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If growth impacts infrastructure, someone has to pay for it, according to Palm Coast Mayor Jon Netts.

“The underlying theory, I believe, is that if you reduce the impact fees and if that results in a spurt of growth, then the fees generated by that growth will offset the reduced impact fees,” Netts said. “I think the fundamental issue is that if you don’t charge the new growth for the impact of infrastructure, then the existing payer has to pay it.”

The City Council on Tuesday discussed the pros and cons of implementing a two-year moratorium on impact fees. No formal vote was taken, but city staff recommended to the City Council to maintain status quo.

According to City Manager Jim Landon, there is no proof that canceling impact fees helps spur growth.

“This argument can go around and around and around as to if we’ll see more development if we don’t have impact fees,” he said. “We could argue that all day long.”

Landon stated that impact fees can work for certain communities, but because Palm Coast will continue to grow, it likely wouldn’t work for Palm Coast.

Palm Coast implemented impact fees in 2002 to pay for anticipated growth. Since then, Palm Coast has collected and spent more than $90 million of impact fees. Some of that money has gone toward projects including Ralph Carter Park, Waterfront Park, Palm Harbor Fire Station and the Palm Coast Tennis Center.

If impact fees were not in place, since 2002, the average household would have had to pay an additional $280 annually in property taxes and utility rate/fees, according to city data.

Through 2035, Palm Coast will need $355 million to fund additional infrastructure to keep pace with anticipated growth — an average annual need of $15 million.

City officials believe Palm Coast’s population will double by 2025.

City Councilman Jason DeLorenzo, who first brought up the issue to the City Council a few months ago, has been an advocate of an impact fee moratorium all along. He gave a mathematical equation toward the end of Tuesday’s discussion that showed the city will have a $93 million surplus based on its projections through 2035.

“I’m asking for a two-year moratorium on transportation and parks,” he said.

Things also got heated Tuesday morning when city staff presented a Mullen and Nicholas study, which wasn’t able to confirm a statistically significant relationship between impact fee reductions and higher rates of building permit issuance for single-family development.

Unimpressed, DeLorenzo said: “What does Nicholas even do?”

City Councilman Bill Lewis replied: “What do you do, Jason?”

DeLorenzo said he supports promoting economic growth in the city, but Lewis wasn’t buying it. Lewis accused DeLorenzo of bringing up impact fee moratoriums because of his affiliation with the Flagler Home Builders Association.

“Let’s not make it personal,” Netts said.

In the end, city staff stated that for a growing community like Palm Coast, impact fees remain the fairest mechanism to ensure growth pays for the associated infrastructure needs and minimize the tax burden of existing residents and businesses.

Even a short-term moratorium can have significant negative impacts on Palm Coast’s ability to fund infrastructure needs, the city report states.

“The pay-as-you-grow mechanism is consistent with Palm Coast’s history of restricting general obligation debt and staying ahead of growth and the associated infrastructure impacts,” the staff report states.

In the end, the City Council elected to table any discussions about changing its impact fees until the new city councilman comes on board and until city staff can take a look at the numbers presented by DeLorenzo.

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