In ‘Huge Deal,’ Flagler School Board Votes to Double Impact Fees on New Construction, 1st Increase in 16 Years

The impact fee for a single family home will go from $3,600 to $7,175, an increase of $3,575. The fee on apartment units will increase from $931 to $1,774, an increase of $843. And the fee on mobile homes will almost quintuple, from $1,066 to $5,279, an increase of $4,213. Overwhelmingly–by a factor of 13–students live in single-family homes.

Cities, counties and school boards impose impact fees in Florida to help pay for fire departments, parks, roads, utilities and schools. The fees must correspond as accurately as possible with anticipated need, and the money generated may not be spent on anything other than those capital improvements. Impact fee dollars, for example, may not be spent on personnel costs. An elaborate process precedes adoption of the fees, including an extensive analytical study that establishes the maximum allowable fees that may be levied, and numerous meetings and hearings providing for public involvement. Typically, builders will be the chief opponents of impact fees–or at least the group likeliest to call for minimizing or limiting fees or fee increases. The broader public seldom gets involved.

Impact fees, which can add upwards of $10,000 to the cost of a home, are part of the sticker price, and are incorporated into a homebuyer’s mortgage along with other fees and costs. But builders see them as an added margin that can price some people out of, say, their first home (the median sale price on a home in Flagler County in the second quarter of 2021 was a record $305,000, according to the Flagler County Association of Realtors). State law allows local districts to generate some construction revenue from property taxes. In Flagler, it’s about $260 for a $200,000 house, with a $25,000 exemption. That money can be spent on existing maintenance. Impact fees make up the district’s needed difference when it comes to building new schools or additions.




The Home Builders Association of Flagler was involved in the district’s process. “We agree, there needs to be an impact fee increase, it’s too low,” Annamaria Long, the organization’s executive director, told the board Tuesday evening, her comment sandwiched between the dozens of comments on masking and covid safety. “We simply are having a hard time with the data to prove that it needs to be double. We feel that it’ll greatly affect housing affordability, which is already a huge issue here. And again, the data just doesn’t support the 4,000 students in four years. It did in 2004. That all happened. But we didn’t have lumber shortages, labor shortages, supply shortages, increasing costs, and it was just a different time.”

Board members Jill Woolbright and Janet McDonald took issue with Long characterizing the fee increase as a “doubling.”

“The comment was that it’s doubled, and that’s not exactly accurate even though the numbers seem to look like they’re doubled,” McDonald said. “In actuality it’s not really going up, it’s just keeping up with inflation. So it’s really kind of flat,” Woolbright said.

That’s not exactly accurate, though inflation is playing a role, and Woolbright is closer to the mark when she says that “there’s been many many years that we did not really address the impact fee.”

In absolute terms, the impact fees are doubling or, in the case of mobile homes, quintupling: builders and buyers down the line (who don’t generally sit down with their calculators to figure out that a $300,000 is really less than it seems when 15 years’ inflation is taken into account) will still feel the substantial effect of what amounts to a doubling of the fee in current figures.

But it is also true that, for a variety of reasons–chief among them a static student population for a decade–the school board resisted raising the fees previously. It is also true that, based on the Bureau of Labor Statistics‘ calculation, in inflation-adjusted dollars, the increase is less steep than it appears. In other words, had the single-family home impact fee adopted in 2005 kept up with inflation, it would have been $5,300 today, and the increase by the board would have amounted to a net $1,875. It is also true that in 2005, when the board adopted the fees at the time, it did so at 60 percent of the recommended fee–not 100 percent, as was done this time around. So in 2005 the board adopted an artificially lower fee structure, further creating a gap between what its latest study shows is its need and what it was taking in.




The bottom line, to the board, is that the fee it adopted on Tuesday, while seemingly much steeper than before, is much more in line with current need–assuming the study’s projections of coming students are accurate.

The study anticipates that new residential development will generate the equivalent of 911 additional elementary school students, 564 middle school students and 853 high school students–a total of 2,328 students–over the next 10 years. The figure is strikingly lower than its equivalent in the decade between 2000 and 2010, when the county experienced rapid growth and the district added several schools to its roster (Matanzas High School, Indian Trails Middle, Belle Terre Elementary). The reason for the difference: while the county is growing at a steady and strong pace, the growth is overwhelmingly among older, retired people without school-age children.

The study’s base year is 2020–an odd year to choose since it was affected by the pandemic–when the district had 12,000 students (not including its one charter school). By 2030, the study projects, the district will have 14,345 students. The district’s current capacity is 14,732 students, according to the study.

The 2021 population estimates for Flagler County by the Bureau of Economic and Business Research at the University of Florida projects growth of 3,037 children ages 5 to 17 by 2030. That’s for the entire population. The impact fee study takes into account only estimates of public school students, excluding private school and homeschool. The fee study bases its population projections on BEBR’s medium projections.

The school district, on the other hand, “has planned capital expenditures for a minimum of 3,835 additional student seats over the next ten years,” according to the study. “During the next ten years, the School District has identified the need for 1,080 permanent student stations in middle schools and 2,755 student stations at the high school level.” In other words, the plan is for one new high school and one new middle school. (Starting next year, middle schools will be converted to include grade 6. Currently, they include just grades 7 and 8.) “Although additional student stations have yet to be identified, it is anticipated the School District will construct additional elementary school student stations over the next ten years.”




Absent the new construction, elementary schools will be at 86 percent of capacity, middle schools at 104 percent and high schools at 108 percent. But even now the district’s nine schools are unevenly used. For example, Wadsworth Elementary is at 106 percent of capacity while Rymfire is at 57 percent capacity.

The study also takes into account land costs, construction costs and transportation costs, among other variables, all of which, especially when stretched over several years, can fluctuate significantly. For example, while one “student station” (the technical term used to define a student’s impact on new construction) in 2004 cost on average $16,410 across all 12 grades ($24,189 in inflation-adjusted dollars), it now costs $27,600.

There was no debate among board members Tuesday evening because the work had already been done in previous meetings and workshops. Tuesday’s votes were more of a formality. But they included a vote to override a new state law that limits impact fee increases to 50 percent of the current fee. Local governments may exceed that limit if they justify the greater increase with a study, demonstrate “extraordinary circumstances” of the need, and approve the increase with at least a 4-vote majority (on a five-member board).

The district’s exigent circumstances? over-capacity in some schools and more when the district switches to a 6-8 middle school model, the anticipated addition of two new schools in the next five years, higher recent growth than over the past decade, and “Current Impact Fee does not support the cost of growth to District.”

There’s one more step ahead for the impact fees to become official. The district must request that the County Commission amend its impact-fee ordinance, which includes school impact fees (since the Flagler County Tax Collector collects the revenue for the school board), to reflect the new schedule. But Gavin said that the step is procedural.

The Bethesda-based Tischler-Bise company conducted the study for the school board.

The Impact Fee Study:

Click to access impact-fees-flagler-schools-2021.pdf