Closer look at impact fees raises doubts

Palm Coast Observer
Opinion

Budget season will be upon us again before you know it, and the tax rate will be a hot topic. Typically, residents are more likely to be worried about the tax rate than city-, county- or state-mandated fees. The tax rate, combined with property assessments, determines how high our property taxes are. Voters take the tax rate seriously, but somehow they don’t pay much attention to fees. That’s why local governments are so fond of fees.

Few people realize that impact fees, permitting fees, and utility connection charges add about $17,000 to the price of a new home in Palm Coast. Considering the median price of single-family, Palm Coast home sold through the Multiple Listing Service in February was $111,000, those fees amount to a 15.3% surcharge. The majority comes from impact fees: school, fire, transportation and parks. This is particularly disconcerting since jurisdictions within 86.6% of Florida counties have recently suspended or reduced impact fees to encourage development.

Palm Coast parks impact fee is $1,264.06 per new single-family home — not $1,250 or $1,265, but $1,264.06. Numbers with decimal points seem somehow more precise than those without — less likely to be questioned. But examination of the methodology used to determine the park impact fee raises doubts.
The impact fee is intended to equate to the cost of providing additional park services for each additional residential dwelling. It considers how much additional land will be required: the cost of the land acquisition plus the cost of development.

It’s easy to get lost in the minutia of the calculations, which mask some flaws.

The city’s impact fee study uses a cost of land per acre of $27,667.34 (another deceivingly precise number), although only a small portion of Bings Landing and Linear Park acquisitions required city expenditures. The rest were gifts, conveyances by developers, paid by grants, etc. The $27,667.34 is bogus.

The assumption that the city will have to purchase all additional acreage is refuted by its own Land Development Code which states, “All residential projects of 25 units or more shall provide recreational land to meet the level of service standards adopted in the Recreational and Open Space Element of the City’s Comprehensive Plan.” In other words, the developers will donate the land in order to get an approved development order.

Flagler Home Builders Association calculations indicate that the city already has a surplus of park land — enough to cover the next 20 years of growth. Perhaps that’s because the city’s calculations failed to include some of the parks it already owns. Yet their calculation looks accurate “to the penny.”