- June 21, 2025
The Palm Coast City Council has tentatively agreed to dramatically increase its impact fees for transportation, fire services and parks and recreation, pending final votes.
If approved by two supermajority votes at the June 3 and 17 business meetings, the city will increase its transportation impact fees by roughly 86% for single family homes, its fire service impact fees by 94-98% and its recreation impact fees by 73%.
Three studies commissioned by the council on each impact fee state that a combination of Palm Coast’s rapid growth and extreme inflation rates qualify Palm Coast for “extraordinary circumstances” needed to bypass a statutory cap on increasing impact fees. Impact fees are the fees developers pay to a municipality that are intended to help the city mitigate the impact of new growth on city services.
ACCORDING TO THE DATA
Jonathan Paul of NUE Urban Concepts - the firm that conducted the transportation impact fee study - and Sean Ocasio, a senior manager with Raftelis - which conducted the fire service and parks and recreation fee studies - presented the findings from the three studies at the May 27 Palm Coast City Council workshop meeting. The studies' calculations factor in projected population growth, alternative funding sources like federal or state grants and the use of the service.
The transportation study found that the city’s transportation fees - which include specific rates for different types of developments - should be increased by 137% per dwelling unit for single family residential homes and 162% for multi-family developments.
Fire service impact fees are recommended to be increased from $434.51 per dwelling unit to $859 per unit for residential developments, a 97.7% increase. For non-residential developments, the fee similarly increases 94.9%, from the current rate of $700 per 1,000 square feet to $1,364. These fees do not include replacing current equipment, but instead the costing of adding facilities, equipment and firefighters to maintain the city’s current service level as it grows.
Parks and recreation impact fees, which are calculated based on a minimum ratio of eight-acres of recreational land per 1,000 people and the city’s 10-year capital improvement projects, were recommended to increase 98% to $3,620 per dwelling unit from the current rate of $1,828.01.
Typically, Florida state law prohibits municipalities from increasing impact fees by more than 50% of the current rate. Any increase must also be phased in over a two- to four-year period and the fees can not be increased but once every four years.
State statute does provide an exception to the 50% cap on increases, if a municipality can prove there are extraordinary circumstances.
And there is a need in Palm Coast, Paul and Ocasio said. Palm Coast has historically been one of the fastest growing cities in Florida, growing by 36% between 2014-2024, compared to Florida’s 18% during the same period, Paul said.
By 2050, Palm Coast’s population is expected to increase by almost 49% while Florida is projected to grow by just 22%.
Another factor is the inflation rates. Transportation building costs, Paul said, have increased 94.5% since 2018. Over the last six years, he said, inflation for transportation building costs have increased 13.4% each year, or by 80% since 2018. Before 2018, typical inflation was 0.66% each year, he said.
“The cost [of improvements] is buying us pretty much half what it was,” Paul said.
Furthermore, Ocasio said, if the rates are not increased at the recommended levels, the current residents will likely end up footing the difference to maintain current service levels.
Just the parks and recreation projects could cost residents approximately $10.1 million in growth-related costs if just the statutory maximum rates and phasing are implemented, the study said.
AVOIDING A ‘SHOCK’ TO THE SYSTEM
But the council members at the May 27 workshop meeting expressed concern that increasing the fees at the rates suggested in three city studies might “shock” the system, deter economic development and price out essential professionals like firefighters and teachers from buying homes.
“We have a lot of interests we have to balance,” Vice mayor Theresa Carli Pontieri said.
All four council members present - Mayor Mike Norris was absent - agreed to enact the fire services impact fees as recommended by the study. The parks and recreation fees, however, were cut by around 20% by removing projects from the 10-year Capital Improvement Plan.
The projects removed from the list were a recreation center, an event center and clubhouse and a cultural arts center.
For the transportation fees, the council decided to remove Highway U.S. 1 from the list of major roadways in the study that would need improvements on Palm Coast’s dime to keep up with growth. That road, they argued, is managed by the state. As well, the council asked the amount of anticipated state funding in the equation be doubled from $25 million to $50 million over the next 25 years.
A city planner provided the council with a rough calculation of how those changes would impact the recommended transportation impact fee rates, though the finalized rates will be presented on June 3. The changes will bring the single family residential impact fee down to 86% from the study’s recommended 137%. To further protect home buyers, the council also asked to see a tier system for single-family residential impact fees based on the sizes of the homes.
The council also agreed to enact the rate changes all at once, if passed, instead of in phases.
THE NEXT STEPS
implementing an increase greater than 50% requires certain steps. First, a city must perform “a demonstrated-need study,” which the city has now completed for these three impact fees. Then, the municipality must hold at least two public workshops regarding the demonstrated need and circumstances.
Palm Coast’s first public workshop was on May 22 at the Palm Coast Community Center, where the studies were presented to the public. The second will be held at 10 a.m. on May 30, also at the Community Center.
Finally, to implement an increase in excess of 50%, a municipal board must approve it in a supermajority vote - for the Palm Coast City Council, that is four of its five votes.
The council will vote on how to proceed with the impact fees at the June 3 and June 17 business meetings.
