Palm Coast Council Shocked, Shocked To Hear It Ever Had $10 Million for City Hall
FlaglerLive | August 3, 2011
There were all sorts of name-dropping references at the Palm Coast City Council Tuesday evening, with Mayor Jon Netts quoting Shakespeare (of course), a tea party member scornfully quoting Joe Biden and a mayoral candidate, not without grandstanding, quoting Clara Peller, the late actress known exclusively for the three and a half words that made her fame in a 1984 Wendy’s commercial: “Where’s the beef?” All three instances were related to tax money, real or imagined, and higher taxes, real or imagined. The only missing quote was Claude Rains’s celebrated shock in “Casablanca.”
City Manager Jim Landon provided that one by other means when he sounded incredulous at the notion that the city had ever had $10 million to build a new city hall.
- As Mayor Netts Gives Up On New City Hall in Near Future, Tea Party Wants a Referendum
- Landon and Council Say Palm Coast City Hall Is Not a Done Deal. Plans Say Otherwise.
- Dog-and-Pony Powerpoints: Landon’s Stage-Managed Shows for a New Palm Coast City Hall
- Palm Coast City Hall Implementation Plan, June 2010
- Palm Coast’s Two Best Arguments For a New City Hall: Take the Tour
Last year’s graphs showing the $10 million’s breakdown, Landon’s presentations to the city council pressing for the project (“Why now? I think you all know this, but timing is very important,” he told them in the context of one of those presentations), his road show to various community associations across the city and his repeated assurances to the council and to community members along the way that unlike the 2005 city hall proposal, this one was different: it was as if all of it had been like Bobby Ewing’s year-long death in “Dallas”—a dream. (Landon’s roots run deep in Texas.)
Rewind to June 2010
“We are not proposing that additional tax levy, or that tax levy be increased to pay for this. The concept is that this building will be paid for out of existing funds,” Landon had told the city council explicitly during a June 2010 workshop, when he was seeking the council’s approval to move forward with that concept’s equally explicit timeline, and which the council endorsed.
The plan was to use $10 million in existing funds as outlined by Landon and his staff, in that chart presented to the council (see above), calling back a note to the Town Center Community Redevelopment Agency (essentially, a subdivision of the Palm Coast government, headed by the same city council, but under a separate taxing scheme), using $2 million from the sale of the Commerce Boulevard city hall to Palm Coast Data, and additional dollars from the utility and building fund.
“Some people say I’m crazy,” Landon said last year, “but I’m really looking forward to going out and having the conversation with the community and start to, when we do presentations, whether that’s staff, whether that’s city council, etc., having presentations, saying, OK, this is why it’s different than five years ago, this is what the plan is and get that dialogue started. Is everybody going to agree with it? Absolutely not, but that’s true with just about everything we do.”
The Missing Beef
Landon had those “conversations.” Many of them. So it’s not a mystery why people in the community have been asking the salient question: where’s that $10 million now? Two people did again Tuesday evening, before the council. One of them was Charlie Ericksen, who’s running for mayor against Jon Netts and who—like three other candidates for city council seats this summer, did not miss an opportunity for camera time Tuesday evening. He’s the one who brought up Clara Peller’s beef.
“I thought I’d be her replacement this evening,” Ericksen said after mentioning Peller’s death (albeit not at the hands of Brutus). “So I ask City council, where is the $10 million that you have set aside for a new city hall? You have told us repeatedly over the past two years that you’d accumulated the necessary funds to be able to build and pay for it up front. Since the city hall is, if I read the newspapers correctly, a no-go, at least at present, let’s use some of that $10 million to cover that $1.9 million shortfall, and give the hard-working and unemployed residents of Palm Coast a break on this year’s taxes. Budgeting I realize is a tough job, and it has to be complete and accurate, but I’d like to know just why we can’t use those readily available funds to make up that shortfall instead of increasing the millage rate.”
At the same meeting, the city set its preliminary tax rate for next year at 4 mils, or $4 per $1,000 in taxable value, an increase from $3.5 per $1,000. Doing so would ensure that the city would take in almost as much revenue next year as it did this year, making up for the more than $2 million loss caused by another big drop in property valuations. Most taxpayers would not see an increase in their tax bills. In fact, most tax bills are certain to drop next year, driven down by the school board’s tax rate, which equates to roughly a 14 percent tax cut for most property owners. But most property owners’ math stops at “millage increase.”
Ericksen was proposing to use a fraction of the money once pledged to city hall to defray some of that increase. Cue Capt. Renault. Or Bobby or Pam.
“First of all,” Landon said in answer to Ericksen’s and an ex-New Yorker’s question on city hall, “we don’t have the $10 million, never said we had the $10 million. More importantly, I want to keep stressing is that even if you have dollars for capital, if you use your savings account to pay your day to day bills, it’s not sustainable and it just causes problems in the future. And that has always been a key, is you don’t use your savings account, if you will, for that. But with that said we do not have the $10 million in the bank, never had, but I’m going to ask Ray to give the details as to where the $10 million proposal was coming from.”
Of course the money was never in the bank. Cities rarely operate based on what’s in the bank. But last year’s financial plan, before the verbal shell games, had laid out how it would be secured.
When One-Time Uses Are Unwise
Ray Britt is Landon’s finance director, who summarized the origins of the $10 million plan, and said: “At this point in time the CRA does not have the ability to borrow that money.” He added that, regarding the rest of the $10 million, “only a portion of that was in cash. Some of that was coming from other funds that cannot be used for the general fund.” Ericksen and others who’ve made the argument about using a portion of the funds haven’t focused on the CRA money, but on the cash generated from the $3 million sale of the old city hall, which can be used out of the general fund—if that money is, in fact, there: the city’s reserves are at their lowest in its existence, and it’s shuffled money around for the past two years to cover its expenses.
And the city may have used up the money last year to ensure that the tax rate would stay where it was then: the city zeroed out the dollars it was devoting to capital projects in order to subsidize the general fund and not raise the millage rate of $3.5 per $1,000 in taxable value.
Last year, Britt was clear about the source of the $10 million, and the availability of those funds: “The biggest bulk of the funding will come from repayment of the CRA note from the general fund, which currently stands about $5.8 million,” Britt said in June 2010. “The CRA would either borrow that money or possibly would have some cash built up that could be used to repay that loan. And this has been part of the discussion for a while, that may be what that money would be used for.”
The Old City Hall’s $3 Million Windfall
With the portions of money from the utility and building fund chipped in, Britt said, “That would leave us needing about $2 million, which would come from the capital projects fund. That $2 million, most of it is coming from the sale of the building on Commerce Boulevard.”
It was actually $3 million. Council member Bill Lewis asked Britt for clarity on the matter directly.
“We still have that $3 million locked up somewhere?” Bill Lewis asks.
The question elicited laughter and jokes about the money being “under the mattress” (council member Holsey Moorman) or “locked up in my desk drawer” (Britt) before the finance director clarified: “There is money in the capital projects fund, yes.” He adds: “The money moves around, so we’re saying yes, there’s two million in the capital projects fund, and that primarily came from the sale of the old city hall.”
“So that money will be available when it’s needed?” Lewis.
“Right,” Britt said.
He specified: “Currently you’ve got money in the CRA fund, and we will have, the design phase is estimated at about $1.2 million, the CRA fund will have additional money coming in in December , and that money can be used as a partial repayment to the general fund, and we’ve covered the design cost. The other $8.8 million is not going to be needed probably until late 2011 and on into 2012. So by that time we would go out, borrow the additional money for, or the CRA would go out and borrow the additional money to repay the general fund, and we’ve got the $1 million in the building fund and the $1.2 in the utility fund.”
Landon himself specified, too: “Two other key points, one of them is that the CRA is paying interest to the general fund right now, so it’s just a matter of moving the money to fund the project. Secondly, a lot of people don’t understand, well, where does the CRA gets its money, well it gets its money from all the new construction in the Town Center area.”
“Also I want to stress we can do it now without increasing the tax levy,” Landon continued. “The sooner you get started, the sooner you get jobs. You wait a year or two from now, the concern will be that construction costs will go up.”
Brutus, Antony, Caesar, Netts
Landon’s next steps, flashed before the council at that meeting last year, were also clear: request for qualifications for architectural and engineering services (a step he fulfilled: the city hired a firm), include the project in its capital projects plan for the following year, negotiate a lease extension at City Market Place, and conduct those “community outreach” meetings, all of which were done. Landon’s direction was clear.
“Thank you and we will proceed with the next steps,” Landon told the council at the end of that meeting.
The backtracking was never as explicit, though it was complete by the time, in mid-June, Netts conceded that there would be no city hall absent a referendum, because there could be no city hall with city cash, as previously proposed. It would have to be paid for with bonds, as was the case with the 2005 proposal.
Netts’ Shakespeare quote Tuesday evening was made in reference to a brief speech by Louis McCarthy, a regular at council meetings, supporting the council’s decision to increase the tax rate if necessary.
“I can’t resist Mr. McCarthy. The evil that men do lives after them; the good is oft interred with their bones.”
Someone chimed out, correctly, that the quote was from Julius Caesar. No one chimed out the words preceding the lines—“I come to bury Caesar, not to praise him”—or following the burying of the good: “So let it be with Caesar.” Or city hall, as the case may be.