As it had signaled two weeks ago, the Palm Coast City Council voted against a water and sewer rate increase, choosing instead to limit increases to development impact fees, the one-time fee builders pay on new construction to defray the cost of new residents and businesses on the city’s infrastructure.
Impact fees are generally, but not always, paid by newcomers as the added cost on new construction is passed down to the owners or renters. Impact fees will increase from a combined $9,435 for water and sewer hook-ups to $12,221 by 2028, a 30 percent increase. The city administration had recommended an 18 percent base and usage rate increase over four years, even as rate payers are at the tail end of a 20.6 percent increase since 2018.
The administration and a city consultant say the increases are necessary to keep up with growth and an aging infrastructure. A majority of council members did not want to saddle existing residents with growth’s burdens. They say a delay in rate increases is warranted. Council member Nick Klufas, who voted in favor of the impact fee increase and was in favor of the broader increase, is the only member who was on the council in 2018, and who had voted for those increases back then. He wanted to follow what “our experts” were telling the city.
“There isn’t huge amounts of waste occurring at the water utility that we’re able to just quote unquote, tighten our belts and be able to continue without running into a deficit,” Klufas said. “And I fear what’s going to occur–because I’ve sat up here long enough to foreshadow this– is in three to five years, we’re going to have another rate study come back and the rate study is going to say: we need the same type of increases except it’s going to be retroactive, essentially because of the power of compounding. So we’re going to have these issues three to five years from now and the increases are going to be more substantial instead of getting ahead of it now.”
But the council had made similar arguments in 2018, at the tail end of a 17.8 percent rate increase over the previous four years. Put another wat, residents have experienced rate increases of well over 5 percent a year for almost a decade, when annual cost of living increases are included, and still, the utility is not getting ahead of needs.
The city will not wait another five years for a rate study, however. Chief of Staff Jason DeLorenzo said the utility will provide a forward-looking presentation on the utility’s capital needs as soon as May, leaving it to the council to decide how to proceed.
Pontieri agrees with Klufas, and said utility rate increases have not been taken off the table precisely for those reasons–the risk of compounding needs in the future. “But at this point, I think we were all kind of wanting a little bit more information before making that leap,” Pontieri said.
Mayor David Alfin described himself as “the lone dissenting vote” on the impact fee increase, explaining his dissent in seemingly contradictory terms: “Good governance requires guts to stand up and lead towards a well planned and managed future above the noise of short term campaign preferences,” he said, a reference to two of his fellow-council members–Klufas and Ed Danko–running for County Commission seats. “I am not fully confident that investing more money in a utility department that suddenly claims extreme circumstances to justify increases is worthy of an immediate approval.”
Yet his very next sentence was: “Approving smaller increases is analogous to death by 1000 cuts. The utility will return to council for future increased rates. Good governance dictates that we consider increasing fees as part of an all-inclusive, comprehensive program that is responsibly forecast for a conservative city budget. Utility fee structure should support the vision of our overall budget and provides the capital investment for our short and long term future new leadership.” The city’s consultant and the administration thought they had done exactly that when they made their case for rate increases.
Alfin was on stronger grounds when he said the city is still awaiting word on the $35 million in a legislative request for the expansion of its Wastewater Treatment Facility Plant 1, though indications are that this particular request was not successful. “Our vote to increase rates in favor of capital improvements is premature until we balance costs against potential investments from the state legislature.”
“The alternative is that our current residents subsidize the cost of growth, and that is absolutely not acceptable,” Pontieri said.
“What I said was that I didn’t think that this moment was the appropriate moment to rush to make a decision,” Alfin rejoined. “And you had also said that you were awaiting additional information.”
“I absolutely said I want to see what it is that we get from appropriations,” Pontieri said. “I’ve seen the ongoing list and it’s not looking so great. So we can’t depend on that. We need to increase the impact fees now because we know for a fact that the majority–and we’ve heard this from staff we heard this from our consultant–the majority of the capacity increases in the capital improvement projects are because of expansion and growth or not because of ongoing operation.” Even if the city were to get the money from state appropriations, “it’s still not going to affect these numbers.”
The Flagler Home Builders Association did not oppose the impact fee increase. “The builders do recognize the need to continue to pay for and support the growth that we helped to create,” Annamaria Long, the association’s executive officer, said. “We certainly want our residents to come here and enjoy the clean water. We want the plumbing to go in the direction it’s supposed to, not hang out in the house. We all, most of us, also live here so we want to enjoy the same things.” Notably, she said, “we can only hope that the water becomes affordable.”
Several residents who addressed the council supported “maxing out” impact fees on builders, an approach Pontieri had favored (and then some), but the current numbers, she said, “support full cost recovery of the cost of growth, so it would be unreasonable for us as a council to charge any more.”
Atwp says
Sound good, why not lower our rates.
Brian says
About time the new construction pays for the impact to the infrastructure. I sure as hell can’t afford an increase in water bills. I shower every other day, have low water use toilets and do the “If it’s brown flush it down, if it’s yellow let it mellow.” Sorry about TMI. I don’t water the yard. Not sure what else I can do to lower it more. If I was younger my happy ass would move.
TR says
I’m in the same boat as you Brian, and do the same things. These developers should have been paying all along and it wouldn’t have been such a mess now and the city has to scramble to find a solution. If they would have been collecting from the builders they wouldn’t have been cramming them in with Alfin and it would have been a gradual growth instead of a growth the infrastructure couldn’t handle.
Steve says
Personally I’d be more concerned about ruining the bowl with staining than the 2 cent flush. Water usage for my home is less than 7 dollars average monthly out of a 125 dollar average bill…
TR says
Mine is also on average around 125.00 a month. But where in the world do you live in PC to have it at 7.00 a month? Because the base rate for water on a single family or duplex is 21.57 and waste water is 21.19 which is 42.76 then add sewer base, sewer use, solid waste (garbage) and storm water and you come in around 125.00 a month. So the 7.00 is may be for just the water because you use under 5000 gal. But you’re not telling the entire story.
Steve says
This is only the water usage portion of the bill that I am referencing, not waste and stormwater base , etc. My bill totals between 120 -130 monthly.
Steve says
As I said, my water USAGE portion…
Billy says
Should have increased development rates 100% and gave current residents a discount!
Let’s be honest says
Well these comments didn’t age well for Alfin. You failed in Tallahassee. You should have asked for record money to fix the current existing needs. Instead you asked for new roads west and only got a portion of those funds and don’t have the money to do anymore. Don’t ask us taxpayers to fund the rest of that project either.
Mr. Smith went to Washington folks and all he got was a 1/4 of a road to nowhere. We now have failing water treatment facilities (maxed out), pot holes, aging roads, unmanaged landscape, commercial businesses who have no code enforcement occurring on them, and extreme density housing being built as fast as he and Danko can stamp them. So thanks for blowing the state requests on things we don’t need. Are you going to put that on your developer paid mailers?
Deborah Coffey says
Years of Republican rule…no money to resurface roads, no water infrastructure, no flooding protection, and for heaven’ sake, don’t increase the tax rates on builders ever; tax the working people! When will the voters realize that the people they elect simply cannot govern?
Mike says
Yes 4 years of democrat rule, high gas prices, over 7 million crossing the border, high inflation, crime out of control. When are people going to realize who they vote for.
The dude says
Deborah points out our local situation. You retort with the national situations that have little to no effect here. While you allow MAGA to whip you up into a fearful MAGA frenzy about things far from here, your local MAGA cohort has been gleefully running things into the ground here.
When are MAGA people going realize who the people actually are they vote for?
Deborah Coffey says
#1 economy in the world, created more jobs than any president ever in the history of the country, inflation down to 3% (inflation caused in part by Donald Trump), huge increase in manufacturing jobs, significantly closed the wealth gap by increasing wages for people at the bottom of the scale, AND, accepted a bipartisan border bill (almost every single thing Republicans wanted) that passed the Senate and then, your dear Trump called the House of Representatives and told them to turn it down because he needed “something” to run on for the presidency. So please…spare us your misinformation.
Mike says
Let’s not forget 20 million job were lost during COVID so they were not created. Wages can’t keep up with inflation which is 3% lower from its all time high. As far as the border bill I guess u didn’t read it. After reading your comment my head is spinning. And by the way I’m a democrat.
FlaglerLive says
In February 2020, the month before Covid, the number of people employed in the country was 159 million. Twenty million jobs were lost by April. The country was back to pre-pandemic levels by August 2022. According to yesterday’s jobs report, 161 million people are employed, a net gain of 2 million jobs created in addition to the recovered jobs.
Ray W. says
Mike’s comment just might qualify as a good example of a person starting an argument with a losing position and then expecting to win the argument.
First, we have not had four years of “democrat rule.” We have had three years of an administration headed by a Democrat, a Senate with a bare Democratic majority and a House with a bare Republican majority. The Supreme Court seems controlled by Republicans, but more than one opinion has baffled that assessment. Since our founding fathers were adamant in their statements that checks and balances were intended to prevent any one party from holding absolute power for an indeterminate period of time, the current split of governmental power supports the argument that today’s government is exactly what our founding fathers intended. While Mike’s point, flawed as it is as to actual years, cannot be completely rejected, the far better argument appears to be that today’s split of power portrays the essence to our founding fathers’ ideal government.
Perhaps it is best to argue that Mike has a far less good argument on this point than he could have presented, when compared to a far better argument. Or, perhaps, it is just a bad argument. Either way, Mikes loses the point.
Mike’s point on high gas prices is also a losing argument, in the context of his overall premise of “democrat rule.” It cannot be disputed that in February 2021, OPEC voted to cut crude oil production by a significant amount. That is exactly what happened. Gasoline prices began to rise as inventories dwindled. The 23 nations that comprise the voting bloc (13 voting nations, at that time, and 10 other nations that cannot vote but are invited to OPEC meetings) have since voted repeatedly to adjust or maintain the production cuts. Gasoline prices have remained high since those cuts took effect. Many industry publications take the position that OPEC is manipulating the crude oil marketplace in order to keep prices above a threshold of $80 per barrel. The Russian invasion of the Ukraine has also affected the distribution network, further driving up the price of crude oil. Even the record levels of U.S. crude oil production and export cannot offset the relatively large OPEC cuts. Higher gasoline prices are NOT due to “democrat rule.”
Mike outright loses on this point.
Mike’s strongest argument centers on the allegation of seven million border crossings by documented and undocumented migrants. His point, while flawed, arises from the issue of innumeracy, meaning it very well may be that Mike simply does not fully understand the numbers.
Some explanation might be relevant at this point. Migrants can enter via legal processes (green cards, etc.), or through announcing desire for asylum by presenting to border authorities upon entry, or by seeking to bypass all processes and enter as undocumented migrants. Assessing these numbers is a huge task. Many sources are out there, with some being more reliable than others. Since the Census Bureau was tasked with the responsibility to generate data on this point at or around the founding of our nation, I often look to Census Bureau publications when I look into the issue. The Bureau publishes annual data sets on the number of foreign-born residents, which includes all categories, from naturalized foreign-born citizens to undocumented migrants.
1970: 9.6 million.
1980: 14.1 million.
1990: 19.8 million.
2000: 31.1 million.
2010: 40.0 million.
2020: 44.9 million.
2022: 46.2 million.
Octo. 2023: 49.5 million.
A number of reliable sources report that immigration patterns actually reversed during the Covid-afflicted 2020, when more foreign-born residents left the country than entered it. The reason, of course, is obvious to all. Even Mike argues in a lower comment that 20 million jobs were lost during the early months of the pandemic. Lost jobs can result in reverse migration. We have no idea how many foreign-born residents left the country during the early Covid years, because gathering of data was interrupted for a time.
While Mike’s seven million border crossings claim is possibly accurate in a narrow sense, he doesn’t account for the number of foreign-born residents who reverse migrated after entry, either back home or to a second foreign nation, nor does Mike account for the number of foreign-born residents who died. There can be no question but that border crossings have increased significantly. But the argument is whether Mike is starting with a losing argument, not whether one of his points is relatively valid. Mike’s argument started out flawed because we have not had “democrat rule” for the past four years, as he claims. We have had bipartisan rule. Another problem with his argument is that had the Republican-controlled House sent a funding bill to the president three years ago that provided additional border agents, additional hearing officers, additional holding spaces, additional support staff, etc., we could be clearing the backlog of millions of asylum claims, and we could be sending back many more people who do not qualify for asylum. This is a bi-partisan issue and both parties have been kicking this can down the road for decades. All the executive orders in the world will not increase the annual immigration budget set by Congress (its duty under the Constitution).
Mike’s most misleading point is the “high” inflation issue. He is right that inflation was once “high.” Since during the pandemic American entered into and emerged from the tenth recession of my lifetime, there can be no argument about the reality that the American economy immediately cooled at the onset of the pandemic. Then-president Trump signed two stimulus packages into law, injecting, over time, $2.9 trillion into the economy in an effort to heat up the cooling marketplace. There can be no argument about the reality that an overheated economy can result in inflation. Then, President Biden signed several more stimulus packages into law, injecting another $3 trillion into the economy over time. Again, there can be no argument about the reality that an overheated economy can result in inflation. So we, as expected, experienced a bout with inflation that has many current signs of abating. The manipulation of the economy by the Fed, via lending rate hikes, appears to have had the desired effect. Inflation is trending down. The overheated economy is cooling, but it is still hot. People are not losing jobs at a higher rate (people always lose jobs – since 1968, the average number of people applying for unemployment insurance benefits is just over 360,000 per week – in the last year, the average number has been barely over 200k per week). Jobs are being created at a rate above expectations. By nearly every measure, the American economy today is strong, given the circumstances. And both parties are directly responsible for this circumstance. Mike loses on this point simply because he will not admit that both presidents signed inflationary stimulus packages into law. The choice was between a potential long-term recession or possible depression and potential inflation. A bi-partisan Congress voted at least five times to risk inflation and two presidents accepted that risk.
The recent bout of inflation is not an issue of “democrat rule”; it has been from its inception a bi-partisan issue.
Mike’s final point, that crime is out of control, is perhaps the one that offers the most proof of his inability to understand numbers. Yes, the overall crime rate rose in 2020 during the pandemic. Yes, the crime rate began dropping in subsequent years. Yes, it can forever be argued that crime is out of control so long as crime occurs, so Mike can always say what he says on this point. In other words, if the crime rate drops from year to year and decade over decade, anyone can still argue that crime is out of control, so long as any level of crime exists.
Mike wins on the point that we need to know who it is that we are voting for. This applies to all candidates.
Please do better in future comments, Mike. At minimum, intellectual rigor demands that much from you.
PB says
Must be election time!
Mayor David Alfin described himself as “the lone dissenting vote” on the impact fee increase.
Seems awfully confident to voice this. Time to vote people.
Nephew Of Uncle Sam says
Surprise, Surprise. Except for Alfin.
Stephen says
I don’t know why our water bill has to be a expensive as our FPL bill? I understand growth and an old system. However, I don’t want my water bill increasing 5 percent a year.
TR says
IMO it’s because the city can not manage their money and spend it the right way, so they have to keep raising rates to cover the costs of their mishandling of funds.
jeffery cortland seib says
The city planners have essentially played a shell game with residents for years. All water treatment and wastewater facilities funding should be included in the general budget, not in this ‘Twilight Zone’ fee world. Taxes haven’t gone up, but fees have. What’s the difference? This nickel and diming approach of raising fees every year may be needed or not, but certainly not at the levels they are promoting. A sustaining increase of all utility’s fees should only be at a minimal size such as 2%. The problem is crystal clear, we pay more for the wildly rapid growth rate we are experiencing. Residential growth, as council member Pontieri stated, is not economic growth. We have to pay for it. Let’s slow it down a bit.
Celia Pugliese says
Totally agree with you Jeffery and we are blessed we have councilwoman Pontieri, we need more like her in the city council. So you have our vote in your campaign for city council District 1, 2024. All these years at least 3 of super growth and not sufficient impact fees to sustain it, is what took us to this point in our utilities financials. Also past administrations use of utility funds for failed projects like Walmart that never materialized: https://flaglerlive.com/old-kings-road-tax-district/#gsc.tab=0
ELIZABETH B CUTLER says
I agree with the view that building a second wastewater treatment plant should be out of general funding, not as a tax on citizens.
Secondly, the budget should prioritize spending, not by how departments feel and complain. As water is probably our most important human need, that should be funded before other department needs. I am no expert in budgeting. One person, the city manager, has been strangely silent in this matter. Why was she hired, if she does not contribute her expertise on this difficult issue?
I praise the city council for voting down this increase. We need more creative ways to fund this. The city council hired a city manager. Let’s hear from her.
MITCH says
Insanity – doing the same thing over and over again and expecting different results. What happens when there is a rush to build, and the infrastructure is not adequate to sustain the growth? You rob taxpayers to prove your insanity and hope no one sees you are insane and borrow excuses to use from others that also have shown their insanity; supportive insanity. Happened in 2008, happening now (we heard it in 2008 and the same record is playing now, just different crowd). Everyone sees the insanity of building anything without the proper foundation. If the foundation is not fixed many will suffer for a long time and those that pushed the insanity for 4 years or 8 years are gone, they successfully did their destruction and escaped knowing that they got what they wanted.