Each of Volusia's 16 cities have already agreed that voters should be asked to approve a half-penny sales tax to fund improvements to roadways, sidewalks and water quality. And the County Council appeared poised to approve a referendum on Tuesday.
It may not be a done deal. DeLand Mayor Bob Apgar said late Friday that a special meeting involving all mayors will be held Monday in light of "increasing concerns" that could keep the sales tax off the November ballot.
Apgar wouldn't specify the nature of those concerns before the meeting, set for noon at Daytona Beach International Airport. But the County Council's refusal to consider an increase to the impact fees paid by developers for new growth has stirred resentment among some voters who view the matter as a question of fairness.
"I know there are concerns about impact fees," said Kent Sharples, president of the CEO Business Alliance, adding that he's still in favor of the sales tax. "Not only am I in favor, I believe that it is absolutely essential."
Before Monday's meeting was scheduled, city officials and prominent business leaders like Sharples were planning to attend the 10 a.m. council meeting Tuesday to urge the county to move forward with the ballot measure, the result of more than a year of planning. Supporters say the extra sales tax — equal to 50 cents on a $100 purchase — is the only way to quickly raise the funds that have lagged at a time when gas tax revenue isn't keeping up with growth, rising construction costs and traffic.
Yet criticism has mounted over the county's reluctance to require more of developers. Impact fees haven't changed in 15 years, even though other Florida counties have approved increases recently and rising construction costs mean the money doesn't go as far as it did in 2003.
Council members said they didn't plan to raise the issue at their meeting. It will be a big part of the mayors' meeting Monday, though.
"I think it deserves a discussion," said Deltona resident Pat Northey, who served 22 years on the council. "I think failure to discuss it and to cast it aside as too complex to explain has really upset some people. I think it's an issue they will have to address" between now and Election Day.
If approved, the tax — set to last 20 years — would increase Volusia's overall sales tax rate to 7 percent, the maximum allowed by state law, while Volusia's impact fees remain lower than many surrounding counties.
Councilwoman Deb Denys called impact fees "a separate issue" from the sales tax. County Chair Ed Kelley agreed, offering an explanation why.
'Not the answer'
A half-penny sales tax is expected to generate $45 million a year, which would be dispersed among the cities based on population size. The cities and the county will be able to decide what projects that money would go toward. And that money will go a lot farther than any increase in impact fees, Kelley noted. Even if the current fees were doubled across all categories, it would take three years for the county to collect $45 million, and there would be more restrictions about how the money could be used.
That's because impact fee revenues must be spent within one of four zones in the county where they are collected. Also, Kelley explained, impact fee revenue can only be used where future growth is occurring, meaning some much-needed improvements around areas that are already maxed out with shopping centers, restaurants and strip malls don't qualify.
For example, impact fee money can't be used to repave an existing road or revitalize infrastructure on the beachside.
"They can use impact fees only to offset costs reasonably attributable to new development," James Nicholas, an impact fee consultant and professor emeritus of urban and regional planning and law at the University of Florida, said, citing a 1976 court ruling. "The Florida Supreme court held that if the improvement was already needed, looking to new development to pay that cost would constitute a 'windfall' to the existing community."
Road impact fee money also can't go into water quality or flood control projects. If approved, the sales tax money could. All of those reasons contribute to Kelley's reluctance to bite off even a moderate impact fee increase, which could drive up the cost of homes or goods.
"If that was an answer I would be supportive of it, but it’s not the answer to fix the current situation," Kelley said.
But by not raising the impact fee in so long, the county has lost out on millions that could have gone toward road improvements around development that's popped up since 2003, said Big John, a former council member and radio personality.
"There’s no doubt about it; impact fees, gas tax and any other funds for roads, it’s all one package," he said. "Voters and citizens don’t buy the story that impact fees don’t count."
The current situation
The Great Recession's dwindling property values put cities behind in their ability to fix aging infrastructure. The gas tax, paid by residents and tourists at the pump, has not generated enough revenue to help them catch up. Those are the two primary reasons why Kelley and city mayors have been working since early 2017 toward an alternative funding source.
"It's the challenges we are all facing," South Daytona City Manager Joe Yarbrough said. "The economy is starting to turn the corner, but we haven’t been able to catch up to what we lost in a decade."
Last April, city and county leaders identified $1.4 billion worth of infrastructure needs that they can't afford to fix without a sales tax.
The gas tax isn't providing enough. The primary funding source that the county and cities can use to fix roads dropped off significantly after 2007 and remained flat until around 2014. Every time you fuel up in Volusia, the county gets 12 cents per gallon. The county collected $14 million in gas tax revenue in 2017, and that money was shared among the cities using a formula based on population size. Volusia got 57 percent of that money, or $8 million. Deltona, the largest city, received 9.2 percent, or $1.4 million.
Smaller cities get much less. Edgewater received 1.8 percent, or $272,527. South Daytona collected 1.3 percent, or $204,063.
In a city with 40 miles of roads and more than 100 traffic signals, "it's hard just to keep our lights on" with that level of funding, Yarbrough said.
Consider: The cost to construct one mile of two-lane urban road is roughly $4.8 million, according to figures provided by the county. To widen an existing two-lane road to four-lanes is roughly $5.1 million per mile. Even the task of replacing a traffic signal at an intersection runs between $250,000 to $500,000, according to the Department of Transportation. Putting in "smart signals" designed to respond to traffic patterns and reduce the time sitting at red lights costs even more.
Bob Davis, president and CEO of the Lodging & Hospitality Association of Volusia County, is tired of waiting for red lights to turn green. It happens often he feels even on the rare occasion where there are no other cars crossing the intersection. He planned to attend Tuesday's council meeting not only to speak about the need to replace antiquated traffic signals and to widen and repave certain roads, but to also stress a point that he believes should be a big part of the cities' and county campaign to sell the initiative to voters.
Much of the revenue from the tax will come from tourists.
"Why not use the tourist to pay half the bill?" Davis said. "That’s the way the county has to sell it."
Last summer, the private sector funded a study to gauge public opinion for the sales tax. Six hundred residents, representing less than 1 percent of Volusia's population, were polled by telephone. That study determined that a half-cent sales tax, imposed with no sunset, would pass by a 54-39 margin.
The measure council members will vote on also establishes that a citizens advisory review committee would examine whether proposed uses for the tax proceeds were authorized and expenditures matched projects. The committee would consist of 17 members serving four-year terms. Each city would nominate one person with the County Council selecting the 17th member.
Challenges
If the County Council approves putting the referendum on the ballot, city and county officials can begin prioritizing their projects and educating voters about why a sales tax increase is warranted. But county officials may have a harder time convincing voters why an impact fee increase isn't also necessary.
In 2007 — the last time Volusia had an outside consultant study the rates — Lake Mary-based Tindale-Oliver came back with a recommendation to raise impact fees by as much as 300 percent in some categories, including nearly quadrupling the amount paid by the county’s biggest houses.
Bracing for the recession, county officials kept the rates the same. Now that the economy is recovering, Volusia's rates aren't in line with many other counties. For example, Volusia charges a flat road impact fee $2,179 for all new houses, regardless of size or cost. The only neighboring county that also charges a single fee for roads is Brevard County, which assesses $4,353 per new house.
Manatee County, which has a median income similar to Volusia’s $41,000 mark, charges 20 different amounts for a new single-family home, ranging from $1,896 to $8,587.
After the County Council decided on March 6 to once again to hold the line on its rates, The News-Journal spoke to several national and state experts who said the county's decade-old fees weren't keeping up with rising construction costs and growth.
Ahead of Tuesday's council meeting, several residents say their vote hinges on whether the council finally asks developers to pay more.
Already growing tired of all the growth in his hometown of New Smyrna Beach, Christopher Bell can't help but let out a sigh whenever he drives along State Road 44. Developers are clearing land for another 1,000 homes in the area at the Venetian Bay subdivision. Two more housing developments are under review by the city.
Traffic problems already persist there, he said, and it's only going to get worse.
While he agrees road fixes are needed, and quickly, Bell isn't ready to vote yes to the sales tax.
"The growth is out of control," he said. "If the county doesn’t raise impact fees, I would be less likely to vote for the sales tax."