“We are at a precipice”
School, county leaders discuss reviving impact fees to help Marion schools catch up to explosive growth.
Commissioners and School Board members meet together during the Joint Workshop with the Marion County Commission and the Marion County Public School Board at the Webber Center at the College of Central Florida in Ocala, Fla. on Friday, August 11, 2023. [Bruce Ackerman/Ocala Gazette] 2023.
The Marion County School Board may ask the Marion County Commission to reinstate school impact fees at less than half the rate recommended by a consultant. The fees, on hold since 2011, are needed to help the district financially accommodate a rising student population fueled by increased housing development in the county.
The school board, which has deliberated the issue for over a year, met with the county commissioners on Aug. 11 to seek a consensus on how much developers should be charged to support the construction of new schools. Impact fees are one-time assessments developers pay for each new housing unit built to offset the effects the increased population has on infrastructure such as schools and roads.
Marion County’s student population is projected to grow by nearly 12,000 by 2038, and the school district could need to spend about $1.1 billion over the next 15 years to support this growth, according to a district-funded study from the consulting firm Benesch.
“Geographically, we’re the fifth largest county in the state of Florida, 19th largest in population and we are growing at an exponential rate with 220 people a month moving to Marion County with no signs of slowing down,” said Commissioner Kathy Bryant. “Impact fees are one of the funding sources we have access to that help growth pay for itself as much as it can. To do nothing would be irresponsible.”
While Benesch recommended an impact fee of $10,693 per each single-family detached home, the school board discussed a rate of 40% of that figure, or $4,277, with the county commission. That figure would be only $310 higher than the school impact fee that was suspended in 2011.
The school board originally planned to adhere to Benesch’s recommendation but altered its view after an outcry from local developers and community members over the potential negative impacts of a fee that high.
Benesch’s study calculated the district’s financial needs to construct new schools based on a population growth estimate derived from a maximum five-year average of 3,500 building permits for new houses each year in Marion County. The study looked at figures from 2021 but the next year, there were 6,320 permits authorized for new homes.
Ningün Camp, a consultant for Benesch, said the number of permits in 2022 was similar to that issued in 2021. Camp explained why they based their recommendation off the five-year average of 3,500 even though Marion County has seen nearly twice that amount of growth in a single year.
“We’re just being overly cautious that we are not projecting too high of school needs,” Camp said. “The school district every few years should look and see what the trends are. If they are seeing more like 7,000 to almost 8,000 (permits), maybe they need to be more aggressive.”
The 6,320 building permits in 2022 include those for homes in age-restricted communities. This sort of development would be excluded from the collection of impact fees because homes intended for people 55 years of age and older contribute very few children to the school district.
Marion County historically has collected school impact fees, which were $3,967 for a single-family home in 2011. In the same year, the school board voted to suspend the fee to help aid economic recovery after the recession.
“The very reason that we suspended impact fees was because the economy was in the tank,’’ Bryant said. “We had 14.3% unemployment in Marion County. We’d lost over 40% of our property values, we were third highest in the state for foreclosures. We were dying on the vine as a community. We’re not in that position now.”
When the school district discussed bringing back the fees at 100% of the recommended rate, there could be certain limitations from House Bill 337, which was signed into law in 2021. The legislation limits governments from increasing impact fees more than 12.5% per year, more than 50% ever or increasing a fee more than once in four years. Marion County would have to prove extraordinary circumstances of growth to be exempt from the law.
Because of this, the district hired Benesch to conduct the study, conducted two workshops to discuss the impact fees and anticipated needing a supermajority approval from the county commission. With the support for the 40% rate, no extraordinary circumstances are necessary as the difference between the 2011 fee and the potential new fee is very small.
While the school board seems to have made up its mind about the 40% rate, it is ultimately up to the county commission to approve or deny reinstating the impact fee once the school board puts its final recommendation forward before the commission for a vote.
Commissioner Carl Zalak expressed several stipulations that prevented him from being on board with reinstating impact fees at this point. Zalak, and several others, requested that changes be made to the residential categories that determine how large of a fee must be paid.
As it stands at the 40% rate, developers would be charged $4,277 for building a single-family detached home, $3,891 for a multifamily home and $2,866 for a mobile home.
“Townhomes are grouped in the single-family residential; I encourage you to look at that. They are drastically overpaying in the current structure,” said developer attorney Robert Batsel.
Batsel also expressed concern over the grouping of mobile homes, and as reiterated by other speakers, showed a potential need for mobile homes on a lot to be categorized with single-family detached homes, and for mobile homes in parks to have a different fee.
School board attorney Jeremy Powers and County Attorney Guy Minter will work out the details and present options to both boards.
Zalak also raised questions about whether the school board intends to put the school half-cent sales tax on the ballot for voters to approve.
The school district would not have to rely solely on impact fees to fund school construction—the half-cent sales tax was formerly approved by voters from 2005 until 2009, which gave the district $4.5 million in revenue. The district currently receives funding from the Capital Outlay Millage, and it levies the maximum 1.5 mills of property taxes to make lease payments, fund construction and for transportation and technology. Millage is a tax rate assessed on a property’s assessed value, and 1.5 mills is $1.50 for each $1,000 of value.
Zalak’s concern was that the school board would put a sales tax question on the ballot at the same time that the county would do the same, which he felt would dissuade voters from voting yes for either or both.
“I’m not going to let any of these things jeopardize our transportation and public safety sales tax. So, if you guys plan on putting it on the ’24 or ’26 (ballots) or along with any of ours in the future, then I’m going to have a problem,” Zalak said.
School Board Chair Allison Campbell said the board hasn’t had any discussions about the sales tax because their main priority is to settle the impact fee debate and establish a concrete way to help ease the financial strain of development on schools and begin construction as recommended by Benesch.
Zalak didn’t accept this as an answer and said his decision “very well might be a no” when it comes time for the commission to vote on impact fees.
While it was decided that more conversations needed to be held before the school board makes a final recommendation to the county, Campbell urged the commissioners to come to an agreement about the 40% rate so as not to impede the momentum of making impact fees a reality.
“We, as a school board, came to this consensus understanding that the recommendation was 100% and you see a county below us that just approved (100%). You see counties all around us that have 100% with just as much growth. And just as this board understands, after hearing from our community, that one of the best things we could do for all factors involved is to address it and recommend it at 40%,” Campbell said.
Several commissioners agreed this rate would be best for all parties involved so the school district can get the funding it needs while also considering developers’ concerns that impact fees could raise the price of new houses and the cost of rent for renters.
“We are at a precipice,’’ Bryant said. “If we don’t do something now, we will never catch up. We can’t keep kicking this can down the road.”