- December 4, 2025
The Palm Coast City Council has adopted its budget for the 2026 fiscal year, but not before Councilman Charles Gambaro asked the city to make last-minute cuts to the general fund.
The Sept. 24 meeting was the City Council’s final budget meeting of the year. The 2026 budget is set as $696 million, a 65% increase from the 2025 budget. But the bulk of that increase is dedicated to addressing the city’s water and wastewater infrastructure needs.
That section of the budget is the water and wastewater capital projects fund, which is typically funded by fees and interest revenue, according to budget documents. In 2025, that fund was $83.8 million, where in 2026, the fund is at $326 million. The city is using bonds to pay for the projects budgeted in 2026.
“The bulk of our increase is only in the water and wastewater utility capital fund,” Pontieri said. “The rest of our budget has largely stayed flat, if not gone down.”
The general fund, which is supported by ad valorem taxes, is $67 million, just 9.7% of the 2026 budget. The council adopted a millage rate of 4.0893, which was reduced from 4.1893 in an effort to save taxpayers money. Gambaro, who voted for the 4.0893 rate before the Sept. 24 meeting, said he would now only support the rolled-back millage rate of 4.0035..
He said he had thought about this over the last several weeks and after speaking to residents, seeing unemployment numbers in Flagler increase and jobs and home sales in the county decline recently, changed his mind..
“Given the difficult decisions that we have made to invest in our infrastructure projects,” he said, “and the current economic trends of the last 60 days, I think that our residents deserve a little bit of a financial break.”
Adopting the rolled-back rate would have required losing another $1 million from the general fund.
Pontieri asked Gamabro where his proposed cuts were, but Gambaro did not have specific areas to suggest. Instead, he said he had proposed “all sorts of opportunities for savings” over the budgeting season, including selling the golf course.
But Pontieri pointed out selling the course would not have happened until the next year regardless, and asked Gambaro what specific other areas he had for suggested savings.
“You don't get to just throw out a proposed rollback without coming to this council with the actual solution,” Pontieri said. “That's a tagline. That's not a solution.”
“That’s my position, thank you,” Gambaro said.
“It’s a hollow position, councilman,” Pontieri replied.
The council did discuss areas another $1 million could be saved: a 2% cost of living adjustment, the 3% cap on the city’s merit-based pay raises or removing funding from the $1.3 million set aside for economic incentive funding.
The 3% cap was already a lower amount than was initially proposed. Acting City Manager Lauren Johnston said instead of removing $1 million, it should be all or nothing for the raise program, or it wouldn’t be fair.
“We either give our merit program or we don't,” Johnston said.
Pontieri said calling for a rolled-back millage rate "because that is a good political position to take" is easy. The hard part is on the city employees and the department heads.
"Looking at the directors," she said, "and telling them, 'go back to your folks and tell them you're not getting your performance-based raise,' that's the hard part."
Pontieri and Councilman Ty Miller said the budget was already lean, with funding designated for targeted areas, like the economic incentives, that would have a return on investments. Miller said cutting from the raise program that rewards hard work creates an atmosphere where employees are not incentivised to work hard.
“So what are we going to be left with, employees that don't feel like working hard anymore because they're not going to get a pay raise for it?” Miller asked. “I think that's, in economic terms, that's bad.”
The council adopted the 4.0893 rate 4-1, with Gambaro dissenting. The 2026 fiscal year budget was adopted unanimously.
