Report says City should lower impact fees but commissioners question calculations

An examination of the City of Fernandina Beach's impact fees collected for new construction recommends lowering the assessment by 11 percent to align with what other cities charge.

Stantec, a Jacksonville consultant, issued its report at Tuesday's city commission workshop that focused on the impact fee charged to developers and building contractors.

But commissioners also questioned how Stantec determined the revised rates.

Impact fees are a one-time charge imposed by local governments on developers for new development projects. They are designed to help cities fund the capital costs of infrastructure and public services necessitated by growth.

According to the report, Stantec conducted a comprehensive review of city impact fees for fire, police, parks & recreation, and public facilities (excluding water/wastewater).

The city's current impact fees were last updated in 2015, and the new study recommends adjustments based on updated asset and cost data.

Stantec suggested the following:

• Parks & Rec fee: 30% reduction ($4,400 → $3,000 per average home)

• Fire fee: 25% increase ($551 → $689 per average home)

• Police fee: Capped at 50% increase ($372 → $606 per average home)

• Public facilities fee: Capped at 51% increase ($678 → $1,017 per average home)

• Overall impact fee: 11% decrease ($6,000 → $5,400 per average home)

If approved, that means the average total impact fees per single-family home of $6,000 would be lowered to $5,400. Stantec used a 1,530 square-foot house as the average structure in its study.

The city will consider adjusting impact fees by Oct. 1 when the 2025-26 budget cycle begins.

"Overall, the existing fees added up were previously $6 ,000 per average single -family home. And the new fees added up on average will be $5 ,400 per single -family home. So, an overall decrease really related to that parks fee decreasing since it's the most substantial of the fees which is an 11 % decrease overall," said Stantec's Peter Napoli, who presented the findings.

However, Commissioner Genece Minshew raised questions about the basis for the adjusted fees.

"I'm concerned that what you used to calculate the numbers is probably not as accurate as it could be," Minshew said.

Several commissioners along with Minshew asked why the golf course and marina, which have dedicated revenue streams, were not included in the general Parks and Recreation asset calculations to determine the fee. There were also concerns raised about incomplete asset capture including beach boardwalks and other city facilities.

"And so, I'm just saying that I just want to understand that we're actually capturing everything that we're legally allowed to capture." Minshew said.

Prior to the workshop, Commissioner Joyce Tuten had also calculated the adjustments to the impact fees.

Stantec's Peter Napoli

"I'm concerned especially about the boardwalks that, as far as I can tell, North Beach Park boardwalk is not in here (asset recognition) and that's a lot of money," Tuten said. "Also, I noticed when I was looking through this, I noticed the new fire station was not in here. And, I added it in myself as a $5 million asset. And my calculation put it well over $700 (fire impact fee). So, I'd like to see (that), I'd like to see that data. I'm not comfortable with that data unless I can see the numbers."

Commissioners instructed city staff to review and confirm that all legally eligible assets are included before establishing new fee numbers. Napoli confirmed that Stantec would revise the impact fee recommendations with an updated schedule of proposed assessments.

City Manager Sarah Campbell said the city's impact fee fund balances thus far were:

• police $506,000

• fire $510,000

• parks $4.4 million

• public facilities $1.7 million

The impact fees apply solely to new construction within the city. Commissioner Tim Poynter mentioned that the potential for increased revenue from these fees is limited, as opportunities for building new homes are decreasing. He pointed out that only 75 new homes were constructed last year.

Napoli provided an outline of implementing a new impact fee schedule.

"The fees, if the commission decided to go forward with the fee schedule as presented, you would set a public hearing date for the adoption, and then you would also notice 90 days in advance of collecting the new fee levels, just to give notice to the local community that the fees will be changing," he said. "And then, again, it's highly recommended that every four years, the city look at recalculating the impact fees and seeing if there's increases that can be adopted."