The Flagler County School Board beat a sharp retreat Wednesday as it adopted a far lower impact fee schedule than it had in August, limiting the increase on a single-family home to just $5,450, from the current $3,600. The original increase the board sought would have doubled the fee to $7,175. Further increases will be dictated by enrollment.
The board’s retreat was a victory for home builders–more specifically, the Flagler Home Builders Association–who exercised their power through a largely pliant county commission. The commission must enact the school board’s impact fees by ordinance. As such, it plays an outsize role on the board, even though the school board is its own independent agency and taxing authority. It’s a quirk in Florida law that in essence makes school boards’ impact fee authority subservient to the county commissions.
Rather than ratify the school board’s wishes, as was originally expected, the commission in this case flexed its statutorily authorized role. The board shouldn’t have been surprised: the commission did likewise in 2004.
In two public hearings the commission held on the impact fees in the last few months, commissioners rejected the school board’s wishes and insisted on a scaled back schedule. Superintendent Cathy Mittelstadt initially appeared to be resisting. When the homebuilders applied more pressure, publicly complaining to the commission that they weren’t getting a chance to meet with school officials, Mittelstadt relented and met with county and association officials. The schedule the school board approved in a special 35-minute meeting Wednesday is the result. The new proposal must still go before the county commission for final approval.
It was an almost step-by-step repeat of the scenario from 2004, the first and last time the school board had adopted impact fees. Then as now, and before any solid numbers were presented, the home builders balked at impact fees. The minutes of a Feb. 3, 2004 school board meeting make that clear: The superintendent at the time “reported that he and Mr. Herrera,” Eddie Herrera being the chairman of the school board then, “went to the Home Builders, who admitted the need, but would not endorse impact fees.” It was that explicit. Then as now, the school board initially adopted a higher fee schedule. On Oct. 24, 2004, the board, following a consultant’s report, voted unanimously to set the single-family home fee at $4,756. Then as now, the home builders howled. And then as now, the school board was forced to retreat, six weeks later setting the rate at $3,600, with Colleen Conklin, who was completing her first term on the board in 2004, making the motion to adopt the lower fee.
That’s where the rate has been since. In inflation-adjusted dollars, the 2004 rate would have had to be $5,358 today. In effect, the rate the board approved Wednesday–$5,450–is not an increase, but merely an adjustment in keeping with inflation. In inflation adjusted dollars–in actual purchasing power–it is the same rate set in 2004, soon to be lower, since inflation is again climbing at its fastest clip in 40 years.
“Working with the HBA and the developers it was demonstrating to them that Flagler County is growing,” Mittelstadt said. “I think the unknown pieces some people don’t realize or have accepted how fast it’s growing. And then all those new rooftops that are coming into our community, are they really bringing kids, and we see that they’re bringing kids.”
In another significant concession to the home builders, the new fee will not kick in until Sept. 1. Previously, the board wanted its new impact fees to start 90 days after approval. They were supposed to already be in the books. In subsequent years, the fee increases, should they take place, will kick in on June 1, starting in 2023. The October enrollment figures will determine whether the fee will increase.
There is one striking difference between the 2004 scenario and today: in 2004, the home builders objected even though the district’s population was booming, demonstrably so, as it had never boomed before, with significant increases in the four years that preceded 2004 fee and four more years of significant student population increases. That has not been the case this time. The home builders are right: Flagler County’s population has increased substantially, but the district’s student population has not. It has been remarkably, eerily flat since 2008. In fact, the latest formal count on which funding is based, set in October, had the district’s traditional school population on nine campuses at 12,275, which is lower than the peak of 12,653 in 2008-09. An expected increase this year has not–or has yet–to materialize despite a boom in construction.
Bott said there is a lag between permitted development and completed homes with students. “There haven’t been all that many that have actually been approved with school concurrency reservations yet, there’s a lot of them waiting,” she said–which worries Conklin: “They’re producing students and seats, but we’re not going to be imposing the impact fee. I feel like we’ve we’ve given [in] on the 51 percent, but now, the 90 days was reasonable, but it feels like six months–maybe that’s just me but I just feel like that’s not reasonable.”
Impact fees are one-time fees builders must pay on commercial and residential development to defray the impact of new development on roads, parks, fire houses, schools, police and so on. Most local governments in Florida have impact fees. School impact fees help pay for new schools or expansions of existing schools. The revenue may not be used to refurbish existing schools or to pay for operational expenses, though they may pay for additions of school buses to a fleet. Local governments may not raise their impact fees absent rationales set out in methodologically defensible studies.
Patty Bott, the school district’s planning coordinator, shepherded the process this time around. “We worked very diligently with the county, the homebuilders association, and our other constituents to come up with a resolution that works for everyone,” Bott said. The new approach, a 51 percent increase, provides for additional increases once the school district registers an enrollment increase of 500 students. Each 500-student increase would equate to a $500 increase in the single-family home fee.
Apartment units will see impact fees rise from $931 to $1,360 and mobile homes’ fees will rise from $1,066 to $2,150. With a 500-student increase, the impact fee for apartment units would increase by an additional $125, and the mobile home amount would increase an additional $850.
Several factors account for the phenomenon of flat enrollment in Flagler County schools: In 2020, census figures showed that the while the county’s population had increased fast enough to rank Flagler among the 100-fastest growing counties, the proportion of people 65 and over has been its fastest-growing segment. That segment grew from 24 percent of the county’s population to 30.7 percent in 10 years, an astounding demographic shift that also explains the concurrent decline in local crime, since younger people account for the larger share of crime. Conversely, the county’s proportion of people 18 and younger decreased from 19 percent to 16.9 percent.
Other factors for the flatline in traditional enrollment include the effect of charter and private schools, whose number increased in the last decade or so, as well as the state’s own Legislature and Department of Education’s continuing assault on traditional public education through hundreds of millions of public dollars in subsidies for private schools, through vouchers and corporate “scholarships” (in exchange for lower taxes). Covid, too, has been a factor in shifting students away from in-person environments, to virtual schooling.
The Flagler County Commission may take up the board’s impact fee proposal on Feb. 21 at the earliest.
Three years from now, the district may conduct yet another study and reevaluate its fees altogether.