In a Reversal, Flagler Beach Commission Declines to Raise Utility, Garbage and Stormwater Fees for Now

When he walked into City Hall Thursday evening, Flagler Beach City Commission Chair Scott Spradley was ready to vote for a modest 3.5 percent increase in water, sewer and trash pick-up rates, all tied to inflation, and a 37 percent increase in the stormwater fee, since fixing the city’s drainage is among the leading concern of local residents.

But when Jane Mealy made the motion to approve the proposal, she got no second. The motion died. Spradley could have passed the gavel to a colleague and seconded the motion, but the vote would have failed anyway.




“I don’t really agree with the methodology that’s being used for this, basing it off cost living or inflation, or whatever it is,” Commissioner Eric Cooley said. “That, to me, is arbitrary. These are enterprise fees.” (An enterprise fund is like an autonomous part of the overall budget, operating on the revenue its fees generate, rather than on property or other taxes. Enterprise funds are designed to be self-sustaining.) “So you look at what it costs to run a department, and then you look at what your projected fees would be coming in, and then you set your rate for that.”

Cooley is not opposed to raising the fees. He sees that as inevitable. But he wants them raised according to what the operations require, and he wants that requirement spelled out. But it costs money to define that.

The sanitation department is about to get its own fee study but for roughly $40,000, according to Commissioner Rick Belhumeur. Even when the study produces the needed bottom line, the commission may then decide to cut certain costs “that are potentially bleeding out sanitation,” Cooley said, such as recycling, thus reducing costs rather than raise fees. (He says “recycling is turning into an albatross,” though the study may change his mind). “We’re going to raise sanitation by cost of living, but then we’re going to turn around in like a month or two, and then look at it all again. That doesn’t make sense to me.”




Belhumeur sided with Cooley: “You just pick an arbitrary number that just happens to be the cost of living and running with that instead of going through the process of what it costs and what you need, and doing it appropriately. Apparently the others felt the same way, once we talked. It’ll come back around, I’m guessing.”

The commission’s shift was still a surprise, because it had discussed the coming rate increases during its budget discussions in August. While Cooley and Belhumeur raised similar objections, the consensus of the commission was to go ahead with an increase.

“I think we owe it to the residents to be a little more definitive of what we’re going to do and why we’re going to that rate,” City Manager Dale Martin said at one of the budget workshops, when he wasn’t ready to state what the increase would be. “The intent is to come back in October or November and just to have the rates adjusted, but having a rationale for what rates we’re going to so it’s just a short time into the next fiscal year before we come back with with the rates justified.”

“Well he didn’t” provide a rationale, Belhumeur said today, “other than cost of living, that was his only real rationale.”




Martin assured the commission that the budget was balanced even with the existing rates, but that it would require an “infusion of approximately a quarter million dollars from reserves,” he said. “The reserves are sufficient enough. We’ve got $10 million in utility reserves.” That means the utility reserves may have to be dipped into further, now that the rate increase did not go through. “We’re transferring money from the general fund to cover some shortfalls in the sanitation fund this year, which was in the budget that was adopted,” Martin said.

Cooley is opposed to that approach. “If sanitation is short, then you raise your rate to cover sanitation,” he said. “You don’t pull from reserves, or don’t do any that. You know, I’m just of the belief that here’s what it costs to run the department, here’s what you charge their enterprise funds. They’re not supposed to make money.” Martin noted that it’s not pulling from reserves, but from the general fund (such as the $60,000 to cover the cost of community trash cans), though that’s beside Cooley’s point: the sanitation fund is designed to be self-sustaining.

Spradley had met with Martin before Thursday’s meeting to go through the breakdown of the fees. He was fine with the proposal, other than needing details on the larger increase for stormwater. “I’ve heard from a number of residents who objected primarily to the stormwater increase, thinking that it was because of Veranda Bay,” Spradley said, “and my understanding is that it is not.” Veranda Bay is the large development along John Anderson Highway heading for annexation into the city, if all sides agree.




Spradley had no issue with tying the fee increases to inflation. “To me it’s not arbitrary, to me arbitrary is picking a number out of the sky. Tying it to cost of living is not arbitrary,” he said. Further studies would be a “mammoth project.”

Mealy is concerned about the commission’s direction. “Years ago, early in my time on the commission, nobody wanted to raise water rates or any of the utility rates, so we raised them, like half a percent,” Mealy said. “I’m exaggerating, but very little. Then all of a sudden, we got hit with a 15 percent increase because we had not been increasing at all. So I know it sounds really good: let’s not raise the rates more than we really want to. Nobody wants to raise rates. I think we need to be careful, because we could get caught up in that kind of scenario again. Don’t raise rates. Don’t raise rates, and then, boom, you have to and it’s ginormous. These are numbers we agreed to during the budgeting process. We already had all this discussion during the budgeting process.”

“We didn’t all agree,” Cooley corrected.

Spradley expects the fee proposal will be back for consideration in coming months.