The ongoing impact fee debate

Shown in a slow exposure, students leave West Port High School in Ocala, Fla. after the last bell on Wednesday, May 10, 2023. [Bruce Ackerman/Ocala Gazette] 2023.

When educational impact fees were instated in Santa Rosa County in 2020, local developers pushed back against the county and its school board, causing a two-year-long legal battle.

In Marion County, the school board and county are in the final stages of making a decision on whether or not to reinstate impact fees so developers will pay a one-time fee for each new home they build to help offset the financial strain that development imposes on school capacity by funding the construction of new schools. The fees were suspended in 2011 because of the recession.

Marion County Attorney Guy Minter has brought the case of Santa Rosa County’s legal troubles to the attention of the Marion County Board of County Commissioners, with concerns that if impact fees are reinstated, the same risk of lawsuit could happen here.

“We are all aware that the school board has a need to adopt a new funding source as soon as possible,” Minter wrote in a memorandum. “The worst scenario would be to have a situation like Santa Rosa County and spend two years in expensive litigation only to have the fees ultimately invalidated.”

In the case of the Santa Rosa County lawsuit, a Circuit Court ruled in favor of the Home Builders Association of West Florida in 2022, which filed a lawsuit claiming that the county’s impact fees were unconstitutional due to flaws in the way the amount of fees and number of students impacted by new construction were calculated. The county had to reimburse nearly $500,000 to builders who were fined before the injunction was filed.

For calculations in this district on how much impact fees should be, the Marion County School Board enlisted Benesch Consulting to conduct a yearlong study, which showed the county will need to build seven to 10 new schools by the year 2038, calculated based on an average of 3,500 new home permits a year.

Schools are expensive to build, particularly with security measures that meet modern-day demands, and costs range from $43 million for a new elementary school, $59 million for a new middle school to $135 million for a new high school.

Benesch, which has conducted studies for the school board and the county for a variety of purposes, has presented its research to both governmental bodies many times throughout the process of trying to agree on how to reinstate an impact fee.

The firm recommended the school board reinstate impact fees at 100% of its suggested rate, which would equate to $10,693 for a single-family home. Instead, the school board settled on 40% of that rate, or $4,337 per new single-family home, after an outcry from local developers and community members over the potential negative impacts of a fee that high.

Because of what he said was the thorough research conducted by Benesch, and the clear need for additional schools, the school board’s attorney, Jeremy Powers, said he doesn’t think the “Santa Rosa” defense is applicable to Marion County.

“I am preparing argument as to why Santa Rosa-type circumstances are distinguishable from ours. Part of that has to do with how the district in Santa Rosa prepared their case for litigation, and what arguments they made, or failed to make, before an injunction was granted and the case headed to the Court of Appeals,” Powers wrote in an email.

Powers said that Santa Rosa County needed to show its impact fee could pass the “dual rational nexus” test and, at trial court, they were unable to meet that expectation.

The test requires a government to show a connection between the need for additional schools, in this case, and the growth in population created by the development of new homes, according to the Florida Association of County Attorneys.

“My goal for the immediate future is to continue review with my counterparts from the city and county as well as our consultant to ensure a sound and legally defensible plan that everyone understands,” Powers said.

The county commission hosted its first of two workshops on Sept. 20 to discuss the circumstances surrounding the fee in order to qualify for the exemption to House Bill 337, which limits local governments from raising impact fees past a certain threshold.

The county and the school board have gone back and forth over what rate the impact fee should be set at, but even more so about how different housing units are classified to ensure the fee isn’t unjustly high.

In the ordinance drafted by the school board, which needs to be approved by the county commission to be final, the rates and categories are:

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

Multi-family (apartments), per dwelling unit: $4,114

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

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

Multi-family (condominiums), per dwelling unit: $1,990

The next county commission workshop will be held at 10 a.m. on Oct. 4.