Daytona Beach mayor defends plan to apply excess permit fees to training facility, city hall expansion

The Joint Legislative Auditing Committee met in Tallahassee to review a recurring Auditor General finding that the City of Daytona Beach has carried an excess unexpended building permit fund balance for multiple years, including $10,800,000 as reported in the city's most recent audit and higher totals cited by committee members.

Mayor Derek Henry and city staff told the committee the city has developed a multiyear corrective action plan and sought an attorney general opinion to clarify permissible uses of excess permit funds. "We have every intent and are fully committed to full compliance with all Florida statutes," Mayor Henry said, listing completed and proposed uses of the funds.

The city told the committee it waived more than $5.5 million in building permit and inspection fees across three time periods since 2020 and used excess funds to rehabilitate a training facility used for continuing education and meetings. City officials said the next, larger planned use is a proposed $9,400,000 City Hall expansion; that project is out for bid and would be built rather than purchased after an attorney general opinion limited purchases of existing buildings.

Committee members pressed city officials on the timeline and scale of the fund increases, asking why the unexpended balance remained high for years despite fee waivers. Senator Wright characterized the situation as long-running and said the public perceives some spending plans as attempts to "spend the money" to reduce the balance. The mayor and deputy city manager responded that the attorney general opinion clarified that purchase of existing buildings was not permissible and that the city pivoted to construction or additions permitted by the opinion.

Members also questioned individual expenditures the city had proposed in earlier drafts, including vehicle purchases and marine equipment. Chief Building Official Glenn Urquhart explained that some 4x4 vehicles were selected for off-road access and that the city operates a 24-foot Everglades boat with a 300-horsepower engine for waterway enforcement and code work. Urquhart said the city generally does not rely on private inspection contractors because its inspectors hold multiple licenses and that a la carte private services can be more costly in aggregate.

On the training facility, committee members sought documentation of actual use. The city said the rehabilitation cost about $600,000 and asserted roughly 95% of the facility's use is for permits-and-licensing training, continuing education units and weekly meetings for multi-discipline inspectors, but acknowledged historical logs were not maintained and offered to begin keeping them.

The committee also asked about allowable carry-forward amounts and recent revenue trends. Deputy City Manager Jim Morris said the statutory allowable carry-forward is $4,400,000 (as presented to the committee) and that preliminary 2025 receipts appear to be declining from recent peaks, but the city had not completed audited figures for the current year.

No formal enforcement vote was taken at the hearing. The committee noted it had previously approved a motion at an earlier meeting to require the mayor or designee to appear before the committee; Daytona Beach's mayor appeared in response to that action and provided the requested documentation and explanation.

A member of the public thanked the committee for its oversight and noted concern about interest earned on large balances. Committee members closed the item by asking the city to provide the attorney general opinion and additional documentation on expenditures and bids for the proposed City Hall project.