Ask the mayor of Palm Coast

Why doesn't the city of Palm Coast divert revenues to more urgent priorities? Mayor David Alfin responds

Resident: “The city keeps saying they have no money to pay for certain projects. Then I see they have plenty of money to pay for others."

  • By
  • | 6:05 a.m. March 12, 2024
  • Palm Coast Observer
  • Opinion
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A recent question from a resident, followed by Mayor David Alfin's response: 

“The city keeps saying they have no money to pay for certain projects. Then I see they have plenty of money to pay for others. Why can’t they divert money from one fund to another? Are there state rules about this? Can’t the council just put it to a vote?”

Funding questions about different city projects are common. Answers may by complex, but I’ll try my best. 

Palm Coast has several revenues that are "restricted" to specific purposes by grantors, bondholders, higher levels of government, through constitutional provisions or by enabling legislation.

The city also has "committed" revenues that represent amounts constrained to specific purposes by our city, using City Council. Amounts cannot be used for any other purpose unless the city takes the highest-level action to remove or change the constraint. 

There are numerous "Restriction Imposing Bodies" in Florida (those who can impose restrictions on how we spend our money), depending on the revenue resource. Florida Statutes establish guidelines for use of taxes and impact fee revenues. State, federal or local government grantors establish restriction for grant revenues. When a city undertakes a loan, revenues identified in the loan agreement become pledged revenues and are restricted for debt payment. City Council can commit certain revenues for specific purposes, but it is not their common practice.

Revenues whose funds are restricted include:

1. Street Improvement Federal Tax – six cents per gallon in Flagler County, restricted for transportation expenditures.

2. Streets Improvement State Revenue Sharing – portion of state sales and use tax collections, along with a one-cent municipal fuel tax. A portion of the municipal revenue sharing is derived from fuel tax so there is a requirement that a certain portion of the municipal revenue be dedicated to transportation expenditures. The remaining portion is used in the general fund as it is considered unrestricted revenue.

3. SR100 Community Redevelopment Agency – taxes restricted only to support redevelopment in the CRA (e.g., Town Center).

4. Enterprise Fund Restrictions – Water/Wastewater and Stormwater Management Funds can only be used to maintain the system or their debt service; Building Permit Fund can only be used for building and permitting costs.

To those who are interested in our budgeting funds, please know that every year, we schedule several budget workshops and presentations that address the specific projects being presented to council. Residents are encouraged to attend these presentations to better understand how our funds are spent. 

I think residents will find that we approach long-term planning comprehensively, analyzing usages within authorized purposes and adopting council priorities. 

Our Finance Department has also recently established a Finance Transparency Dashboard. It’s a comprehensive view of our total financial landscape. You can view our revenue streams, expenditures and budget allocations and it’s updated weekly. It’s available on our website.


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