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Hearing Echo of Broken Promise, Palm Coast Council Girds For Opposition to New Utility Fee

| June 4, 2012

When Vince Liguori speaks, politicians listen. (© FlaglerLive)

Vince Liguori is not happy. A decade and a half ago, when he was among the leaders of Palm Coast’s Home Rule Coalition—a paving stone toward the city’s incorporation—he’d made a public promise: the city would never levy utility fees or taxes. Earlier this month, the Palm Coast City Council voted unanimously to do just that: impose a 6 percent “utility franchise fee,” essentially, a 6 percent tax on electricity bills, and seal the arrangement with a 30-year agreement with Florida Power and Light, which provides all the city’s electricity. The council rejected a proposal to also levy a separate 2 percent utility tax.

Members of the council–including Mayor Jon Netts and Frank Meeker–had in the past made similar pledges against utility fees or taxes. Meeker now says: “Things change,” a line Liguori calls “arrogant.”

Liguori, a member of the local tea party’s executive committee and an influential behind-the-scenes broker on local issues, is mounting an offensive against the city council’s proposal that will culminate Tuesday evening. Liguori himself will appear before the council to make an extended counter-proposal of his own. He sent an outline of the proposal to council members (see the full memo below). He’s also, along with Tom Lawrence, who chairs the local tea party, urging numerous people to turn out at Tuesday evening’s meeting (at 6:30 p.m. at the Palm Coast Community Center) to make their presence felt and heard.

Liguori isn’t disputing the city’s claim that it needs $7.5 million a year to spend on infrastructure improvements, particularly its stormwater system, which is badly decayed. He is disputing the way the city is going about generating that $7.5 million: taxing electricity has nothing to do with stormwater, he says.

The 6 percent utility fee is new. It would cost the average homeowner between $6 and $7 a month. But most homeowners would also be getting a tax cut of $8 a month, because the city is eliminating that $8-a-month stormwater fee that appears on the majority of Palm Coast water customers’ bills.

Among the wrinkles that anger opponents of the plan: Many customers (including a large segment of Grand Haven, the gated community, and big commercial concerns) currently don’t pay the stormwater fee because they have their own stormwater system. But they would all have to pay the utility fee regardless, netting the city what’s likely to be  an overall profit, when compared to the current plan. The city justifies the switch by citing the inequities in place right now, with the existing stormwater fee system.

“We paid a lot of money to a group of consultants to try to come up with a plan to meet those legal standards to make the stormwater fee legal,” William Reischmann, the city’s attorney, said. “That is becoming extremely difficult, if not impossible.” So the city opted to drop the stormwater fee altogether and replace it. Liguori says the city spent about $93,000 on consultant fees only to drop the stormwater plan it came up with a year ago, and he notes that innumerable Florida cities have stormwater fees on the books. Palm Coast shouldn’t drop the system.

Rather, Liguori says, it should support a plan to renew the half-cent sales tax that expires at the end of the year (the city has been at loggerheads with the county over that renewal, because the county wants a larger share of the revenue). The city, Liguori says, should urge the county to add an additional half cent sales tax—bringing the total sales tax to 7.5 percent, up from its current 7 percent. The city should actually increase the stormwater fee. And it should levy a 0.5-cent additional gas tax.

“I do realize that some of these options may not be doable, however, my goal is to retain      the integrity of our current stormwater fee configuration and to eliminate the deficit,” Liguori said in his memo.

Liguori met with council member Jason DeLorenzo about it late last week, while council member Bill McGuire was planning to meet with City Manager Jim Landon and Finance Director Cghris Quinn to discuss the proposal.

DeLorenzo was intrigued, but, after the meeting with Liguori—and Lawrence—was unsure about the feasibility of the proposal. “There’s a lot of ideas but if it’s not legally defensible, none of them are worth it,” DeLorenzo said. “Just because he says they’re legal doesn’t make them legal.”

The council is prepared for a possible onslaught Tuesday evening.

“The objections that I hear the most are that, gee, electricity has nothing to do with stormwater, and you’re going to make my electric bill go up to fix the stormwater infrastructure, and people that don’t use any electricity are going to go scott-free,” McGuire said during a council workshop last week.

“And 7 percent on my bag of crackerjacks has nothing to do with stormwater either,” Mayor Jon Netts said, “but we do fund stormwater partially out of our sales tax.”

The council’s recurring question was this: Is a 6 percent fee necessary right now, and should that agreement with FPL stretch over 30 years? Landon said yes to both, with a little odd logic thrown into his argument.

“The going rate in Florida is 6 percent. You can set that at something different,” Landon said. “In my opinion, you set it at zero and find your stormwater some other way, but you still need to have an agreement with FP&L that allows them to use the right of ways. Then in 30 years, versus 10 or 20, obviously it’s high, high capital expenditure for them for installing the lines and getting electricity to homes and businesses. If you think that you are wanting to kick FP&L out of right of way earlier, then it would make sense to do a shorter term. That’s why the 30 years—it’s hard to imagine you would not want electrical lines. It’s not exclusive. Somebody else could come in and do electricity too. But the fee is, really, it’s how much city council wants to charge for the use of the right of way.”

But FPL has been providing electricity to Palm Coast all along without a franchise fee in place. And the electricity market in Florida is not deregulated. In other words, it’s not as simple as another electricity company coming in and providing electricity, as Landon claims: the industry is regulated, down to its rates, by the Florida Public Service Commission.

The council’s other goal was verbalized by McGuire: “The questions that I get are questions born out of ignorance. How many people come to a city council meeting? I mean, the people that call me never come. All they know about is what they read in the News-Journal, the News-Journal or on FlaglerLive.” His suggestion: advertise the city’s plan clearly and broadly.

“And I think inherent in your comments and your observations,” Nedds added, “is the fact that we need to make a definitive pledge to our residents. We did it 10 years ago with the road resurfacing program. We didn’t tell you which road necessarily, but we told you this is how we’re spending the money.”

“It’s more than just a pledge by us. It’s a legal obligation,” Reischmann, the attorney, said.

Vince Liguori proposal.

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21 Responses for “Hearing Echo of Broken Promise, Palm Coast Council Girds For Opposition to New Utility Fee”

  1. Linda H. says:

    Our Council is more than a little arrogant on this one. Do the homework, folks. Look up the storm water fees for the other cities in the area and be sure that you don’t leave out Jacksonville and Orlando. We currently pay more than all of them. You will also find out that other cities charge ALL LANDOWNERS these fees whether you are a residence, business or vacant lot.

    Why does everything cost more in Palm Coast? Really, I’d like to know why.

    I also wonder if the council realizes that many 3 bedroom, 2 bath homes here run electric bills of over $300 a month? (Yes, I know that’s high.) Our current fee is $8 per month or $96 per year. I’m not sure who is doing the math on this one, but it more than doubles many storm water fees.

    FlaglerLive, my math sucks but how do you get $6 or $7 out of that?

    DO YOUR HOMEWORK, FOLKS. Your elected officials are not.

    Mr. Liguori, where do we sign on to your plan? No elected body should be able to raise taxes this high without a vote on the ballot.

    In the meantime, my family has just installed both a solar water and pool heater and will be looking into adding extra insulation in the attic in order to cut our bills but many cannot afford to do this in our current economy. We will be using what’s left of our retirement.

    How about the city look into helping the residents with financing on helping us to go greener and save on these bills, or would that cut into your profits, Mr. Landon?

    • xenith says:

      Go outside and look at all the empty houses around you.


      Linda H,,,,,,,,,,Will you be at the meeting?

      • Linda H. says:

        Yes, I will, Mr. Diliberto. I hope that you will attend as well. In my research I discovered the following storm water rates:

        Flagler Beach – $4.00
        Cocoa Beach – $6.00
        Daytona Beach – $7.04
        Jacksonville – $2.50 (small home); $5.00 (average home); $7.50 (larger home)
        Orlando – Average home, $119.88 yr; maximum of $137.88.

        Palmcoaster: I am trying to get my utility bills down, but at the rate the city is slapping fees on us it makes it difficult to afford to make the necessary updates to our home. What I find most frightening is the 30 year commitment when we have no idea what the rates are going to be by then but will be locked in.

        This is not good government, folks.

  2. vincent Liguori says:

    Linda: On Tuesday, at the Council meeting, I will propose a new plan which maintains the identity of stormwater fees at a cost of $10.24cents per month to all, including vacant lots.

    • Linda H. says:

      Sounds good to me, Vince. I have the data from all the other cities, if you’d like to look at it. Thank you for attempting to come up with a positive plan that won’t bankrupt us all.

      And then we need to pass a law limiting the amount of money our council can continue to spend on counsultants. Most here expected them to do more of the work themselves.

      I’d love to see the total cost of the money spent on consultants here. I’ll bet it’s enough to bail us out of this mess. No more money on consultants!

  3. birdie says:

    I think its time to leave Palm Coast! More and More fee’s, but hey we can afford it! Wait till we have toll booths at our front doors. Just noticed Palm Coast charging me $8.00 month on my cell phone bill, guess since my call comes thru the air here, they deserve a cut. Next will be to charge by the minute!

    • Linda H. says:

      Birdie, instead of planning on leaving Palm Coast, please come to the council meeting tomorrow night and add your two cents — even that may cost a lot more soon!

  4. palmcoaster says:

    @Mr.Liguori…Your proposal looks interesting but still leaves large areas in our city (gated communities like Grand Haven) off without contributing and probably the $2.24 additional dollars a month that you suggest won’t be sufficient to cover the gradual redoing of our whole decaying storm water system. Would be interesting that our city officials will give us an approximate budget of the most urgent repairs cost and some logistic planing figures for years to come. One way or the other we need to fully fund our storm water system. Look what happened when Florida Park Drive caved in unannounced. That time were lucky because in the worst case scenario some homes could have been damaged as well.
    In my case as they will do away with the storm $8 water fee….in the winter months paying the 6% franchise fee will cost me about the same, but in the summer months may cost me more, about $12. One way or the other, there will be an increase. Maybe is also time that our city demands a profit from the busy Palm Harbor Golf Course managed by Kemper Sports, as we are at the 5 year mark. This will help the budget.

  5. slyfox says:

    It is time to leave Palm Coast & I would if I could too. Our neighbors left 2 weeks ago, went back up north, hated it here after 12 years. Sold their house for a loss & left as quickly as possible. Many people I talk to would leave too, if they could. It is too expensive to live here period. Our government is like a giant sink hole, it will keep on sucking up all of our money.

  6. Robert says:

    Whoever sold you folks on home rule sold you the proverbial snow job.
    It was not a well thought out proposition. Most proposals look good on the upside and the advocates discount the downside.

    Doesn’t anyone who reads and comments on these; taxation, funding, budget issues understand the ROOT CAUSE. There is an additional story on the front page about the county budget shortfall.

    The city will continue to increase taxes to support itself. The county will be doing the same. Each year the cost of government will continue to increase. Revenue streams will not increase to offset the need for continuous tax increases.

    Wake up folks. There is one too many governments in this county.

  7. PJ says:

    Oh I just don’t even know where to start.

    Everyone on the comment board is just saying as it is. I can’t comment as I am just speechless except for one thing.

    The current Palm Coast government is a prime example why you need to vote everyone of these people out. They do not have a clue and say yes to Landon on anything. Landon does nothing but hit us residents up.

    That’s a City Manager raise some kind of fee. He reiminds me of Fredo in the movie the Godfather when Fredo says “I’m samart I know things”

    He and the council have no idea to offer solutions to manage just a bunch of Lemmings.

    Thank you Mr. Liquori on something refreshing. Like an idea, wow…….again I don’t know what say!!!

    • Linda H. says:

      PJ, come to the council meeting tomorrow night, help us figure this out.

      Questions to ask: How many in Palm Coast are not paying storm water taxes currently and why not? If all were paying their fair share, would this help to meet the shortfall without such drastic measures? Is it time to have our own storm water dept. like Cocoa Beach?

      Most cities have the tax billed in their property taxes. It would be cheaper to collect the amount once a year vs each month. All landowners pay property taxes so why are some exempt from storm water fees? Why should storm water taxes be tied to electricity bills? We have two governments in place here not meeting their budgets. Whose fault is that and how much longer are the voters going to stay asleep and watch us go bankrupt?

      We need to work this out as a community and that is why we need people to attend this meeting. Please come calm and collected and be ready to offer your ideas. We are all depending on you.

  8. palmcoastpioneers says:

    1972, 1973, 1974, 1975, 1976, 1977, 1978, 1979, 1980,. 1981, 1982, 1983, 1984, 1985, 1986, 1987, 1988, 1989, 1990, 1991, 1992, 1993, 1994, 1995, 1996, 1997, 1998, 1999, 2000, 2001, 2002, 2003, 2004 —

    The above are the years were were not charged for Stormwater/Drainage since our Public Offering Statement/ and Homesite Purchase Agreement stated ‘The Company’ would provide this.

    From 2004 onwards we have been billed on our properties for this. We keep asking WHY aren’t we ‘Grandfathered’ in; after all, being the first purchasers here, doesn’t that warrant something?
    We have regularly and repeatedly asked the Utilities WHY; they are non-responsive on this; also non responsive on the loss of our public with membership Palm Coast SunSport Beach Club, Our Palm Coasts’ Oceanside and also Intracoastal Resorts and so much more WITHIN a Federal Order of ‘Consumer Redress ‘ for us. ( Federal Trade Commission Docket C-2854 ordered the above for US – we miss it all alot )

    @ Palm Coaster – we paid very high to almost obscene costs for the Palm Coast Golf Course Location with Features / Acreage…we can’t understand how this can be considered a *GIFT* for us since all the FEATURES / Acreage we paid for weren’t *gifted*. ..However, some Features *gifted*…some Features lost, sold, transformed, …other Features now being *leased*…)

    We miss ALL our lost Federally ordered ‘Consumer Redress’ alot.

  9. vincent Liguori says:

    Linda and Palm Coaster: My proposal does cover the funding needed for refurbishing the entire system which is $50 million and the consultant’s cost for the stormwater utility was $93,000. Total funding needed-annual basis $7.5 million. The taxes(including electricity) they are proposing have nothing to do with stormwater and adopting these taxes ends the stormwater utility and user fees.

  10. Tired says:

    Linda H & Mr. Liguori I applaud the energy you are tackling this topic with! I fought long and hard and eventually lost my job at the city over this very topic, although Mr. Landon would never admit that. Originally, there was a Stormwater Department but when the city engineer resigned due to politics they merged the Engineering & Stromwater Department. Now the Engineering Stormwater Department is tasked with rediculous tasks, given no authority for it’s placed in the hands of the uneducated Public Works crew who chooses to “eyeball” everything and skip the precision. The “stakeholders” were given over a half dozen meetings with staff and the consultants when the new ordinance was in the works but unfortunately, Mr. Landon never saw the average citizen as a stakeholder, only the large developers and their attorneys were present at those meetings in addition to a few others that represented communities. Basically, they got what they wanted. The cost is now going to be taken from the landowner and passed to the occupant. Perhaps if the kick-backs that have been passed back to city staff was used to pay for the stormwater infrastructure no fees would be needed at all. Good luck at the meeting this evening folks!

  11. Jojo says:

    …And the roads need repairing and repaving in some spots again because of the quality of the job done. Splitting and chunks coming loose from poor preparation and work. You get what you pay for.

  12. Linda H. says:

    Vince, I am now hearing there is nothing currently in the law that states these fees must be tied solely to storm water. Do you know if this is true? Mr. Meeker, is it true? (I know you read Flagler Live.)

    palmcoastpioneers: I knew this had been put off for a long time, but it is staggering to see how long it has been neglected.

    Note to Council: Don’t even THINK of building a new City Hall. We have some hard decisions to make for us all. Those of us paying taxes to both the county and the city are now supporting two bankrupt governments. Something must change here. Cooler heads must prevail in order to solve this problem and that is not going to be easy under the circumstances.

    Come with solutions, people. Options are always better than anger.

    Vince: No matter what happens tonight, you are my hero. Not sure what this community would do without your very patient guidance. While the rest of us are “fussing and fighting” you are always there to lend a hand, offer a solution. I am grateful.

  13. palmcoaster says:

    @Linda H. I will be at 6.30 PM in the Community Center meeting today. I will be open to do a lot of listening, as the only way to address and resolve these issues with success and satisfaction to all or most, is by attending the meetings. I understand that our city officials will present a detail power point in the large screen of the past emergencies that arise ( Florida Park Drive cave in at a cost of over 380,000), the current eminent priorities to be repaired before they cave in too, and the long term logistic planning to proceed with the rest in the coming years as funding will be available. We need to be aware that in most of our roadways the original metal culverts that connect our canals and drainage run underneath our roads and when decaying cave in, so there goes the road as well. The scary part is that some of those culverts also run underneath some private lots along homes…can we imagine where the home may go in a cave in? Most of us do not have sink hole insurance coverage? Otherwise ask our long serving PE Mr. John Moden since the times of ICDC ( ITT Community Development Corporation) He sure knows and I suppose will be present in this meeting as the original drained system boss. Many of us here may not know that those culverts visible when the tide is down in our canals, run underneath our properties and streets and then what will happen if they cave in like happened in Florida Park Drive and there are no $$ on reserve for the costly replacement? Palm Coast was built by digging canals in a swampy land and feeling up our lots whit the digouts while installing drainage huge culverts to connect our water ways and drainage. We all better keep that in mind. We live like in type of Venice here with 300 miles off canals among us, but no gondolas or gondoliers, just some juvenal gator’s watching us only, unfortunately. Then we should all imagine should be a bit more expensive than residing west of Rte 1. Still muuuch less expensive that what it cost me to reside in NJ, in an unincorporated area until 1991. So lets get together today and use our common sense and work this out, but with real facts and in a calm and civilized manner. Lets ask the city how much money we have in reserves from the 8 bucks we were paying until now, after the Florida Park Drive cave in expense.
    Lets ask them how much money they estimate the most urgent repairs in danger to cave in is needed now and what is their repair plan and cost for subsequent years.
    @ Vincent L. If we need 7.5 million on an annual basis I do not see that increasing my storm water fee by only $2.24 will generate the total of the annual need being maybe that we are 35.000 to 40,000 households…or the vacant lots also pay the storm water…? If so why are some gated communities like Gran Haven exempted? Kind of confusing to say the least.

  14. palmcoaster says:

    @Robert . Do you work for the county? The Home Rule Coalition was voted by our overwhelming majority of Palmcoasters and is alive and well and The Best Decision Ever, we made! As nothing is perfect, otherwise look at the county waste of our mainly Palm Coast generated revenue, we need to get together discuss and direct our city government to resolve our needs, that is all.
    How come every time we need to iron our city issues, there comes one with the whip to beat over again the already dead horse called, Home Rule Coalition. To the contrary we were blessed we had one and even Mr. Liguori was a member and I thank them all. City should take over this whole county “a la” Jacksonville Duval, that is why Jacksonville is the largest city in the USA, last I read.
    So we do not have a county approving a several million super hangar to some Ginn, promising that will lease it for 20 years and takes of in less than 2 leaving us holding the bag. By the way now he is gone form Hammock Beach as well and 4 individuals own it I understand 2 Americans and what looks two foreign ancestry individuals or citizens. Cakes Across was same shame. Or be solely under county commissioners that go around witch hunting some of our good constitutional elected officials, just because they do not abide by the good old boys special interest. Sure help making the bed for some crooks instead. Look at the county deficit now… what do they do with our funds?

  15. Vincent Liguori says:

    Linda:Florida statute 403 089 3(1) authorizes a municipality to create one or more stormwater utilities and adopt stormwater fees to operate and maintain the system. Capital improvements are for the benefit of all potential users and are an equitable cost. Florida courts have upheld fees based on the cost of making the stormwater system available to potential or exempted users without regard to whether the customer actually uses or desires to use the service.

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