School Board Chair Trevor Tucker proposes compromise plan that stretches out proportionate share payments to 42 months.
A proposal and a deadline extension are on the table. But a new interlocal agreement with Flagler Schools is still in the hands of Flagler County's commissioners.
School Board Chair Trevor Tucker proposed a compromise in the final minutes of the final ILA oversight committee meeting before the county’s imposed deadline. With the proposal, the school district, county and three municipalities — Palm Coast, Bunnell and Flagler Beach — took steps toward finalizing a new ILA.
The sticky point that has kept the county and district apart has been concurrency — the timing of developers’ projected school impact fee payments to ensure space for new students.
With a proposed plan on the table, county representatives tentatively agreed to extend the Sept. 1 deadline to pass the new ILA.
Commissioner David Sullivan, who represents the county on the committee along with Commissioner Andy Dance, had been resolute in not wanting to extend the deadline. But at the Aug. 4 meeting, Sullivan and Dance agreed to support an extension to Nov. 9.
“As soon as you start to extend things, you get in the mode of continuing to extend things,” Sullivan said.
But Palm Coast City Attorney Neysa Borkert said in order for the ILA working group to draft the agreement, present it to the oversight committee for approval and then have all five governmental entities bring it back to their elected bodies for approval, an extension is necessary.
“I will only go along with this because we need to move it along,” said Sullivan. But he also brought up the possibility that the other three county commissioners could vote against an extension.
Palm Coast Mayor David Alfin, the oversight committee’s chairman, told Sullivan, “We’re counting on you to be an excellent ambassador on what was said today.”
If the commission approves an extension at its Aug. 15 meeting, the oversight committee would likely sign off on a new ILA agreement at a 9 a.m. meeting on Sept. 8.
At that point, the major question would be whether the county commission accepts the proposal, which is still a leap from the county's capacity reservation proposal.
SPLITTING THE DIFFERENCE
The negotiations began after the county issued a 120-day termination notice of the current ILA on May 2. The Flagler Home Builders Association and county commissioners objected to the school district's proportionate share agreements in which 100% of projected impact fees are collected early in the developments' planning stages.
Without a new ILA in place, Borkert said at the Aug. 4 meeting, the district would not be able to enter into any new proportionate share agreements which could halt major development projects in the county. She said three or four current projects in Palm Coast would be immediately affected.
“The whole working group is taking directions from you (the oversight committee), so we can make progress on the last piece of the puzzle (to draw up a new ILA),” Borkert said.
The committee seemed no closer to an agreement until Tucker suggested to split the difference between the city of Palm Coast’s proposal and the school district’s proposal.
At the July 20 working group meeting, Palm Coast proposed a concurrency plan that would spread developers’ proportionate share payments over four years with 30% due at 60 days from an agreement with the district, another 30% due at 24 months and a final 30% due at 48 months with the remaining 10% picked up when impact fees are due.
Tucker’s proposal would close the gaps for the middle 60% to 21 months and 42 months.
The district had proposed a three-year plan with 40% to be paid within one year of a proportionate share agreement, 30% in the second year and the remaining 30% in the third year.
Earlier in the Aug. 4 meeting, Patty Bott, the district’s coordinator of planning and intergovernmental relations, said the district needs what are essentially impact fee down payments within three years of final plat approval to plan for school construction and have the funds to bond for capital projects.
Palm Coast Chief Development Officer Jason DeLorenzo and Bott each made a presentation to support their concurrency proposals.
DeLorenzo said all projects have different lag times. A number of factors, including the state of the economy, can affect when houses get built and the development begins to impact the district, he said.
DeLorenzo said there is no impact on schools in the first 12 months as infrastructure is completed before home construction even begins.
DeLorenzo used five Palm Coast developments, each planned under different economic circumstances, as examples.
- The Conservatory’s final plat was approved during the housing bubble in 2005 with 340 units. After 36 months there were only three certificates of occupancy, so there was 0% impact on schools after 24 months.
- Grand Landings Phase 1 had 89 platted units during the recession in 2007. With only eight certificates of occupancy at 48 months, the project had little impact on schools.
- Park Place had 123 units approved in 2015 during a period of slow growth. At 48 months, it already had 92% of its certificates of occupancy. However, because it is a 55+ community, it had no impact on student growth.
- Sawmill Creek had 259 units approved in 2019 during a period of moderate growth. It had a 62% impact at 36 months with 161 certificates of occupancy.
- Grand Landings Phase 4 proceeded during a period of high growth with final plats approved for 186 units in May, 2020. With 32 certificates of occupancy at 24 months, there was 17% impact.
The district sets up proportionate share mitigation agreements with developers only when schools are at capacity. The agreements set the timing for payments and guarantee credit vouchers for impact fees. Bott said the district has signed four agreements in the past three weeks with two more moving forward. She said 18 concurrency applications are waiting to go through proportionate share mitigation. Without an ILA, those 18 applications would be discarded.
Bott said with 100% of proportionate shares collected through the current agreement process, the district would still need $8.7 million in additional debt servicing to fund a new middle school and a new high school — projects that will cost a total of $165 million and are currently in the district’s five-year capital plan.
With the district’s three-year proposal, the debt servicing would jump to $16.4 million. Under Palm Coast’s 48-month proposal, the needed debt service would jump to $39.5 million, Bott said.
DeLorenzo said those numbers are based on assumptions.
The major construction for the $70 million middle school would begin in Year 3 of the capital plan (2025-26) and the major construction for the $90 million high school would begin in Year 4.
“I mean just the acknowledgement to get to this point and move forward, future collaboration is what we have to focus on to stop some of the strife and battles and moving forward on a unified front to make our schools adequately funded.”
— ANDY DANCE
“If that arc changes due to student generation, that gap would change significantly,” DeLorenzo said. “If the draw isn’t needed for the high school until a year later, that gap would come down.”
At the first ILA oversight committee meeting on June 9, the county proposed a capacity reservation system in which 20% of impact fees for all developments would be paid up front and the remaining 80% due as impact fees.
Dance, who used to be a School Board member, appealed for better relations in the future between the district and the county.
“I think it should be noted that the current proportionate fair share agreements that developers have signed have all been signed with a much shorter timeline, but more money was due up front sooner. And so, just another concession from the school board side is it's pushing that a little bit farther out again. And it always seems like the school board's making the concessions in this process. I mean just the acknowledgement to get to this point and move forward, future collaboration is what we have to focus on to stop some of the strife and battles and moving forward on a unified front to make our school adequately funded.”