Flagler County commissioners debate funding tools for beach program; half‑cent sales tax remains controversial

Flagler County commissioners spent extended time at a June 16 workshop parsing funding choices for the county’s beach management plan, discussing options that include reallocating tourist development funds, creating municipal services taxing districts (MSTU/MSBU), raising ad valorem (property) revenue, and the potential use of debt. No binding decision was made.

County staff presented a range of scenarios and planners’ assumptions and stressed that a defensible, stable local match will be necessary to leverage larger federal and state grants. As county staff put it, projects will only be competitive for state matching funds if local government can demonstrate credible, available local funding.

What the presenters said about costs and shortfalls - Staff and the consultants used a planning model that separates initial construction from ongoing maintenance. County staff presented a planning‑level estimate that left a shortfall in the near term: staff reported a local shortfall of about $17,500,000 needed over the next two to three years to keep construction on schedule and also called out a longer‑term reported local funding gap for recurring maintenance (staff noted a remaining local funding shortfall of about $10,000,000 annually in one scenario). Heidi Petito, a county staff member, summarized that "It still leaves a local funding shortfall of $10,000,000 annually." - Tourism dollars and other sources: Amy Lukasik, the county’s tourism development director, presented TDT figures and said, "We're projecting $4,400,000" in tourism tax revenues for fiscal year 2026; staff discussed applying current TDT allocations, shifting portions of capital grants, or dedicating additional pennies (the county currently allocates 1.5 cents to beach/capital uses and state law allows up to 3 cents). Lukasik also presented cellphone‑based visitor counts (~940,000 visitors in the last year) and showed how existing visitor‑funded programs are balanced between capital, beach and marketing needs.

Funding tools discussed and legal/timing constraints - MSBU/MSTU and special assessments: consultants and staff reviewed municipal service taxing units and benefit‑unit models. Staff advised that a taxing unit that includes municipal jurisdictions would require interlocal agreements and ordinance timing to meet property‑tax notice (TRIM) and billing schedules. County staff explained that a taxing unit established with municipal participation would not generate revenue until the next tax cycle (revenue not available until late 2026 if created now), while a county‑only special assessment limited to unincorporated areas could be implemented sooner. - Bonding: county finance advisers cautioned that recurring renourishment resembles an operational expense and thus is a poor fit for long‑term bonding; bond counsel advised pay‑as‑you‑go or other recurring revenue options instead of bonds for ongoing maintenance. Staff noted bonds could be used for portions of upfront construction if a repayment source is identified. - Half‑cent local option sales tax: proponents, including several members of the public, argued the half‑cent (additional local option) sales tax is the least painful and spreads costs to visitors. Opponents and other commissioners raised concerns about permanence (most sales taxes are difficult to sunset) and the effect on other county programs if revenues are diverted. Public testimony included residents who said the sales‑tax approach is fair because tourists pay a portion, while others argued the tax would be regressive or unfair to specific neighborhoods.

Public comment and political context - Public speakers were split: tourism and business representatives urged a stable dedicated funding stream to protect the local economy; some long‑time residents urged reliance on visitor taxes rather than property taxes. Suzanne Johnston, a long‑time resident, observed that residential property values reflect beach proximity: "If my home was in the middle of the state, it would be worth less," she said in public comment, arguing equity considerations weigh in favor of public investment. Other speakers urged immediate action — several asked the board to pursue an MSBU/MSTU and interlocal agreements to bring municipal partners into the funding plan.

Board direction and follow‑up - The board asked staff to produce revised funding scenarios and spreadsheets that allow manipulation of variables (TDT allocation, MSBU/MSTU rates, ad valorem increases, bonding options) and to supply clear timing implications (what can be implemented this calendar year versus what would appear in FY‑26 tax bills). Staff said they will return with modeled scenarios and that several technical deadlines (like TRIM/ordinance timing for assessments) constrain how quickly some options can be implemented. No formal vote or binding commitment was taken at the workshop.

Ending: Commissioners and staff emphasized the need for a defensible funding plan to unlock state and federal grants. The board asked staff to return with concrete scenarios that show how combinations of TDT reallocation, MSBU/MSTU assessments, targeted ad valorem adjustments and, where appropriate, short‑term borrowing would close the construction gap and create a multi‑year maintenance fund.