St. Johns County v. Northeast Florida Builders Ass'n, Inc.

• Decision Date: 18 April 1991
• Docket Number: No. 75986,75986
• Citation: 583 So.2d 635,69 Ed. Law Rep. 636
• Parties: ST. JOHNS COUNTY, Florida, etc., et al., Petitioners, v. NORTHEAST FLORIDA BUILDERS ASSOCIATION, INC., etc., et al., Respondents. 583 So.2d 635, 69 Ed. Law Rep. 636, 16 Fla. L. Week. S505
• Court: Florida Supreme Court

Page 635

583 So.2d 635

ST. JOHNS COUNTY, Florida, etc., et al., Petitioners, v. NORTHEAST FLORIDA BUILDERS ASSOCIATION, INC., etc., et al Respondents.

No. 75986.

583 So.2d 635, 69 Ed. Law Rep. 636, 16 Fla. L. Week. S505

Supreme Court of Florida.

April 18, 1991.

Rehearing Denied Aug. 15, 1991.

James G. Sisco, County Atty., St. Augustine, and Charles L. Siemon and Michelle J. Zimet, Siemon, Larsen & Purdy, Chicago, Ill., for petitioners.

Michael P. McMahon, Virginia B. Townes and Gregory J. Kelly, Akerman, Senterfitt & Eidson, Orlando, for respondents.

William J. Roberts, Roberts & Egan, P.A., Tallahassee, amicus curiae, for Fla. Ass'n of Counties, Inc.

Ned N. Julian, Jr., Stenstrom, McIntosh, Julian, Colbert, Whigham & Simmons, P.A., Sanford, and Robert L. Nabors and Sarah M. Bleakley, Nabors, Giblin & Nickerson, P.A., Tallahassee, amicus curiae, for School Bd. of Seminole County.

Robert M. Rhodes, C. Alan Lawson and Cathy M. Sellers, Steel, Hector and Davis, and Richard E. Gentry, Tallahassee, amicus curiae, for Fla. Home Builders Ass'n.

Sydney H. McKenzie, Gen. Counsel, State of Fla., Dept. of Educ., and Joseph L. Shields, Tallahassee, amici curiae, for Dept. of Educ., State of Fla., Fla. School Boards Ass'n, Inc. and Fla. Ass'n. of School Adm'rs.

GRIMES, Justice.

We review St. Johns County v. Northeast Florida Builders Association, 559 So.2d 363 (Fla. 5th DCA 1990), in which the district court of appeal certified as a question of great public importance the question of whether St. Johns County could impose an impact fee on new residential construction to be used for new school facilities. We have jurisdiction under article V, section 3(b)(4) of the Florida Constitution.

In 1986, St. Johns County initiated a comprehensive study of whether to impose impact fees to finance additional infrastructure required to serve new growth and development. At the request of the St. Johns County School Board, the county included educational facilities impact fees within the scope of the study. In August of 1987, the county's consultant, Dr. James Nicholas, submitted a methodology report setting forth what action the county could take to maintain an acceptable level of service for public facilities. The report calculated the cost of educational facilities needed to provide sufficient school capacity to serve the estimated new growth and development and suggested a method of allocating that cost to each unit of new residential development. As a consequence, on October 20, 1987, the county enacted the St. Johns County Educational Facilities Impact Fee Ordinance.

The ordinance specifies that no new building permits ¹ will be issued except upon the payment of an impact fee. The fees are to be placed in a trust fund to be spent by the school board solely to "acquire, construct, expand and equip the educational sites and educational capital facilities necessitated by new development." St. Johns County, Fla., Ordinance 87-60, Sec. 10(B) (Oct. 20, 1987). Any funds not expended within six years, together with interest, will be returned to the current landowner upon application. The ordinance also provides credits to feepayers for land dedications and construction of educational facilities. The ordinance recites that it is applicable in both unincorporated and incorporated areas of the county, except that it is not effective within the boundaries of any municipality until the municipality enters into an interlocal agreement with the county to collect the impact fees.

The Northeast Florida Builders Association together with a private developer (builders) filed suit against the county and its county administrator (county) seeking a declaratory judgment that the ordinance was unconstitutional. The opposing sides each filed a motion for summary judgment. The trial court entered summary judgment for the builders, declaring the ordinance to be unconstitutional on a variety of grounds. In a split decision, the district court of appeal affirmed, holding that the ordinance violated the constitutional mandate for a uniform system of free public schools.

This Court upheld the imposition of impact fees to pay for the expansion of water and sewer facilities in Contractors & Builders Association v. City of Dunedin, 329 So.2d 314 (Fla.1976). We stated:

Raising expansion capital by setting connection charges, which do not exceed a pro rata share of reasonably anticipated costs of expansion, is permissible where expansion is reasonably required, if use of the money collected is limited to meeting the costs of expansion.

Id. at 320. In essence, we approved the imposition of impact fees that meet the requirements of the dual rational nexus test adopted by other courts in evaluating impact fees. See Juergensmeyer & Blake, Impact Fees: An Answer to Local Governments' Capital Funding Dilemma, 9 Fla.St.U.L.Rev. 415 (1981). This test was explained in Hollywood, Inc. v. Broward County, 431 So.2d 606, 611-12 (Fla. 4th DCA), review denied, 440 So.2d 352 (Fla.1983), as follows:

In order to satisfy these requirements, the local government must demonstrate a reasonable connection, or rational nexus, between the need for additional capital facilities and the growth in population generated by the subdivision. In addition, the government must show a reasonable connection, or rational nexus, between the expenditures of the funds collected and the benefits accruing to the subdivision. In order to satisfy this latter requirement, the ordinance must specifically earmark the funds collected for use in acquiring capital facilities to benefit the new residents.

The use of impact fees has become an accepted method of paying for public improvements that must be constructed to serve new growth. See Home Builders & Contractors Ass'n v. Board of County Comm'rs, 446 So.2d 140 (Fla. 4th DCA 1983) (road impact fees upheld), review denied, 451 So.2d 848 (Fla.), appeal dismissed, 469 U.S. 976, 105 S.Ct. 376, 83 L.Ed.2d 311 (1984); Hollywood, Inc. v. Broward County, 431 So.2d at 606 (park impact fees upheld). However, the propriety of imposing impact fees to finance new schools is an issue of first impression in Florida. ²

Turning to the first prong of the dual rational nexus test, we must decide whether St. Johns County demonstrated that there is a reasonable connection between the need for additional schools and the growth in population that will accompany new development. In the ordinance, the county commissioners made a legislative finding that the county "must expand its educational facilities in order to maintain current levels of service if new development is to be accommodated without decreasing current levels of service." St. Johns County, Fla., Ordinance 87-60, Sec. 1(C) (Oct. 20, 1987). No one quarrels with this proposition. However, an impact fee to be used to fund new schools is different from one required to build water and sewer facilities or even roads. Many of the new residents who will bear the burden of the fee will not have children who will benefit from the new schools. Thus, Dr. Nicholas determined that on average there are 0.44 public school children per single-family home in St. Johns County. Applying the single-family home ratio to a per-student cost calculation, he concluded that it required $2,899 per new single-family home to build the school space anticipated to be needed to serve the children who would live in the new homes. Finding that existing taxes and revenue sources would produce $2,451 per single-family home, Dr. Nicholas concluded that for each new single-family home there was an average net cost of $448 for building new schools that would not be covered by existing revenue mechanisms. He made similar calculations based upon his determination of the number of public school children residing in multiple family units of construction.

The builders argue that because many of the new residences will have no impact on the public school system, the impact fee is nothing more than a tax insofar as those residences are concerned. We reject this contention as too simplistic. The same argument could be made with respect to many other facilities that governmental entities are expected to provide. Not all of the new residents will use the parks or call for fire protection, yet the county will have to provide additional facilities so as to be in a position to serve each dwelling unit. During the useful life of the new dwelling units, school-age children will come and go. It may be that some of the units will never house children. However, the county has determined that for every one hundred units that are built, forty-four new students will require an education at a public school. The St. Johns County impact fee is designed to provide the capacity to serve the educational needs of all one hundred dwelling units. We conclude that the ordinance meets the first prong of the rational nexus test.

The question of whether the ordinance meets the requirements of the second prong of the test is more troublesome. As indicated, we see no requirement that every new unit of development benefit from the impact fee in the sense that there must be a child residing in that unit who will attend public school. It is enough that new public schools are available to serve that unit of development. Thus, if this were a countywide impact fee designed to fund construction of new schools as needed throughout the county, we could easily conclude that the second prong of the test had been met.

However, the St. Johns County impact fee is not effective within the boundaries of a municipality unless the municipality enters into an interlocal agreement with the county to collect the fee. The ordinance provides that the funds shall be spent solely for school construction necessitated by new development. However, there is nothing to keep impact fees from being spent to build schools to accommodate new development within a municipality that has not entered into the...