Second budget workshop results in balanced FY2021/22 budget for Fernandina Beach

Submitted by Suanne Z. Thamm
Reporter – News Analyst
August 26, 2021

The Fernandina Beach City Commission (FBCC) took another crack at whittling down the FY 21/22 budget at a second budget workshop held on August 24, 2021.  This time they succeeded with the input of City staff.  The next step in adopting a new budget will be the First Public Hearing on the Budget, which will take place at City Hall on 5:05 p.m. on September 7, 2021.  

Commissioners left the first budget workshop on August 4 generally confident that they had resolved budget shortfalls by reprogramming expenses from the City’s general fund to impact fees, despite Commissioner Chip Ross’ claim that such programming was not a proper use of impact fees.  Vice Mayor Len Kreger also sounded cautions on using impact fees too broadly.  

Impact fees are a one-time fee assessed to either developers or builders for new homes, including townhouses, apartments and condominiums, as well as new commercial developments. The purpose is to help pay for increased infrastructure demands created by the new growth.

Mayor Mike Lednovich had been the driving force behind the decision to use impact fees to pay for such things as repointing the bricks at the Peck Center and replacing the roof on the Atlantic Avenue Recreation Center.  Ross, who read from the law, disagreed.  City Attorney Bach said that whereas use of impact fees had been loosely proscribed in the past, the Florida Legislature passed new legislation this past session clarifying how impact fees might be used:  to add infrastructure to support growth, not to repair and maintain existing infrastructure.

Despite misgivings on the part of some Commissioners and City staff, the FBCC cancelled its second budget workshop scheduled for August 10, in the mistaken belief that budget matters had been reconciled.

Following that meeting much time and effort were devoted to clearing up the impact fee controversy.  With a better understanding of how impact fees may be legally and properly used, Mayor Lednovich rescheduled the second budget workshop to find other ways to reconcile the $450K gap caused by the FBCC’s decision to adopt the adjusted rollback rate as opposed to reauthorizing the millage approved for the FY 2020/21 budget.

In kicking off the meeting, Mayor Lednovich said, “We are here tonight because we have had a reversal of legal opinion on the use of impact fees.”  He said he has decided that “you can go round and round on the appropriate use of impact fees.”

Following public input from four individuals, Commissioners turned their attention to their need to cut $450K from the budget.  The FBCC agreed to cut $50,000 from the Parks and Recreation Budget proposed for Buccaneer Field fencing and $250,000 in administrative impact fee funds that had been proposed to design a new City Hall.  Commissioners also cut $25,000 from the streets paving program.

By further analysis of needs and funds available, the Police Department was able to tap into Police Department impact fees to fund purchases for expanded Ocean Rescue and Beach Rangers operations, thereby freeing up general funds.  Additional cuts were made to proposed improvements to the Police Department building on Lime Street.  

Lednovich acknowledged that using impact fees to repoint bricks at the Peck Center and to replace the roof at the Atlantic Recreation Center was “probably a bridge too far.” At the request of the Mayor, City Attorney Tammi Bach read a list of items requested by the Parks and Recreation Department in the coming budget and explained that these items were replacements of existing equipment (water fountains, water pump, A/C unit, etc.) and could not be funded with impact fees.  “Replacing something that has just gotten old is not necessitated by growth,” Bach said.

Lednovich said he was not going to challenge these determinations, but believed the state law on use of impact fees was “vague and nebulous.”  He supported Vice Mayor Len Kreger’s call for a policy on use of impact fees.  “Our past use of impact fees has been inconsistent as heck,” he said and requested the City Attorney to develop a policy.  Lednovich did not seem to agree with others who said that the new state law had clarified use of impact fees, probably due to “creative” interpretations used throughout the state.

By agreeing to cuts and reprogramming allowable expenditures to impact fees, Commissioners cut $11,000 more than needed to produce a balanced budget.

Once again, Commissioner Ross attempted to get other commissioners to set an example by agreeing to reduce their salaries by ten percent.  Ross at earlier budget meetings has questioned the propriety of City Commissioners obtaining health insurance through the City when other part time staff are not eligible to do so.  

An obviously exasperated Mayor said, “This has been brought up twice and it is insulting.  I don’t want to go there; I don’t want to play that game.  Gentlemen, if you want to have this discussion, I won’t cut you off.  We have just balanced the budget, and personally I don’t think we need to discuss this.”  No other Commissioner seemed to want to discuss this suggestion either.

Commissioner Bradley Bean thanked City Staff for going over the budget once again to identify areas where cuts could be made.

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