The Palm Coast City Council started its day on a chilly note at one of its serial ribbon-cuttings (“are we running out of ribbons yet?” council member Mary DiStefano quipped later in the morning). That one took place at the city’s new, 2.2-mile Graham Swamp trail, an attractive hiking and biking path that connects the Wild Oaks and Woodlands subdivisions to Waterfront Park on the Intracoastal. The chill wasn’t just in the air, but in what is proving to be the last such park-related ribbon-cutting for several years: at just $265,000, the city’s park-improvement fund is depleted. Over the next five years, the city expects to collect less than $2.5 million.
There are no plans for park construction in the next three years. And, in a gift to builders and future home-buyers that amounts to a deferred tax on existing residents, the city administration is recommending against improving the city’s revenue collection for park construction.
“This is true of just about all of your infrastructure: Your impact fees will never pay for all of it. Your existing taxpayers are going to have to contribute to some of it at some point in time, just as they have in the past,” City Manager Jim Landon told the council, cutting off what had been an hour’s discussion on the matter. (Landon, rather than Mayor Jon Netts, has been increasingly leading council meetings—and policy.) No one was arguing Landon’s point: residential development doesn’t pay for itself. It’s a loss leader for cities. That’s why development impact fees amortize the loss. The question has always been where to draw the line between impact fees and property taxes, so that current residents aren’t overly burdened by demands from new residents.
The message behind Landon’s new impact-fee plan presented to the council on Tuesday was stark: Palm Coast’s parks and park services, already below the level where they should be, will fall further behind. And future residents will not be asked to pay their fair share.
Barely an hour after that ribbon-cutting, the council heard Landon’s latest plan on fire and park impact fees, the one-time fees levied on new construction to help build or improve parks and fire stations: Those impact fees are already considerably lower than what they should be, according to the city’s own calculations. The city is running a deficit between the park acreage it’s supposed to have for a population its size. That deficit will only grow if development resumes in three massive new subdivisions the city just approved. Yet the administration is proposing to keep park fees at the same level they’ve been since 2004, and lower fire impact fees levied on new commercial construction. In inflation-adjusted dollars, they’ll be paying far less in the coming decade than current residents did in the 2000s.
Ray Britt, the city’s finance director, showed residential fire impact fees to be 66 percent below what they should be, based on the complicated formula local governments use to determine their impact fee costs, and park impact fees to be 23 percent below what they should be. (Builders pay a one-time fee of $1,264 on a residential home for park improvements, and $196 for fire services. They should be paying $1,559 and $325.) Despite the deficit, the administration is acceding to builders’ demand that they hold impact fees where they are, except for commercial developments’ fire impact fees, which would rise slightly. That wasn’t enough for council member Mary DiStefano.
“Is it possible not to delete the impact fee, but is it possible to reduce it?” she asked.
“The short answer to that is,” Landon said, “our calculations, based on the ordinance, indicate that you should increase it. So if you decrease it, it would just be an arbitrary—I mean, we wouldn’t be able to come back and give you an accounting kind of answer as to what it should be.” Landon misspoke: he had just shown the council what impact fees should be, based on those calculations. The arbitrary decision is to keep them lower than what they should be. As he put it: “What we are proposing is to leave it alone except where it indicates we’re charging more.”
And that, even though, also by the city’s calculations, the city has a 139-acre backlog of parkland improvements based on its current population.
“So from a strictly pragmatic point of view, using this formula, we have just barely kept our head above water,” Palm Coast Mayor Jon Netts said.
“You do not have enough money according to our projections to do any more improvements in essence in the next three years,” Landon said.
“Nor are you likely to get significantly more.” Netts.
In 2011, the city manager said, $137,000 would finish up Grand Swamp. That would be it. “So in essence,” he said, “we are proposing no new projects for 11, 12 and 13, so that’s the facts to answer your question, yes Mayor, we’ve spent it all, we’re just keeping our head above water. Do we still have demand out there, yes we have demand out there.”
“Here’s the reality,” Netts said. “2001 to 2010, when we had a significant amount of growth, we spent a lot of money on parks, but we’ve only got $250,000 left. So whether this component of the formula should have been lower and this component should have been higher, the end result, this formal has kept pace just barely with our comprehensive plan agreements. So I mean, you can push the numbers around, you can add more to this, take away from that, but the end result is we are just barely collecting the money to meet our vision for parks and recreation in Palm Coast.”
The deficit between the city’s idea of itself, as outlined in its 2009 parks master plan, and the city’s projections of future park improvements, is more vast. That plan was “poised to do more than just meet the recreation needs of its current and future residents,” it concluded. “The plan envisions enhancing the public realm of the city, from small neighborhood parks in neighborhood park systems to the creation of a network of ‘complete streets,’ trails and greenways. By balancing community needs for recreational services and enhancing the area’s quality of life, the Recreation and Park Facilities Master Plan can take a leadership role in steering the future of the City of Palm Coast.”
Nice words, which Landon on Tuesday belittled. “It’s a plan that has some legal teeth behind it that you can use as a means of making decision, but the fact of it is, if you don’t have the money, your comp plan can’t grow money,” he said. Comprehensive plans, however, are sold to taxpayers as their blueprint of what they want their city to be, and as a guide to the council and the administration to come up with the means to make that plan a reality. By saying that “your comp plan can’t grow money,” Landon was in essence sidelining the administration’s responsibility to give the council options that would potentially grow money to help the city get closer to its vision.
The move is even more significant given the legal requirement that the city reevaluate its impact fee schedule only every six years. So even when the economy begins to grow again in the next few years, Palm Coast—which, according to its own embrace of those massive new developments, expects to almost double in size—will not have the fee schedule in place to ensure that current and future residents get the parks and recreation space they’ve asked for. The deficit could be steeper in the coming decade because in the past 10 years, the overwhelming amount of acreage Palm Coast developed into parks was donated.
“Taking that in consideration,” Netts said, “I go back to my point that using this formula, using this collection rate, we have just barely kept pace with what we should be doing, in spite of the fact that the land was donated. Now, going forward in the future, looking forward, we can reasonably anticipate exactions from developers, donations of parkland. No guarantees, but based on past history, that does not put us way ahead of the game, because it didn’t put us way ahead of the game in the past.”
“If that’s true mayor,” council member Frank Meeker said, “at the total build-out of the city of Palm Coast, we will not meet our level of service.” Meeker had raised issues with the administration’s presentation, which obscured the real cost of park development by assigning arbitrary land costs to acreage donated to the city as a means of projecting future park-development costs. The calculations appear to downplay the real cost of those developments, thus keeping artificially low the already-low impact fees necessary to defray those costs.
Meeker didn’t get far, as he often doesn’t on the council, with Landon steering the conversation or, as the city manager did on Tuesday, simply ending it by declaring it a “good conversation” and announcing: “I just want to summarize it to close that, I didn’t give direction specifically to, all right, we’re going to reduce these fees, we’re going to reduce those fees. That really came from staff. They’ve heard the message loud and clear. We’re trying to be as fair as possible. You have a total of three impact fees and one land-development fee kind of in combination, and they’re proposing reducing two of those four that’s in front of you.”
“But not proposing to increase the others,” Netts said.
“Right,” Landon said, “and they could make that proposal. I think your staff is hearing the message loud and clear, but they are making a recommendation they think is responsible for today’s issues and situation but also trying to look into the future. You all can make whatever decision when it’s all ultimately said.”
And with that, Landon ended the matter and the mayor moved on.