After 8-Year Moratorium, Flagler County Will Get Back To Taxing Development for Roads and Possibly More

By next spring, it’ll be eight years since the Flagler County Commission adopted a “moratorium” on transportation impact fees in hopes of spurring development. Impact fees are one-time levies charged to developers on new construction. The fee–in essence a one-time tax–is passed on to whoever buys the property.

In Florida, impact fees defray the cost of new development and pay for new parks, roads, intersection improvements, schools, fire departments, libraries and other such capital improvements. Flagler only had a transportation and a parks fee on the books: a $1,438 transportation impact fee for a single family home, and a $268 parks fee for a single family home. (See: “Impact Fees: What They Are, Who Pays Them, How Much They Pay.”)

In 2012, the moratorium, which also affected the parks fee, was supposed to last two years. The parks fee was restored in 2015. The transportation fee was not. The commission, swayed by arguments from the building and real estate industry, made the moratorium indefinite, costing the county hundreds of thousands of dollars in revenue every year, and shifting the cost of development from new residents to existing taxpayers.

By next spring, however, the county appears headed back into the impact fee business, and it may do so with more than just a transportation impact fee. It is asking a consultant to study the feasibility of impact fees for libraries, Flagler County Fire Rescue, law enforcement and public buildings, according to the document the consultant submitted.

Earlier today, the county commission unanimously approved a $150,000 contract with Tampa-based Tidale Oliver, a consulting service that specializes in crafting impact fee studies for local governments. Local governments are required by state law to have such studies conducted before implementing a new impact fee schedule, or even raising existing fees. The study may be done in house. Many governments prefer not to do the job.

“In order to do that you have to be very, very expert,” County Administrator Jerry Cameron said. “It is not a thing that staff can do. It’s one of those things that you have to be able to say in court that you got the best advice that you could get when you developed these impact fees.” 

Tindale’s scope of work includes an analysis of all those listed, potential fees. That doesn’t mean the county commission will be willing to adopt the proposed fees. “Some of that may not not be feasible in the end,” Adam Mengel, the county’s planning director, said today. 

But it is almost certain that some of the fees will make it onto the books: the county can no longer afford not to have a transportation impact fee, and with a looming cost of more than $12 million for a new sheriff’s operations center in Palm Coast and the cost of a branch library that it keeps putting off year after year, it may well adopt a facilities or a library fee as well.

“Those impacts have to be paid for. The only question is who pays for them, do the existing taxpayers and tax base absorb those costs, or do the people who are creating the impacts absorb those costs,” Cameron said. “The impact fee is designed to transfer that cost from your existing tax base to the people that are creating the impact. It is for capital only.” 

Palm Coast never abandoned its impact fees, which are the steepest in the county: it never stopped developers, who are now producing something of a boomlet in the city despite an $850 parks impact fee, a $2,961 transportation impact fee, a $9,000 water and sewer fee, a $223 fire and rescue fee, and, separately, a $3,600 education facilities impact fee (all those figures applying to single-family homes: businesses pay according to a different schedule.) Housing and real estate interests pushed Palm Coast and the school board to adopt moratoriums in the aftermath of the housing bust. They failed. (“I don’t see that eliminating or doing away with the impact fees are going to help the real issue, and that is the economic development of this county, and jobs,” School Board member Colleen Conklin said at the time.)

Enrollment stalled in schools for almost a decade, but population growth slowed, it did not stall, especially in the city.

“Whether it is for an intersection traffic control device, whether it is for a new sheriff’s building or a new fire station or a new park, all of those things are created by increased population and the demand for those increased services,” Cameron said. “The devil is in the details, and that is determining exactly what those negative impacts are.” 

Tindale will deliver its first draft report on March 24 and hold public meetings in subsequent weeks before submitting a final report and a draft ordinance that would presumably propose new fees on May 8. The county commission would hold adoption hearings in June or July–in the thick of the election campaign, with three seats up for grabs, including those of County Commissioners Donald O’Brien and Dave Sullivan, who are running for reelection, and Charlie Ericksen, who is not running.  The new fees would kick in a year from now.

See the contract with Tindale Oliver.