The conflict that started five years ago when Palm Beach Gardens began collecting a city fee from developers to help pay for local transportation projects and stopped collecting a county fee to pay for roads has spawned a new twist that echoes an old one: letters to developers demanding that they pay twice for their project’s impact.
When the county wrote such letters to developers in 2021, it sparked outrage from the business community, forcing the county to withdraw the letters and sue the city instead.
The county won a temporary injunction after a five-day trial in 2022, requiring the city to begin collecting the county road impact fees from developers once again. The ruling didn’t say the city had to stop collecting its “mobility” fee.
The city challenged the injunction. It lost an appeal but didn’t start collecting the county fee.
Instead, it asked the court to clarify its ruling, a request that lagged in the courts for two years before a judge rejected it.
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The county now says the city’s failure to collect the money merits sanctions.
“I feel confident in our position that they owe us the fees,” County Administrator Joe Abruzzo told Stet News.
But the city says it doesn’t owe the money; the developers do.
Developers have ‘no legal obligation to pay’
In recent court filings, the county added up what it says the city now owes: $6.7 million. The county asked the court to sanction the city for withholding the money.
While impact fees, first enacted in 1980, pay only for roads, mobility fees allowed in the past dozen years can pay for alternative transportation efforts, such as sidewalks and bike paths as well.
Developers pay the fees before building to cover the cost of their project’s impact on the community.
Over the five years since the city stopped collecting the fee, development has been booming in Palm Beach Gardens.
The city continued to collect its own fee in the large swath of the city covered by the mobility fee (which did not include the huge Avenir and Alton developments) but did not renew its collection of the county fee.
The county demanded $3.1 million in August 2023.
In its request for clarification, the city said it had no way of collecting the fee.
“Developers who completed their projects and who have paid the fees assessed at the time of permit issuance have no legal obligation to pay additional impact fees,” city attorneys Max Lohman and Scott Hawkins wrote.
While they awaited a court ruling, city officials went to Tallahassee to get state legislation passed that would require that no more than one fee be charged.
The new law went into effect on Oct. 1, 2024. After that, the city says, the county’s road impact fee no longer applied in Palm Beach Gardens.
In April, the City Council passed a new mobility fee, asserting that it no longer would collect the county fee.
The state law gave cities and counties until Oct. 1, 2025, to decide how a single fee should be shared.
Palm Beach County and Palm Beach Gardens missed the deadline, unable to agree on a split.
Judge rejects clarification request
In August, Circuit Court Judge James Sherman threw out the request for clarification without explaining to the city how to collect the money.
“This court accepted at face value (the) city’s claim that it sought clarification rather than rehearing,” Sherman wrote. “At the hearing, however, it became apparent that (the) 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).”
On Sept. 12, the county asked for sanctions and estimated the uncollected fees amounted to $6.7 million.
The “city has conspicuously revealed its intention to disobey the order,” Assistant County Attorney Maureen Martinez wrote.
She cited City Attorney Lohman’s comments at a March 2021 County Commission meeting, in which he said: “We have over $25 million in undesignated reserves. We have a couple million dollars in mobility fees that we’ve collected. If a judge issues an order … and says we have to pay it, we have to pay it.”
Martinez pointed to city testimony explaining that the mobility fees included “the cost of all traffic impacts and that millions had been collected (at that time),” yet the city “appeared before this court suggesting financial inability to pay,” she wrote.
Not ‘a debt owed by the city’
But the city responded in a Sept. 12 email to Martinez that it was indeed pursuing the money.
To do so, it sent letters to developers, adhering to then-Circuit Court Judge Paige Gillman’s March 2022 order. The order instructed the city to follow the convoluted path of telling developers “to submit their plans, as completed, to the county for assessment of its road impact fees and to collect such fees from those developers and remit them to the county.”
In letters to developers sent in mid-September “by order of the court,” the city tells developers who have completed projects between Jan. 1, 2020, and Oct. 1, 2024 (when the new law went into effect), that they must submit their plans to the county for assessment of road impact fees.
“Such fees,” the city letter says, “are to be collected by the city and remitted to the county.”
Lohman assured the county that the city is “diligently pursuing collection efforts” but the fees are not a debt of the city’s.
“City staff are communicating with developers to make demand for payment of the county’s road impact fee,” Lohman wrote. “However, the unpaid road impact fees do not constitute a debt owed by the city, as they remain the developer’s responsibility.”
No leverage to force developers to pay
That brings the dispute back full circle to 2021, when the county sent letters to developers threatening to place a lien on their properties if they didn’t pay their road impact fees.
The proposal drew howls from the development community, with Michele Jacobs, chief executive of the influential Economic Council of Palm Beach County, telling county commissioners, “This will create a black eye for us.”
County commissioners ordered staff to back off, and two months later, the county filed suit.
Now, it appears unlikely developers will comply with the city’s request. Most have completed their projects. Some no longer own the property. The leverage to require payment before the project can begin is gone.
Jacobs, of the Economic Council, did not return phone calls to discuss the issue. The council doesn’t appear to have taken a position, but its executive board includes a key figure in the case, the city’s co-counsel, Hawkins of the Jones Foster law firm.
The court has scheduled a hearing Nov. 18 on the county’s call for the city to be held in contempt. A full trial on the county’s request for a permanent injunction could begin as early as Nov. 21.
This story was originally published by Stet News Palm Beach, a WLRN News partner.
