United States: The New Growth Management Legislation and What it Means to You

The growth management legislation (C/S C/S C/S SB 360), passed by the Florida Legislature on May 6, 2005, carries important implications for those engaged in development-related businesses throughout the state. This "pay as you grow" act overhauls and expands key principles of the current growth management act, which has remained largely unchanged since it was passed in 1985.

During those 20 years, Florida has maintained a growth management policy called concurrency. This policy has been both praised and maligned. Praise has come because it tried to assure that services and facilities needed to serve new growth would be in place — or at least planned and funded — in time to serve the new growth. Local governments determined the extent of the required services by setting levels of service for roads, water, sewer, parks, and other infrastructure elements. If new development’s impact would break or exceed the required levels of service, one of two things could happen: either the developer could pay the entire cost to maintain the level of service or local government could deny approval. Very few state sanctioned exceptions to concurrency were granted.

The concurrency policy was maligned because the legislature enacted this "adequate public facilities policy" without adequate funding. It was imposed on an already deficit-ridden infrastructure system that was $50 billion in the red — and the legislature did not seriously attempt to close this funding gap for 20 years.

Meanwhile, the regulatory policy of concurrency remained, and local governments and developers danced the concurrency dance. Music was provided by dueling themes from transportation planners, usually ending in a crescendo of trip-counting accommodation. The process has been described as "voodoo planning."

The new legislation attempts to make concurrency meaningful. If concurrency represents the teeth of growth management, then the new act sharpens those teeth. First, it adds schools and public water supplies to the list of public facilities and services that will be subject to concurrency. Second, the act provides funding — though modestly — to address the state’s infrastructure deficit of at least $36 billion.

Regarding transportation, the new legislation accelerates the timetable for state roads to be in place or at least planned and funded in order to satisfy concurrency. The prior law allowed five years from the time a local certificate of occupancy was issued. This is now reduced to three years and is triggered by issuance of a building permit, a development order that is received earlier in the approval process.

The planning and funding of local schools also have changed. Previously, local governments were required to coordinate their land use plans and decisions with local school boards. However, they had the freedom to decide whether or not to apply the concurrency requirement to schools. Only one local government in the state chose to do so. Now, the game has changed.

The new law mandates that educational facilities be available or under construction within three years of development approval. Successfully implementing a statewide school concurrency policy will be challenging. With few exceptions, mandatory interlocal agreements among all localities within a school district — that is, a county — must reflect agreement on school plans, levels of service and, ultimately, on concurrency districts. In addition, financial feasibility must be assured.

Local governments must then adopt or amend elements of their plans to implement these agreements. They also must enact regulations to execute these agreements and plans which is no easy task. As well, the state will be watching because state officials will have to approve the adequacy of the local planning effort. Local governments that fail to implement school concurrency will be prohibited from adopting new plan amendments that increase residential density. (Death Penalty I).

School concurrency processes will be addressed — and hopefully rationalized — by a new school concurrency task force before the 2006 legislative session.

Providing potable water is not a new issue and remains subject to concurrency. In addition, local governments will now have to consult with the appropriate supplier to confirm an adequate water supply before the development is approved. This new requirement attempts to link local land use decisions and recently legislated water supply plans produced by the state’s water management districts.

Under the new act, we clearly have more concurrency services. We also have an accelerated provision of transportation facilities, greater linkage between land-use decisions and identification of water supplies, automatic sanction for failure to adopt school concurrency and, as we will see, some modest funding requirements for all of these efforts to tighten concurrency.

Did the legislature provide landowners any tools to smooth the hard edges of concurrency? Yes, but not many. Concurrency may be satisfied for roads if a developer pays a proportionate fair share (PFS) of money, land, or other developer-provided value to mitigate the impact caused by its new project. This represents a significant and meaningful balance to the new concurrency requirements.

PFS may be applied only if the roads or schools to be provided or funded by PFS are included in a local government or school district capital improvement plan. Facilities also may be added to the plan the next time it is amended. Additionally, PFS may be allowed if the projects to be funded by PFS contributions are not in the local plan but funding is "reasonably anticipated" within 10 years. Another option enables PFS to be applied if the projects are not in the plan or "reasonably anticipated" but the PFS mitigation provides a significant benefit to the transportation system by funding one or more transportation improvements. The improvements must be added to the capital improvement plan at the next update. This last alternative is similar to the state’s former long-standing transportation mitigation policy, "pipelining."

PFS is not an absolute right granted to a developer. It is ultimately subject to local government discretion either by action amending a local capital improvement plan to include improvements to be funded by PFS or by determining adequate revenue required to fund the PFS improvements is "reasonably anticipated." The Florida Department of Transportation (FDOT) must be a party to a PFS agreement that affects state roads. Similarly, the school district must approve a PFS agreement for schools.

Bottom line: FDOT and the school boards are now much more engaged in local land use decisions.

The act tightens the connection between the local capital improvement plan and concurrency. Conceptually, concurrency has always been tied to a local capital improvement plan. These plans were to be financially feasible, which is to say the improvements to be provided by the plan would be identified and matched by adequate funds. While many local government capital plans are transparent and financially feasible, others are not.

The new legislation reinforces the mandate that capital improvement plans be financially feasible by adopting a definition of financial feasibility. It also requires that annual updates to the capital plans be produced, reviewed, and approved by the state. Capital plans that are not approved trigger sanctions for a locality, including the inability to adopt future plan amendments until the state approves the capital improvement plan.

This ultimate sanction (Death Penalty II) triggered much legislative debate. Key issues centered on the ability of third parties to shut down a locality simply by administratively challenging and thus deferring state approval of a capital plan amendment without having to show even a reasonable chance to succeed in the challenge. Another concern centers on the adequacy of state resources and personnel to deal with all of the amendments that will pour in for review. We can expect this controversy to continue.

Although the new legislation is short on incentives and long on mandates, local governments are offered incentives to designate urban service boundaries (USBs) and urban infill and redevelopment areas and to produce community visions. These visions are descriptions of what a community will look like in the future. The act sets forth a number of issues that visions must address and an extensive process for public participation. Visions may be adopted as plan amendments.

USBs and local policies encouraging urban infill and redevelopment are meant to act as urban sprawl busters. Land within a USB should be able to accommodate 10 years of compact and contiguous development and must be complemented by a 10-year, financially feasible capital facilities plan. Of course, it also must be consistent with a locality’s land use plan.

If a locality adopts a USB, it is not required to deny new development outside its limits. But the new act does encourage local governments to apply full cost accounting when reviewing these requests. Full cost accounting is not defined but is generally understood to mean an assessment of the full costs and contributions of a new project to a locality.

If a locality adopts a vision, plan amendments within a USB are not required to undergo state review, but they may be challenged by third parties on grounds that they are not in compliance with state standards.

What does the new legislation say about developments of regional impact (DRI)? Actually, it doesn’t say much about PFS. The new act exempts development within urban service boundaries from DRI review. But as is typical with DRI exemptions, hurdles are attached. The exemption is conditional upon the local government reaching agreement with adjacent localities and with FDOT on measures to mitigate cross-jurisdictional road impacts and impacts to state and regionally significant roads and facilities.

Similar DRI exemptions are available for rural stewardship areas and for urban infill and redevelopment areas, with the same attendant mitigation agreement conditions.

Regional cooperation is given a boost by provisions authorizing and providing some financial incentives for the Metropolitan Planning Organizations (MPO) to combine their transportation planning efforts, organizations, and funding to produce more significant regional transportation plans linked with local land use and capital improvement plans. The State Transportation Commission and the Urban Land Institute (ULI), recently reported ways to improve regional cooperation and have promoted these concepts.

Local government presently is required to evaluate and assess local plans, prepare a report called an Evaluation and Assessment Report (EAR), and update the local plan by amendment to reflect the report. Full implementation of this statutory mandate has been uneven. The act underscores the importance to evaluate, assess, and amend the plan as appropriate by prohibiting future plan amendments if a locality fails to timely adopt and transmit to the state plan amendments based on the EAR. (Death Penalty III).

The new legislation provides approximately $1.5 billion in new infrastructure funding for the current year and $750 million in recurring funding. This money will address planning, technical assistance, and facility provision. This is good news — though the funding is very modest — given the state’s infrastructure deficit of at least $36 billion. But it is a start. A portion of the new state transportation fund is available only to local governments that opt to match state dollars. Since many rapid growth localities have transportation backlogs and are already revenue strapped, this may preclude their ability to benefit from the state assistance. Consequently, these dollars may be directed to slower growth, lower priority areas, and not targeted to help alleviate the most pressing backlogs. A final note: although the act contemplates recurring future appropriations, future legislative action can re-direct these dollars. Infrastructure proponents should pay careful attention to the legislature’s transportation appropriations process.

The label "reform" usually is attached to public policy action that reorganizes or restructures existing roles and power; simplifies or streamlines the delivery of services; or establishes significant new rights or obligations. By these measures does the 2005 effort reform growth management in Florida? This remains to be seen. It does tighten administration of the present act by adding more state review of new, mandatory local action and strengthens state enforcement of concurrency by adding several Death Penalty sanctions for non-compliance. It also expands the reach of concurrency. The legislation recognizes past neglect in funding concurrency and provides a modest start in helping fund a bulging infrastructure backlog. The 2005 act is meaningful. What it actually and ultimately means will have to be sorted out in the coming months.

The day after the present growth management act was passed 20 years ago, talk began to circulate about a cleanup or glitch bill for the next session. This came to pass. A glitch bill was adopted and reflected positive clarification and some new accommodation of interests. If the past is any indication of the future, we will see a significant glitch bill in 2006.

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