At its May 2 meeting, a 4-1 majority of the Flagler County Commission (with Andy Dance in dissent) voted to have the county bail from a 14-year-old agreement with the school board and three cities that controlled, in part, how school construction is planned and financed in tandem with new development. The commission’s 120-day notice meant that the county would be out of the agreement by Sept. 1.
The commission’s deadline was arbitrary, and assumed a working group of county, school board and city staffers would have time to rewrite the agreement by then. The agreement is commonly referred to as an interlocal agreement, or ILA. If the county bails, there would be no ILA in place.
The unanswered question at that commission meeting and for months since was this: what would happen to planned or ongoing developments if the county bailed from the ILA, making that agreement nul?
The question was answered Thursday at a meeting of the ILA oversight committee, which gathers elected officials from the county, the school board, Palm Coast, Bunnell and Flagler Beach. And that answer was simple, if potentially devastating to the local economy: many local developments would stop. People would be out of work. The local economy would be needlessly jolted.
And at this point, it all hinges on the County Commission not to let happen what it set in motion with its arbitrary deadline. The commission will have to agree to extend the deadline–from Sept. 1, to Nov. 9–as all other local governments appear in accord to do.
The question as to what would happen if the ILA was no longer in effect was answered at great length by Neysa Borkert, the Palm Coast City Attorney, who addressed the full oversight committee on the matter toward the end of the meeting, starting by posing the question the same way it’s posed before judicial bodies asked to render an opinion.
“If on September 1, the current ILA terminates, what happens during that period of time until a new ILA can be put in place?” Borlkert asked. She said she had worked on the answer with Sean Moylan, the deputy county attorney, and Chris Wilson, the attorney working with the school board on the issue, but not with the attorneys in Flagler Beach and Bunnell.
“We’ve reviewed the statute and we’ve come to the determination that section 163.3180 requires that concurrency be adopted in both a comprehensive plan and also in the intelocal agreement that we have. So if there’s no ILA, the district wouldn’t be able to enter into any prop share agreements or capacity reservations, because there’s no method to do so.” Prop share is short for proportionate share, itself the heart of the matter regarding the working group and the oversight committee’s task: what should developers and builders’ “proportionate share” of payments be, ahead of construction, to defray the cost of planned school construction? (The oversight committee appeared to agree on an answer to what question on Thursday, too. See: “Solution in Sight in Months-Long Conflict Over School Construction as Halt to Big Developments Looms.”)
Borkert continued: “So that means that any agreements that were entered into prior to September 1, 2022 would be honored. And obviously, those are vested, paid-for vouchers, they can move forward with their units. But anybody coming in, and as Jason said, at a final plat stage, during this period of time, if their development–if there’s not capacity, then they would have no method to enter into the prop share and continue their development until there’s an ILA in place.” She was referring to Jason DeLorenzo, Palm Coast’s development director.
“Now, I’m sure your next question is, well, are there any projects that are in this position?” Borkert said. “I have been notified by Sean [Moylan] that that we don’t believe Flagler County, Bunnell, or Flagler Beach have any projects that would potentially be impacted, but Palm Coast has.” As it turned out, Bunnell mayor Catherine Robinson, who was at the table, would soon inform the oversight committee that, in fact, Bunnell’s largest development–and one of the largest in the county–Grand Reserve, which has been booming for years, would be affected.
“Palm Coast would have some that would potentially be impacted if there’s a lapse,” Borkert said.
“And that means they could not move forward until there’s an agreement,” School Board member Colleen Conklin said of developers.
“Right, because we can’t issue our final development order until we have–and this is in our comp plan–until we have sign-off from the school district. So we’re prohibited from” moving forward, the city attorney said. The terms were unequivocal, but had not yet been heart with that much clarity–or definitiveness–on the oversight committee.
Some of the committee members were in pinch-me mode, just to be sure. “It’s a simple yes or no, right? If the agreement expires and a developer comes in, can they proceed? Yes or no?” Conklin asked again of an expired ILA.
“If they’re coming in to say anything that requires us to look to the district to say, yes, we have capacity to serve those students or no, we do not,” Borkert said, “any of the ‘no’s, we do not,’ that would be an issue.’ That’s where the issue comes from.”
In Wilson’s words (in a July 29 email to Borkert and Moylan, not at the open meeting): “If there is no extension or if an “interim” agreement is done that does not include concurrency, then the District will not be able to enter into any proportionate share agreements or issue any capacity reservations until a replacement ILA is fully approved and executed between the parties. If a prop share agreement was entered into while concurrency was viable, prior to 9/1/22, then it would be valid and honored.”
There is some disagreement between the attorneys about the nuances within the law’s application. For example, in internal emails between Moylan, Wilson and Borkert, Wilson and Moylan disagreed about what document had “primacy”–the comprehensive plan or the ILA. (“The ILA must be consistent with the Comp Plan not the other way around,” Moylan wrote Wilson on July 29. “For example, if the County were to unilaterally eliminate school concurrency from the Comp Plan (which is not at all the plan, just an illustration), the ILA could not impose school concurrency.”) Moylan, to be clear, called any adoption of an ILA without concurrency a “bad idea.”
To Wilson, “if the County is not a party to an ILA that adopts concurrency, then the County is prohibited from applying concurrency to educational facilities,” he wrote Moylan. “Likewise, if the county is not a party to an ILA that adopts concurrency, then concurrency cannot occur in other municipalities in the county. ”
But Moylan the school boards and county’s attorneys did not disagree about the law’s application in the main. The more substantial disagreement in the interpretation of the law is from Michael Chiumento, the attorney who represents developers and has followed the ILA process closely.
“The District asserts that if that Base ILA is adopted, it will shut down growth and building permits,” Chiumento wrote in July 31 email to developers and certain government officials, referring to a base ILA without concurency, mitigation or what he referred to as “all the other machinations of the district’s concepts that can never be reliable or believable.” He went on: “We all know that is not the case. And, if the District desires to file some action attempting to enjoin the local governments from doing so, they will be faced with many unintended consequences such as adverse impacts to the ½ Cent Sales Tax, a counter suit against their impact fee study, a counter suit to return impact fees it has collected for decades without the necessary expenditures, depositions of their staff and their methodologies, and more.”
That did not sway the members of the oversight committee or school staff, who stuck to Borkert’s interpretation of what would happen next.
Patty Bott, the school district’s planning director, specified how many developments would be affected: “I have 18 concurrency reservation applications, waiting to go through prop share. So they submitted their application for reservation. Those 18 would have to stop. They would be affected. They’re in various stages of their negotiation.” She added: “So those 18, and some are on my schedule to go to the September [school board] board meetings for approval, they would have to stop. I mean, that’s what would happen if I’m understanding Neysa correctly.”
Palm Coast, too, has its share of developments that would be affected. “We have four that we think would be immediately affected, 15 total,” Borkert said, “but I can’t say if that’s an addition to the 18 or not, we probably don’t know.” DeLorenzo today clarified that there is “quite a bit” of overlap.
By halted development, that literally means developers would not be issued building permits without a proportionate share agreement in place. Developers could move ahead with infrastructure work, if they so choose, but that’s not putting up homes. Developments of regional impact (or DRIs) and all those quarter-acre lots in Palm Coast would not be affected. Nor would such developments as Plantation Bay or Hammock Dunes, which are vested.
This what-happens-next question started building urgency in recent weeks because Dave Sullivan, who sits on the oversight committee with Commissioner Andy Dance, had said repeatedly–and said again at the beginning of Thursday’s meeting–that he was not moving away from the Sept. 1 deadline. In other words, that the county would bail on Sept. 1, come what may.
But Thursday’s oversight committee meeting was quite successful in potentially resolving the sticking point delaying the writing of a new ILA. That resolution would make any fears of a county without an ILA moot.
Thursday’s compromise, however, hinges on the county agreeing to extend the deadline to Nov. 9, because the draft agreement needs time to circulate and win the approval of all parties. Getting agreement for that new deadline is likely, but not definite: the commission–ground zero the Sept. 1 deadline–will have to formally agree to move it to Nov. 9 at a meeting later this month. (County Commissioner Dave Sullivan said “I don;t see any problem with that being extended.”) The other governments and the school board are almost certain to agree, since they weren’t thrilled about the Sept. 1 deadline to begin with, and no one was thrilled with the possibility of a county without an ILA in place.
“We’ve spent a lot of time addressing the issue of what happens next,” Chris Wilson, the school board’s attorney, said. “Collectively Neysa and Sean spent more time on that than reviewing the agreement in the last few weeks. May I suggest that we’re spending a lot of time on something that we would rather have more time to solve the agreement and the issues then argue about what happens after September 1?”
Long strings of emails attest to the discussions the three attorneys have had on the matter in the last few weeks. But as Borkert wrote her colleagues on the eve of Thursday’s meeting, “I think we are near the finish line in concept.”