Many sea walls in Palm Coast’s C and F Sections are deteriorating. Some are collapsing. Is Palm Coast looking to create a taxing district to pay for privately owned seawall repairs on the city’s 26 miles of saltwater canals? Not exactly. Certainly not yet. But it’s not off the table, vague as the approach may be at this point.
Concerned residents have been peppering officials with anxious emails, one of which read in its subject line: “City considering Special Tax Assessment District for saltwater canal front houses.” Even Jon Netts, the former mayor who himself lives along the saltwater canals in the F Section, received at least four communications as of the middle of last week from worried homeowners.
“What is about to be considered by Palm Coast City Council is a tax on all salt water canal properties to fix sea walls not being repaired by their individual owners,” one homeowner wrote. “This is serious. Basically this would be a special tax on all of us who live on salt water canals to fix other people’s failing sea walls. What the heck??”
Homeowners might be excused for worrying about the possibility, based on the city’s published goals, overly broad and easy to misinterpret though those can be. One of those goals reads, “research and provide presentation of findings for a Special Assessment District for saltwater canals and seawall repair options.” It’s been part of the city council’s ongoing priorities and discussions. One took place in early summer. The latest took place last Tuesday. In both instances though, there was never a specific proposal to establish a taxing district.
“We heard some chatter in the public that the city was adopting a special assessment district,” Beau Falgout, the city’s interim manager, said. “There’s nothing on the agenda next week to establish a special assessment district. We’re at the beginning stages of this process.”
Nevertheless nothing was ruled out, and all options are being analyzed so the council can decide in the near future what is and what isn’t on the table. That includes a special taxing district.
“We are looking at all options, making sure that we have a comprehensive approach, and having that decision-making coming to council with all the right information,” Denise Bevan, who’s coordinated the city’s goal-setting process, said.
Special taxing districts for infrastructure projects that benefit private property are not illegal. Flagler County government established just such a district earlier this year along a segment of shoreline in Painters Hill to protect private properties from erosion. The county is building a sea wall. Each homeowner affected will pay an additional $100,000, spread over 15 years. The charge will be tacked on to each homeowner’s annual tax bill. But homeowners who are not benefiting from the sea wall are not included in the district.
“The legal basis for the establishment of a special assessment district through case law and statutes would place severe limitations on a proposal where you would not have any benefit,” Bill Reischmann, Palm Coast’s attorney, told the city council. “Similarly, there are a lot of practical issues” as far as going through the standard code enforcement route, before imposing a district. That works well if someone isn’t mowing the lawn, for example: the city can mow it and bill the homeowner. “It doesn’t work as well when you have to redo a sea wall that may be $10,000 or $15,000,” Reischmann said.
“Way more than that,” Holland said.
“It is a blunt tool, so there’s going to have to be some refinements that’s going to be done in the systematic evaluation of the solution to this,” Reischmann said.
The council appears opposed to any kind of tax district that would somehow include homeowners who are assuming their own sea wall repairs–but not to a tax district in principle.
“If you own the property, that seawall is yours and you have to maintain it, that’s your responsibility,” Jack Howell, a new council member, said in an interview, “and code enforcement should come in and give you notice that your sea wall is in disrepair and you have so many days to start fixing it.” The alternative is fines, liens, then foreclosure. “It’s not right to have a tax district for everybody, You’re paying for everybody’s sea wall. That’s insane.”
Holland said the city could look at connecting homeowners with so-called Pace funding (the Pace Funding Group is a California-based financing company focused on green projects). She said the mechanism is used in South Florida. The financing is added to homeowners’ tax bills.
“So the focus of the conversation has been this: how do we look at this comprehensively,” Holland said, “because you might have done your due diligence and done it correctly, but if you’re repairing your sea wall and the neighbor isn’t doing their due diligence or doing the right thing, it’s degrading your investment as well. So we’re not necessarily solid in saying, let’s set a taxing district, but let’s look at this comprehensively: where are our sea walls in disrepair.” Making others pay “was never the conversation,” though she made a distinction between the cost of repairing sea walls and the cost of dredging the city’s canales. That necessity ties into the city’s stormwater system, which applies to a much broader swath of property owners.
“But absolutely, 100 percent, it is never the intent to penalize or double, you know, tax any resident for any type of infrastructure,” Holland said.