The Flagler County Commission on Monday, despite sly maneuvering and lack of notice, voted to scrap and replace within 120 days a key inter-governmental agreement with the school district and three cities that frames how school construction and new development go forward in the county.
The 4-1 vote was on a significant policy matter that was not publicly noticed until hours before Monday’s meeting. It was yet another snub to process, to the Flagler County School Board, to Palm Coast, Bunnell and Flagler Beach governments.
The vote was also colored by disinformation and inaccuracies from Commission Chairman Joe Mullins.
The dissenting vote was that of Andy Dance, who objected to the lack of public notice and unfairness to the School Board. The commission’s actions drew sharp rebukes and correctives from two top school district officials at the meeting on Monday. Commissioners ignored them.
A working group made up of county, school board, home builders and others has been meeting to negotiate a new so-called “interlocal agreement” defining how new development and school construction work concurrently, so the school district is not overrun with students it cannot reasonably and properly accommodate.
No one on the working group disputes that a new agreement, referred to by its acronym, ILA, is needed. The current one is 14 years old. State law has been changed a few times since its inception. It needs an update.
But if everyone agrees that it needs a re-write, one issue in the ILA has been a sticking point. It sounds complicated. It’s not. The only complication is a different way of interpreting the issue, even though it was not a sticking point previously. It is an issue now because homebuilders–and, specifically, the Flagler County Homebuilders Association–is flexing its muscle. Residents are not. Parents with children in school are not. Future residents are not.
The sticking point is called “proportionate fair share.”
Here’s how to understand that: home builders pay a one-time “impact fee” of several thousand dollars to the school board on every new home, apartment and mobile home constructed. (No such fee is levied when existing homes change owners.) That new construction often, but not always, brings new students. The fee revenue helps the school board to defray the cost of new construction required to accommodate the influx of new students. It’s called concurrency. Concurrency has not been an issue for over a decade, because growth has been relatively mild. It is an issue again, now that development is again skyrocketing, and the school board, with the commission’s ratification, has just increased one-time “impact fees” imposed on new residential development, though not as much as it wanted to.
What is proportionate fair share? It has to do with when developers must pay that impact fee.
Here’s how County Administrator Heidi Petito explains it: “The way it works now, developers have to pay this [impact fee] in advance of their project.” In other words, when a development is planned out and approved through the local-government regulatory process. “What the development community would like is to pay as homes are being built. In other words, they would pay their impact fees at the time of permit issuance (homes typically take about a year to construct). So the School Board would receive these funds in advance of someone living in the home, instead of having to lay out the entire amount well in advance of a home ever being constructed.”
What that also means is that if impact fees are paid only when someone is closer to moving in, as opposed to when the developer plans out a project. So the school board is receiving money later, potentially denying the district the ability to properly plan. The approach makes school district priorities and students’ needs subservient to developers’ bottom lines. That’s the approach the school district is resisting.
That’s the approach a majority of the Flagler County Commission, led by Mullins, with Commissioners Donald O’Brien, Dave Sullivan and Greg Hansen in tow, is pushing.
That struggle was part of the reason the County Commission resisted the school district’s request for higher impact fees (the commission only approved a scaled back plan earlier this year). The struggle is now at the heart of discussions by a working group.
Commissioners had announced their intention to end the ILA with the school board months ago when the two sides were at loggerheads over those school impact fees (the school board wanted higher fees; the commission, answering almost exclusively to the demands of the Flagler County Homebuilders Association, which writes generous campaign checks, wanted fees far lower than those requested by the school board, and muscled its will through).
The two sides agreed to keep talking with the school board through a “working group.” That group included on its periphery (if not quite at the table), again, the homebuilders association and a representative from a group that has called itself a chamber of commerce. (Who and what that chamber is remains opaque, beyond its front man and a few founding members like the Observer newspaper. “It does increase the cost of housing,” Greg Blosé, the chamber’s representative, claimed to the commission in reference to impact fees in the context of mitigation credits, repeating–without evidence–a favorite claim by home builders, who frequently deflect skyrocketing housing costs on yet-unimposed impact fees.)
“All of this is in line at the working group meeting everybody understands that the ILA needs a rework, and doing the 120-days puts in place the timeline for that replacement,” Dance, who attends the working group meetings, said. “It’s good for us to back up what’s already in place, because [Assistant County Attorney Sean Moylan] was directed by the working group to chair the re-write of the ILA. So it’s appropriate that the commission is in support of Sean’s continued work. As far as the future meeting guidance on mitigation: as we look into that, I think again, having a thorough conversation of all this is great, because there’s tons of misinformation and mischaracterization of things that are in place that need to be clarified, and one suggestion was having an independent third party actually look at the mitigation component. It was suggested that maybe an independent third party that isn’t partial to the school district or to the county or to the development community be the one that comes in and talks about this.”
The suggestion was put forth during a working group meeting.
Hansen immediately rejected the idea of a third-party analyst. “I would consider that this board is the third party. We don’t have a dog in the fight. We’re just trying to make sure that it’s done correctly,” Hansen said–inaccurately claiming that the commission had no dog in the fight: the commission made clear that it was opposed to the existing ILA in part because of the mitigation credit issue.
“I agree,” Mullins said. “And my thing on mitigation,” he continued, inaccurately claiming that “taxes up front are never good. It’s just not the way the system was working, was made to work, and then I was told where we pick and choose who does it.” He said–inaccurately–that mitigation was the confusing matter, and it’s “where it just seems like there’s total chaos and disconnect.”
But there isn’t. It’s a sharp and clear difference of policy–not fact, not interpretation.
“We’re not the expert, we’re not the subject matter experts, Commissioner Hansen,” Dance said. “That’s the idea, is to have a third party expert that would be neutral. None of us up here are subject matter experts in litigation, or concurrency. We can’t play that role as experts. But I agree with the motion. As stated, I think we have time within the working group to work out those issues especially with a third party.”
Commissioner Donald O’Brien, who floated the motion to scrap the ILA, said he would leave it to the working group to decide whether to have a third party.
Mullins made clear he would override that approach, though he cannot do so unilaterally: “I don’t mind getting a consensus with the commissioners if we want to look at that but I definitely think with it coming back to us we’re going to have to play a role in making this decision,” Mullins said. “I see party one trying to, one party trying not, and then it switches. It’s just not going to move anywhere, and its’s not going to solve. And to say we’re not experts, I do feel we’re experts in what this community wants.” Mullins presented no evidence to back up his claims. He almost never does.
“I’m not a fan of this mitigation. I think it’s ridiculous, asking the businesses to pay everything, these impact fees, all up front,” Mullins said. “I want to know if we even need to have that in there. I’m being told statewide a lot of areas don’t, that’s where a lot of this confusion comes in. So I think we need to be very clear when we’re saying if we want it or not.”
There has, in fact, been no confusion: the disagreement is a matter of policy, not mechanics. The school board and the county have long agreed to the current arrangement because it allows the district to better plan for needed construction: once a development is approved, the developer pays school impact fees, understanding that it takes months, at times a few years, for the district to plan for a school expansion or a new school. Developers have the ability–and responsibility–to pay. But they’d rather not pay it sooner than they absolutely have to–or, in this case, want to.
Put another way: the mitigation on the county’s and developers’ terms, if and when enacted, enables developers to deny districts greater lead time in planning new construction–and limits the district’s bonding capabilities. It places developers’ private bottom lines ahead of public education’s constraints.
Hadeed did not answer Mullins’s question, not wanting to take a policy position: “That’s going to be an issue that will be addressed by the working group and hopefully, it’ll be resolved in some way,” Hadeed said. “If not, then you have to make a decision on it. But that is one of the issues that is pending now with the working group.” He stressed: “You understand I’m not passing judgment,” he said. “All these are open questions about how do we go for here, what’s the new world look like? And no one knows right now.”
O’Brien was not as dogmatic as Mullins. His motion left it up to the county attorney’s office, at a future meeting, to “provide guidance to us or an explanation of what our roles and responsibilities are with respect to the proportionate fair share mitigation process.” Commissioner Greg Hansen was also concerned about not starting entirely from scratch: “I just want to make sure that when we write the new one, we consider what’s in the old one. They were put in there for a reason, and although we didn’t follow them, maybe we should follow them,” he said.
The school district’s Patty Bott, the point person on impact fees and mitigation, attempted to correct Mullins’s misinformation without naming him as she addressed the commission–and as she called out the commission’s skirting the law.
“First thing I’d like to do is object to any vote on this matter today since it was not properly noticed,” Bott said. “We got noticed at 9:34 via email this morning, that this was even being brought up, so the school board has had no time to prepare any information for this item. In addition to that, we’d like to address some of the items regarding proportionate share. We do not ask for money upfront with proportionate share. We meet, and it is done equally with each and every new developer in the community. We meet with each developer and sit down and come up with a proportionate share of payment plan as to the timing that works along with their buildout schedule. So the information you’ve been getting on it is not coming from someone that has knowledge of it.” That “someone” was Mullins.
“The other item I’d like to bring up is that the interlocal agreement is a contract between five separate entities,” Bott said. “You are one. The school board is one. Palm Coast is one. Bunnell is one and Flagler Beach is one. Should you vote to put the school board on notice of 120 days, that would be between you and the school board but would not affect the other entities to that contract. We are working very hard with the working group with Mr. Moylan and the working group to try to address everyone’s concerns. We have invited people to join us at the working group,” who are not part of the ILA. She meant the homebuilders.
“So the school board is doing everything they can to work toward coming together with all communities. And the ILA is written and approved by all communities. It’s not written by the commission and the school board. It’s not written by Palm Coast and the school board. It’s all five coming together with each of those thoughts, and each entity must approve the new interlocal agreement and sign it. So it’s not voted on by one individual or two individual entities.”
Kristy Gavin, the school board’s attorney, also noted that she only learned that the commission would be discussion the issue that morning. She recalled the history of interlocal agreements since 2005, noting that all five entities that are party to it agree that a new one is necessary due to changes in law, but terminating it without a newer agreement in place “is in violation of statute,” she said. “So my recommendation would be: you have set a deadline of September for the new agreement to be put forth, and the working group committee can make sure that September is when that new agreement comes forward, but that the agreement remains in place until the new agreement is drafted and presented to all five groups for approval. Until all five groups approve it, which means it has to be placed on all of their agendas, not just your agenda and our agenda, but all five communities would have to place it on their agenda for approval. So my recommendation would be that the current agreement would stay in place until the new one goes forward.”
The commission has run roughshod over the school district for months on impact fees and mitigation issues. It did so again on Monday, even before the discussion began.
“I really would just defer to county attorney Al Hadeed to kind of lead off the discussion here,” Commissioner O’Brien said, prefacing the scrapping of the ILA. He was being disingenuous. The commission had led that move, and had only deferred the mechanics of it to the attorney’s office to execute, by way of legal cover. In that sense, the legal office was being openly manipulated.
O’Brien, as is often the case with him, was predisposed to make a motion, as he made clear later. He had spoken with Hadeed over the weekend, had all his questions answered, and had prepared a statement as a preface to his motion. O’Brien claimed he was unclear only about a key part of the successor agreement on the “proportionate fair share” portion that’s been a sticking point, though a central reason for the re-write is that very matter.
Hadeed presented the commission’s choices: either edit the old agreement or write a new one. The current document was adopted in 2008. It’s “lengthy, it has a lot of detail in it, it’s outdated,” Hadeed said of the 34-page document, its procedures not necessarily followed anymore. Hadeed and Assistant County Attorney Sean Moylan recommended that the county start “on a clean slate,” enabling everyone to participate more meaningfully to rewrite the document.
The 2008 document has a 120-day termination clause requiting either side to give notice of terminating it as a “pathway to get from the current to the future” document, Hadeed said, reminding the commission of the other parties to the agreement. He also underscored Gavin’s proposal to use the 120-day period to craft a new agreement, a proposal with which Hadeed concurred. The deadline would be Sept. 1.
In Hadeed’s words, the county was following a procedure to “terminate the existing interlocal agreement in order to make way for the preparation and finalization of the successor agreement.”
“There’s not an intent to jettison every single part of the existing interlocal agreement,” Hadeed said. “It needs to be practical and feasible.”
“There’s no point in having a regimen that’s not likely to be followed. Here the agreement we have, to use a phrase, has been honored in the breach.” Hadeed then ventured: “My guess is that you’re going to have something in between. From present, heavily structured, to the existing practice of very informal. It’s going to be somewhere in the middle.”
But a majority of commissioners have already made clear that to them, that new world entails scrapping the agreement with the district to the extent that the previous mitigation agreement is no longer enforced, making this 120-day period a form of theater–going through the motions–than an invitation to substantive work.
Mullins later claimed that “it’s very crucial with all the eyes on the education system in our state by state level and all the attacks and stuff that we’re seeing. ” He continued: “I think it’s very important here in the community, we’re going to have more parents not just leave it up to individuals to determine in the way this stuff’s being done. We need to be very conscientious about all this stuff and make sure that we’re protecting the quality of our education, from our level that we do.”
Mullins may not have been aware of his own contradiction. The district has been arguing to the commission that, by exclusively and rather blatantly carrying the developers’ water, it has not been protecting the quality of local education so much as undermining its capital planning.