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HomeMy WebLinkAboutLTC 239-2026 City Attorney's Responses to the City Commission's discussion at the Fiscal Year 2027 Budget Retreat on May 5, 2026OFFICE OF THE CITY ATTORNEY LTC No._239-2026____ _ LETTER TO COMMISSION TO: Mayor Steven Meiner and Members of the City Commission FROM: Ricardo J. Dopico, City Attorney@ DATE: June 2, 2026 SUBJECT: City Attorney's Responses to the City Commission's discussion at the Fiscal Year 2027 Budget Retreat on May 5, 2026. This Letter to Commission ("LTC") has been prepared in response to the City Commission's discussion at the Fiscal Year 2027 Budget Retreat on May 5, 2026. I.Legal mechanisms for new development to fund City infrastructure improvements. The following is a summary of funding mechanisms authorized under State law to pay for public facilities and infrastructure that are necessary to support new development. 1.Impact Fees, Concurrency, and the Mobility Fee A.Impact Fees. Impact fees are regulated by the Florida Impact Fee Act (codified at Florida Statutes § 163.31801). The Florida Legislature recognizes that "impact fees are an important source of revenue for a local government to use," as an outgrowth of its home rule powers to provide services within its jurisdiction, "in funding the infrastructure necessitated by new growth." Fla. Stat.§ 163.31801(2) (emphasis added). Impact fees are collected prior to the issuance of a building permit for new development. The City, County, and School Board charge impact fees on new development to fund improvements to public facilities and infrastructure.1 The City may adopt and collect impact fees by ordinance. At the time of adoption, these fees must be based on a fee study "using the most recent and localized data available within 4 years of the 1 "Infrastructure means a fixed capital expenditure or fixed capital outlay, excluding the cost of repairs or maintenance, associated with the construction, reconstruction, or improvement of public facilities that have a life expectancy of at least 5 years; related land acquisition, land improvement, design, engineering, and permitting costs; and other related construction costs required to bring the public facility into service .... " Fla. Stat. § 163.31801 (3)(a) (internal quotations omitted). Under Fla. Stat. § 163.3164, "[p]ublic facilities means major capital improvements, including transportation, sanitary sewer, solid waste, drainage, potable water, educational, parks and recreational facilities." Fla. Stat.§ 163.3164(41) (emphasis added) (internal quotations omitted). Letter to Commission June 2 , 2026 Page 2 current impact fee update." .!.9.c § (4)(a ). Any increase to an impact fee must also comply w ith the Florida Impact Fee Act's phase-in requirements . Impact fees must satisfy the "dual rational n ex us " test recognized by the Florida Supreme Court and U.S . Supreme Court, and adopted by the Florida Leg islature in the Flori da Impact Fee Act: impa ct fees must be proportional and reasonab ly c onnected to , o r have a rational nexus with (1) the need for additional capital facilities and the increased impact generated by the new development; and (2 ) the ex penditure of funds collected and the benefits ac cruing to the new development. 2 For each particular development, impact fees must be offset by the value of any monetary or in- kind contribution related to the public facilities or infrastructure for wh ich the impact fee is charged . Impact fees cannot be used to address existing deficiencies; rather , they c an only fund the incremental cost to service new development at the level of service ("LOS ") adopted in the City's Comprehensi v e Plan. B . Concurrency Management and the Mobil ity Fee . Consistent w ith the Commun ity Planning Act ( codified at Chapter 163, Florida Statutes), the City has adopted LOS standards in the Capital Improvements Element of the Comprehensive Plan for the following publi c facilities : potable water, sanitary sewer, solid waste disposal , drainage, and parks and recreation . The LOS for public schools is fixed by Miami-Dade County Publi c Schools . Any new development approved by the City must be concurrent with the adopted LOS. If a project wou ld cause a deficiency in the LOS for a particular facility, then the developer must pay its proportionate share of the cost to mitigate the deficien cy in order t o obtain appro val. Since 2016 , and as authoriz ed under Section 163.3180(5), Florida Statutes , the City assesses a mobility fee based on the impa cts of new development pursuant to an adopted mobility plan . The City's current mobility fee structure is based on the City's 2016 Transportation Master Plan , which superseded the earlier-adopted 1999 Munici pal Mobility Plan . The mobi lity fee is assessed at the time of a buildi ng permit and may be used to fund a wide range of transportation services and improvements, including , but not limited to , the City's Trolley and Water Tax i services, micromobility and pedestrian infrastructure enhancements , and street and sidewalk improvements. Prior to 2016, the City assessed a transportation concurrency mitigation fee , whi ch was set by the City Commission in 2000 and funded improvements set forth in the 1999 Mobility Plan . The mobility fee adopted and co llected for transpo rtation concurren cy mana gement must be based on an impact fee study complying with the requirements of the Florida Impact Fee A ct. The Comprehensive Plan must demonstrate , for all other con currency requ irements , that the applicable LOS can be rea s on a bly met, and the Co mprehens ive Plan must contain principles , guidelines, standards , and strategies for the maintenance of con currency levels of service . 2 See Wald Corp . v. Metro . Dade Cnty., 338 So. 2d 86 3 (Fla. 3d DCA 1976), reh'g denied , 348 So . 2d 955 (Fl a . 1976); see also Nollan v . Cal. Coastal Comm 'n , 483 U.S. 825 (1987 ); Dolan v . City of Tigard , 512 U.S. 374 (1994); Koontz v. St. Johns Water Mgmt. Dist., 570 U.S . 595 (2013); Sheetz v . El Dorado Cnty., 601 U.S. 267 (2024); Fla . Stat.§ 163 .31 801. We are committed to pro viding excellent public service and safety to all who live, work, and play In our vibrant. tropical, historic community. Letter to Commission June 2, 2026 Page 3 The studies and plan elements for concurrency levels of service , the mobility fee , and impact fees may require updating to reflect increased costs to maintain concurrency or implement an infrastructure plan. On June 24, 2026 , the Mayor and City Comm ission will cons ider a proposed referral to the Land Use and Sustainab ility Committee ("LUSC ") to discuss commissioning an updated transportation study to replace the 2016 Transportation Master Plan , including an updated analysis of transportation costs as part of the Mobility Fee Progra m and consideration of the types of transportation projects to which the mobility fee would be applied . The C ity may also consider reviewing the City 's Water Supply Plan , which is requ ired to be updated every 7 years following the adoption of a Water Supply Plan adopted by the South Florida Water Management District and Miami-Dade County; and the current Recreation and Open Space LOS standards in the Comprehensive Plan .3 However, any initiative to create a new impact fee or additional LOS standards(~. for parks and recreation facilities or certa in public safety faci liti es), or to increase an existing impact fee, should be reviewed for compliance with Florida Senate Bill 180 (2025).4 2. Development Agreements For certain large-scale developments or developments involving City property or the construction of a City facility, State law authorizes the City to negotiate and enter into a development agreement pursuant to Ch . 163, Florida Statutes . The Florida Loca l Government De velopment Agreement Act serves as a statutory framework to provide public facilities that will support these developments. See Fla. Stat. §§ 163.3220-163.3243. Development agreements are required to include "[a] description of public facilities that will service the development, in cluding who shall provide such facilities ; the date any new facilities , if needed , will be constructed; and a schedule to assure public facilities are available concurrent with the impacts of the development." See Fla . Stat.§ 163.3227(1)(d ). 3. Special assessments The City has authority to levy special assessments on real property with in a defined area to pay for public facilities and infrastructure. Special assessments may on ly be used for a public purpose . Special assessments must provide a special benefit to affected property owners, rather than a general benefit to the community as a whole. Special assessments must also be apportioned fairly among affected property owners. Th is means that the amount of each property's assessment must be proportionate to the special benefit accru ing to that property. 4. Zoning incentives Although the City has the ability to adopt a system of incentives as part of an overall Comprehens ive Plan and zoning plan , the City Comm ission cannot condition its adoption of 3 The Comprehensive Plan , at Policy CIP 1.5.6, encourages the City to exp lore the feasibil ity of replacing Recreation and Open Space LOS standards with a Parks and Recreation Impact Fee. 4 At least one court has held , in Freedom Housing Alliance, Inc ., et al. v. Manatee County, Case No. 2025 CA 1549 (F la . 12th Cir. Ct. Dec . 29 , 2025), that a new increase to an impact fee adopted after the effective date of Senate Bill 180 violates Section 28 of Senate Bi ll 180. Litigation in this matter is ongoing . We are committed to providing excellent public service and safety to all who five, work. and play In our vibrant, tropical, historic community. Letter to Commission June 2 , 2026 Page 4 legislation on the receipt of consideration or otherwise bargain or commit its regulatory powers in exchange for consideration . Notwithstand ing the foregoing , the City may exp lore , as part of targeted zoning incentives for specific areas of the City, creating a legislative framework to mitigate impacts of new development on public infrastructure. Any fees associated with such a framework must also meet the "dual rational nexus" test enumerated in the Florida Supreme Court and U.S. Supreme Court cases cited above , as well as the Florida Impact Fee Act. By way of example, on February 25 , 2026 , the Mayor and City Commission referred a n ite m to the LUSC to discuss the creation of a Resilience Trust F und to offset the impacts of high-density residential development on public infrastructure along certai n co rridors of the City. This referral is based on an existing program in the City of Miami , adopted pursuant to O rdinance No . 18452, to fund infrastructure projects that "result in reducing flooding , storm surge , or urban heat island effect" in specified areas that allow for increased density. II. Legal and ethica l considerations associated w ith private contributions made outside of the development review process to support capital infrastructure projects. The City routinely applies for gra nts, loans, and othe r fi nancing opportunities to support capital projects. Prior to considering or accepting a voluntary contribution from a private individual or corporate entity, the City Administration is requi red to perform due diligence to identify the donor, analyze the source of funds , and evaluate any conditions, agreements, or restrictive covenants that may apply to the funds . Any private contribution must be evaluated, among other t hings , for compliance with app licable legal requirements and the State , County, and City co des of ethics. Th is is particularly important when a prospective donor has business pend ing before the City, such as cu r rent and prospective vendors, property owners, and business owners . RJD/NK/JA/sp We ere committed to providing excellent pub/le seNice end safety to all who /Ive , work, and p/ey in our vibran t, tropical, historic community.