Flagler Home Builders Association Will Sue Palm Coast Over Parks, Fire and Road Impact Fee Increases

The Flagler Home Builders Association is preparing to sue Palm Coast government over the City Council’s approval in June of sharply higher development impact fees for fire, parks and roads. The new fees don’t apply until Oct. 1.

The HBA today sent a 14-day notice to the city of its intent to sue, as is required before a civil lawsuit is filed against a government. The suit would be filed on behalf of HBA, five  construction companies and two city residents. 

The pending action argues that the city’s new schedule violated the law by raising fees too sharply and too quickly, without a substantiated showing of “extraordinary circumstances” that would justify the sharper increase, among other alleged violations. 

“We believe the notice of violation accurately states the law as well as the defects and deficiencies of these ordinances,” Annamaria Long, Executive Officer of the Flagler Home Builders Association, is quoted as saying in a release by HBA. “We are committed to protecting citizens and ensuring a fair business environment in our community.”

A city spokesperson said the city had received the notice and was reviewing it. 

Palm Coast Vice Mayor Theresa Pontieri, who pressed for higher impact fees with three different council colleagues last year and again this year, countered HBA’s notice in strong language today. 

“It’s unfortunate that at a time when our city has experienced incredible growth and unprecedented increases in infrastructure construction costs, our homebuilder’s association would find it necessary to threaten us with legal action, rather than recognize the importance of growth paying for itself—which it never truly does,” Pontieri wrote in a statement to FlaglerLive. “Impact fees are a necessary cost of doing business, and they ensure that the city’s future infrastructure needs and public safety are adequately funded. Providing residents with fire stations and safe roads is not optional—it’s our duty. Additionally, providing for parks and recreation keeps families healthy and active. Its unfortunate that we, as public officials, have to defend our quality of life to the HBA—the same folks that earn money by selling houses in the very community we work so hard to keep safe and beautiful.”

Notably, the HBA’s action is also an outgrowth of recently passed and controversial legislation that forbids local governments from adopting land-development regulations that would be burdensome to developers. The legislation, known as Senate Bill 180, largely addresses recovery measures after natural disasters, but also applies the “burdensome” prohibition across the board, whether an area is in recovery or not. The legislation is itself facing litigation and sweeping opposition from local governments. 

Local and state officials have said it is very likely to be revised in the coming session. How that will affect litigation citing SB180 is unclear, though HBA’s lawsuit is multi-pronged and would likely not be nullified if the burdensome” standard was narrowed. 

The Palm Coast City Council in June approved increases in its fire and rescue, parks system and transportation impact fees. The fire impact fee rose 117 percent, the parks fee 73 percent, the typical transportation fee 115 percent. The city increased water and sewer impact fees 30 percent last year. 

The HBA states Palm Coast more than doubled combined impact fees on homes and businesses from a minimum of $5,764 to $11,646 as of October 1, 2025. When added to water and sewer fees, a 2,000 square foot home would carry at least $31,528 in impact fees, according to the association.

“It is incomprehensible,” the HBA’s notice states, “how over a 100% increase in impact fees with a $5,681 increase for a single family, 2,000 square foot home, could be anything but ‘more burdensome’. The Ordinances would, therefore, be found null and void ab initio.” That’s Latin for “to start with,” or “from the outset.”

Impact fees are one-time fees, barely distinguishable from taxes, imposed on new development–houses, office buildings, industrial buildings–to defray the “impact” of that new development on the community. The impact fee revenue is intended to fund necessary infrastructure improvements and schools caused by a larger population, though fee revenue is generally not enough to meet all such needs. 

Governments must justify the fees through rigorous studies that directly link population increases, including projections, with need. The HBA successfully argued several years ago that an attempt by the School Board to double its impact fees was based on a questionable study. The proposal was scaled back before it was approved. The HBA is making a similar argument in Palm Coast’s case, focusing on the city’s claim that “extraordinary circumstances” exist to justify the large increases. 

A relatively new state law limits impact fee increases to one every four years, and to no more than 50 percent during that four-year period–unless the local government can show “extraordinary circumstances.” Those are defined as population increases faster than the state average and unusually high construction costs. HBA claims Palm Coast failed to meet those standards. 

“The impact fees are not proportional or reasonably connected to or have a rational nexus with the need for additional capital facilities for the properties as there was no effort whatsoever to apply such impact fees to neighborhoods or even regional areas within the City,” the notice to the city states. 

The notice was drafted by Daniel Webster, a Daytona Beach attorney. While he claims that the city’s study lacked rigor, the same may be said of at least some parts of the notice, leaving them easy pickings for the sort of merciless attorney the city is in the habit of hiring to fight lawsuits. 

Webster says, with questionable accuracy, that the city’s study was not Palm Coast-specific, relying instead on national and state data. The city relied on such city and county-specific data as that provided by the University of Florida’s Bureau of Economic and Business Research and the Census Bureau, both of which provide Palm Coast and Flagler County-specific data. 

Webster states the city did not make a case for “extraordinary circumstances” other than to show that there was inflation, and that the local population increased, “which in Florida is the norm, certainly not extraordinary.” The statement is disingenuous: while Florida’s population has increased almost every year for decades, Fagler County’s increases in some years after 2018 placed it among the fastest-growing counties in the state, with most of that growth in Palm Coast. That growth continued last year. 

The notice also claims that “The Ordinances are unlawful because they are assessing impact fees for the reconstruction or replacement of previously existing structures.” That would be illegal: impact fees may be used only to add capacity, not to repair or replace existing capacity. But in all publicly announced city projects, the city appears to have abided to that requirement quite strictly, and its administration is quick to remind council members what their impact fees may or may not fund. 

For example, impact fee revenue is being used to build a new fire station in Seminole Woods (Fire Station 26). It has been used to expand a water treatment plant, and to add new amenities to existing parks. The notice does not include examples of violations of that standard. 

The notice refers to Fire Station 26, if with odd reasoning: “With respect to Fire Station 26, they are showing it as a current need with a $10,910,978 budget that serves the growing Seminole Woods area; so, therefore, cannot be benefiting those within the entire City and cannot be a need based on future growth or apportioned by neighborhood.” 

The reasoning assumes that, say, a new turning lane, a new fire station or a new park in one neighborhood would be a violation of impact fee use since it would not benefit the entire city, but that’s not been the reasonable application of the standard since by necessity, almost all impact fee spending is geographically specific: even water treatment plants serve specific areas of the city. 

The notice seems to go even further afield when it claims that “The City fire stations also serve areas outside of the City and utilize as personnel Flagler County Fire Department personnel operating out of City Stations, which also serve areas outside of the City. This was not addressed.” 

It is true that city fire stations serve areas outside the city: mutual-aid agreements are in place with Flagler County and Flagler Beach. That has been true since the founding of the city. It is also true that county personnel operate out of city fire stations. That’s because the county alone operates ambulances, which are stationed jointly with city personnel as an efficiency measure. It is almost unimaginable that someone like Circuit Judge Christ France, before whom this lawsuit is likely to play out when filed, would find either of these arrangements objectionable or relevant to a case against higher impact fees.

Webster’s claim that  “There has been no allocation or explanation as to the current actual needs nor any study showing why additional stations or personnel are needed” is not accurate: the Fire Department produced data showing that the new station in Seminole Woods was needed because the area is underserved, and a new station would cut response time in half for many residents. (See: “As Seminole Woods Soon Gets Its Own Fire Station, Emergency Response Times May By Cut in Half for Many.”)

Webster’s arguments against the city’s proportional calculations of needs may be sounder when he shows that the capital needs the city shows can be paid for through impact fees include all of the city’s firefighters in the equation, rather just the 33 additional firefighters who would be needed through 2035. 

Webster applies similar approaches to the city’s transportation and parks impact fee calculations, finding them wanting and concluding that “there is an exceptionally strong case to overturn all three (3) Ordinances.” (Each impact fee increase was ratified through a separate ordinance.) 

“It is unfortunate that the consultants hired by the City, undoubtedly at a substantial cost to tax payers, failed to address the fundamental requirements required under the State’s legal precedent,” the notice concludes. “Additionally, the studies failed to mention or address the statutory changes, which were pending before the legislature, and approved by the Governor on June 26, 2025 – – which was four (4) days before the Ordinances were adopted.”

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