t, our street network is built-out in and around downtown and what is needed isn’t more road capacity for single occupancy vehicles, but rather different modes that can increase the options of people to get from point A to point B to allow the system to continue functioning. I love this quote from Jarrett Walker of Human Transit, describing the functioning of a transit system:


    • As the study by Urban3 shows (see video below), a large portion of the impact fees generated downtown have been spent outside of downtown. Even the major capital project cited as benefiting downtown, the Okeechobee and Australian interchange project, has had specious benefits to the downtown neighborhood. Same for money spent to widen Okeechobee. If suburban commuters’ lives are made slightly more convenient by 30 seconds of travel time each day, at the expense of the urban fabric in which the fees have been generated, can this really be considered a benefit? Besides, the law of induced demand shows that road widening begets more traffic, cancelling out its benefits in short order.


    • Urban3’s countywide tax productivity study shows that the breadbasket of the county is the traditionally designed neighborhoods east of I-95. This land area accounts for 1/3 – 1/2 of the entire tax base of Palm Beach County, although as a percentage of the total land area it is much less. (skip to minute 31 in the video below). These are the areas with the highest potency, with downtown West Palm Beach the most potent of all land areas in the county. Good stewardship over the county’s fundamental resource (land) would suggest that policymakers not just safeguard, but enhance, this high yielding source of wealth and county operating revenue.


    • Let’s not forget that city residents pay county taxes just the same as folks in the unincorporated part of the county. What are city dwellers in neighborhoods east of I-95 getting in return for this substantial county tax levy?


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County staff is simply following policy as it is written. A smarter transportation impact fee policy will make a stronger county and stronger cities. This change needs to come from the County Commission. There’s much more to be said on this subject, but it’s good it is starting to get attention. Palm Beach Post story below.


Urban3 presentation at the Chamber of Commerce – “How We Value the City”


As business improved, the owners of Table 427 in West Palm’s up-and-coming Northwood Village looked forward to adding a patio with seating for 100 more.

That would give Maria and Roberto Villegas enough seats to qualify for a free liquor license to really boost business. In preparation they bought chairs, tables, refrigerators and a fountain.

Then Palm Beach County officials told them if they hoped to obtain a building permit, they’d have to pay a $17,000 impact fee for road improvements. They only gross $13,000 a month, Maria Villegas says.

And what road would the county use the money for that could possibly benefit them, she asks. “The back alley?”

“If we can’t do the patio, we will take our equipment and move it to the Gardens and do another small restaurant there,” her husband says. “If you want to bring people to the area, give us a little help.”

City Administrator Jeff Green says the Villegas are poster children for a county tax program whose fees are designed to improve roads but which charges too much and puts improvements where they’re of little benefit to urbanized areas like Northwood or downtown.

Where is the money going?

The city commission has scheduled a vote for Feb. 16 on a resolution urging the county to use impact fees not just to widen suburban roads but for “alternative transportation infrastructure, streetscape improvements and other investments more appropriate for the eastern urban area.”

County Administrator Verdenia Baker — who once served as impact fee coordinator — counters that the program is being used exactly as set forth in the county charter, for thoroughfares, collectors and arterial roads. “They are not necessarily spent on city roads,” she says. “In addition, they can only be expended for capacity purposes and not maintenance or repair or renewal, just capacity, and that’s how it’s calculated. If we included all of those other costs, …the costs would be very high.”

Impact fees are commonly used by Florida counties to have builders pay for municipal needs associated with that urban growth.

But in an unusually pointed article in the Insider Newsletter on West Palm Beach’s website, next to a photo of Mayor Jeri Muoio, the city says the county’s administration of the impact fees amounts to “a multimillion-dollar problem.”

The article, headlined, “City wants the county to spend downtown dollars downtown,” says road impact fees are assessed by estimating how much traffic a project will generate, and charging accordingly. The money is supposed to pay for adding lanes, buying right-of-ways to help widen roads or for installing traffic signals, the city says.

The problem: “The county is using it on projects in other places (sometimes not even in the city.),” the article says.

“If your restaurant is on the corner of Okeechobee Boulevard and Jog Road, then most of your customers probably will drive to get there because they don’t live within walking distance. But if your restaurant is on the corner of Clematis Street and Olive Avenue, then many of your customers probably won’t drive to get there,” the article says.

So, the city wants the county to change the rules and use the money not just for road capacity but for trolleys or bike share programs or other improvements that help people get about downtown, where the money is generated in the first place.

Interpretation of the program

But Baker says impact fees were never meant to serve as the city proposes.

“We have spent the money properly and we have spent dollars within the zone to lay the foundation for people to get in and out of downtown West Palm Beach,” she says. The money is meant for capital projects, not operating costs like trolley systems, she says.

She adds that the fee structure is based on how much impact a project is expected to have on area roads, on average. But any developer or business owner expanding a building is free to hire a traffic consultant, take measurements, do a study and make a case for a reduced fee, as long as they follow the county’s basic methodology, she says.

West Palm’s Green counters that during the past 11 years, the county collected $9.3 million from the downtown impact fee zone but only $6.5 million went back to the zone for projects. It went toward rebuilding the interchange at Okeechobee and Australian Avenue, for example, and to widen Okeechobee.

The spending isn’t limited to the immediate area where the money was collected, but that doesn’t mean contributors don’t benefit, Baker responds. “People who live in the downtown area do leave the downtown area.”

As far as the heft of the fees, she says, the county has a backlog of road projects, not to mention the vast amount of development in the pipeline that promises to impact county roads even more. “Every time we don’t collect enough revenue to offset the impact, it becomes part of the backlog.”

“I’m not saying they didn’t spend the money to improve downtown,” City Administrator Green says. “But if you were to add up the numbers, the amount they collected in our area versus the amount they spent in our area….”

And with $2.5 billion worth of development projects in the pipeline, most of them downtown, he said, “it’s only going to get worse.”


  1. Barry OBrien

    Kind of reminds me of the hundreds of thousands of tax dollars I’ve spent that went to schools, and I had no children. But that’s the way it works.

    Sent from my iPhone


    • This is a policy decision, not an inevitable outcome. It’s the result of the way the impact fee rules are written, requiring the money to be spent on new lane miles on roads. A more appropriate policy would allow impact fees generated in urban areas, like the downtowns and traditional neighborhoods, to be spent on capital projects that benefit mobility in those neighborhoods.

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