Palm Coast City Manager Jim Landon wasn’t going to take a challenge to one of the city’s most important sources of revenue lying down. And on Tuesday morning, he didn’t. His administration laid out an unequivocal case against cutting impact fees, which builders pay on new construction, calling such a cut detrimental to the city’s infrastructure and unfair to existing residents who have already paid their impact fees, and questioning the assumption that any such cut would help the local economy. Evidence of such benefits is slim to none.
What Landon didn’t expect was that Jason DeLorenzo, barely at the end of his rookie year on the council, would not only stand up to Landon’s pre-emptive strike, but stand him down with a relentless counter-attack of his own, at one point coming close to accusing Landon of conducting “backroom” deals that damage the city’s reputation with the business community. DeLorenzo systematically challenged Landon’s numbers with calculations of his own that—using the city’s own population projections—undermined the credibility of Landon’s conclusions. And he warned Landon not to suddenly backtrack from those numbers and suddenly produce new ones to make them fit Landon’s agenda.
It was a remarkable case of turning tables. The Flagler County Chamber of Commerce and the Flagler Home Builders Association are pressing local governments hard to adopt impact fee moratoriums for two years. They succeeded before the county government. They failed before the school board. Palm Coast is the big prize, having the biggest impact fees. The county had appeared receptive to the chamber’s and homebuilders’ idea from the outset (the county commission is chaired by Barbara Revels, a home-builder). The school board had done a little more homework. Landon had done plenty of it, but so had DeLorenzo, who succeeded on Tuesday in at least forcing the conversation to continue, rather than have it ended there and then.
Along the way, the youngest member of the council by far showed a mettle, and a willingness to question the administration’s playbook, neither Landon nor other members of the council had seen before.
At the heart of one disagreement was Landon’s projection that the city would need $335 million in infrastructure investments between now and 2035.
With calculations as nimble as they were simple, executed before the council, DeLorenzo showed that the city is poised to collect $448 million in impact fees just for residential construction, and millions more when commercial impact fees are included. His point was that not only could the city afford an impact fee moratorium for two years, but that its fees were higher than they should be to start with. Whether DeLorenzo’s figures are accurate or not wasn’t the point so much that, if anything, the city’s figures, and the argument they undergirded all morning, did not seem nearly as reliable, either, if they were the basis for policy.
DeLorenzo didn’t leave it at that.
“I’m going to tell you, I’m going to be really upset if this public policy document that says we need $355 million then you come back and tell me, oh, we missed that, we need $600 million,” DeLorenzo told Landon. “That’s not going to fly with me, OK? This is what you told me.”
Landon then seemed to backtrack in a long and unusually uncertain reply that now undermined his own staff analysis: “What I can tell you is,” the city manager said, “separate from that, because once again, the whole point of that, and whether you like it or not, and you know, some people don’t like it, the whole point of that was trying to change the conversation in the fact that you have some commitments that you have to fill and what those are, and how impact fees play into that. It is not intended to confirm the $335 million. That is what you also asked us to do. So I can’t promise you we’ll come back, you’re not going to not see a different number, because you specifically asked us to come back with that. We weren’t planning on coming back and saying oh, we need to now raise impact fees to cover these costs. That wasn’t the game plan at all.”
Landon then said that he would not actually re-calibrate the $335 million figure, because he’s trying to “get realistic with the next five years, with our capital improvement plan, because that’s what we keep kicking down the road, and you’re talking about–”
“No no no,” DeLorenzo says, cutting off Landon, his voice rising. “You’re talking about. You gave me this document. I didn’t ask for this. We asked for a discussion about a two-year moratorium on parks and transportation impact fees. You told me we needed $355 million worth of infrastructure.”
No such direct challenge has taken place between a council member and Landon in memory, least of all in such finger-pointing terms.
“Is that a private conflict between you two?” Lewis asked.
“No, this is a staff document,” DeLorenzo said, referring to the nine-page “Public Policy Analysis that was the basis for Landon’s opposition to an impact fee moratorium. (The paper, which ran to 24 pages when including appendices, was actually presented by the city’s planning manager. See the full paper below.).
“But you’re also representing another industry also and you are expounding their particular point of view,” Lewis said. DeLorenzo is the government affairs director for the Flagler Home Builders Association, which is pushing for the impact fee moratorium. It is an inescapable fact that DeLorenzo is literally doing the association’s bidding from his council seat.
“Let’s not make this personal,” Jon Netts, the mayor, intervened.
“I’m not personal. It’s just putting the facts on the table and being honest,” Lewis countered.
But DeLorenzo was as if on a mission, shredding apart the policy paper point by point. The paper had noted that an impact fee moratorium would hurt developers who “installed infrastructure to support the future development of their property in return for impact fee credits.” In other words, developers who built the roads, the sewer connections and the parks they would have had to pay for through impact fees. Instead of paying impact fees, they got impact fee credits. One such development is Town Center, cited in the policy paper. “If a moratorium is enacted,” the paper continued, “those impact fee credits will have no value and be additionally burdened with increased taxes to pay for the demand for infrastructure created by those who do not pay impact fees.”
DeLorenzo didn’t buy it.
“I called the Town Center developer and asked him about it,” DeLorenzo said of developer David Lusby. “He said that credits would have no value while the moratorium was in place. It would have no effect on the overall value. He has a half a million dollars in credits, and when a moratorium was expired, he’d still have half a million dollars in credits, which he would then receive. He also said that there’s currently no activity in Town Center, so he’s not getting any of those impact fee credits back anyway, and that activity breeds more activity, so if the possibility that the moratorium would add businesses in Town Center, then that would breed more activity, and then Town Center would grow out and he’d have a better business at the end.”
Landon then made another startling statement: “Well, then that developer is talking out of both sides of his mouth because I proposed to him many times to waive his impact fees on those credits and they refused to do so. We tried to do that to get the movie theater etc. in here, and say hey, waive your impact fees if that’s going to help, and they would not do that.”
Landon’s talk of waiving impact fees to some developers only encouraged DeLorenzo to raise questions about Landon’s transparency. “Regardless of where this discussion goes,” DeLorenzo said, “I would like to see a schedule for waived impact fees, a published schedule of potentially waived impact fees. I think we’re doing ourselves a disservice to have backroom, backroom—‘oh, come, meet with me, we’ll tell you what we can do.’ We’re missing opportunities if we’re relying on them contacting us. We should have it published, it should be out in the open and say, we will potentially, we will do this if you bring us this many jobs. We are willing to do this.”
Landon, clearly outplayed as he’d rarely been (he and DeLorenzo have something of a history that pre-dates DeLorenzo’s accession to the council, when it comes to disagreements), was left to asking the council how it wanted to proceed on impact fees. The pre-emptive strike he’d crafted had make key points, but none that the council hadn’t heard before: that a moratorium is an unproven economic tactic, that it unfairly rewards current builders at the expense of those who have already paid their impact fees, that it shifts the tax burden, and that it does nothing to reduce the city’s infrastructure needs. But it does eliminate an important revenue source, which must be made up.
The city calculates that the property tax rate would have to increase to make up that shortfall, but even that claim was suspect: the city has also quit taking on infrastructure projects in the last couple of years to keep its tax rate low—possibly artificially low, given the demands on its infrastructure, and the city’s willingness to impose other tax-like fees to make up the difference.
Council member Frank Meeker is on DeLorenzo’s side. Netts and Lewis are opposed to a moratorium. (“If anybody can show me some documentation that a moratorium on impact fees stimulate growth, I’d like to see it. I just haven’t seen that data,” Netts says.)
“Jason made some great points, he’s got some good ideas,” McGuire said, “but we’re the ones that are sitting here, prepared to stand or fall, and the guy that’s going to benefit the most from it, it’s a win-win situation for him.”
“But the city grows not based on the city and on government, [but] by those that are willing to invest in the city,” Meeker said.
“OK, Frank, and if you grow, you don’t owe me a dime,” McGuire replied. “But if you don’t, and you say you’re going to, and I cut my funds off, you owe me, buddy.”
The council agreed to have both DeLorenzo’s figures and Landon’s vetted for better accuracy and perspective, and take on the debate again at a subsequent meeting. But it could be academic: Meeker is off the council. Today’s was his last meeting. He’s running for a county commission seat. Should he not win it, he could apply to return to the council, but the four remaining council members will be voting on an appointment, which could well come down to the applicant’s position on such things as impact fees. That applicant will be picked in early November.
Palm Coast Impact Fee analysis, 2012
2012 Impact Fees for a Single Family House in Flagler County, Bunnell, Flagler Beach and Palm Coast
| Flagler County School Board | Schools | $3,600 |
|---|---|---|
| Bunnell | Water | $1,800 |
| Sewer | $1,800 | |
| Transportation | $1,438.10* | |
| Schools | $3,600 | |
| Total Impact Fees in Bunnell: | $8,638.10 | |
| Flagler Beach | Water | $1,891.60 |
| Sewer | $2,733.20 | |
| Transportation | $1,438.10* | |
| Parks and Recreation | $268.45* | |
| Schools | $3,600 | |
| Total Impact Fees in Flagler Beach: | $9,931.35 | |
| Flagler County | Transportation | $1,438.10* |
| Parks and Recreation | $268.45* | |
| Schools | $3,600 | |
| Total Impact Fees in Flagler County: | $5,306.55 | |
| Palm Coast | Parks and Recreation | $1,208 |
| Fire and Rescue | $189.75 | |
| Transportation | $2,827.56 | |
| Water | $2,430 | |
| Sewer | $2,480 | |
| Water and Sewer Required Hookup Charge | $2,535 | |
| Schools | $3,600 | |
| Total Impact Fees in Palm Coast: | $15,270.98 |
Kendall Clark-StJacques says
Very glad to see this from DeLorenzo. While I disagree with providing a moratorium on impact fees, I am glad to see that someone has the backbone to challenge Landon and his backroom dealings.
Magnolia says
I’m with Mr. Lewis. Delorenzo represents every builder and developer in the county and we are supposed to believe he is looking out for OUR interests?????
His wife is in a high level position on the Chamber.
Considering the fact that both are being paid a lot of money by special interests, how else would you expect him to behave? He is on that council to do the bidding of the Chamber and the builders and for no other reason.
DeLorenzo is PAID to represent the Builders. None of his actions are surprising, only that the idiots in Palm Coast elected him to the City Council in the first place.
The builders and the Chamber worked hard to put him on that council. So did the leaders of the Tea Party and several elected Republican officials.
Politics makes strange bedfellows. Follow the money.
Bronx Guy says
I agree completely with Magnolia. DeLorenzo must represent all of Palm Coast and if he cannot, he should recuse himself on such issues because of that conflict of interest, especially given his wife’s job. I paid heavy impact fees in 2005 and those who build now should also pay them.
DWFerg says
As a private citizen and local tax payer(since 2003), I have already paid for my impact to the city of Palm Coast even though I was only a part time resident(from neighboring Duval Co.-Jax) from ’03- ’10—I had no children to be educated in the school system and travelled(by car) largely between I-95, Palm Coast Pkwy.Belle Terre,and the WalMart. On infrequent occasion, I might venture down to the GSB,the Town Center(misnamed by the way), and Route 100 to visit our Vet. The point is, my Impact surely did not weigh in as much as a family with school age children. I expect this example to be representative of more than 25 % of our “population which swells during the “cold” season (Snowbirds). What is their impact besides paying a significant sales tax on most everything !
I support a one -two year moratorium(like Volusia, Clay and other counties in Florida) on Impact fees. This county needs any stimulation ,predictable or unpredictable to spur economic activity. This is one form of Government ACTION you can take as a Step toward Recovery. If it is successful, then the “fairness” issue will take care of itself as a broader tax base thereby achieved will serve to reduce the required property millage on existing real estate going Forward. This is a mere layman’s opinion, after reading the latest Public Policy analysis paper dated October 2012. I also believe projections stretched out to 2035 are spurious at best, and worthless in terms of accuracy in my opinion……Let’s try Something New to catalyze our current stalled economy in Palm Coast / Flagler County. It makes sense from a Businessman’s point of view. …
Lonewolf says
So…if we get rid of the impact fees does the impact disappear too?
Ben Dover says
Good for Delorenzo , he`s the only one I`ve said I`m voting to keep , the rest are just thieves, that belong in jail, why isn t anyone looking into the rigging of the lights, and the reason behind 52 camera`s , if that don t smell crooked, I don t know what does. I`ve lived in Palm Coast since the roads were dirt, I`ve never witnessed a problem with people running lights, we didn t need the first batch of camera`s they put in , then they were only supposed to add ten more , which was way way way over the top for a small town like this , but 52 just reeks of corruption, we already have to stop at every single light in town with the rigging they`ve done, the only way to not catch them all is to speed like hell , and people are doing it , driving like a bat out of hell to beat the next light , they are making the town unsafe with the damn things, and I can t say I blame the people either , some of these lights are long , never heard of 5 minute lights before. Somebody , hopefully the new people voted in will address these issues, use some common sense and get rid of these damn camera s
PJ says
I can’t believe it?
Someone actually read the report and CHECKED it.
Amazing, what is more amazing Councilman Lewis complains about the number picking. What the rush Lewis you have to go home and watch the grass grow?
Listen to this guy, DeLorenzo has this area of expertise in hand. (The Jury is out on many other meetings) but not on this one.)
Netts once again can’t take anyone pushing Landon “Let’s not make this personal”. WHY NOT? Landon does when he wants his way he just pushes the board aroud and they react to it as puppets or bobble heads.
I’ve been saying this all along. We need a strong city manager not a weak over paid manager.
DeLorenzo sees the real picture Landon is painting, backdoor dealings(red light cameras)(wastepro)(all cost us more), fees to us the residents and business owners to make up his short comings of revenues.
What a joke!
One Council member stands up for something he knows about because this is his livelyhood and Landon tries to fight it out with smoke and mirrors.
The other council members who drink from Landonaid can on perfect time, chime in to slow the attack like Lewis did.
Often the Mayor will slow down the beatdown too as he did. Sad display of a poorly lead city council.
Not much we can do hear but read about it but when we can vote out the deadbeat city councilmen who don’t manage Landon.
Remember they all work for us, the city manager works at the pleasure of the board not the other way around as it currently appears……………………
Reality Check says
Sorry but just do not trust either of them, Landon is a proven Bully, snake in the grass and down right ego maniac. Jason sits on a Builders Board so of course he will push to help the builders, it is his job; but the question has to be, is he using his political influence to do it? If he is then shame on him and there needs to be some type of a review, he would need to either step out of his role in one of the two positions that he now holds.
The answer in my opinion is simple, give the commercial builders a two year break on impact fee’s since they may help bring economic stimulation to the area; but we do not need any more residential units at this point. We cannot fill the house that are empty now, and when they do we get a less than acceptable crew of residents in most cases. Palm Coast has become a section eight and trash community over the past few years, this is due to owners and banks just wanting some type of money to come in on their empty house.
Alex says
Adam Smith:
Laws and business
· “The proposal of any new law or regulation which comes from [businessmen], ought always to be listened to with great precaution, and ought never to be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention. It comes from an order of men, whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it.”
o I.xi.p.10 (Conclusion of the Chapter)
Maryjoe says
Go Jason! And I gotta tell you.. I have never been so disappointed in someone I voted for than Bill McQuire. He’s a sarcastic uninformed man voting on things he has no clue about.
And I agree with Reality Check on the idea of giving commercial venues the break. I know of three large commercial venues that would not build here because of the impact fees being ridiculously high. That represents a lot of jobs and income that HELPS this City and it’s citizens..not just the builders!
Palm Coast Elder says
Good for DeLorenzo. Its about time someone stood up to Landon.
Bill McGuire says
Mr. Meeker cannot apply for the city council opening created by his departure. The deadline for filing for this position has expired and Meeker’s resignation is irrevocable.
Tired says
Bravo Mr. DeLorenzo, it’s about time someone stood up for our community! America was founded on Democracy, a representative form of government. DeLorenzo was voted into office by the very people he represents. He did not hide his involvements when he was running for election, nobody was blind-sided by his affiliation with the builders association nor the Chamber. The Chamber thrives when the community thrives so why would his affiliation with them be seen as anything negative? He wants our community to thrive therefore his wife’s employer will thrive, it’s a win-win-win. Nothing dirty there.
For far to long the numbers in Landons office haven’t added up. He changes his answers to get the responses he wants to follow his own agenda. I sure hope the council members start to due diligence on behalf of the tax-payers or step aside so others that are up to the task can take their seat.
confidential says
None of these developers to benefit from the two year moratorium, employ local construction workers, use local suppliers machinery, backhoes, trucks etc. or local lumber, steel or other supplies vendors.
As a business owner myself I know and heard the complaints of local contractors not being utilized themselves or their equipment, that the big developers bring from elsewhere after we give them the exemtions to the comp plan to build and the tax breaks.
Otherwise did anyone pay any attention at the Florida Hospital Annex workers and contractors..? were all from outside this County, that is just one example. Remember the one’s used by David Lusby in Town Center? Anyone with real facts data please document me if I am wrong.
Does anyone know we spent well over 6 millions of taxpayers monies for infrastructure on a Walmart that didn’t show up? Also 5 million plus on a Town Center CRA for Mr. Lusby, that we yet didn’t get back?
The rich developers get the tax breaks that, we “the little guys”, have to foot with higher taxes afterwards, for some illusionary jobs that never materialize. This is why we are considering to move away…
The big guys around here, control our elected one’s.
Anon says
@confidential
Additionally, wasn’t work stopped at European Village because of all of the illegal labor.
I don’t know why all these folks are patting J DeLorenzo on the back. He might be standing up to Landon but he is standing up FOR the developers.
One represents those who pay them and the developers pay DeLorenzo. That’s who he represents.
This is an excellent example of bought and paid for special interests inside of government.
confidential says
By the way and just in case everyone forgot…The City of Palm Coast needs many of millions to just repair our small, medium and gigantic culvers that connect and drain to the canals our rain storm waters to the system so we do not get flooded. Some of those already seriously decaying culvers (pipes) run under many of our properties into the canals.. you can see them while boating how bad they are. Even non water front properties have them. The gigantic ones lay under our roads and many in danger of caving in with the next hurricane or heavy rain tropical storm, just like happened to the one in Florida Park Drive couple of years ago…
Our storm water drain system needs repair and replacement and we need the revenue to pay for it, unless every city resident wants to pay more in taxes. So better be aware before taking sides in this issue.
Magnolia says
Confidential: Our current system was built to withstand 100 year flood, was it not? What happened?
If we are in danger of flooding, then ZERO projects should be approved until the problem is fixed, otherwise you will flood all those neighborhoods behind the Colbert Lane project, will you not?
Biker says
I guess my first issue is that Jason Delorenzo did not recuse himself from this matter. Jason’s title, “Government affairs director” by any other name, in any other industry would be titled “Lobbyist”. So with this in mind , we have an elected official who is also a lobbyist for an special interest group (the developers) The lobbyist/council person is attempting to change current city policy to beneifit the people who he lis a lobbyist for, namely the developers. Jason, just because you do away with the impact fees, dosent mean you do away with the impact. So someone like me who has already paid imapct fees will now have my taxes raised to make up for the loss of the futuret impact fees. Does that sound right to anyone? Other than a special interest group (Developers) or their lobbyist? Do you want your taxes raised for something you have already paid for ? Do you want your taxes raised just to make the developers richer?
Jim Neuenfeldt says
I think one thing that people who do not know Jason DeLorenzo may not be aware of is his personal dedication to duty and his thoroughness at what he does. He is professional, researches his information and has an open mind.
He has shown time and time again to have done the research, learned the good and the bad of both sides of the situation and the moved forward with the idea about doing the right thing.
I think he hit the nail on the head this time around.
You all often speak like it is the builders who ruin Palm Coast, and simply without them what would you have? Nothing! Responsible and Controlled Growth is the right way to do things, and ends up with a community that can survive.
confidential says
@ Magnolia, you bet! You are totally right in most of your comment , except one!
If we are going to compare other 100 years flood designs with currently one’s destroyed by Sandy’s on the Northeast, no one is ever safe lately, neither us.
Palm Coast system “was designed” to withstand a 100 year flood, but does not mean or is not the same to last 100 years without replacement and or repairs. Like I suggested look at those culverts when you go by…and see how eroded they are…and yes why to give moratoriums on impact fees when we do not even have enough revenue or utility account reserves, to properly sustain the current infrastructure in order to attract more residents.
Same with our Palm Coast utility water sewer company. They wasted way over 2 million of their reserves in useless meetings and projects and consultants for the “Coquina Desalinization Plant” to end up canceling the project “for lack of funds”. Also over 6 million from the same utility for the infrastructure of South Old Kings Road to welcoming a phantom Walmart. 8 million plus out the window. Why to raise now, our water rates to fund more utility upgrade projects with no population growth?
Someone benefiting from consultants and/or potential contractors here..? Otherwise some belt tightening should be in place.
PC Dissapointment says
Way to go Jason! I cannot believe these people that do not agree with you. I have no idea what world you people are living in but The city of palm coast is going to be a zero growth community with a huge government staff with only one way to get the money. Raise your property tax and water bill. What is the big deal to cut impact fees for two years? What is good for a growing community? Developers, builders, etc. Not government.
Who is the largest employer in the county? Probably the city. How efficient are those workers?
[Correction: the largest employers in the county are the Flagler County School Board, Florida Hospital Flagler, possibly Palm Coast Data, county government, Sea Ray Boats. The city is a large employer, but not in the top five.–FL]
Tired says
When Palm Coast was growing by leaps & bounds a significant amount of money was collected in impact fees. Where did that money go? The infrastructure has been in poor shape for a number of years, that’s nothing new. Why did our city manager chose to build sidewalks and fill in primary drainage ditches INSTEAD of utilize those funds for critical infrastructure improvements? Oh, that’s right, because that is what was in the long-range goals. Take off the blinders folks!
Logical says
Out of one side of the mouth I hear people in other forums complaining about about the roads, not being wide enough, not enough lanes, needing sidewalks in their areas, repairing sidewalks, wanting trails, the list could go on. The impact fee money is what pays for these things. If the money is not collected, where will the money come from? I paid my share of my impact I made when I built in Palm Coast, I’m happy to pay towards school because whether or not I have children, I will benefit from educated people in my community. If the impact fees are eliminated, I will lose that much equity in my home, and so will you. Jason D. has every right to bring forth what topic he feels the council may need to address, regardless if it’s a private group or not, we are all citizens, but I do agree he should totally recuse himself from the discussion and put himself on the other end of the podium , not sitting in a council seat voting on a topic that will benefit his employer.
Patty Jones says
I agree with ‘Confidential ‘.
Delorenzo should recuse himself from this issue otherwise it seems that he is looking after the interests of his paymasters instead of the people of Palm Coast. Its not about his integrity but the danger or percenption of conflict of interest
SC says
So, I read the comments and then I read the report. I encourage everyone to do so! The report does not appear biased in anyway. In fact, it appears that the preparer did a good job in researching similar counties with that of Flagler. The results are evident. A slight negative correlation between growth and the reduction/removal of impact fees. In other words, waiving impact fees will NOT benefit our community!
This supports common sense. If a person is planning on buying/building in Palm Coast, I don’t believe a 15k impact fee will determine whether or not they build here. It may affect the number of upgrades they choose in their home based on their budget. I believe most people choose to live in Palm Coast because they like our community including parks, trails, etc. Remember, nothing is free and you get what you pay for. If we do not have impact fees to pay for these amenities, we will be paying for it with sales taxes or property taxes. Now, higher property taxes may discourage home buyers.
Furthermore, as a community , we need to determine how fast we really want to grow. With increased growth comes a need for schools, roads, fire stations, increased police, etc….. This has to be paid for somehow. Also, if growth occurs so rapidly that the infrastructure cannot keep up, a building moratorium could result. Then the builders will really be screaming!
Lastly, you have to ask yourself: If the impact fees are waived, how much of those saving will really be passed on to the consumer? Or just put in the builder’s pocket?