It was as if the words “electric tax” and anything related to them were taboo during a lengthy and candid discussion between the Palm Coast City Council and its administration this morning, as officials tried to decide how to pay for a $21 million reconstruction of the city’s old public works facility.
The words “alternative,” “creative,” “different,” “hybrid” and “grant dollars” were heard a lot more, in essence putting to rest possibilities that the city would consider adding an electric public service tax to its funding menu any time soon.
The public service tax was included in two of the three options regarding the public works project the administration was presenting this morning. But the presentation to the council didn’t even get that far as it became clear to Interim Manager Beau Falgout that the council would rather go with the option that sticks to existing revenue sources, along with additional “creative” means of borrowing some of the money.
Just as certain to the council: there is no way to delay moving forward on the public works project on 7 acres off U.S. 1, however expensive. In fact, the council is pushing the administration to move the project up and start with some interim improvements before full-blown construction begins. The reason: the facility is so old, some of it in such disrepair and prone to flooding, that it is endangering a large segment of city employees–the very employees dispatched around town to keep infrastructure in good repair and help mend neighborhoods after major storms, alongside first responders.
Council members alluded to the many ironies of a public works facility in disrepair as they discussed reconstruction plans, not least the likelihood that the city’s vaunted code enforcement officers would, in Mayor Milissa Holland’s estimation, not leave uncited a private residence or a business if either had some of the structural problems seen at the public works facility.
“This is a very serious issue, there’s no getting around it,” Holland said, “and past councils did not want to spend the money, they spent it elsewhere.” She did not specify where, wanting to be as diplomatic as possible, but it’s not a secret. Inessential glamor projects got the money: City Hall ($10 million, though some of that money could not have been spent on public works), the Community Center ($8 million), Holland Park (nearly $5 million), just in the last few years. “The fact of the matter is we have to figure out a solution to this problem, we can’t kick the can down the road.”
Holland described work areas with standing water at the public works facility, among other problems, and alluded to the problems water intrusion created for employees at the Sheriff’s Operations Center, evacuated since June because more than two dozen employees complained of sick-building-like illnesses. “This is bad, and I’m not going to sugarcoat it,” Holland said.
She didn’t need to, at least not to her immediate audience: Falgout said he was well aware. But Holland’s audience was beyond the meeting room, to constituents who, not privy to the several tours council members have taken of the facility, are not aware of public works’ conditions.
The administration first discussed making large-scale improvements at the facility two years ago, when the price tag was a third what it is today and the scope of the improvements less extensive. A consultant is proposing the broader approach. Last October the council sought to move ahead with the plan, but with the public service electric tax possibly in the mix as a means of paying for it. Residents rebelled. The council asked for alternative funding sources. Today’s proposals included those, along with–still–the electric tax.
The sticking point is debt. Absent a referendum, the city can only bond money against specific, dedicated funding sources, though it can borrow through a commercial bank with fewer restrictions. It cannot, for example, borrow against its regular property tax revenue. Neither sources of sales tax revenue may be bonded against. But the option the council is going with at public works requires borrowing. Electric tax revenue would be bondable. So is revenue from stormwater fees, already borrowed against. But the stormwater department is off on its own, away from public works.
If it was clear from the beginning of the discussion that the electric tax would be a non-starter, the discussion provoked some ideas that weren’t part of the administration’s options.
“Using funding capabilities that we have at our disposal,” as Holland put it, she proposed merging public works with stormwater operations, which are related anyway, thus opening the way for leveraging the stormwater fund for the public works facility. The feasibility of the approach has yet to be studied. That’s what Falgout will do, among other explorations. Another is to seek grant opportunities: Holland cited Pasco County’s Kevin Guthrie (a former emergency management chief in Flagler) who secured one such facilities grant through the Federal Emergency Management Administration (FEMA).
Other sources of money that will be explored include the city’s fleet division, utilities, and short-term borrowing. And there’s always the property tax.
“We hear you loud and clear, Option C,” Falgout told the council at the end of the discussion, synthesizing the council’s direction, “but you want to do everything you can to accelerate,” with existing revenue sources and grants.
Part of that option also means delaying other capital improvement plans, specifically at city parks: don’t look for major improvements or new facilities at Long Creek Preserve, for example, for a few more years. Priorities are getting rearranged in favor of the less glamorous but more essential–something previous councils could have done had they had more fortitude in themselves and candor from their then-manager.
The next step will be a presentation of those funding options in the context of the annual council review of its five- and 10-year capital improvement plans in a few months. For now, however, all talk of an electric public service tax is terminated.