Palm Coast Council Surprised by Discovery of Unannounced CRA Funding for New YMCA Project

The Palm Coast City Council got a surprise Tuesday when it learned that its cash-strapped Town Center redevelopment zone is contributing $1.4 million to the planned $16 million YMCA. As Council member Theresa Pontieri noted during the discussion, “I wasn’t aware that CRA funds were going to be paid towards that.”

Pontieri is right. The council approved contributing $3 million to the YMCA, but none of the money was from its CRA fund when initially presented to the council. 

The council approved the contribution last summer. The amount was to be in addition to a land donation valued at $2 million. The land was previously donated to the city by Allette and Douglas Properties. 

The monetary contribution was not spelled out during its budget discussions. The closest the administration came to mentioning the $3 million was during an August 12 workshop on capital expenses, when Carl Cote, the director of stormwater and engineering, outlined planned expenses from the parks impact fee fund. 

Impact fees are one-time fees paid by builders and developers for every new structure they build. Park fees are levied on houses and apartments but not on commercial properties. 

During that workshop, Cote outlined the parks and recreation projects to be funded out of the roughly $3 million in annual revenue from park impact fees. He spoke of the Lehigh Trailhead, the completion of the Long Creek Nature Preserve boardwalk and future nature center, dollars to design expanded parking at the Community Center, projects at the Southern Recreation Center, and $1.3 million in 2028 for lighting at the Indian Trails Sports Complex, 

Then  he made this allusion: “We have the aquatic center, we put the $3 million in here, $2 million next year for city portion towards that project, and then we have some interfund transfers.” He did not say what “that project” was, and council members didn’t ask. The budget document Cote was referring to also referred to a $3 million allocation to the “Aquatic Center.” 

For several years, the city’s municipal pool, or Frieda Zamba pool, has been known as the Aquatic Center in budget and other documents. That’s not what Cote was referring to. As a city spokesperson confirmed to FlaglerLive at the time, well after that meeting, the reference was to the YMCA, for which $2 million was to be allocated this fiscal year, $1 million the next. 

The council that September approved the budget with that $3 million line-item. Last July the governor signed a budget that awarded the city an additional $125,000 for the YMCA. 

On Tuesday, during a discussion on the Town Center CRA’s finances, a slide listing internal CRA debt included $1.4 million due to be paid to the YMCA. That’s what prompted Pontieri’s question: since when was the CRA contributing to the YMCA (beyond the land donation)?  “It wasn’t part of the YMCA presentation,” Pontieri said. 

The administration said it was working through the numbers. The administration is working on structuring the financing arrangement in such a way as to determine whether–and which part–of the facility might be leased or owned by the city, if any. For example, the city could own the pool portion of the facility. The numbers would then be presented to the council. 

No, Pontieri said: there should be no presentation “if City Council hasn’t given that direction.” She was not objecting to the city’s contribution to the YMCA: the council is strongly supportive. But the details were not matching up. 

“There’s a lot of things that are happening that were not discussed or agreed upon up here, and I was very concerned when I saw this, because I feel like the CRA is an already stressed fund,” Pontieri said. “So to see this here, we should not be conveying this to the public if we have not agreed to this. So I don’t know who that needs to trickle down to, but I don’t specifically ever recall even discussing the CRA with regards to the YMCA.” 

Brittany Kershaw, the communications director, said this morning that for the current budget year, park impact fees are covering $1.065 million of the $2 million contribution to the YMCA, and the CRA is covering $934,200. Next year, impact fees will cover $532,900 and the CRA will cover $467,100. “It is funded and in CRA approved budget,” Kershaw said. The council approves CRA budgets separately. 

 Cote on  Tuesday explained: “As part of the budget process last year, we put the YMCA in the park impact fee fund,” he said, “because the project was within the CRA and that’s what was adopted and approved.” The dollars, he said, could be used for something else if they are not spent on the YMCA. 

“I just don’t recall having the discussion in depth about using CRA monies,” Pontieri repeated. 

“I understand your concerns,” Council member Ty Miller said. “But there’s also a need for that. And if it doesn’t come from that, it comes from somewhere.”

“God forbid,” she said, “the capital campaign actually pays for the money rather than taxpayers.” 

John Walsh, a YMCA board member who made the request for the contribution to the council, alongside Chris Seilkop, CEO of the Volusia Flagler YMCA, said today that the campaign had raised $5 million, excluding local government contributions.