‘It is a crisis:’ School board to pursue both impact fee and sales tax

Nancy Thrower of the Marion County Public School Board, left, speaks as Lauren Debick of Marion County Public Schools, center, and Superintendent Dr. Diane Gullett, right, listen during the Technical Working Group meeting at Marion Technical Institute on East Fort King Street in Ocala, Fla. on Monday, Nov. 27, 2023. [Bruce Ackerman/Ocala Gazette] 2023.

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Posted January 31, 2024 | By Caroline Brauchler
caroline@ocalagazette.com

After months of deliberation among local government entities and years of planning from the school board, officials have reached a tentative agreement about the rates to reinstate impact fees.

With schools nearing capacity and deteriorating, the Marion County School Board has been considering asking the County Commission to reinstate impact fees since May of 2022. The board now plans to discuss putting a half-cent sales tax request on the ballot this year to fund the school district’s facility needs as the county continues to see explosive population growth, with 200 new residents moving to the area each week.

“It is a crisis, and we have to move. This is not an ‘either-or’ scenario, this is a ‘both and’ scenario,” said School Board Member Allison Campbell about reinstating both impact fees and a potential sales tax increase.

Marion County currently has a sales tax of 7%. If voters approve a half-cent sales tax for schools, the tax will be added on top of the existing tax. The county’s penny sales tax for infrastructure and public safety, first approved by voters in 2016, will also be on the 2024 general election ballot to continue the tax for a term of 20 years.

Impact fees are one-time payments by developers for each home they build. The county suspended the educational impact fees in 2011 following the economic recession. The school board would ask the county to reinstate them to raise funds to build schools and repair existing ones.

When the impact fee was suspended in 2011, it was $3,967 for each new single-family home built. 

The school board has drafted an ordinance to impose impact fees at less than half of the rate recommended by Benesch, the consulting firm that conducted the yearlong impact fee study. Benesch recommended the board seek to reinstate impact fees at $10,693 for each single–family home built. After pushback from community members and local developers, the school board agreed to lower the fee to 40% of the recommendation, or $4,337 per single-family home.

 

The school board, city and county have tentatively agreed on the impact fee rates for all of the following categories, excluding multifamily apartment units, which are still in deliberation.

Single-family detached/mobile home on a lot, per dwelling unit: $4,337

Mobile home park, per dwelling unit: $2,866

Single-family attached/townhouse, per dwelling unit: $2,020

Multifamily (condominiums), per dwelling unit: $1,990

 

These rates are determined by the average amount of approved building permits per year, plus the student generation rate they would create from those who will live in them.

The category of multifamily apartment units has been questioned by Ocala officials, who have asked the school board to send Benesch back to collect more data to more closely divide multifamily apartment units to impose fees differently based on their square footage, saying that families with school–age children would be less likely to live in a one-bedroom apartment.

Benesch came back with five scenarios, to which the second and third scenarios were most popular among all parties.

“The first focus of our impact fee conversation needs to be determining which tier we want to proceed with as a board,” said Board Member Sarah James.

 

The second scenario has three tiers of rates based on square footage:

Multifamily apartments

1 to 700 square feet: $1,604

701 to 900 square feet: $3,847

Over 900 square feet: $4,649

The third scenario has four tiers of rates based on square footage:

Multifamily apartments

1 to 700 square feet: $1,604

701 to 900 square feet: $3,847

900 to 1,200 square feet: $4,337

Over 1,200 square feet: $5,525

 

The county commission is constrained by a recently passed Florida statute that limits local governments from increasing impact fees by more than 50%, unless they are proven to be needed to meet extraordinary circumstances. The school board has taken a number of steps to meet that requirement.

“In every scenario before us each one of them has a calculation that exceeds that 50% threshold that is going to require a supermajority of the county commission,” said Campbell.

School Board Attorney Jeremy Powers explained the category of multifamily apartments looks much different in this county than it did in 2011, when school impact fees were last collected.

“Multifamily (homes were) perhaps undervalued at the time or were perhaps underutilized within Marion County, but have increased since that time,” Powers said.

Needing a supermajority vote from the county commission could prove tricky, as Commissioner Carl Zalak has said at a previous workshop that he would not vote in favor of the impact fee depending on whether or not the school board also would be pursuing a sales tax.

Zalak’s concern was that if the school board puts a request to increase the sales tax for education on the 2024 general election ballot at the same time as the county also asks to raise the sales tax for transportation needs, he believed voters would be less likely to vote yes.

After hearing opinions from Ocala Chief of Staff Christopher Watt and County Administrator Mounir Bouyounes, the school board tentatively agreed with the city and county on scenario three, which would have four tiers of rates for multifamily apartment units.

“We believe that the option containing four tiers within the multifamily housing type is the least detrimental to the city’s ongoing and projected development types,” said Watt.

The city first brought up its concerns on the categories of housing that the fees would be implemented on at the Aug. 11 joint workshop between the county and the school board, to which the school board altered its ordinance to show different types of single-family and multifamily homes. After this change, Ocala officials came back and said they needed further specification.

“Despite the insufficient data we have been provided but in light of the extraordinary need articulated by our partners at the school district in the event that the Marion County School Board and the Board of County Commissioners of Marion County Florida develop a school impact fee ordinance incorporating the housing type breakdowns which have been provided thus far, the city of Ocala is prepared to comply with its prior agreement to collect the school impact fees assessed by said ordinance,” said Watt.

Bouyounes said the county would also be comfortable with either scenario, two or three, that the city recommends.

The Ocala City Council will meet on Feb. 6 and make a final recommendation to the school board and county. The school board will likely meet on Feb. 13 to approve the multifamily apartment scenario choice and finalize the ordinance before sending it off to the county commission for a final vote.

Bouyounes said the commission could start discussing it as soon as early March.

Based on the recommendations that Benesch has made about how many schools the district will need to keep up with growth, however, funding from solely impact fees won’t be enough.

District staff has recommended that five new schools and nine new wings to existing schools need to be constructed over the next 15 years to sustain growth. The cost for this new construction in addition to necessary maintenance and renovations to other schools will cost the district about $1.8 billion, $1 billion of which needs funding.

“I think the data has shown that we need a half-cent (increase in the) sales tax on the next ballot, and I would recommend that to be for the 2024 ballot for long term,” said Superintendent Diane Gullett.

Voters previously approved a sales tax for schools in 2004, which expired in 2009. The district has collected a total of $111,164,680 in revenue from the tax since 2004, including in interest from 2010 until the present.

Benesch recommended a term of 15 years for the one-half cent sales tax, which would be up to voters to approve if the school board decides to put it on the 2024 ballot.

The school board will discuss the tax at their Feb. 6 meeting, which the public may attend and offer comment on.

The Ocala Metro Chamber & Economic Partnership Director Kevin Sheilley came forward in support of the sales tax but suggested a slightly shorter term of 10 years.

“We are very supportive and encouraging of the board to move forward with asking the county to put on the ballot the half-cent sales tax for a 10-year period,” Sheilley said. “We believe that is something that we can all work for, it gives you an ongoing revenue source.”

If approved for a 15-year period, the half-cent sales tax could bring in about $562.5 million in revenue for the district for construction by the year 2038.

With student enrollment reaching an all-time high of 45,651 students, the facility recommendations are not a “wish list,” it’s a “list of necessities,” said Board Member Eric Cummings.

“We’ll just continue to work together and hammer through and do what’s right for our students, our employees and by extension the community,” said Gullett.