The City of Palm Coast City Council on Sept. 5 adopted a tentative fiscal year 2025–2026 budget of $696,444,327 and set a tentative millage rate of 4.0893 mills, by unanimous vote during a public hearing at the John Nitz Community Wing of City Hall. The council also set a final public hearing to adopt the budget and final millage on Sept. 24 at 5:15 p.m.

The tentative budget funds a large slate of capital and operating needs, with council and staff saying the principal drivers are water and wastewater infrastructure, stormwater work and public safety. Finance Director Helena Aus and Budget and Procurement Manager Gwen Ragsdale told council that ad valorem (property) tax revenue accounts for about 63% of general fund revenues; state revenues about 15%; charges for services about 11%; and permits and fees about 4%. The council reduced the city tax rate by one‑tenth of a mill from an earlier proposal in response to council guidance given at the Aug. 26 workshop.

Councilmembers and staff framed the change: the rollback rate — the rate that would yield the same total dollars as last year — is 4.0035 mills; the city’s adopted maximum for 2026 is listed as 4.1893 mills; the council’s proposed tentative rate is 4.0893 mills. City leaders explained that under Florida’s TRIM process the state defines a “tax increase” as any situation where the taxing authority would collect one dollar more than the prior year; staff said the council reduced the rate by 0.1 mill while still increasing total revenue because of rising property valuations and other revenue changes handled by the property appraiser.

Staff highlighted several budget specifics. The water and wastewater operating fund is increasing 23.7%, primarily to cover debt service tied to proposed utility revenue bonds referenced in a recently approved rate study; utilities staffing and capital rehabilitation projects (including rehabilitation of Wastewater Treatment Plant No. 1) were cited as drivers. The water and wastewater capital fund is increasing significantly (described in the presentation as up about 189%) to fund several rehabilitation and R&R projects. The stormwater fund shows an overall decrease of about 9% from the prior year, attributed to project timing, one‑time equipment loans in FY2025 and operational realignments; staff also noted a transfer of six FTEs from stormwater to the General Fund Planning Division. The general fund expenditures were described as increasing about $6.4 million, with notable increases for economic development incentives (set at roughly 3% of the FY2025 original general fund budget), planning (including new residential site development inspectors), fire (two new stations coming online, collective bargaining adjustments and a new inventory clerk), and law enforcement contract increases for Flagler County Sheriff’s Office positions.

Capital projects listed in the presentation include $14.6 million for the Matanzas Woods Parkway expansion; $7 million for Belterra safety improvements; $6 million for White View safety improvements; $4.7 million for Palm Coast Parkway extension/loop road; recreation projects including $1.3 million for Grand Swamp Trail Phase 2, $2.2 million for Waterfront Park, $1.5 million for Indian Veil Sports Complex parking expansion and $2 million for an Aquatic Center; and a maintenance operations complex budgeted at $13.9 million. The presentation noted that the American Rescue Plan Act (ARPA) fund should be fully expended by Sept. 30 and will not carry forward into FY2026. Staff also noted a $1 million transfer from general fund reserves to the streets improvement fund for the paving program.

Public commenters raised concerns about the overall effect of higher property valuations and utility bills on new residents and on people with fixed incomes, and called for attention to neighborhood stormwater swales. Richard Drogas, of 21 Flaxton Lane, described increases to his property tax bills and urged the city to pilot physical stormwater‑swale fixes rather than repeated cleanouts. Sharon Moss, a resident, questioned why taxes would rise as new housing and commerce come to the city and urged sensitivity to residents on limited incomes. Councilmembers responded with guidance on homestead exemption and taxable value caps (the staff explanation cited the property appraiser’s cap on increase in taxable value for homesteaded property), pointed to county and other taxing authorities the public might contact about their portions of tax bills, and encouraged residents to review TRIM notices and property appraiser records.

Council discussion acknowledged rising utility rates related to deferred infrastructure needs: councilmembers and staff said prior underinvestment in water and wastewater infrastructure requires larger capital and debt spending now. Several councilmembers praised staff for multiple budget workshops and for aligning the budget with long‑term capital and comprehensive plan priorities, and they emphasized the council’s stated priorities of water/wastewater infrastructure, stormwater, and public safety. The council also noted work to secure a YMCA project as part of economic development and recreation objectives.

Formal action: the council voted unanimously (Vice Mayor Pontieri; Councilmember Gambarra; Councilmember Miller; Councilmember Sullivan; Mayor Norris) to adopt a resolution setting the tentative millage rate at 4.0893 mills and to adopt a resolution setting the tentative FY2026 budget at $696,444,327. The council scheduled a final public hearing on Sept. 24 at 5:15 p.m. at City Hall to adopt the final millage and budget.

The presentation and council discussion referred repeatedly to prior workshops (Aug. 12 and Aug. 26) where detailed fund and capital project reviews occurred; staff said additional documentation and the full budget are available on the city website. The council and staff said the most immediate next steps are public notice and the Sept. 24 final public hearing.