The cost of residential construction is going up in New Smyrna Beach following the approval of an ordinance that updates the city’s impact fees.
Ordinance 21-21, which was approved 4-1 at the April 27 City Commission meeting, raises impact fees associated with the construction of a new home by 170%, from $806 to $2,178. The increase will generate funds to support the city’s law enforcement, fire protection and emergency services, and parks and recreational facilities.
Commercial developers in New Smyrna Beach also will be affected, but for the most part their fees have been reduced, some dramatically. Non-residential impact fees are determined by the square footage and vary based on the type of business permitted. Industrial development will experience the biggest change under the new ordinance, with combined police and fire fees for those businesses dropping from $3.07 per square foot to $0.06 per square foot. Fees for institutional, office and retail development also fell.
The impact fees for restaurants increased slightly, while the fees for gas stations and for restaurants with drive-throughs nearly tripled. According to a study of impact fees in New Smyrna Beach prepared by Raftelis Financial Consultants Inc. and presented to the City Commission in March, businesses that see more activity, such as drive-throughs, require more services and therefore should pay a higher impact fee.
Hotel and motel developers will now pay $270.50 per room for police and fire impact fees, rather than $3.07 per square foot previously paid.
The Raftelis report explains impact fees are “an important source of income for municipalities to fund infrastructure costs related to growth.” The 48-page report explains the updated fees will allow the city to be “less reliant on existing residents and businesses” for the resources needed to fund police, fire and other community services.
The $2,178 for new residences brings New Smyrna Beach’s fees in line with those of neighboring communities. Fees for the same services in Daytona Beach total $2,398. In Deltona, the fees total $2,005. The previous amount of $806 was just below the $830 charged in Orange City.
While the ordinance made slight adjustments to the fees for police and fire services, the fee for park services changed the most, jumping from $143 to $1,350. In Daytona Beach, the park impact fee is $1,747. In DeLand, it’s $1,410. In Edgewater, it’s $706.
Commissioner Randy Hartman voiced concerns about the changes prior to the vote, but noted impact fees can be appealed by companies that would be overtaxed by them. “If it truly impacts a start-up business or something like that, it’s certainly something that we can deal with at that time,” Commissioner Hartman said.
Commissioner Michael Kolody, who noted the impact fees hadn’t been changed “for a long time,” urged a quick adoption of the ordinance. “The State of Florida is looking at changes to the rules and regulations,” he said. “The sooner we pass this, the better we are.”
Commissioner Jason McGuirk voted against the ordinance, stating he had hoped to see “more balance” in the changes. “We spent a lot of time and money with studies, we’ve kicked this around,” he said. “I see some things in there that I’m not necessarily comfortable with, but that certainly seems to be the exception, not the rule.”
There were no public comments offered during the meeting regarding the impact fees. The New Smyrna Beach City Manager must issue a public notice regarding the fees that includes the date upon which they will take effect.
In other business:
•The commission unanimously approved hiring Ghyabi Consulting & Management to assist in developing a plan to address traffic issues that continue to plague State Road 44 and the beachside in New Smyrna Beach. The approval released funding, not to exceed $20,000, from transportation impact fees.
•The Commission unanimously approved increasing the parking time limits in the Canal Street Historic District from two hours to four hours. The change was requested by the Canal Street Historic District Association, which has been working with the city for more than two years to increase the parking times to match those on Flagler Avenue.