Six years ago, the Palm Coast City Council came close to adding a pair of new taxes on electric bills to replace its stormwater fee, which was $8 a month at the time. Residents’ rebellion was swift and angry. The council backed down, and soon raised its stormwater fee to $11.65 a month. Last month it doubled it to $30 two months after raising water and sewer rates 21 percent over the next four years.
And now the council is looking at those additional taxes on electric bills again: a “utility franchise fee” of up to 6 percent, and a “public service electric tax” of up to 10 percent that could add up to $15 or more on the monthly bill–not as a replacement for any existing fees or as a means of lowering other taxes, but as a net surcharge to all other existing taxes and fees. That is, as a net new revenue source.
The council this morning asked its administrative staff to draft two ordinances, each of which would lead to the potential imposition of the new tax and fee, neither of which would need public approval beyond public hearings.
The council wants new revenue to pay for a new public works facility, to pay for a new, multi-year round of street paving, and to add a new source of revenue separate from the property tax.
“We’re doing for multiple reasons,” Mayor Milissa Holland said. “One of them is finding an additional diversification of our revenue. Our auditors have very clearly said this annually, ‘You’re not being fiscally responsible by just putting all your eggs in one basket of revenue source,’ so we’re sort of solving a few items from my perspective in this decision.” Holland asked the city staff to bring back a “matrix” of options that would show how the city could finance the new public works facility and its streets program without overly burdening taxpayers.
It is almost certain that the council will not impose both a franchise fee and a public service tax. A franchise fee, which would have to be between 3 and 6 percent, requires the city to enter into a 30-year agreement with Florida Power and Light. The council doesn;t want that sort of locked-in commitment. But the council is leaning heavily toward a public service electric tax, albeit with caveats. It may not impose the entire 10 percent. And if it imposes any tax, it may exempt users’ first 500 kilowatt-hours so as not to overly tax retirees on a fixed income and other low-income residents.
Whatever approach the council takes, however, will be a new and substantial tax burden on residents and businesses, adding an additional $65 a year to electric bills, and potentially close to $100 a year more. And whatever approach the council takes, it’s unlikely that it will face less of an uproar than it did in 2012, when none of the existing council members were in those seats.
Why did this come to be? Start with the city’s public works facility on U.S. 1.
The facility is old, getting older, and, after it was inherited from the county, for years has been in need of reconstruction. It was in need of reconstruction when when a different council and then-City Manager Jim landon pushed to build a $10 million city hall and an $8 million community center instead of earmarking some of the money toward a better public works facility, This, even though the justification for a new facility is centered on employee safety, and even though public works is central to parks and sports field maintenance, all the city’s beautification programs, the stormwater division, which maintains all swales, canals, ditches, and the streets division that maintains traffic signals, signs, roads, paving and so on.
The public works facility is not visible to the public, but it’s a beehive where fleet maintenance maintains 220 light vehicles, 352 pieces if heavy equipment and 33 fire trucks and trailers, 79 mowers and 700 hand-held pieces of equipment such as saws and weed-whackers. Its parking is inadequate. Office workers occupy decades-old structures or trailers. The facility has outgrown its needs and the 7 acres it uses.
Since 2017 the city carried out a land swap, giving up 5 acres to the north for more acreage to the south, where it had 3 unused acres, resulting in a total of 16 acres now within the property limits of the public works facility. A reconstruction plan means building two 30,000-square-foot facilities, one of them for fleet management (the Community Center, for comparative purposes, is 21,000 square feet).
Space isn’t the only thing getting outgrown.
Less than two years ago when the members of the Palm Coast City Council toured the facility they were told the upgrade would cost $6 million. In July 2017, the consultant hired to deliver a “master plan” on a new facility estimated the cost at $15 to $20 million. Today, after another tour, the council was told it would cost nearly four times the original estimate: $21.5 million.
A new tax the council claims is needed to diversify the tax base and pay for pressing needs.
Helena Alves, the city’s finance director, says the city has no revenue source to pay for that project, let alone pay for a new round of street improvements pegged at $16.4 million between now and 2023, with $7 million of that unfunded.
“We weren’t able to accommodate those projects with our current resources,” Alves said, referring to the capital-improvement plan. “So what we did is we went out and analyzed non-ad valorem revenues,” that is, revenue unrelated to the property tax, “and the reason why we focused on non-advalorem was to spread the cost not just to property homeowners, but also to renters and commercial renters, and we focused on revenues that are being used in neighboring cities around us, so we wouldn’t be unique.”
The options Alves and Interim Manager Beau Falgout presented to the council were limited to the two franchise fees, to the exclusion of any discussion of the property tax–still among the lowest in the state for a city of Palm Coast’s size–or revenue from the city’s share of the sales tax supplement it receives from the county.
Alves, however, was repeating a common but inaccurate assumption: that renters and non-property owners don’t pay the property tax. Council member Bob Cuff later sharply corrected her.
“The notion that families that rent a house or an apartment and business that rent 5,000 square feet of commercial space don’t pay ad valorem taxes is just wrong,” Cuff said. “Everybody that uses real estate, whether they own it themselves or they pay somebody else for the right to use it, is paying ad valorem taxes. I don’t know of a landlord in the state of Florida or anywhere that doesn’t set their lease rate high enough to recapture that, or just say in the lease that you’re going to pay the real estate taxes on this structure while you’re using it. I’m not saying we should go back to ad valorem and raise the millage rate, but I really want to make sure I understand what this tax is being imposed on and what the impact is aside from raising enough money to provide us with the money we need for capital improvements.”
Many cities, including Flagler Beach, Ormond Beach, Bunnell, St. Augustine and DeLand impose the maximum 10 percent public service electric tax and, with the exception of DeLand, a franchise fee. Some cities, including Flagler Beach and DeLand, also impose a 10 percent water public service tax. (The 6 percent electric fee is applied to the entire bill. The utility tax is not applied to the fuel portion of the bill.) The city’s finance director says 80 percent of cities in the state impose either the fee or the tax, or both.
Anticipated revenue with a 10 percent electric tax would be $6.5 million a year. A 7 percent tax would generate $4.5 million. The franchise fee would bring in $4.3 million even if set at 6 percent.
Put another way, and based on figures the city administration calculated, for a house using 1,000 kilowatt-hours a month, the bill would go up by $8.10 a month, or nearly $100 a year, if a 10 percent tax was imposed, and by $5.67 a month, or $68 a year, if a 7 percent tax was imposed. It would go up by nearly $6 a month, or $72 a year, if a 6 percent franchise fee were imposed.
But those are somewhat under-estimates: According to the Florida Public Service Commission’s 2017 annual report, average monthly residential consumption for FPL customers was 1,118 kilowatt-hours per month.
“These are regressive taxes. They’re essentially a version of the sales tax.”
“These are regressive taxes. They’re essentially a version of the sales tax,” Cuff said, “and if you’ve got a homeowner that’s barely making it now, adding another 6 percent to their electric–I mean, electricity is not a luxury in Florida. I don’t think air conditioning is a luxury in Florida. So one of my concerns is, is there any minimum portion of the bill that either will not apply to, say, low-income residents.”
There is: the city could, for example, exempt the first 500 kilowatt-hours a month from the tax, thus defraying the burden for lower-income residents. Most council members liked the idea, though Holland asked for the eventual matrix to include revenue estimates if the exemption was lower than 500 kwh per month.
“I think we have to discuss it,” Cuff said, saying there’s a reason groceries are exempt from the sales tax. “For somebody that’s existing on what passes for a living wage here in Flagler County, this, added to the stormwater, this added to this, this added to that, you know, a million here, a million there, before you know it, you’re talking about real money,” Cuff said. He was the only council member to refer to the council’s recent and substantial increases in stormwater, water and sewer rates. We need to be realistic, but we need to look at it compassionate[ly],” Cuff said. “We talk a lot about workforce housing, we talk about affordability of housing.”
But Holland–who’s herself spoken forcefully in favor of workforce and affordable housing– pushed back on several occasions. “We have to figure this out,” she said. “I guess we have to find that balance of making sure we’re moving forward with these projects, not kicking them down the road for another 10 years, having something probably seriously happen in that time to one of our employees.” She said she wasn’t inclined to have both new taxes added, but she wanted options.
“These are decision points that are challenging and difficult,” Holland said. “They’re not easy for any of us sitting here, but it’s what we do.”
Vincent Ligouri, the local activist and tea party firebrand who six years ago led the fight against utility taxes, said this evening he would be “mobilizing” his ranks again and opposing the renewed initiative.
Palm Coast Public Works Facility: Background and Proposals
Click to access palm-coast-public-works-2018.pdf
Kathy says
Please stop raising taxes and utility fees. Gonna run us seniors on FIXED incomes right out of town. Ugh!!!!
Ken says
No Tax should ever be imposed without a vote by the people
Lou says
It is a tax inrease regardless how you hide it or justify it.
snapperhead says
?Less than two years ago when the members of the Palm Coast City Council toured the facility they were told the upgrade would cost $6 million. In July 2017, the consultant hired to deliver a “master plan” on a new facility estimated the cost at $15 to $20 million. Today, after another tour, the council was told it would cost nearly four times the original estimate: $21.5 million.”
Did anyone ask why a project estimated at $6 million two years ago exploded to a cost of $21.5 million? Material costs haven’t risen that much in that time.
Mark says
So, because another entity does it we should do it? How about thinking out of the box? How would lowering upper managements wages and benefits add to saving money? How about cutting the grass at six inches instead of four inches? How about renting a facility or facilities? How about getting rid of a board member? Stop taking the easy way out!
Brian says
I moved here in 2012 because the utilities and housing were affordable. Being retired that was kind of a big deal. Water and sewer has increased of late to the point that I take 3 showers a week and use the toilet twice before flushing. If I could figure out how to use the water from the shallow well I would. This increase will likely force me to look elsewhere. Add in the future increased traffic from all the new apartments and subdivisions and it is becoming a not so good place to live. As you are seeing, growth does not pay for itself. I will vote no if I can.
John Brady says
It was in need of reconstruction when when a different council and then-City Manager Jim landon pushed to build a $10 million city hall and an $8 million community center. This is why you have heard us as fiscally responsible Democrats preaching maintenance over monuments. Scrap the Whiteveiew project save 1.8 Million .Find less costly legal representation another 200,000. That is two million right off the top by one of your cost conscious Democrats.
Any tax increase hurts we seniors on fixed incomes and young and lower wage earners.
These Landon clones refuse to look at the expense side and waste money trying to kill a dog
Stretchem says
And in just a few years a large portion of homes will be off the grid anyways. Can’t stop progressions in technology. Create these kinds of taxes and solar’s ROI gets shorter and shorter.
Rob Jr says
The people who ran and run this city seem to think this city is high tone.
It is anything but high tone, it is the opposite.
This hole was dug with a purposeful intent.
Who led the charge for the following?
The desalination plant.
An expensive community center, a new city hall contrary to voters’ mandate, a golf course, a tennis center. Then there was the widening of Old Kings Road for the benefit of the landowners along the road. Using the water utility fund as a piggy bank, paying 6 figure salaries to city employees.
Slowly and surely, the cost to run the city continues to increase, so with a limited tax base the residents will have to assume a larger portion of the expense. It may be called a tax, it may be called a fee. In either case it is an expense for the citizens.
That phenomenon is economics and is the result of piss poor management.
Bill k says
Glad i didnt buy a home here 3 months ago. Wow, high taxes, high crime.
Chris Howell says
Holland is a joke and has no business being mayor. We need to send her and the rest right behind Landon! The people of Palm Coast need to rise up and tell them that they can not waste our money this way!
Tony says
Be very careful city council of PC you will for sure make residents leave
We came here because we liked the area over taxing people another reason I left NJ
Please don’t make me move again
Realist says
Getting rid of Jim Landon was just a first step. The rest of the cancer is Holland and Klufas. Both have to go to save this city.
jake says
Must be following how Flagler Beach imposes taxes. A minimum of $70 water & sewer tax BEFORE using any water or sewer, up 25% this year. Flagler Beach motto, “No new services, just impose the tax and spend it any way they can and cry for more.”
Layla says
Difficult? It’s obvious she is not fit to make decisions like these.
Shark says
Hundreds of thousands are wasted on the plantings everywhere. It’s obvious by looking at all of the weeds that they are not capable or able to maintain this extravagant waste of money. Cut back on this waste and use the money saved to supplement this increase.
lnzc says
There the democrat mayor goes tax and spend while she has it made
To bad she doesn’t have to live on the average family does
Retired folks going to have to downsize
Agkistrodon says
THIS IS what happens when you elect a democrat who just became a republican to get elected, along with her little lap dog Klufas. Get used to it, they will now tax, tax, tax, of course they won’t call them taxes, they call them “fees” and in the process, they call YOU and I “fools”. The goal is to get the older fixed income people OUT, then they can raise tax….err “fees” even higher, and kame PC into what THEY want, GOOD LUCK. When does the “free” stuff start. More IMPORTANT any chance these fees could be used for residential street lights> Just yesterday I seen two kids walking to buddy taylor almost get hi,t as it is dark and no sidewalks, WHERE PEOPLE ACTUALLY LIVE>
Richard says
How do people in Palm Coast like being TAXED into poverty? Any sane person will get the hell out while property values are rising.
Thomas says
This Mayor and Council are disasters. Look in file drawers and desks where you have always found money for your pet projects.
mark101 says
OK Voters, you put these council people in office, its time to remove them. NO NEW TAXES What we have here is a city council that let council members and the mayor run wild on pet projects that exhausted funds. A failure at money management is the key here not a call for an increase in taxes. Voters remember this at reelection time.
atilla says
Brian, like they say, if it’s yellow leave it mellow but if it’s brown flush it down.
DRedder says
It is safe to say the current leadership needs improvement and replacement, along those lines, Mr. Nets should not be welcomed back either as Ms. Holland was his puppet.
No new taxes should be Imposed. The current class of clowns needs to sell off some of the stupidest things recently purchased like sun sail shades and other dumb ideas. If funds are in fact needed then impose them and or increase them on new construction such as all the cluster housing they have authorized. Cut costs by eliminating stuff that only benefits the few.
Vincent A. Liguori says
Citizens of Palm Coast: Immediately contact your council member and voice your disapproval for the proposed electric utility tax. Tell your friends and neighbors-this tax will be a “forever tax.” You must plan to attend council meetings and participate in this matter. There are other options. Stay informed and involved.
Me says
Council stop making decisions without taxpayers voting on your poor choices with our money, not your money it is our money you fooling around with.
How about planning on bringing in industries to help off set your poor planning. Your keep saying out grew your buildings, things need this and that. Because you did poor planning now you want us to foot the bill.
Tell Netts you didn’t need that new building for a City Hall, there are plenty of empty buildings around this town already. All you do is build more shopping centers, with stores that pay barely min. wage to its employees.
Anytime you feel the need to raise our taxes for your poor planning we want to vote on it, and we will vote no.
How about taking a pay cut for your over prices salaries in the county and to Landon and pay for your mistakes that way.
cruiser33 says
When will it STOP ? The three STOOGES are at it again. Can’t raise taxes, citizens will vote it down. So lets put a fee on utilities were they cannot do anything about it. Wrong answer Stooges, remember what you are doing when elections come up for YOUR POSITIONS. Spend city money wisely, quit wasting it on all the things that don’t benefit anyone but the Council Members. Can’t wait till election time. You Mr. Netts do not have a chance in hell getting back in
Edith Campins says
Drive us retirees out of town and who will you have left? Stop wasting money.
Was at City Hall today tumbleweed blowing through the halls, employees bored to tears, what a colossal waste of tax dollars.
No, no, no on any more fees or taxes.
Jeffrey says
Will Palm Coast help pay for the repairs of our home as needed? I doubt that. There are other ways to get the funds to take care of business. Why leave it on the shoulders of the citizens? Palm Coast pockets much money from it’s ‘business activities’ and fund raisers. We need to stop these crooks dead in their tracks!! Are they making us pay for the money that mysteriously came up missing at Mosquito Control?? They are sneaky and not to be trusted! STOP ROBBING US!
Pogo says
@United you stand – divided you drown
Just stay tuned to Fox and Fools, elect Republicans, and God will provide. That’s how you got here.
Or…
Wake up to the fact that Flagler County ought to be the name of the single government entity in and for Flagler County. Makes far too much sense to ever happen; all the minnows who see a whale in their mirrors would never cooperate. But there it is.
Peter a cerreta says
What about the platinum parachute holland and the
Council gave Landon then she fired him l think to save face. Our leaders apparently cannot foresee the repercussions of their behaviors.
woody says
what a joke,remember when the town hall was NOT going to cost taxpayers?We lost the interest on the loan we were collecting on and by now would have taken a chunk out of it..How about the 8 million dollar sheriff building now just a warehouse.THEY sure can piss away the tax dollars.
CELPF says
The Mayor and Council are the biggest Joke you ever saw.. They waste Money on an expensive Lawyer, Give a $250,000 severance package to Landon after they fired him, Plant trees and so much Landscaping, Now they want to raise Taxes! What a Joke they are. They waste money fighting a Dog when they could have sent him to the rescue ranch in April and now they said they would change the ordiance on TNR cats but instead raising taxes is more important Really They are a JOKE We have to DRAIN THE SWAMP!!!!!
Jack "No Tax Jack" Howell says
This is simply outrageous! The City Council continues to amaze and bewilder the citizens of Palm Coast. This is one of the main reasons that I am seeking election to City Council. Somebody needs to reign the council in with foolishness. I demand a full accountability regarding all options that have been looked at in the process of constructing new facilities. And, trust me, I mean ALL options. However, I suggest the council table this issue until the new council members are sworn in. That would be the smart thing to do. But then again, the City Council is not known for being smart. Why? Look at the parking at the newly opened community center. That is why!
tulip says
Why is it that the city will give builders incentives to build more and more homes and apartments here, creating more and more use and abuse of the infrastructure, etc., yet the city thinks nothing of charging more fees or whatever you want to call them, to the resident’s cost of living here? The council voted for those shades in the mayor’s (Holland) Park at a cost of thousands and thousands of dollars, when they could’ve hired local carpenters to maybe build some kind of pergolas over the swings and slides for shade and would certainly last longer. To me it’s like they get what they want at any cost and then tax us cause they don’t have enough money for other things. Perhaps some of them should take courses in good money management and know the difference between “what I’d LIKE to have” and “what we NEED “. A lot of money has been wasted over the years for projects that didn’t work out well, like the golf courses.
Palm Coast is NOT the mayor’s or her cohort’s private home to do they want with and get what they want without considering the resident’s well being. There are people living here that can easily afford the hike in fees and there are many residents that really can’t. You can build “work force housing” and give them barely perceptible pay raises, but what good is that when the council starts to nickle and dime them out of whatever little money they have left.
Find another way to manage money, cut back on frivolities and give the residents a break.
just sayin says
Willing to bet the same 90% bitching about the tax have no problem calling the city needing some type of service constantly. That fleet shop they are asked to work in is a joke. I have seen much smaller cities in the state have much nicer Fleet Maintenance shops than the one in Palm Coast .
Just Sayin
Laurie says
My fixed income is stretched to the max, have to move, my house is up for sale, not how I pictured it would be when I moved here years ago……
j evans says
maintains 220 light vehicles, 352 pieces if heavy equipment and 33 fire trucks and trailers, 79 mowers and 700 hand-held pieces of equipment such as saws and weed-whackers.
DOES THIS SOUND LIKE A LIKE OF EQUIPMENT FOR A TOWN THIS SIZE?
I know for a fact at least one number is inflated!!
Vincent A. Liguori says
Council Meeting: Tuesday, October 16, 9am in City Hall. Be there and tell the council you don,t want this tax. I’ll be there. Public participation begins at 9am(3 minutes per person).
Sherry says
This is a “DIRECT RESULT” of Republican tax cuts at the Federal and State level! Pushing the costs down to the corrupt “local” level.
The county and city commissions MUST look at ways that millions are being wasted on things like “beautification before safety”, equipment, and inflated salaries for too many bureaucrats.
Many of the same local politicians have been in office much too long. My suggestion is to vote all incumbents out and let’s bring in ethical, fresh thinking, scrutiny and ideas. Out with the old!
Bill says
What BS from OUR counsel . The Council is looking at this as a “net new revenue source.”. WTF what NEW SOURCE its still the same SOURCE the RESIDENTS. VOTE IN new blood.
anony says
Vote for Jack Howell for city council. This is what you get for voting republican, people. They will not bid out projects, but just pick and choose their favorites no matter the cost. The $400,000 given away to a ‘consultant’ to figure out and negotiate with ATT, Sprint, Verizon and other telecommunications corporations could have been reduced substantially. The $17,000 paid out for a $500 sun shade could have been negotiated. Nope, not these bunch of republicans. The only really fiscally conservative group are the democrats and independents. Vote for Jane Gentile Youd for Flager Commissioner over Jim Mullens or you will have the same type in Flagler county – spend and tax.
Eugene Hartke says
Nothing warms the cockles of my heart more than watching Republicans screw over the people who voted for them. HaHaHa!
jake says
@sherry, “This is a “DIRECT RESULT” of Republican tax cuts at the Federal and State level! Pushing the costs down to the corrupt “local” level.”
@pogo, “Just stay tuned to Fox and Fools, elect Republicans, and God will provide. That’s how you got here.”
Clearly, you both blame Republicans for any problems in your life. Flagler Beach raises the base water & sewer, don’t increase services, not only do you blame Republicans, you don’t even realize your taxes have been raised. Palm Coast is about to do the same thing, you still blame Republicans. Local government is not dependent on Federal funds, only grants from time to time. Your local elected, and appointed officials, are responsible for what goes on here.
Both of you need to look in the mirror and find another reason for your misfortune. Blaming others isn’t part of the solution, it’s just more of the problem. As much as you two complain, why don’t you both run for office and fix these problems.
Sherry says
Well Jake. . . currently, we all live in a country where the White House is occupied by a Republican, the majority party in the Senate are Republicans, the majority of members in the House of Representatives are Republicans, the governor of Florida is a Republican, the Florida legislature is majority Republican, and as far as I can determine, the majority of the local political office holders are Republicans.
Therefore. . . when the problems we suffer are political in nature. . . why in the Hell would any “reasonable”, “educated”, “astute” person blame anyone other than the Republicans?
When it comes to being politically influential, I have actually traveled to Washington DC several times as a member of the Board of Directors of the National Assoc. of Computer Consultant Business. There I discussed the needs of the industry personally with members of Congress. I’ve marched in many protests for things like PEACE, THE ENVIRONMENT, WOMEN’S RIGHTS, EDUCATION, GUN SAFETY, EQUAL JUSTICE, and AGAINST STRIP CLUBS in RESIDENTIAL NEIGHBORHOODS.
Even though I’m now retired, I often write to and call legislators to encourage them to resist big money and to “do the right thing” by ALL our people. I also financially contribute to the candidates I believe in.
I have actually “lived in” and interacted with the communities of “Democratic Socialists” countries. . . you know, the places that have much better education and health services than we do. Although, sadly, many (of the ignorant) here think that Socialism and Communism are the same thing. At this point, I travel to and live in other countries about 6 months a year, and have good friendships with people in over a dozen foreign countries.
And you, Jake. . . please tell me all about how “YOU” try and make our country and world a better place for us all. I would love to read all about it.
Pogo says
@A Republican explains nothing – as usual
jake says, “Clearly, you both blame Republicans for any problems in your life..” This is just an absurd and nonsensical statement; a non-sequitur posing as a thought.
jake says, “…Flagler Beach raises the base water & sewer, don’t increase services, not only do you blame Republicans,…” Who is in charge? Republicans – elected by Republicans.
jake says, “…you don’t even realize your taxes have been raised…” You know this because?
jake says, “…Palm Coast is about to do the same thing, you still blame Republicans….” Who is in charge? Republicans – elected by Republicans.
jake says, “…Local government is not dependent on Federal funds, only grants from time to time….” Really? Start with the socialist plagues of Social Security and Medicare that are absolutely essential to so many of the locals that local governments govern. Moreover, is the self evident fact that everyone is part of ever larger divisions of a whole. Palm Coast is not a planet – it’s a city.
“…Your local elected, and appointed officials, are responsible for what goes on here…” Republicans – elected by Republicans.
jake, you don’t seem to know the difference between complaining and everything else.
Vote Blue as if your life, health, and future depend upon it – they do.
Sherry says
POGO. . . Excellent! Really Excellent!