Palm Coast City Council Balks on Millage Rate, Will Reconsider After Election

At its regularly scheduled meeting Tuesday morning, the Palm Coast City Council discussed an array of resolutions, most notably one to set the millage rate for the fiscal year of 2022. According to Investopedia, a millage rate is defined as:

“…the tax rate used to calculate local property taxes. The millage rate represents the amount per every $1,000 of a property’s assessed value. Assigned millage rates are applied to the total taxable value of the property in order to arrive at the property tax amount.”

Palm Coast’s maximum millage rate has been the same since 2019: 4.6989. Property values in Palm Coast have appreciated at approximately 28.38% from 2019 to 2022’s projection, meaning that over time, revenue from property taxes has been increasing despite the millage rate remaining static. Palm Coast is also looking at a projected 10.22% increase in population over that span, the largest jump in the span documented in Tuesday’s presentation.

It’s important to note in Tuesday’s meeting that a tax increase was not suggested by any party. Those who voted against lowering the millage rate were only voting for the tax to remain the same.

The recent history of millage rates in Palm Coast, as shown to the Council in Tuesday’s meeting.

Three motions were brought to the floor on Tuesday in efforts to set the millage rate for 2022. Councilman Ed Danko made the first proposal, wanting to lower the millage rate to 4.6000 from its current 4.6989. Victor Barbosa seconded the motion.

An objection was quickly made by Councilman Nick Klufas, on the grounds that the City should examine and determine which areas of the budget it plans to cut in order to compensate for a lowered maximum millage rate. This started a lengthy exchange between Klufas and Danko debating whether it’s wiser to determine how to compensate in the budget and then commit to a tax cut, or whether to guarantee residents a tax cut and then figure out how to make it happen in the budget. A real horse and cart situation, Klufas advocated for the former and Danko for the latter.

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Where decorum is concerned, the two Council members spent the majority of the interaction debating the conundrum on its merits. There were a few instances that bordered on bickering, Klufas telling Danko to “do your job” and asking if Danko had made a “no you” argument, and Danko telling Klufas, “I know you’re half my age”, at one point, when discussing experience with home finance as an analogy.

Danko heavily advocated for giving residents a tax break after the financial hardships of the pandemic year, saying, “We can send a message to the taxpayers that we feel your pain.” At no point did Klufas express disagreement with this in principle, but maintained that he was unwilling to support it without the getting ducks in a row as far as the budget is concerned.

He did, however characterize Danko’s approach as “operating in bad faith.” Danko replied curtly to this assessment, “Do you see any place you’d make a cut?” Klufas paused, and responded that Danko had been the one proposing the cut in the first place. “Why hamstring ourselves now?”, Klufas asked, worried about placing premature constraints on the budgetary process for 2022. Danko remarked that it’s “shame on us,” if the Council is not able to find a cut to make in the budget at a later time. Though interim Mayor Eddie Branquinho was now interjecting into the discussion, Klufas could be heard responding, “shame on you“ back to Danko.

Branquinho’s opinion was that a maximum rate still left room to operate on a lower tax rate, and that it wasn’t necessarily a bad thing to retain the same maximum and still strive for cuts to property taxes.

The Council had a few different options laid out for them at Tuesday’s meeting.

After hearing considerable deliberation from his fellow councilmen, Victor Barbosa spoke up to retract his second from Danko’s motion, leaving Ed seemingly alone. A murmur went over the room, with Barbosa not yet able to expand upon his reasoning.

Mayor Branquinho asked if there was a new second to Danko’s motion to allow it to come to a vote. None appeared. The motion failed, and City Attorney Bill Reischmann informed the Council they could now proceed with further discussion or a different motion. Branquinho handed his gavel off to the next in line of seniority (Klufas) so he could make his own motion: to keep the millage rate at 4.6989. In order to second Branquinho’s motion, Klufas then passed the gavel down to Barbosa, the third in line. Klufas seconded and brought the motion to a vote, but it too failed with a 2-2 stalemate (motions need three votes to pass regardless of a four or five-member Council).

It was then Barbosa’s turn, making the third different motion on the matter of the day. Victor put forth a rate of 4.4593, representing an even greater cut than what Danko had suggested. Danko seconded the motion to get the conversation rolling, before being informed by Reischmann he hadn’t needed to.

“Councilman Barbosa, please,” Klufas asked, “tell me what you’re going to cut out of this budget.” Barbosa thought on it, then suggested the recently approved racquet facilities, estimated over $5 million in costs. Branquinho reminded Barbosa that the court funds couldn’t be cut, as they’re appropriated for their designated purpose.

This started a renewed discussion into just how committed Palm Coast is financially to these courts. Branquinho did remark earlier in the meeting that only 16% of the courts’ cost was coming out of the general fund.

Ultimately, Barbosa’s motion maintained its second from Danko but failed to received a needed third vote, leaving the Council 0-3 on agreeing to a new millage rate. The matter will be reconsidered before the August 4th deadline, but after certification of a new Mayor on July 30th.

“I think we have to do the responsible thing,” Branquinho said after the meeting. “And the responsible thing is to approve something maybe a little higher now [than Danko and Barbosa’s proposals], and if we have to go lower we’ll go lower once we go through each item and see where we can cut. We first have to know everything. If we go low, and then we can’t cut, then there’s no remedy for that. If you go a little higher, then you can cut, which I have absolutely no problem with. Wherever you could cut, we’ll cut. But if we can’t, we can’t.”

“As an elected official, what I’m looking for are details on our budget that would allow us to lower our tax rate to the different numbers that were proposed by Councilman Danko and Councilman Barbosa,” Klufas said in regards to his side of things. “I am a huge fan of lowering our tax rate, and I think that would be a tremendous thing. I just need to know the details on what services and programs we eliminate inside of our city to make that possible. As Council members are proposing such millage rates, I was hoping that they would’ve had those types of things prepared, and wouldn’t work backwards in filling the budget.” Klufas went on to say he’d vote along with Danko if items to cut were identified, and that he’d already been looking for slush funds to trim from the system. “I am absolutely against wasteful spending.”

Victor Barbosa didn’t view the end result as a product of dysfunction, but an opportunity to deliberate some more. “You have four different people, four different opinions,” he added. “We’re missing obviously the Mayor, so I think it’s pretty good that we’re gonna wait for them to be the tiebreaker.” Barbosa also committed that he’d put forth the 4.4593 rate again when the issue is revisited.

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One other major point of contention occurred at the Tuesday meeting. In closing comments, Eddie Branquinho took a shot at Ed Danko, sarcastically referring to a visit Danko alleged on tape that Ron DeSantis made to Palm Coast, threatening Milissa Holland with criminal investigation should she not resign. The Governor’s communications director did state that no such meeting took place, and Branquinho went as far as to call Danko out in statements made after the meeting. “That was calling Councilman Danko a liar,” Branquinho said of his remarks. “That doorbell video proves he’s a liar.”