FLAGLER

Flagler eyes half-cent sales tax hike to pay for dune maintenance

Matt Bruce
matt.bruce@news-jrnl.com
Flagler County finance director John Brower presents a long-term beach funding plan to commissioners during the board’s meeting Monday in Bunnell. [News-Journal/Matt Bruce]

BUNNELL — Flagler County officials this week discussed the prospect of increasing the small-county sales tax by a half-cent, a measure that would raise Flagler’s overall sales tax levy from 7.5% to 8%.

Officials say the proposed hike would help pay for long-term plans to maintain the county’s beaches against coastal erosion, a priority Flagler County commissioners adopted in 2018.

The prospect of doubling Flagler’s small-county surtax from a half-cent to a full cent was one of several options John Brower, the county’s finance director, laid out for commissioners during a board meeting Monday night.

“Currently, we’re the only county that can get this funding that we only ask a half-percent for that,” Brower said during his presentation. “We can go up to a full cent. That would bring in another probably $2.7 million to the county if we were to go from 0.5 to a full 1 percent.”

Hurricane Matthew decimated Flagler’s 18-mile coastline in October 2016 and Hurricane Irma made things worse 11 months later. Commissioners listed protective dune improvements as a goal in the county’s 2018 strategic plan.

In February, Flagler crews completed a 13-month, $20-million dune restoration project that buffered 11½ miles of the county’s coastal berms north of Flagler Beach with more than 750,000 tons of sand.

Next June, the U.S. Army Corps of Engineers is poised to embark on a 50-year beach renourishment effort set to fortify a 2.6-mile stretch of dunes between South 6th and 28th Streets in Flagler Beach. That project, estimated to cost $98.8 million over its span, will extend the dunes 10 feet seaward and buffer the berms with 550,000 cubic yards of sand dredged from a pit about 10 miles offshore. Then every 11 years afterward, for the next 50 years, crews will further re-nourish the area with 400,000 cubic yards of sand.

Brower said the county is using the 1% percent tourism development tax and other special assessments to pay $9.6-million worth of debt spent on previous public projects such as the beach restoration effort.

He categorized cash reserves from the tourism office’s beach fund as a “one-time” option for dune restorations, but said that would only be about $200,000. He offered a special beach tax that would show up on residents’ property tax bills as one source of recurring funding and said county officials could dip into general fund cash reserves as another source.

But citing the $142 million in Flagler’s overall debt, Brower advocated against that idea, saying he’s working to build the reserve up to $20 million. The general fund balance currently hovers a shade under $9 million, he said.

County officials seemed most interested in the idea of raising the small-county surtax, which County Administrator Jerry Cameron said expires in 12 years.

“How seriously, Mr. Cameron, have we looked at the half-cent sales tax,” Commissioner Greg Hansen asked. “Because I think we’re going to have to do that.”

Cameron told commissioners that staff members were heavily weighing that option and he planned to present facts and figures to the board early next year.

“We are looking at that very seriously because we have obligations coming up, things that have lagged behind that we should have done that are going to have to be paid for it,” Cameron said. “And the question is not whether you do it or not. The question is how you pay for it.”

Cameron also said the tax increase would help the county address a staffing shortage in the county’s fire rescue department, calling it a “preferable way of addressing those shortfalls.

“Tourists and out-of-county folks that don’t pay any property taxes impact those services very heavily,” he said. “So the half-cent sales tax will help them to offset the expense that they create for us on roads, services, everything that they impact.”

Commissioner David Sullivan, who was named the board’s new chairman during Monday’s meeting, noted that the county’s current sales tax rate is 7.5%. Following the meeting, he said he’s against increasing the tax.

St. Johns and Volusia counties both have a 6.5-percent sales tax rate. In May, Volusia residents voted against raising it to 7 percent to pay for road and water improvement projects.

A roundtable of Volusia officials met on Monday to discuss the prospect of putting the option back on the ballot as a referendum in 2020.

When Sullivan asked if Flagler would have to pose the question to voters as a ballot initiative, Cameron said it would depend on how the county intends to use the extra funding from a possible tax increase. Cameron indicated it would take a super-majority vote from the commission absent a referendum, but Brower said it wouldn’t have to go on the ballot.

“For this specific sales tax, it would just be a board approval if we use it for operating purposes,” he said. “Now if we wanted to use it for debt, it would have to go to referendum.”