In Feud’s Latest Distortion, Palm Coast Blames County for “Killing” $600,000 City Road Grant

Palm Coast and Flagler County are at it again. Palm Coast City Manager Jim Landon is blaming County Administrator Craig Coffey for “killing” a $600,000 state appropriation for a city road. In response, the county this morning issued a statement not only to correct the manager’s characterization of the issue—spending that money on a city road would have been illegal, in the county’s view—but noting a $1.2 million project miscalculation by the city as the source of the “hole” the city is trying to plug.

In this latest flare-up, the city appears to have made more of the issue than it deserves: the money feared lost for the Old Kings Road widening project will likely be regained in a larger amount, based on a pledge by the state Department of Transportation. And legally speaking, the state transportation department and even some city council members acknowledge that the county could not have been compelled to sign off on an agreement it did not consider absolutely legal, though Landon was stunningly dismissive of the law in a council meeting this morning.

“As far as the legal question goes, as to who’s right or wrong,” Landon said, “I’d be very surprised if the county has challenged this in the past, and if they have challenged it, you know, it’s like what FDOT did this time, ‘we’re trying to give you money, if you want to fight about it, we’re not going to sit here and have a legal fight.’”

The county, which has had its share of legal and ethical challenges in the past three years—all but one deemed frivolous so far, and some of them by the same man who’s taken the city to court on two occasions–does not want to open itself up to more lawsuits than it needs to. “Any time we know of a law, we don’t go out of our way to violate that law,” Coffey said this morning.

The flare-up is the latest  among many, starting with a long battle over a water agreement between the two governments concerning the county airport, and more recently escalating over disagreements about fire rescue service in the city, disagreements about the timing of the county’s move to a more modern emergency communications system, and just this month, chafing over the city’s decision to modernize a fire station in Palm Coast—by, in part, cramping out county personnel posted at the city station.

Relations between Flagler County government and Palm Coast have been so poor that they’re a central campaign issue for the 23 candidates running for six seats on the two boards. Commission Chairman Barbara Revels and Council member Jason DeLorenzo, both of whom are running for the county commission, claimed at a recent forum that the press is making more of the issue than it is. They spoke as if they had not been paying attention to the accumulation of issues, or to their respective administrators’ language.

“It is hard to believe that the Flagler County Administrator believes that losing a $600,000 State grant for our County is good news, and it is hard for me to understand,” Landon wrote council members just before the Memorial Day weekend. Referring to an email from a state transportation official, he continued, “As you can see from Mr. Frank O’Dea’s email below, Mr. Coffey has been successful in killing our FDOT grant for this fiscal year. I do not blame FDOT for not wanting to fight with Flagler County or insisting they accept the grant. I cannot express in words how frustrated I felt for a couple of hours, but now for the really good news.”

Landon was unfairly misrepresenting the issue.

Coffey had used the words “good news” in the subject line of an email Coffey sent to his five county commissioners on May 25—the third email he had sent them that day on the same issue. The “good news” he was referring had nothing to do with “losing” the $600,000 grant, as Landon characterized it to his council members. Rather, it was identical to the “really good news” that Landon himself was referring to: that the money on which the county was not prepared to sign off would be made available to the city anyway, through other means.

Judging from the trail of documents, Coffey’s third email was the culmination of an afternoon of wrangling over the $600,000—not with Palm Coast, mostly, but with the state transportation department,  which was rushing the county commission to sign off on the money so it could be sent to the city, absent a legal opinion. The county refused. That prompted a call from Bill Reischmann, the city attorney, to Al Hadeed, the county attorney, asking him why the matter was not being resolved. Hadeed told him Coffey would later tell the commission: doing so would simply not be legal. Hadeed, whose legal memos to commissioners often read like scaled down Brandeis briefs, had studied the law. It did not permit the county to pass the money through to the city on the city’s latest terms.

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All agree that the law must be followed, but the county gets blamed for trying to follow it anyway.

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Frank O’Dea, the director of transportation development for the state agency, had made clear to Landon what he’d made clear to the county:  that “if the county had concerns about the legality of the agreement, they should not sign.  I do not have sufficient information to know if the county’s legal concerns are valid, but I must trust that their legal counsel is giving them sound advice. I am not ever going to ask someone to sign a contract or document the do not have confidence in, it would not be appropriate.”

While Landon included a copy of O’Dea’s email to his own to council members, his rebuke of the county and his town contrasted radically with the facts presented by O’Dea. (During this morning’s council meeting, Steven Nobile, the council , member, said he had objected exclusively to the county’s “tone,” not its position regarding the money. But Nobile was reacting to Landon’s characterization of the county’s position rather than to the county administrator’s direct, and far more nuanced, language.)

The background to the issue helps explain its final outcome, and why in this case the city, not the county, appeared to have been out of line.

The city is involved in three road projects. one of them is the extension from Forest Grove Drive to Matanzas Woods Parkway, which will be completed this summer. The county is building that road for the city (a detail the city administrator tends not to include in his mentions of the project).  That stretch is irrelevant to this issue.

Another project is a planned extension north of Matanzas Woods Parkway to U.S. 1. The third, and the highest priority for the city council, is the widening of Old Kings Road from Palm Coast Parkway to Forest Grove. The latter two projects are at the heart of the current issue. Design is almost done for the widening. Design was entirely paid for by state transportation dollars.

The next phase, however, is right-of-way acquisition. It so happened that the city did not complete its right of way acquisitions before knowing the exact cost of the project. That cost turned out to be higher than expected, “now creating a major funding hole for the project,” as Coffey described it in an email to commissioners on May 25. “Overall, as a County we have consistently supported this widening project and ranked it fairly high on our annual 5-year work program list prior to the City,” Coffey wrote, “even assisting the City with getting it moved up in funding priorities.”

The northern extension from Matanzas Woods Parkway to U.S. 1 was originally planned as a four-lane extension. No longer. It will be two lanes. When it was projected as a four-lane project, right-of-way acquisition costs were pegged at $600,000. When the project was scaled back, much less right of way was needed, costing just $40,000. The city wanted to shift the remaining $560,000 that the state Department of Transportation had allocated down to right-of-way-acquisition for the Old Kings Road widening segment to Palm Coast Parkway. “FDOT agreed to that,” Landon said.

The city worked with DOT to make sure all its agreements were signed off. The money had to be allocated by July 1, or it would be forfeited.

But DOT had allocated that $600,000 grant from a specific pot of money, with specific restrictions. The pot is called the Small County Outreach Program. It’s designed to help smaller counties build up their infrastructure.  When the state had awarded the $600,000 for the Matanzas Woods extension, it did so through Flagler County. As long as the money was used on county roads, the county had no issue with it.

But once the city decided to shift the money to an exclusively Palm Coast road, the county objected, citing a violation of law. “Unfortunately,” Coffey wrote, “this section of Old Kings is not a County road.   I have consulted with the County Attorney and he researched the issue at my request and he concluded that it clearly does not meet the standard.”

“We obviously were surprised and concerned that we were going to lose the $600,000,” Landon told his council this morning. “But on the other hand if you’re FDOT and the county says no they don’t agree with this being the right funding source for this project, you’re not going to make them take the money or suggest they sign an agreement that the county administrator is objecting to. So in essence the county were successful in killing that grant.”

Jason DeLorenzo, the council member who serves on the Transportation Planning organization, was at a meeting of the organization earlier this month and had a chance, after the meeting, to speak about the matter with Barbara Revels, who chairs the county commission, and with Gene Ferguson, a state Department of Transportation liaison with the planning organization. Ferguson told him the money could be used anywhere, not just on county roads. But DeLorenzo subsequently was privy to the county’s legal research, which disagreed with the state transportation department’s interpretation of the law.

Nevertheless, this morning he said: “I tend to agree with DOT,”  a tune he is likely to change if he is elected to the county commission this fall.

In the end, however, O’Dea, the state transportation official, assured city and county that $1.2 million would eventually be made available to the city for its widening project.

“At the end of the day, we’re in as good if not better shape than we were,” Palm Coast Mayor Jon Netts said.

But what could have been resolved between two cooperative governments—and two more collegial top administrators—first took a turn for the snide and the snippy down to this morning’s council meeting, after which the county felt compelled to take the unusual step of issuing a statement in response to a council meeting even as it was still a few minutes from its final gavel.