Gandalf the Gray’s morphing into Gandalf the White in Lord of the Rings is one of the great transformations in literature. One could have sworn that a similar transformation took place Wednesday evening as Palm Coast City Council member Charles Gambaro suddenly sounded awfully like former City Council member Ed Danko.
The council had been humming along–not a phrase often associated with the council this year–towards final votes on the tax rate and budget for the coming fiscal year, which starts next week. It was the second of two required hearings. The first had gone without a hitch. The second one looked like it was heading that way when, well into the 11th hour, Gambaro attempted to change the fate of Middle-earth.
Gambaro cited the steadily rising local unemployment rate, the struggles local residents face paying rent, the pending departure of Boston Whaler, the county’s largest manufacturing employer, and the slowdown in home sales. Then he asked the council not to vote for the proposed tax rate, which would decline from this year’s by 2.4 percent, but to adopt the so-called rolled-back rate, which would be a 4.4 percent decline.
The difference for homesteaded homeowners would be negligible–$13 for a $200,000 house, though the cumulative effect on the city’s budget would be significant. It would require the budget to be cut by $1 million then and there.
Gambaro minutes before had thanked the city’s finance department and directors “for all the hard work in putting this budget together.” Now he was asking them to redraw it. Danko in his four years on the council, had also been an advocate of the rollback rate, and was sometimes fanatical about it. But he never pulled the rolled-back challenge at the last minute. He would make his intentions clear at the outset of budget season, or while the budget was still a work in progress.
Council member Theresa Pontieri was stunned.
“Councilman Gambaro, what are your proposed cuts?” Pontieri asked him after hearing that the cut would equate to a $1 million reduction in the general fund’s $67.6 million budget. The general fund pays for police, fire, parks, code enforcement, streets, street lights and other day-to-day municipal functions, with employee salaries accounting for a substantial part of the cost.
“We could have sold the golf course, we could have done a bunch of different other things that would have allowed us to even out,” Gambaro said.
“Even if we sold the golf course, that wouldn’t have happened until maybe next year,” Pontieri said, her voice unusually stern. “So what are your other savings? Because you don’t get to just throw out a proposed rollback without coming to this council with the actual solution. That’s a tagline. That’s not a solution.”
“It’s my position. Thank you,” Gambaro said.
“It’s a hollow position, councilman,” Pontieri shot back.
Mayor Norris conducted a few back-of-the-envelope calculations to come up with $1 million, suggesting slashing $1 million of an intended $1.5 million merit pay raise for employees. The proposal did not get support.
Pontieri half-heartedly suggested other avenues. “We already did go with a lower percentage raise in order to better accommodate the budget,” she said. “We saw in our risk management assessment that we just got back that retaining employees is already a challenge. We currently have a salary survey ongoing. I’m hesitant to cut in that regard, knowing that that’s already a risk and they’re in the middle of that survey. So that’s a concern for me.”
Interim City Manager Lauren Johnston also cautioned against reducing the merit pay to a third of its intended amount, advocating for her employees (all city employees except the city manager and the city attorney are under Johnston’s purview, not the council’s): “It’s an all or nothing,” Johnston said. “It would not be fair to employees to do that. So we either give our merit program or we don’t.”
“Yeah, this is really unfair to the staff to do this now. The better time to do this would have been the last hearing, but here we are,” Pontieri said. Removing money from economic development did not make more sense, she found, nor did disinventing in employees. She again asked Gambaro what he was proposing. He suggested switching employee health care from PPO (preferred provider organization) to a cheaper HMO with less individual autonomy and choices (health maintenance organization). That ship has sailed, Johnston told him, as employees have already selected their plans.
The rolled-back rate is theoretically the tax rate at which the city would take in as much revenue next year as it did this year, outside of new construction. The state defines any rate higher than the rolled back rate as a tax increase. The definition is more politically than mathematically accurate, and in some regards it is an outright fallacy. For the homesteaded–the majority of local property owners–the Save Our Homes cap on taxable value increases chronically benefits homeowners even when the tax rate stays the same (which purportedly translates to a tax increase under Florida law’s definition).
More importantly, the rolled-back rate does not take inflation into account, or the loss of purchasing power. Applied year after year, especially in inflationary years, the rollback rate would cripple a city’s ability to function at the service level demanded of it by residents. Still, asking for the rollback rate remains a potent political tool. Gambaro is running for a congressional seat against Randy Fine, who bills himself as an ultra-right fiscal conservative, possibly prompting Wednesday’s turnabout.
Pontieri returned to the charge as what had started as a routine, seemingly pro forma meeting had now crossed passed the half-hour mark in a room distinctly more barometrically pressured than it had been at the start.
“Councilman Gambaro. Would you please answer my question,” Pontieri said. “Because this happens every single year, and it’s always, let’s do the rollback, because that is a good political position to take. But, but looking at the employees, the directors, of whom [many] are sitting in the back of the room and telling them, go back to your folks and tell them you’re not getting your performance-based raise, that’s the hard part. Saying I’m going to roll back is easy. I want to know, sir, what you would cut.”
“Let’s sell the golf course,” Gambaro said, immediately adding: “Listen, if you guys don’t agree with me, don’t vote for it. But I’m not changing my position.”
The budget and tax rate at the original amount the council had approved at the first hearing passed with a 4-1 vote. The hearing drew almost no audience in the chamber.
Danko’s actual voice was not far off. On Facebook, he called Pontieri the “tax and spend Queen of Palm Coast,” a demonstrably unfair accusation: Wednesday’s adopted tax rate adds up to a cumulative 11.1 percent reduction in Palm Coast’s property tax rate over the past four years, the sharpest four-year decline in the city’s tax rate in nearly 20 years, even as inflation has risen nearly 20 percent in that span. (Between 2006 and 2009 the city’s total tax rate fell by 12.9 percent, largely through reductions in the capital tax rate, only for a sudden 18 percent increase in 2010 as the city weathered the effects of the housing bust.)
The 2025-26 tax rate’s combined loss in purchasing power and reduced revenue, compared to what the city would have collected with a somewhat flatter rate, is likely to have consequences for the budget as the city continues to struggle to meet demand for services.
t.o. Doug says
Sounds to me like he doesn’t have the first clue what to actually cut to achieve a rollback. This is simply political posturing from a guy that knows it will likely pass without his vote anyway.
With that kind of gutless, style-over-substance rhetoric, Gambaro might actually be well suited for the national congress after all.
Duncan says
Gambaro failed to research his position and offered little more than vague remarks to justify his eleventh-hour change of mind. That shows poor judgment, and Theresa Pontieri was right to call him out on it.
As for Randy Fine, he’s a prime example of the broken state of today’s politics, so I’d vote for almost anyone over him. But if Gambaro’s strategy is to rely on posturing and opportunism, he has a lot to learn before he can beat Fine at his own game.
Larry says
His idea about the rollback seems insincere, because it’s impossible to sell the golf course in time for a tax rollback and he knows that. Seems he’s just trying to create a talking point for his upcoming campaign for the US House seat. Playing politics. Too bad.