Filtering by Tag: special assessments
County Could Impose Special Assessments for Recently Completed Projects Using Reassessment: A. Davis et al v. Marion County, 93 So. 3d 113 (Fla. 5th DCA 2012).
The homeowner's predecessors in interest (the developer) cut a deal with the county to set up an improvement district to fund not only the roads internal to the project, but also to build a major section of arterial road. While the project was still under the developer's control, an assessment was levied (for 20 years) against property in the development and the bonds were validated.
None of the other developments who benefit from the improved major road were assessed. Later, homeowners subject to the assessment -- understandably annoyed when they realized they were paying for infrastructure for the entire area, and effectively subsidizing the other developments-- sued to establish that the assessments were illegal because they were not proportionate to the impacts of the paying development.
The circuit court dismissed, holding that the statute of limitations had run the validation of the bonds precluded later challenges to the assessments. The District Court affirmed, holding that the homeowners were bound by their predecessor's knowledge of the date of the validation/action.
In the case now before us, we must balance the interests of the Homeowners in
receiving notice of the exclusive nature of the Unit 18 assessments against the
public policy concerns highlighted in H&B Builders. Weighing these competing
interests, we find that, on these facts, the Homeowners interests are outweighed
by the need of the District for certainty in creating water management plans and
funding those plans. As a result, the approval and creation of the assessments
and impact fees here by the District provided sufficient notice to then existing
and future homeowners of their obligations. This is true even if the assessments
and impact fees were improperly levied. See Ves Carpenter, 422 So. 2d 342;
Spring Lake Improvement District, 814 So. 2d 1077.
So, clearly, sue before you buy - or at least be sure that your developer did.
Fla Supremes Make REALLY Sure We'll Have Lots of Special Assessments - No Bonds for TIFs w/out Referendum
Not any more. In Strand v. Escambia County, the Florida Supreme Court drove a stake into the heart of the Miami Beach case that established the "TIF exception" and loosed an arrow (not yet struck) into the "combination of revenues" exception established in the Sarasota County School Board case.
Not surprisingly, a local government had taken the TIF exception (carved out for CRA type improvements) to an extreme, funding a major road improvement ($135M) for Perdido Key solely from TIF-backed bonds. The TIF "area" is the "Southwest Escambia County Improvement District"-- which does NOT appear anywhere in the opinion as an MSTU/MSBU; instead it appears that the County tried to use its home rule powers to simply create a TIF-type area from whole cloth to segregate general-fund ad valorem tax dollars into the bond payments. [I'm sure I'll here from the principles if I've got this wrong or if the Court missed it.] The Court invalidated the bonds as being in violation of Article VII, s. 12.
The Court did a very scholarly job of reviewing the bad history of ad valorem-backed bonds in Florida and the two main "exception" cases. It also discussed (cogently) the Volusia County case that held that the County couldn't pledge a hodge podge of non-ad volorem revenues to back a bond if it appeared that the county might have to raise ad valorem taxes to replace the pledged revenues. The Court concluded that the Miami Beach and Sarasota School Board cases went too far and reeled them back in.
So, in the span of two weeks we find out that local governments get huge discretion to issue bonds backed by special assessments and have little or no discretion to issue bonds backed by ANY kind of ad valorem revenues. Two results are pretty much automatic:
1) HEELLLOOOO MSTUs and Special Districts with special assessments. I'm guessing we'll see lots and lots of these because its the only way left to raise funds to pay for infrastructure.
[Well, maybe we won't see so many in the short run. After over 25 years of Republican preaching about "no new taxes" and government waste, the citizenry thinks that it can get better roads and other infrastructure for free. It's all new development's fault, just use impact fees to do it, and if they don't work, screw around with concurrency to create moratoria and then make them pay for everything just to be able to do anything. In that climate, we probably won't see cities and counties establishing responsible ways to pay for infrastructure until they lose a few major cases.]
2) Bye, bye CRAs!!! No bonding for TIF revenues from CRAs, so why bother - straight into special assessment districts. First they lose the power to condemn for redevelopment, and now they lose the ability to bond TIF dollars - the two useful functions of CRAs are now pretty much toast.
Here's the problem: CARES claimed that the City was playing a major funding shell game and mixing up the costs of rehabilitating its aging 3.5 MGD existing plant with the costs of expanding the plant to 5 MGD.
The circuit court and Supremes found that there was enough evidence before the City Commission to support its legislative finding that the assessments reasonably benefit the properties to be served and were reasonably attributable and assigned to those properties.
And of course there was testimony that (a) the plant would not have had to be expanded (or new lines run) absent service to the new areas; (b) the bond proceeds were pledged to "expansion costs" for lines and treatment capacity; and (c) the existing users would get no special benefits from the expansion. The Supremes found that to be enough to meet the 2 part test for a valid special assessment in a bond validation proceeding where the bonds are funded by the assessments.
The problem, of course, is that we don't know (from this kind of appellate opinion) how much the local government was hiding, and what CARES was really asking for was meaningful cost accounting to distinguish between capacity improvements and rehabilitation of the plant. If the City had been charging pure impact or hookup fees instead of special assessments, that kind of inquiry would have been required (see the Sarasota County case from a couple months back, or the Volusia County school impact fee case). But by playing a switcheroo game, labeling the charges "special assessments" and pledging them to bonds, the City gets away with minimal scrutiny of its cost accounting.
This is wrong. Maybe the City is playing fair, but based on what I've seen of public finance lately, I don't believe it. All over the state, local governments are refusing to hand existing residents the bill for the service upgrades they want (wider roads, better drainage, better equipped parks) and pretending that the "need" for additional capital investment is entirely attributable to new development.
The Supreme Court, whether intentionally or not, made this problem worse with this decision. The Court -- and the abusive local governments - are simply daring the legislature to adopt meaningful legislation to provide minimal, uniform standards of accounting for capital improvements, and a standard approach for impact fees and other exactions.
Seems like a silly piece of legislative oversight that could have dramatic impact on the fiscal viability of charter schools.
The case is Remington v. Education Foundation, here's the link to the opinion.