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Palm Coast Zaps Electric Tax in Favor of Existing and ‘Creative’ Revenue to Rebuild Public Works

| January 29, 2019

Palm Coast’s public works facility sits on 7 acres west of U.S. 1, but would expand with new construction. (Palm Coast)

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.

Click On:

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.

17 Responses for “Palm Coast Zaps Electric Tax in Favor of Existing and ‘Creative’ Revenue to Rebuild Public Works”

  1. Roy says:

    What if they used funds from something that is less important than public works shed.

  2. lnzc says:

    Stop planting trees,sucking up scarce water
    Stop building ball fields and trails
    Cut some high paid salary’s
    Do what is needed

  3. tulip says:

    Well, it looks like the council is getting wiser and thinking things through and that Mr Falgout is paying attention to them and participating. Perhaps things will improve now.

  4. The original woody says:

    This is going to be rammed down the tax payers throats like the city hall that got voted down multiple times.It’s not about what’s right or wrong it’s about what the city hacks want.

  5. charles detoma says:

    Someone needs to tell us what this 21 million dollars is going to build?

  6. Laurie says:

    Smart move, we cant afford to pay any more

  7. Ronoman says:

    Stop trying expand everything and keep palm coast a small town! Stop developing every area of woods and nature! Shhesshhh!

  8. Stretchem says:

    I too am having trouble wrapping my brain around a $21,000,000 warehouse. And the cost tripled in two year’s time? I assure you the likes of private enterprise such as Amazon, Walmart, etc aren’t paying much above $20sf to build their distribution centers. A half a million square foot facility, which is gargantuan and would likely be the largest facility in the county, would cost maybe $10,000,000. FlaglerLive, get the county to show their work. Sounds like a Taj Mahal for storing lawn mowers.

  9. palmcoaster says:

    Well by now not to be worried, as in the workshop meeting that I attended today Mayor Holland proposed to get funding other than any FPL tax, instead look for a short term loan backed/funded from revenue items like our storm water fee that we pay in our utilities bills that is about $15,55 a month as per my Palm Coast Utility bill.
    There is a great need for the public works facility as our workers day in and day out endure water intrusion on their training and administration offices and their equipment repair garages. Was described by new elected Councilman Branquinho that he toured the current facility and is awful the work environment of our city public works employees. So the new buildings are needed for our workers safe work environment and I believe that the new funding suggested by Mayor Holland could be a solution if manager and staff research it and find it doable by law and a lender. I was glad to see our councilmen Howell and now also Branquinho were opposed to the FPL tax idea that promoted the mayor wisely to look into other funding source. I also mentioned at the end of the meeting in my 3 minutes that since we incorporated we have been paying too much taxes to the county for the services they provide to us, right now almost double that what we pay the city that provides all our services, compared with my property in Daytona we pay same to county and city and Daytona has its own police. Mayor said is in talks with county Chair Mr. Obrien regarding that issue. Nice workshop today were the residents concerns were taken in account by Mayor, Council and Manager. My appreciation to them all.

  10. Dan Potter says:

    The mayor presents the public works area as a run down 7 acres that must be brought up to date. They have every known piece of equipment money can buy and they can’t create a better base of operation? I get the impression they want to spend money on a giant scale. Why not pay some of that on the $250,000,000 city debt that we are paying millions of dollars each year on interest.

  11. Wow says:

    Just call it a new soccur field with million dollar bathrooms. No problem getting money.

  12. atilla says:

    The money we have paid for utilities has been a slush fund for Landon. City Hall, Holland Park, Community Center to name a few. If they don’t dip into this fund there should be plenty of money to rebuild without a tax increase.

  13. JimB says:

    I drive by the location often. I have gone there for sandbags before storms. Without going inside and having a complete understanding of requirements, I believe they do need an adequate facility to work out of. But at that cost? I think they really need to review requirements, realistic requirements, and bring it to reasonable cost. Don’t need something like the county buildings.
    While I see the city spending over a million dollars to remove a lane on whiteview or see the city talking about investing millions on a fiber project that they hope will bring growth to PC. We need to get away from the “build it and they will come” thinking and be ready to handle growth at the time it is presented.
    Lets get realistic with our dollars and how we spend them. Make sure there is justification, not just presentations, for things we spend money on. Plus review project afterward to make sure they met the original requirement and justification. That’s how businesses have to work today.

  14. palmcoaster says:

    Mr. Potter were did you see or learned about the city 250,000,000 millions in city debt that we pay millions each year in interest? Could please share that info with us? Maybe I missed that important detail along the way. Sharing data help us to keep us realistically informed in order to present our request in the council meetings.

  15. James says:

    I have an idea… not sure how “creative” it is. Ask Tallahassee for the money, isn’t that how politics worked back in the good old days?

    The new naked ape in charge wants to do something about Florida water quality, well why not tackle our little problem… once and for all. After all, doesn’t it mean anything to be on the winning side of anything anymore… or have you all been trying to hold on to an idea that has long past? To paraphrase our new senator beady-eyes.

  16. John dolan esq. says:

    Mz Holland your supposed to have the answers. Don’t throw up your hands and say I dont know what to do.

  17. palmcoaster says:

    Dan: you are almost right as I got it. The City Debt is about 236,000,000 shown in the 2018 budget page 84.

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