Palm Coast Takes Stock of Its Capital Funds Ahead of Budgeting for Parks, Roads, Fire, Swales and Utilities

The Palm Coast City Council this morning got a glance at what the city’s own major capital or construction plans will look like over the next 10 years, where the money will come from, and what city projects may drive the spending. The review of the city’s Capital Improvement Plan, or CIP, combines the tedious with the essential, delineating the wishful from the possible.

“The CIP is crucial for City Council as it provides a roadmap for prioritizing projects, allocating funds and ensuring maintainable development,” Acting City Manager Lauren Johnston said.




It’s also only a dip into a rushing river: it’s never the same from one year to the next. “That’s a dynamic plan. We’re not starting the beginning of 10 years now to end 10 years from now. It’s an ongoing process,” Mayor David Alfin said, describing it as “a wheel that keeps turning.” It’s a chance, he said, for the council to refine their priorities–their annual goals–based on the newest data.

Capital projects are paid for through several city funds, each dependent on a different revenue source. For example, the half-penny sales surtax you pay on most goods and services (out of the 7 percent sales tax levied in Flagler County) contributes between $4 million and $5 million a year to the city’s share (the county gets half the revenue, the cities share the remaining 50 percent, based on population.) That fund’s revenue focuses on “critical and urgent needs,” says Carl Cote, the city’s engineering and stormwater director. That can be sports field rehabilitation, lighting, painting, carpeting, AC replacements, safety improvements at parks. The money will also contribute part of the revenue for the new maintenance center on U.S. 1 and fill in dollars for certain projects where other funds fall short of the need.

The recreational or parks impact fee brings in another $4.5 million to $5.2 million a year. Impact fees are the one-time levy on new construction. The fee revenue is used to defray the cost of new “impacts” on the city brought by new residents, who require more roads, parks, fire stations and so on. Parks impact fee revenue may only be used to expand parks or build new ones, not to maintain existing ones. The impact fee currently levied on a new single-family home is $1,800.




Transportation, school, fire, water and sewer impact fees are separate and additional fees. “In social media and other places, and even from HBA reports,” Alfin said, referring to the Flagler County Home Builders Association, “you’ve seen a number bantered around of $16,000 for impact fees for new dwelling.” He asked Chief of Staff Jason DeLorenzo if the number was correct, or if it was more. It is, in fact, more: about $17,000, as of last year, not including the increase in utility impact fees the council just approved. (See the schedule here.)

As for the city’s priorities on future spending of parks and recreation improvements or expansions, Cote said those will be on additional access points to water, developing a new athletic complex, more restrooms along trails and in playgrounds, more football, soccer, softball and baseball fields, preserving open spaces and wildlife.

“The majority of bullet points I see there, at least in my mind, seem to be focused on a younger resident, which is great,” Alfin said, “but we don’t want to underestimate the resources necessary to keep our older demographic’s quality of life at the highest level.”

Near-future spending you can expect: Boardwalks and overlooks at Long Creek Nature Preserve, thanks to a $325,000 grant; additional parking at Waterfront Park, thanks for a $330,000 grant, potentially new shades at Waterfront Park if a grant is approved this fall, five additional tennis center at the city’s Southern Recreation Center thanks to a $700,000 grant through the United States Tennis Association about to come before the council, and a pending grant of $615,000 through the state Transportation Department for the trail system. The city has also completed design on additional parking at the Indian Trails Sports Complex, and will add lighting there to more fields, expanding usage and time of play




The city also collects transportation impact fees–$3,311 per single family home. The city is conducting a rate study in advance of raising the fee. The city reaped close to $105 million in state appropriations for the loop road from Matanzas Woods Parkway to Palm Coast Parkway (assuming none of it is vetoed by the governor), through the undeveloped portion of Palm Coast west of U.S. 1. Aside from the construction of the $18 million widening of another segment of Old Kings Road north of the bowling alleys, money secured through a legislative appropriation last year, the city is still looking for money to pay for the four-laning of the remaining segments of Old Kings Road North and South, the extension of Old Kings Road, and the widening of Matanzas Woods Parkway.

The city has money in hand and will soon start adding safety lanes along Belle Terre Parkway, sough of Palm Coast Parkway, and has a $1.6 million grant for safety improvements about to start construction on Whiteview Parkway. The extension of Citation Boulevard in Seminole Woods is under way.

The city also collects fire impact fees–$428 per new single family home and 69 cents per square foot for any other type of construction (for example, a 40,000 square foot storage facility would pay $27,600). The fire impact fee generates less than $1 million a year. It helps pay for new or expansions to fire stations, and for additional fire trucks and equipment. Seminole Woods is getting a new fire station with $5 million in impact fee revenue, but the replacement of Fire Station 22–the city’s oldest, on Palm Coast Parkway, which will be rebuilt new further east on the Parkway–cannot use impact fee revenue, since it’s not an expansion. It’ll use $3.5 million in federal American Rescue Plan grant money appropriated in 2021.




Palm coast’s Street Improvement Fund is a separate account, funded through its share of gas tax revenue. The local gas tax is 6 cents per gallon, split between the county and cities based on the miles of road each jurisdiction maintains. “This particular fund is the primary source of resurfacing our roadways,” Cote said. “It’s also maintaining all our roadway network, so we do focus on our safety and maintenance project.” That includes lighting up the city’s main roads, an ongoing initiative, replacing traffic signals, adding traffic-calming measures, and so on. Money is limited: the gas tax is generating around $2 million a year. The state adds another $860,000. The council has declined to increase revenue into that fund by other means.

“We need to be able to allocate more funds to continue to keep the roads at the level of service that we expect in Palm Coast,” Council member Nick Klufas, who had supported an increase, said.

The city also draws significant revenue through its stormwater and utility funds, which are run like independent operations through their own fees. Repairs and construction of stormwater and utility projects are less visible, but no less critical, to the city’s health: it’s the undergirding infrastructure that keeps the city dry, clean, and quenched. The administration sought further increases in water and sewer fees, on the heels of almost two decades of such increases, but the council declined to impose such increases–for now.

In sum, Johnston said, “investing in our infrastructure improvements stimulates economic growth. So by attracting businesses, fostering that job creation enhancing property values, ultimately benefits not only the city’s economy, economy but also our residents.”

The presentation this morning was part of the city’s budget process. There were no decisions. That will come over the next few months as the council sets its budget priorities.