Palm Coast Taxes Would Rise Modestly For Most in $37 Million General Fund Budget

Palm Coast government’s administration submitted a budget that would keep the property tax flat for next year, which would amount to a modest tax increase of at most 3 percent for homesteaded residents, when property values’ appreciation is figured in. That’s assuming  council members decide to stick with the flat rate, as opposed to possibly increasing it a fraction, by the time they approve the budget in September.

The current property tax rate in Palm Coast is $4.5937 per $1,000 in taxable value. For a house valued at $200,000 with a $50,000 homestead exemption, the city tax would be $689. Even if the tax rate remains the same, property values in Palm Coast have increased 6 to 7 percent. But the value on which homesteaded properties may be taxed is capped at 3 percent of the increase. So that $200,000 house would see its taxes increase to $717, a nearly $28 increase from this year.

Most non-homesteaded properties and commercial properties will see their taxes rise about twice as much as homesteaded properties, reflecting their improving values.

All of that will generate a $1.9 million increase in revenue for Palm Coast’s general fund, to just under $37 million.

Council members may consider increasing the tax rate to $4.6937 per $1,000 in taxable value, which would increase the tax bill by about $15. They would do so only if they decide to pay for $360,000 in upgrading city government’s office technology, phone, databases and so on.

Palm Coast Council members heard a presentation on the proposed budget at a workshop this morning. With the new money the city plans to add five positions—including a traffic technician, a business tax inspector, and a “safety coordinator” who will focus on preventing injuries–and expand one position in marketing from part time to full time. Employees would get a 3 percent merit raise on average, and a 2.9 percent raise to starting salaries.

A few highlights: City Manager Jim Landon’s office (himself and a secretary) would see a budget increase of 4.4 percent, to $398,000. City attorney services would grow $56,000, or 12 percent, to $526,500. Of that, $336,000 is a flat fee (up from $270,000 three years ago), the rest reflecting additional services to cover litigation. In comparison, the proposed budget for the Flagler County attorney’s office—an in-house office of four that also contracts out extra litigation—is $749,000.

“This isn’t just writing them a check,” Landon said of Palm Coast’s legal costs with Garganese, Weiss, D’Agresta and Salzman, the Orlando law firm whose Bill Reischmann usually sits for city meetings and workshops. “We’ve had people say we pay Reischmann $470,000, but that’s just not true.” But his firm got a 15 percent raise in 2015.

Palm Coast’s public relations and marketing office would grow by $29,000, to $456,000, with four full-timers. The finance office would cost $934,000, and economic development $473,000, reflecting a 9 percent increase.

As always, the largest burdens on the general fund are police and fire services. Palm Coast contracts with the Flagler County Sheriff’s Office for policing and last year agreed to expand the force by five road deputies primarily assigned to traffic enforcement. The city will pay $3.5 million for 28 cops, including supervisors and one school resource deputy. The city’s fire services will rise 3.3 percent (mostly a reflection of raises) to just under $9 million. The city is not adding firefighters.

Other labor-intensive city services that account for large shares of the budget include the code enforcement, planning, construction and engineering and parks and recreation, which add up to $7.6 million. The city’s tennis center and golf course at Palm Harbor are separate line items in the budget: both operations are for members only, yet have been heavily subsidized by taxpayers in previous years and continue to be subsidized to remain operational. The two operations will account for $1.8 million.

The city has received a $570,000 reimbursement for debris removal for Hurricane Matthew, but about $3 million is still owed and remains hung up in state offices for review. Once in the city’s coffers, the money is expected to replenish the city’s disaster-reserve fund.

Last week Council member Robert Cuff, in a rare reaction to a resident who had intimated that the city was preparing to levy a big tax increase through such things as utility or fire fees, responded : “Personally as a member of this council I’m somewhat frustrated by what I see is the perception on the part of the public that we have committed to some substantial tax increase for the coming budget year,” Cuff said. “I don’t remember voting on that or directing staff to prepare a budget based on that. The comparison between going to a fire service assessment tax, which if it makes sense for the city is I think something council and staff should look at.”

But Cuff  said that would be not an alternative to a utility tax. “I think we do need to look at options to keep our millage rate as low as possible and fairly assess the residents for the services they receive,” he continued. “But the perception on the part of some members of the public that there’s some secret mass tax increase or millage rate increase coming up for this year is, I don’t want to say irresponsible, but some members of the public have gotten the wrong impression.”

Today’s budget presentation suggests that the fears of a substantial tax increase are misplaced.

Palm Coast’s Proposed General Fund Budget

Click to access palm-coast-budget-presentation-11.pdf