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Daytona Beach is studying how to issue permits and license fees quickly

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DAYTONA BEACH — The city government has a financial dilemma that is both enviable and a bit risky.

If it stays within the bounds of state law, Daytona Beach could splurge on $11.4 million that will help the city catch up on permitting and license distribution projects. If it falls outside the parameters of a Florida statute, the city could be forced to forfeit the money, lose sales tax collections and be sued for failing to comply with state law.

The $11.4 million is the excess fund balance of construction permit fees and must be spent by October 4.

City staff have put together a list of more than a dozen things they think the money could be used for. But questions from the city commissioner have led to one item — a $1 million mobile command vehicle — being removed, and six other proposed expenses questioned.

The list was scrutinized during a three-hour City Commission workshop meeting Tuesday evening, and now city staff will decide whether to change or eliminate any of their proposed expenses.

At stake are projects requiring $4 million to purchase property for a new permitting facility, and $1.5 million to renovate a new facility that will allow for permit and licensing expansion.

Also on the list are a $125,000 rehabilitation of office space, a $250,000 renovation of a permitting and licensing facility, the $600,000 construction of a meeting room for both permitting and licensing officials and the city’s engineering review team, and the $750,000 purchase of a maritime unit. stage platform.

Also at stake now are three new positions that together provide $400,000 annually in salaries and benefits: a fire inspector for new buildings; a liaison officer for building code enforcement staff; and a floodplain management enforcement officer.

A March 25 letter from the city manager to state officials shows that the city tried to secure a multimillion-dollar real estate purchase last year for permits and licenses, but the seller backed out. The document states that “closing is now expected to occur on or before September 2024 and renovations will begin shortly thereafter.”

The letter goes on to say that “the acquisition will enable the relocation and expansion of the P&L business.” It said the move would “allow for the necessary increase in required personnel, the addition of a floodplain manager and various equipment and storage.”

The state government is watching

The city of Daytona Beach has been under state audit since 2021 because permit and licensing fund levels have risen too high, and the city could be forced to forfeit some of those funds to the state government if they are not used quickly enough.

Under state law, Florida governments can’t let too much of their permits and licensing revenue go unused year after year, but the city finds itself in that situation. The fund currently has a balance of approximately $19.7 million.

Top city officials have devised an $11 million plan to slash revenues, and those proposed expenses are being reviewed for compliance with state law.

Until early May, at least some city commissioners were unaware of the permits and permit funds collected, the state laws governing their use and the ongoing audits.

In a May 8 email to several top city employees, City Manager Deric Feacher wrote that the mobile command vehicle “could be useful” for both permitting and licensing and city operations dealing with “Code, Building, Fire Inspectors and during major disasters/ events. for police and fire brigade.”

But state law specifies that permits and licensing fund dollars must be used for permits and licensing functions. Commissioners decided Tuesday to halt the purchase of mobile commando units.

The state Auditor General and the Joint Legislative Auditing Committee have been involved in an effort to bring the Daytona permits and licensing fund into compliance. An audit report for the 2021-2022 fiscal year concluded that the city’s unspent building permit funds at the end of the budget year exceeded the city’s average operating budget for the previous four fiscal years by $10.97 million.

In early December of last year, the 11-member Joint Legislative Auditing Committee, made up of senators and state representatives, ordered the city of Daytona Beach to provide a written update explaining the status of its corrective actions.

On March 25, Feacher sent a letter to the commission’s chair and vice chair detailing the city’s updated plan to reduce the amount of unspent fund balance. That plan is what the commissioners took a close look at on Tuesday.

Feacher’s letter states that growth in Daytona Beach has created a need to expand the city’s permitting and licensing staff, acquire additional work space and purchase new equipment.

What the law says

A state law passed in 2019 requires permits and licensing fees to be issued within four years of receipt.

The law requires the Auditor General to notify the Joint Legislative Auditing Committee when a municipality has failed to correct an audit finding reported in three consecutive financial or operational audit reports.

City Commissioner Stacy Cantu told Feacher that the permitting and licensing fund issues could have been resolved a few years ago if he had gotten city commissioners involved.

“Why didn’t we have a workshop asking ‘do you approve of this?’ Cantu said at Tuesday’s meeting. “We probably could have resolved this audit a long time ago if you had come to us and asked us what we want.”

In a May 30 memo to Feacher, City Attorney Ben Gross explained that building permit fees are generally limited to enforcement of the Florida Building Code.

Under state law, enforcing the Florida Building Code includes reviewing construction plans, building inspections, re-inspections and processing building permits. It may also include building code enforcement, fire inspections for new construction and training costs.

Any excess fund balance may be used only to reimburse or reduce building permit costs, and to pay for the construction of a building subject to the local government’s building code, or for the training programs for building officials, inspectors, or plan examiners involved are involved in enforcement. . Any portion of the excess fund balance used for construction may not be carried forward for more than four consecutive years.

Building permit fees cannot be used for planning and zoning purposes; general government activities; inspections of public buildings at a reduced rate or without a fee; enforcement and implementation of other local ordinances; and requests for public information, community functions, boards, and any program not directly related to the enforcement of the Florida Building Code.

Some of the spending commissioners’ proposed proposals questioned Tuesday include a $250,000 upgrade of the city commission chambers used by permitting and licensing staff, as well as city commissioners and various city boards.

‘Go for the literal language of the law’

Although permits and licensing funds are now under a microscope, Feacher said that “the city has not misused any permit and licensing funds.”

He also noted that before the passage of the 2019 law, there was no limit on how much cities could transfer in permits and licensing funds, causing revenues to pile up. Gross noted that cities sometimes let that money accumulate to offset the economic downturn when construction activity slows.

Feacher also said the city has been submitting spending plans for the funds to state officials for two years.

Read more: An Eleven Million Dollar Dilemma: The City of Daytona must spend millions quickly or lose the money

City commissioners discussed temporarily waiving permit fees to withdraw funds, but they did not vote on that because that was not possible during a workshop meeting.

Gross did not elaborate on the details of what the city should and should not do with permits and licensing funds, but he did suggest that the city would follow “the strict language” of state law.

“My recommendation is to follow the literal language of the law,” Gross said.

You can reach Eileen at [email protected]