For years, Palm Beach Gardens has stood alone among cities trying to redefine county rules for collecting and spending money from developers to pay for roads.
Last month, the city suffered a setback in its four-year legal battle with Palm Beach County. A judge threw out a 2023 challenge that the city had used to justify its refusal to pay the county $3.1 million in fees it collected but didn’t share with the county.
The amount represents impact fees due from January 2020, when the city stopped collecting them on behalf of the county, until August 2023, when the city sought court clarification of a 2022 temporary injunction granted in the county’s favor. The amount due has continued to grow.
Two years after the city filed its request for clarification, it got its answer on Aug. 22.
“This Court accepted at face value City’s claim that it sought clarification rather than rehearing of the trial court’s order that had been affirmed on appeal,” Palm Beach County Circuit Judge James Sherman wrote in a two-page order.
“At the hearing, however, it became apparent that City is not, in fact seeking clarification of the trial court’s order, but instead seeks reconsideration of the order on bases already raised at the time of the injunction hearing (in 2022).”
Sherman denied the city’s motion, saying the city failed to raise these issues on appeal and that the court’s original findings, issued by then-Circuit Judge Paige Gillman, “are apparent on the face of the order.”
City trying ‘to run the clock out’
The judge did not address whether the city has to immediately pay the county, a question that figured heavily in a two-hour hearing before Sherman on Aug. 11.
The county “has real concerns that the city has no intention of ever paying,” Assistant County Attorney Sean Fahey argued.
The city, he said, is “just trying to run the clock out,” until a change in state law makes the issue moot before a full trial can be held. But that’s not right, he said, because “the court has already concluded that the city’s actions in this dispute are irreparably injuring the county.”
Can’t charge developers twice
City Attorney Max Lohman countered that Gillman’s 2022 temporary injunction allowed the city to continue to charge developers a mobility fee on top of the county road impact fee but the city could not, under state law, charge developers twice for the same impact.
And going back and charging developers the county’s fee now “would precipitate hundreds of lawsuits against the city,” he said.
The amount of money the city has been collecting under its mobility rules is not calculated the same as the county’s impact fee so it isn’t a matter of the city simply turning over the money to the county, he said.
Furthermore, in her 2022 ruling granting the injunction, Gillman did not specifically order the city to pay the county from its own accounts, he said.
Lohman, backed by Jones Foster attorney Scott Hawkins, objected to a county request for damages on top of the unpaid fees since the county had never sought damages in court pleadings.
“The county,” he said, “attempts to have its cake and eat it, too.”
The city asked the judge to hold off on ruling and order the county to comply with the new state law, a proposal the judge rejected.
Mobility fee effort began in 2017
The hearing did not get into the city’s decision this year to formally replace the county’s road impact fee with a city mobility fee under an updated state law that the city helped pass last year. The law gave both sides a year, until Oct. 1, to decide how to split the fee, but in-person negotiations have not taken place.
Like many cities, Gardens wanted more say in how the developers’ fees are spent within the city. The county spends the money on regional roads, which can mean money generated in the city goes to roads in Jupiter or elsewhere.
The impact fee also is limited to road work and cannot pay for sidewalks, bike paths and other alternative transportation options, as mobility fees can.
The city began pursuing its own mobility fee in 2017 and approved it in 2019 under a state law that city officials interpreted to mean they no longer had to collect impact fees on behalf of the county.
The county disagreed, suing the city in May 2021.
Suit languished after initial ruling went county’s way
After a five-day trial in 2022, Gillman ruled that the city had gone too far, granting the county a temporary injunction to require that the city keep collecting road impact fee payments on behalf of the county, as it had for decades.
“The city is temporarily enjoined from issuing permits to developers absent compliance with the county’s procedures relating to its assessment and the city’s collection of such road impact fees and remittance to the county,” Gillman ruled.
Additionally, she ordered the city to collect the fees from developers and “remit them to the county.”
The county interpreted the ruling a year later to mean the city had to pay $3.1 million in back fees. The city refused in August 2023, asking the court to clarify its ruling.
Gillman, now Kilbane, was appointed to the 5th District Court of Appeal by Gov. Ron DeSantis in January 2023. Two years passed while the case shifted from one judge to another before Sherman agreed in February to hear the city’s motion for clarification of Gillman’s order.
Both county attorneys who tried the case in 2022 have departed, replaced by Fahey and Maureen Martinez. Both city attorneys, Lohman and Hawkins, remain.
While a full trial on a permanent injunction is not planned before November, the county has been working to determine how many building permits the city has issued since 2020 to figure out how much money it should be paid.
A county public records request asking the city for five years of building permits didn’t go forward after the city calculated that gathering the material would cost $1.2 million and take one employee more than seven years.
The city objected to a similar county request issued as part of court discovery but agreed to pay a $500 fee to give the county access to the material through an electronic database.
In public presentations, neither the city nor the county has offered details on how much the lawsuit is costing taxpayers.
This story was originally published by Stet News Palm Beach, a WLRN News partner.
