Oviedo has enough roads to run to Key West and does not collect enough taxes to maintain them into the future, according to a consultant’s presentation to the city’s Community Redevelopment Agency board on Monday night.
An analysis by Urban3 LLC, a land-value economics firm, has local leaders seeking ways to find the funding the city needs to maintain its infrastructure, including roads, water pipes and ponds, as well as altering the way they think about development in the future.
The report revealed that Oviedo’s revenues reflect a $15 million annual budget shortfall based on the amount of money it would take to maintain its infrastructure.
According to the analysis, Oviedo has enough water pipes to run all the way to Havana and enough ponds to fill 285 Olympic-sized swimming pools. The city currently spends $4 million annually to maintain its infrastructure but Urban3 found that $19 million is needed.
Rapid population and commercial growth in Oviedo has meant high tax revenues for the city, allowing the tax rate for citizens to remain around the same each year. But, once growth slows, the city will have to find new revenue streams to compensate.
“We haven’t been charging enough because the new growth that we get in our community has sort of masked these bigger problems that we’re growing into,” Urban3 Principal Joe Minicozzi said.
“Right now you’ve got a gap between what you’re spending and what you need, and if you don’t address it, it’s going to exacerbate over time. So looking out to [year] 2050, that gap could widen to $430 million.”
The city’s tax rate has increased each year since 2016, usually by one or two cents. For instance, the rate increased from $5.12 per $1,000 of assessed property value last year to the current rate of $5.13 to balance the $15.6 million city budget. Under the new proposed rate, a homeowner whose home is officially assessed at $300,000 would pay $1,538 in city taxes.
Urban3’s possible solutions include:
- Raising taxes
- Charging higher taxes to residents who live in areas that cost more money to serve (example: those living in more rural areas)
- Increase the tax base while decreasing additional infrastructure (example: higher residential or commercial density in areas where infrastructure exists)
- Increasing the population (this solution would require 70,000 more people to fill the revenue gap)
- Stop building roads (this is not advised by Minicozzi, but he suggested focusing on building roads as a grid structure in the urban core to disperse traffic)
- Charge a fee to those who live on dead-end streets (because fewer people use them)
- Implement a new tax, such as a gas tax
- “Revert to dirt” in the rural areas (stop maintaining roads that get very little use)
Minicozzi said many cities choose to implement a combination of several solutions to lessen the impact. Compared to other cities, he said Oviedo’s situation is “not the worst we’ve seen.”
Deputy Mayor Bob Pollack said he sees going vertical as the solution.
“Single-family homes are probably going to be less and less available. It’s going to be multi-family residential because we can’t afford to build sprawling neighborhoods anymore in the community and we don’t have the land for it either,” he said.
Mayor Megan Sladek said she favors a mix of building density in existing high-density areas as well as adjusting city fees.
She said this report could alter the way the city considers development applications by considering its impact on the infrastructure over its lifetime.
“When we are deciding where to put additional density or whether to approve proposed [Oviedo comprehensive] plan changes, I think people will look at it and they will genuinely think about, will this require an extra road, will this require an additional lift station and can we use what’s already there? Will it cover the cost of its existence with that density?”
She hopes the report will help the city create its 10-year mobility plan and comprehensive plan, which is expected to be complete in May 2022. The comprehensive plan establishes the city’s policies regarding future development, transportation, housing, environmental resources and infrastructure over the next 25 years.
This is Urban3’s second report to the CRA. The first report showed that multi-family housing generated double the tax revenue per acre as commercial and single homes; Oviedo on the Park produces the most property tax revenue compared to other areas in the city; and denser development leads to lower infrastructure costs per person.
About the CRA
Oviedo’s Community Redevelopment Area (CRA) totals 674 acres and encompasses the historic downtown and Oviedo on the Park areas. The Community Redevelopment Area Board consists of the five Oviedo City Council members and two members appointed by the Seminole County Commission who either live or do business in the redevelopment area. You can find those members here.
The CRA board plans and funds road, housing, arts and culture and business-related projects within the two downtown areas that are identified within the Oviedo Community Redevelopment Plan, which was adopted in 2010. Funding for CRA projects and activities come from annual tax revenue increases associated with increased property values within the CRA area from the baseline taken in 2010. The CRA’s revenues in 2020 totaled almost $999,000.