Associate Editor

Saying it would be difficult to subsidize more than an estimated $1 million this year if it suspended transportation impact fees linked to upcoming private building projects, the Kissimmee City Commission decided Tuesday not to put a moratorium on the revenue stream.

The commission asked city staff to explore the implementation of a temporary fee suspension in December similar to that proposed by Osceola County government, which on Jan. 10 approved an ordinance to establish a one-year freeze on the fees for non-residential construction to try to stimulate building within the business community and to create jobs.

However, if the city were to establish a moratorium, it would have to suspend fees for all types of building in Kissimmee or risk a lawsuit, City Manager Mike Steigerwald said, after City Attorney Don Smallwood reviewed case law.

“It has to be done equally across the board,” Steigerwald said.

But the larger issue was how the city would have had to supplement its impact fee revenue. The city’s single largest non-restricted funding source is the general fund, which is where the supplement would likely have come from, Steigerwald said. It’s a fund that pays the salaries for public safety officials, including Kissimmee police and firefighters, Steigerwald noted.

“It’s a tough place to take funds from to subsidize transportation impact fees,” Steigerwald said.

In 2010, the city collected $604,212 in transportation impact fees. However, Steigerwald stressed that because of capital projects planned for this year, with developers and property owners pulling permits, the city manager had staff estimate how much the city planned to make in transportation impact fees. Staff believed it had the potential to at least double, Steigerwald said, meaning the city would have to scramble to try to make up $1.2 million to $1.3 million if a moratorium were established.

The city might have to raise property taxes if Kissimmee went that route, City Commissioner Jerry Gemskie said.

“I don’t want to do that,” he said. “We are switching the load on somebody else.”

When Commissioner Wanda Rentas asked Steigerwald if employee layoffs could be possible to make up the impact fee shortfall, he said it wasn’t off the table.

“I don’t agree with any employee losing their jobs at this time,” she said.

Gemskie also noted that the commission in November reduced impact fees by almost 30 percent after city staff presented a Florida Department of Transportation study to the City Commission showing that between 2007 and 2010 road construction costs had decreased substantially.

The city shouldn’t waive impact fees, Commissioner Cheryl Grieb said, but in-stead, look at adjusting them accordingly.

One option to accomplish that, Steigerwald said, would be to establish a mobility fee. Such a fee would cover various transportation needs, including roads, signalization projects that manage traffic, mass transit, bikeways and pedestrian walkways. Fees would not be the same for all locations in the city and would be based in part on how many miles new residents would need to travel to get to retail stores, for example.

The Osceola County Commission plans to revisit its moratorium in February to possibly extend the time allowed for projects to be completed for which fees would be waived and to possibly include a moratorium or reduction of residential impact fees.

Mayor Jim Swan said he didn’t think the city should follow that path.

“I’m not willing to support something because someone else did it anymore than I’d be willing to jump off the top of this building (Kissimmee City Hall) because someone else did it before me,” he said.

Steigerwald said the city plans to hire a consultant to study alternative ways to offer incentives to new businesses.