The Palm Coast City Council today took its closest step in 25 years toward a utility franchise fee, an additional levy that would raise your power bills by up to 10 percent. Public opposition has defeated such fee proposals four times since 2011.
But the council is leaving it to the voting public to decide what the fee should be, or if there should be a fee at all. The fee must be contingent on a future referendum. And the referendum must be binding. The approach all but vitiates the council’s fiscal authority in that regard, deferring to public sentiment, and more likely than not ensures that a franchise fee will not appear on any power bills in the city any time soon.
The council voted 3-1 to approve the conditions to enact a utility franchise fee of between 0.5 percent and 10 percent–at least until a future council amends or scraps the resolution, which any council could do. The fee, indistinguishable from a tax, would be added to all Florida Power and Light electricity bills for residents–homeowners or renters–and businesses, including churches, nonprofits and entities otherwise exempt from paying the property tax. (Mayor David Alfin says the fee potential would top off at 6 percent. State law allows for up to 10 percent.)
The resolution City Attorney Marcus Duffy initially prepared for the council proposed a non-binding referendum, in line with past discussions by council members. Council member Ed Danko wanted that changed to binding, against Council member Nick Klufas’s opposition. Danko carried the day, with Mayor David Alfin and Council member Theresa Pontieri joining him in the majority, and Klufas in dissent. Council member Cathy Heighter by then had left the meeting.
“I don’t want this to be a virtue signal if it’s non-binding,” Pontieri said. If it was legally the only choice the city had, it would be one thing. But if the city can legally have a binding referendum, “then it’s not just a virtue signal. It’s actually doing something.”
To Danko, a non-binding referendum would be no more authoritative than a survey. “We’re keeping our word from 10 months ago,” Danko said, referring to the time when the council first discussed the approach. We’re putting it on a ballot now if a future Council comes along, and they want to fight that battle, political uphill battle, but that’s up to them, okay. They certainly are capable
The resolution appears as if it lacks crucial elements–it doesn’t specify when a referendum would have to be held, seemingly leaving open the possibility of a primary election when turnout in Palm Coast is heavily weighted toward anti-tax Republicans. But the city charter requires all referendums to be held in the general election.
It is too late for the primary anyway. The council has time to schedule a vote for the general on Nov. 5.
In one respect, however, the resolution is either short-sighted or cleverly (or unwittingly) loop-holed: it only specifies a referendum for the utility franchise fee–not the public service tax. The public service tax could also be levied at up to 10 percent, and decided by the council.
The spirit of today’s resolution, however, suggests that councils would have to adopt the same approach with a public service tax, giving the resolution a precedent-setting weight that residents may attempt to leverage to other ends. That’s why local governments are generally loath to tie recurring tax policy to popular votes, the two being naturally at odds.
Bunnell and Flagler Beach are among the 88 percent of cities that have long had such a fee, on top of a public service tax. Either or both can be levied at up to 10 percent. The council is desperate for a new revenue source. It sees the franchise fee as one such source.
Klufas did not vote against the motion out of opposition to the franchise fee. He supports the fee, especially if it were to be revenue-neutral–meaning that if the city were to not raise more revenue, but use revenue from the franchise fee to lower the property tax.
“It collects taxes at a higher propensity to high usage users of our electrical system,” Klufas said. “So the hospitals, the big churches, the ones that don’t pay any tax in the city of Palm Coast, they have some of the most prime real estate in all Palm Coast but they don’t pay any taxes. If we were to say as a governing body, we are not going to collect any more taxes in total. Instead we are going to take a percentage of that and collect it through an FPL franchise fee, the end result for a normal average homeowner in the city of Palm Coast would be your taxes going down.”
Most people, Klufas said, don’t see that possibility, which he said often gets misrepresented. “That’s also why I’m a bit hesitant to allow this to go out onto a ballot,” he said, when the council could responsibly pledge to enact the fee only as a shift that would overall lower property taxes. “That’s why I’m a bit hesitant, because I don’t trust the communication that happened and the educational moment that has occurred to be the most truthful.”
He has reason to be hesitant: nothing in the city’s strapped finances suggests that this or future administrations will resist the urge to see the franchise fee as a supplement, not a substitute, as other cities do (both Flagler Beach and Bunnell have significantly higher property taxes despite imposing both utility franchise fees and public service taxes.)
Pontieri herself spoke of the city’s financial demands. “We just went through our [strategic action plan] that had 13 priorities, we are going to have to fund them,” she said. “So we need to be very mindful of the fact that yes, while we are entering into this agreement, again, money doesn’t grow on trees. So we are going to have to figure out a way to fund our priorities, to provide infrastructure, public safety, build fire stations, make sure our first responders are getting the right salaries and pay that they need so that they don’t use us as a training ground and go elsewhere to other counties, as the sheriff alluded to. So I’m in favor of this. But I do think that we need to be very mindful as we move forward that we have a limited amount of funds to choose from.”
Danko is mistrustful of the messaging for a different reason. “Yes, we’ll collect a lot more from the businesses, but they will collect it from consumers,” Danko said, to doubts on that count from Klufas and Pontieri. “There’s no free ride here for consumers.” He added: “Any raising of utility franchise fee would need to be sold to the public and if it’s a good argument, the public has shown they will go for it.”
There was no word from council members about scheduling a referendum. That will likely be a discussion in the near future, though they did inquire about what it would cost them to hold a referendum. The referendum would appear on the November ballot, which is administered by the supervisor of elections.
“The only cost would be incurred if an additional ballot page was necessary due to the referendum for city voters,” Supervisor of Elections Kaiti Lenhart said. “I quoted them an estimate of $14,000 for that additional page based upon the number of voters in the city of Palm Coast, and 20 cents per ballot page. That estimate does not include any additional postage necessary for city voters who request a mail ballot. The postage may increase due to weight, with a two-page ballot.”
Lor says
People should not live to pay utility bills, I have heard complaints that’s there’s nothing to do here for entertainment and basically there’s no real community because utilities are greedy. The employees want more money so they can make sure hard working people don’t get freedoms and benefits. There are really no top line people running this city and seems that they would rather see people die of boredom so they can flip houses
Billy says
Puts me one step closer of selling and moving out! Too expensive here anymore!
Pissed citizen says
Let’s screw the residents for a bad council that failed to plan ahead for all this growth. Impact fees for new construction? Somebody getting their palms greased? Maybe we need some more apartments and storage units. Nevermind about actual major businesses.
Atwp says
At least twice a month Palm Coast, Flagler County are talking about taxing the people. Thank you Republicans. We should vote all of them out of office.
Hmmm says
Where are all those so called impact fees going? My power bill is expensive enough. They want to add an additional fee to a service we pay for already, and have us believe our taxes will decrease? Yeah right.
The Sour Kraut says
Tax, spend, repeat. No thanks.
Greg says
Just maybe the city needs to be a bit more fiscally responsible our tax dollars. You se3n to have millions to piss away on pet projects, want to expand, but you cant even take care of what you have now. You gave yourself a big raise and healthcare too. Just wait until the homestead deduction increases after this election. Best start planning in belt tightening now. Can hardly afford to live here now!
CJ says
How about “No” Palm Coast. What gives you the right to taxing the electricity and lines you don’t provide or service! I think the city needs a Forensic Audit.
What a BS artist! says
Danko you are a part of this, you made a stink about it when you could have stopped it from even getting started. Instead you saw a chance to make it a political football for your campaign.
I’m voting your ass out. You are a sham!
Vote no to Danko!
Stephen says
I would rather keep a 1/2 cent sales tax. Don’t we have a 1/2 option sales tax expiring soon. I’m not against keeping this to fund Palm Coast wishes. Leave my utility bill alone.
Celia Pugliese says
Our council is also totally controlled by some and too many lavishly paid administrators that have no idea what they are doing except hiring six figures assistants of the assistant and pressure for approval of overpriced contracts in luxuries we can’t afford with the hope hardly ever materialized to attract tourism to national championship events. These administrators even went to Tallahassee with the lobbyist that cost us since 2020 or before $60,000 a year at least to do what? lobby for developers in our dime, “West expansion in developers owned vacant lands”. Meanwhile east of Rte 1 our infrastructure is NOT properly maintained or expanded given the ill planned growth. Now we need in Rte 1 ; Bear, Wildlife Crossing Signs to be paid out of the impact fees as wildlife expelled from razing those lands by developers is being killed by growth so better install those signs asap! In our city staff we have too many chiefs at six figure pay without the needed credentials and very few indians needed to do the work. We could save 2 million a years plus by terminating some unnecessary slots. Why do we have high paid administrators supposed to be some professional college graduates , if every time they need to move a finger they hire a consultant at 1000,000 or more? Too many studies paid and no problems resolved in speeding traffic, and lack of sufficient and well maintained roads contamination, floods, etc. etc. Our city and county need change! Please stop lying to the residents regarding what the state allows or doesn’t! These political stands are affecting our lives, health and safety! Closing my post I would say I would not oppose this tax if our council will start imposing fiscal responsibility in our city administrators and rest of city staff and then after millions saved we may not need any higher taxes.
Mary Jane says
Because the City of PC doesn’t know how to budget their money they are going to make taxpayers pay for their mistakes. Guess what all are votes are NOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO.
Endless Dark Money says
make companies pay same utility rates as people. Tax the rich, close the loopholes. No need for additional taxes on the working poor, they can barely survive as is.
JimboXYZ says
That would only make sense, Klufas says the commercial is short on paying taxes, so they come after the rest of us as residents to pay for what they allowed the corporations to not pay. This is why Klufas shouldn’t advance to Flagler County elected, he’s done enough to Palm coast already. Charge that Tesla battery up and see how far it gets him away from the devastation he’s been a part of in Palm Coast & Flagler County. The theme is always the same, give them more money to provide what we were always getting for less. SO new article hits FlaglerLive, the school crisis they created didn’t happen, they were wrong again, but they raised school taxes, yet somehow SRO’s are too expensive to have on every school premises ? Wrong on everything, it’s time to stop rewarding being so grossly wrong about the cost of anything. The waste service, that’s 1,5X for the same garbage pickup we always had. What an improvement in service that has been. I pick up more litter out of my yard from the neighbor’s garbage that doesn’t get into the trucks. We’re living in a landfill of a trash dump for the growth of Palm Coast. There’s a vision of 2050 for anyone. Only going to get worse too. More growth, more garbage, more wasteful spending to solve a problem that never existed before growth.
Skibum says
I agree with Councilman Klufas. I would definitely agree to pay the utility tax if the city formally announced an offset to the property tax, but otherwise, if they are not committed to formalizing that in writing, they most likely would “forget” about such a commitment that they made. Klufas is not only smart, he is one of the most reasonable and community minded local elected people we have here in Palm Coast, and I plan on supporting him in his upcoming election to the county commission. I certainly cannot say that about dimwit Danko!
Jim says
I agree with you in principle but I have absolutely no trust in what a future city council might do. This council could go so far as to put in writing that they’d cut property taxes to offset the utility tax but then the next city council will say they need more money and just raise the property tax rates to get that money. Once you let a tax take hold, you’ll never get rid of it.
And, like many have stated here, city officials need to stop talking out of both sides of their mouths. If we are going all out to increase the number of homes in Palm Coast and, somehow, that’s supposed to be good for us, why do they need to increase the amount we citizens are paying? The answer, of course, is that they continue to “add improvements” to the city but at the same time, admit they do not have the money to maintain what we already have. When you own a home, you don’t add on a new garage if you are already having trouble paying for the house as is. You plan and save some money for that. But in government, you just find a way to get more money from the taxpayer to pay for your pet project(s).
There is an election in November and we have an opportunity to send a message. The current mayor has got to go. And I hope we have some decent candidates for the council as well so this ship can be turned around before it’s too late.
Callmeishmael says
What Klufus seems to have missed in his “analysis” is that property taxes are deductible on our federal taxes while fees are not. So if you’re going to bend me over and have your way with me, I’d rather you increase my property taxes so I can at least offset those federal taxes.
Dennis C Rathsam says
I hope everyone in P/C says no, to this moronic idea! Its now time for the city to cut back! We, the tax payers are already over taxed here in P/C! The city needs to lose a few employees, & make some part time. Take back the raise the council voted for themselves. This is not a full time job, in wasnt suppose to be. With the ellection 4 months away, it time for the people to take back our government! If they cant continue, let them all resign! We cant let a few fools, put us in the poor house. Is there a money tree in your yard? There,s not one in mine? Then it rains here we have a beautifull rainbow, the problem is, theres no pot of gold at the end, just a pile of shit from the people we ellected.
The dude says
The people you elected over and over again.
You and Jimbo are like the dog that caught the car… you’ve had your electoral way for decades here, now it’s an expensive, over taxed, underserviced, shithole of a place. All because of the electoral choices you, Jimbo, and the rest of MAGA have reliably voted for in the 2000’s.
In other words both you and that dog chasing that car got exactly what you wanted… now what?
willie says
No Utility Tax and no more Republicans on the City Council !!
John says
City of PC residences its time we vote for Democrats because these Republicans don’t know what their doing.
Lets start with the Mayor and work our way down the list. Taxpayers have had enough of the incompetents.
Jay Tomm says
Yeah OK…..Like they really are any different? Come on…..
BTW most of the PC council are RINO’s anyway. And 2 of the county commissioners.
atwp says
Why raise taxes, the city isn’t using the money they have now properly.
Jay Tomm says
LET’S DO IT!!!!
Make Flagler so expensive people STOP moving here!!!!! STOP building here!
James says
“Palm Coast Takes A Step Closer To Utility Tax…”
Yeah. … Good luck with that.
I don’t know which Stones album to put on the turntable? “Let It Bleed” or “Beggar’s Banquet.”
Just say’n.
Jey Stone says
I wonder if any resident can read this without feeling insulted. And obviously shameless proposers pitiless, and perhaps humoured by those residents whom are not.