Settlement Offer Gives Palm Coast Council Chance to Pull Embattled Debt Referendum from the Ballot

The Palm Coast City Council is holding a closed-door meeting at 3 p.m. on Thursday at City Hall to consider a settlement offer in the lawsuit challenging the veracity of the city’s debt referendum on the Nov. 5 ballot. The offer proposes that opposing sides agree to end the lawsuit and not count the results of the referendum, which will still appear on the ballot. The city would not owe the opposition attorneys’ fees.

The referendum asks voters whether they would approve “removing provisions” from the city charter that limit the city’s borrowing and leasing authority. It does so in confusing and opaque words. The language never tells voters that they would be ending the city’s requirement to float referendums whenever it seeks to borrow $15 million or more for certain projects, or enter into leases longer than three years, nor does it tell voters that they would lose the right to vote on those referendums. The language states that “future residents” would “contribute to infrastructure costs,” misleadingly implying that current residents would not. The title of the referendum’s summary language is equally vague, referring to a pivotal change in the charter as a mere “update.”




The proposal has been controversial from the start. Though its language was unanimously approved in July, two of the five council members who approved it have since voted to pull it from the ballot, a third has resigned, and the council member who replaced her has also attempted to remove it from the ballot. A majority of the current council is on record against the charter amendment in its current form. Alan Lowe, a former candidate form mayor, sued the city to have it removed. He is represented by Jay Livingston, the attorney from the Palm Coast firm Livingston and Sword.

On Monday, Livingston filed a motion seeking an injunction to remove the referendum from the ballot, or stop the Supervisor of Elections from counting the results of the referendum. The motion also seeks an expedited court ruling. “The requested relief is necessary because the City of Palm Coast has submitted the Charter Amendment in violation of law,” the motion states, “because the title is misleading, and the ballot summary does not adequately inform the voter as to what they are voting on.”

The same day, Livingston sent a letter to Rachel Crews, the GrayRobinson attorney representing the city in the matter, with a settlement proposal. On behalf of his client, Livingston wrote that “we feel it is in the City’s best interest to put this matter to bed as quickly and efficiently as possible by entering into a stipulated final judgment directing the Supervisor of Elections to remove the ballot measure from the ballot and the Flagler County Canvassing Board to not tally or certify any votes that might be cast for or against the charter amendment. ” Livingston included a proposed “Joint Stipulation for Final Judgment and Stipulated Final Judgment,” which would be submitted to the court for a judge’s signature, ending the case.




A joint stipulation means that the opposing sides in a lawsuit agree to certain terms. It can apply to procedural matters in a case, to speed things along, or it can apply to the disposition of an entire case, as in the lawsuit against Palm Coast.

The proposed stipulation spares Palm Coast of any admission that it violated the law, and it does not require it to pay attorneys’ fees for the opposition even as it is running up its own. But the court would enter a judgment in favor of Lowe, which some city council members may find difficult to stomach, while forbidding the supervisor from “tabulating, counting, releasing or certifying the election results of the Charter Amendment vote.”

Giving Lowe the only ballot-related victory he’s ever had in about half dozen tries aside, the proposal allows the city to achieve what three of its council members have sought, while also, presumably, limiting the damage to the city’s future efforts to craft a better-written proposal for a future ballot–an argument council members have also made in favor of cutting losses now.

“At least three of five members of the City Council (Danko, Gambaro, Pontieri) have openly expressed their concerns about the misleading ballot summary language and voted to withdraw the Amendment from the ballot, albeit on separate votes,” Livingston continued, referring to Ed Danko, Theresa Pontieri and Charles Gambaro.  “No action has been taken, however, because the City Attorney advised the counsel [sic] that only an order from the court would be sufficient now that the ballots have been printed and mailed. At least one member of City Council has also expressed concerns about the costs to the City to def end the lawsuit. All of these concerns can be easily addressed by entering into a stipulated final judgment in advance of the election.”




Livingston in the letter said the city attorney’s claim that the issue was “past the point of no return” was not true: if–as in a previously reported accounts on FlaglerLive, citing recent history and the Supervisor of Elections–the City Council were to vote to ask the supervisor not to count the referendum results, that would be sufficient. It would not require a judge’s order.

“The Flagler County Commission faced a similar issue with a referendum in 2010,” Livingston wrote. “After adopting a resolution approving a referendum for a Local Economic Investment Initiative on June 7, 2010, the County Commission decided to change course and cancel the referendum. This decision was made on October 4, 2010 after ballots had been finalized and printed.” The local initiative was pushed by Enterprise Flagler, a now-defunct economic development organization whose board included government and business representatives. The proposal would have raised the property tax modestly, but it was poorly received by the public and looked as if it was heading for a colossal defeat. (See: “Enterprise Flagler’s Tax-and-Build Plan Bombs as Tea Party Wags a Big No” and “Memo To Enterprise Flagler: Why Your Tax Plan Is Fumbling (and What To Do About It.“)

Rather than risk that, Enterprise Flagler asked the County Commission to kill the proposal. The commission did, approving a resolution to that end. (See: “‘Economic Development’ Tax Dies: Enterprise Flagler Wants It Removed from the Ballot,” and “Defeated Without a Vote, Economic Tax Talk Shifts Back Uncertainly to the County.”) It’s all still fresh in Livingston’s memory: his office at the time was next-door to where Enterprise Flagler wrung its hands.




The Supervisor of Elections in 2010 sent notices in mailed ballots that the referendum would not be counted, and posted notices in voting booths. “The same measures can be taken in this case if the parties stipulate to cancel the proposed charter amendment. This has been confirmed by the current Supervisor of Elections,” Livingston wrote.

“I do not have the benefit of the City’s response to the lawsuit at the time of writing this letter,” Livingston wrote–remarkably, the city has yet to answer the lawsuit, GrayRobinson was hired only last week, and the council was asked to meet on the matter only yesterday–“but regardless of any defenses that might be raised, we are confident in the merits of the case.”

The Supervisor of Elections, who is a named party alongside Pam Coast in the lawsuit, has responded both to the initial complaint and to Monday’s motion to say that the supervisor will maintain her impartiality and not take a position on the merits of the lawsuit, but also seeking “a speedy resolution” of the matter and an expedited hearing to avoid confusion at election time. In the supervisor’s previous answer–filed by County Attorney Sean Moylan–the supervisor stated that while it was too late to remove the proposal from the ballot, which had begun to be mailed by the time the lawsuit was filed, the only way for the ballot measure not to be counted is if a judge were to grant an order to that effect.




The council has not discussed the lawsuit at all, and was advised by its attorney not do do so in an open meeting. City Manager Lauren Johnston, after hiring GrayRobinson to handle the lawsuit, brought up the matter at the end of a day-long council meeting on Tuesday: “We’re receiving rapid communications from our attorney who’s representing us on the active litigation between the Allen Lowe case. It would be very beneficial to have an executive session so that you could give myself some direction on how you’d like to proceed in that case.”

“My understanding is you had a conversation this morning with the attorney from GrayRobinson, who made a recommendation or suggestion,” Danko said.

Johnston acknowledged that but Pontieri stopped her to say that “any type of confidential settlement, communications and advice from council, that should be done in a shade meeting.” Alfin asked the attorney about holding just such a meeting. Duffy said it could be done “within a week’s notice” (it could actually be done sooner).

“I’m confused here,” Danko said. “Mr. Lowe released that letter from his attorney to us the client, right? And we are the client. I don’t know why we need to go into the shade, if we can just basically accept the offer that they’re giving us here.”

“We’re in a public setting, and it’s a confidential settlement offer,” Pontieri said–correctly, though Danko, too, was right: the confidentiality is allowed the council, but not required by law. The shade law applies to government, not to private litigants (except if the two sides were court-mandated to have a mediation session, as almost all litigants in civil matters usually are: those mediations are confidential whether government is a party or not).

“We need to discuss any settlement resolution to this case in the shade, and then if we come to a decision in that shade meeting, then obviously–not even the resolution could potentially become public,” Pontieri continued. “In the legal world, a lot of, most settlement agreements, are confidential. So even if we were to come to a settlement agreement, presumably much of that would be confidential.”




That is correct regarding most settlements between private parties. It is incorrect regarding settlements involving governments. If there is to be a settlement, the city is not only required to disclose the nature of the settlement, but to readily prepare at its expense and provide to the public (on request) a word-for-word transcript of any shade meetings that would have been part of the case, as well as disclose any monetary payments that are part of the settlement. The council is required to reach those decisions in open meetings. It is prohibited from taking any votes in closed meetings, without exceptions.

Wednesday’s closed-door session to discuss Livingston’s proposal is at City Hall. In compliance with law controlling such meetings, the “shade” meeting portion, or closed-door portion, will be preceded with a portion that’s open to the public, when the mayor will announce the closed session, its estimated duration, its purpose and who is permitted to attend. At that point anyone not authorized to be in the meeting must exit, but may return once the closed session ends, and Alfin reopens the meeting–only to formally declare the proceedings over. See County Attorney Al Hadeed’s tutorial, provided county commissioners, on closed meetings in the video below.