Why Palm Coast’s Debt Referendum Failed

It was a bit sad last week to hear the now-former Mayor David Alfin and David Ayres, host of Free For All Fridays and unofficial spokesman for the local chamber, talk about the 41 percent who did vote for Palm Coat’s failed referendum to do away with voters’ controls on city debt. It was as if to the two Davids that 41 percent knew the truth and the 59 percent did not. As if it was time for an immediate redo. As Ayers put it, “But yet that 41 percent, or thousands and thousands of people that said, Okay, this is something, a tool that, you know, we’ve got to take the shackles off.” 

Odd. I never heard Ayers or Alfin say something similar about Kamala Harris’s 48 percent and her millions, or how maybe Trump’s 51 percent were bamboozled. Harris is done. The referendum is done. But its chamber sycophants are not. Expect these guys to try to float this referendum again, possibly on the special election ballot to replace Congressman Mike Waltz, who’s being called up to serve in Trump’s cabinet. But a proper reading of the charter suggests charter amendments belong on the general election ballot, not special elections. 

Since there was no interest in analyzing why the referendum failed other than to imply that the majority was ignorant (again, not something you’ll hear them say about the redder majority in the last election), a little post-incident review may be helpful. 




A good starting point is to recognize that the council did not propose a charter referendum. It fumbled through poor ad copy posing as a referendum. And it rushed it through. Put aside the fact that the ballot language never told voters that they were doing away with the right they’ve had for 25 years to vote on loans larger than $15 million.  “Having future residents contribute to infrastructure costs” is snake oil in prose. 

When’s the last time you heard a presidential candidate promise a tax cut to future taxpayers? It’s never happened, because it wouldn’t be true, and the candidate would lose. The candidate’s promise is always pitched to present taxpayers. If this referendum succeeds, the moment the city puts it to work, whether it’s a lease or a bond, all of us are immediately on the hook. We’ll be paying those debts, along with future residents, assuming they continue to come at the last few years’ rate. Indications are that they’ve slowed down a lot. 

If the flow of new residents slows, our debt burden will grow. That’s what happened after the housing crash, when Palm Coast had to pay stormwater and utility debts banked on residents that never materialized. We paid the price in sharply higher bills. The debt barons now want us to risk the same scheme for what? A gaudy $100 million sports-complex to spice up Rayonier’s land prices west of U.S. 1. When I asked city officials what actual projects there are in line for the new debt scheme, the only one they could cite was that folly, even as council members were still pretending before the election that the new financing scheme would help infrastructure. 




The city sold the referendum on a series of misleading claims. City officials claimed they had no choice but to do away with the debt limit if this is to be a vibrant city, that the pay-as-you-go system doesn’t work, and that infrastructure needs help. 

This is false on at least three grounds.

First, the Palm Coast those same officials celebrate every day and at every groundbreaking or dedication has been a pay-as-you-go city, and has been so in perfectly good health: The two fire houses of 2007, the City Hall of 2011, the Community Center of 2018, the Southern Recreation center of 2024, the fire house that just broke ground in Seminole Woods and the one about to break ground on Colbert Lane–all paid without debt, without interest, without that minefield known as “public private partnerships.” 

Second, officials kept talking about needing to invest in the city’s utility and stormwater systems, admittedly the city’s two most pressing needs, next to roads. But there are no debt limits on stormwater and utilities. Those two accounts are outside the general fund. They may borrow all they need, and do. By conflating the city’s needs with those two accounts, officials were banking on electoral ignorance to sugarcoat a poison pill. It didn’t work.  




Third, if the city still needs more money to pave its roads, improve its parks and build on an already excellent staff (how did it do that without debt?) it’s not because it cannot borrow more. It’s because year after year, council members made policy decisions to lower taxes, to irresponsibly pander to property owners and go to the rolled back tax rate, to get in the way of the county’s attempts to increase the local sales tax, and to focus more on tripling council members’ salaries instead of passing a utility franchise fee or a public service tax, all of which normal cities have on their books, all of which we should have, all of which would turn this cluster of subdivisions into an actual city.  

But this  referendum was never been about improving the city’s finances or its infrastructure. It was and remains a scheme to open the way to private-public partnerships that will primarily benefit private business, offloading risk on tax paying residents. 

Few people know what private public partnerships are, how they’re structured, how risky they can be, and who invariably pays when they go bust. It’s not the private side. It’s the people securing the debt: taxpayers. You won’t read that in ballot language. You’ll hardly read  it in city ordinances. But that’s where we’re headed if the city takes off the “shackles.”




Admittedly, the current limit on debt is ridiculous. It’s a product of late 1990s Gingrich-Republican dogma for a balanced federal budget that somehow trickled down to Palm Coast’s charter. Hardly any of Florida’s cities have a similar limit in their charters. So removing it should not be an issue. 

But we’re not there yet. The city isn’t so broken that it needs to resort to debt. The city hasn’t begun to tap a series of other legitimate and necessary revenue sources that would fund all its infrastructure needs while avoiding the doubling of costs from interest-bearing debt, or any fealty to private “partnerships” that just want to use taxpayers as collateral to their profits. Until those revenue sources are tapped, there’s no reason to remove the debt limit. It protects against what would otherwise be hidden taxes that would end up costing residents far more than a utility tax or a modest increase in the property tax. And it’s a hedge against harebrained schemes like that sports complex the chamber’s oily profiteers are salivating over. 

The 59 percent were not wrong. It’s the 41 percent who were deceived. Be on guard: the city will try again, unless prudence prevails on this new but not necessarily wiser council. 

Pierre Tristam is the editor of FlaglerLive. A version of this piece airs on WNZF.