Follow the Money: A Fund-by-Fund Look at Palm Coast’s $696 Million Budget

This is the second installment in a series digging through the City of Palm Coast budget now in place, just as the city starts laying out next year’s spending plan.

The full budget with line-by-line expenditures for each department can be found here.

Palm Coast is running a combined budget of $696,444,327 when you add up every fund it maintains. That headline figure includes what the city expects to spend, what it intends to hold back, and what it plans to reserve, covering everything from police and fire services to drinking water, paving, trash collection, and employee health coverage.

To see how those dollars actually move, one point matters upfront: municipalities don’t park every dollar in a single giant account. They split money into separate “funds.” Each fund comes with its own restrictions and purpose — basically rules that say what that pot of money can, and can’t, pay for. What follows is a fund-by-fund walk-through using the city’s published numbers.

And because the details are long, the city’s own line items are shown in table form so the accounting stays intact, then explained in plain language around the edges.

The Big Picture: All Funds Together

Palm Coast rolls its finances into five major buckets. Here’s how the $696,444,327 total is allocated:

Enterprise Funds dominate the picture — 69% of the entire budget. These are the city’s fee-supported operations, what governments often call “business-type” activities. Taxes aren’t the primary driver here — user fees are — and the water and sewer utility is the heavyweight. The city itself points out that the Water/Wastewater Utility Fund is the largest single contributor in the whole budget.

What the Money Pays For, Across Every Fund

Spending is also organized by what it’s for. Below is the city’s function-by-function breakout, showing how each purpose is funded:

If you strip out money that’s just being shuffled between city funds, listed as Interfund Charges & Transfers totaling $51,588,522, the city’s net expenditures come to $644,855,805.

The largest single purpose is Physical Environment, $221,914,348, and it’s overwhelmingly the water and sewer operation. After that come Transportation at $75,498,232 and Public Safety at $44,608,916.

How the City Organizes Its Money

Before getting into individual funds, it helps to translate the fund types.

Governmental Funds are the tax-supported side of the house:

• The General Fund, the city’s main operating account for daily services. The city notes that historically under 1% of General Fund spending is for capital purchases — operating costs are what push the totals.
• Capital Project Funds, used for constructing or expanding buildings and infrastructure.
• Special Revenue Funds, which hold money legally limited to certain uses — think police education, grants, disaster reserves, and street projects.

Proprietary Funds operate more like fee-funded businesses:

• Enterprise Funds, including water/wastewater, solid waste, stormwater, building permits, and IT, each built around a rate structure reviewed annually.
• Internal Service Funds, where city support units bill other departments — examples include fleet, facilities, emergency communications, IT support, and the self-insured health plan.

Fiduciary Funds are dollars the city manages for someone else. In this budget setup, that’s the Volunteer Firefighter Pension trust fund.

On reserves, the city’s policy targets General Fund reserves of 10% to 20% of the annual budget. Enterprise Funds keep reserves for operations and long-term capital needs. Internal Service Fund surpluses are typically returned to the departments that paid in. Special Revenue Funds don’t have a reserve requirement.

Where the Fund Balances Stand

A fund balance is the running savings level inside each fund. The city published a comparison showing what was available on September 30, 2024, what it expects by the end of the 2025 budget year, and what it projects by the end of 2026, alongside the revenues in and spending out.

Here is the full table:

The city puts the combined available fund balance at $212,746,301 as of September 30, 2024. By the end of the 2026 budget year, it projects a combined balance of $358,163,568, with total revenues of $224,951,144 and total expenditures of $495,467,650 across the listed funds.

Why Some Balances Swing So Much

City rules require an explanation whenever a fund balance changes by more than 10%. The explanations provided are:

• General Fund (-11%): Planned use of savings for economic development incentives.
• Police Education (-85%): Revenue projected to be paid out in the 2026 budget year.
• Streets Improvement (-99%): Planned use of savings for street rehabilitation and renewal projects.
• Recreation Impact Fee (-39%): Planned use of savings for aquatic center construction and parking expansion at sports fields.
• Fire Impact Fee (-90%): Planned use of savings to build a replacement for Fire Station #22 and a new Fire Station #26.
• Development Special Projects (-15%): Planned use of savings for the tree fund and a transfer to the streets improvement fund.
• Transportation Impact Fee (-67%): Planned use of savings for Whiteview and Belle Terre safety improvements, Old Kings Road North widening, the Matanzas Woods Parkway extension, the Palm Coast Parkway extension, and Loop Road.
• Town Center Transportation Impact Fee (-58%): Planned use of savings for four-laning Royal Palms Parkway.
• Neighborhood Stabilization (-100%): Planned use of savings for prior-year grant fund obligations.
• Old Kings Road Special Assessment (-36%): Planned use of savings for Old Kings Road design.
• Capital Projects (-59%): Planned use of savings for the design and construction of the Maintenance and Operations Complex, plus fire station maintenance and energy improvements.
• Water & Wastewater Utility (-12%): Planned use of savings for operational expenses.
• Water & Wastewater Utility Capital Projects (+530%): A bond issue to build Water Treatment Plant #3 and expand Water Treatment Plant #1 and Wastewater Treatment Plant #1.
• Collection and Sanitation (+17%): A planned increase to savings for operational reserve purposes.
• Stormwater Management (-70%): Planned use of savings for drainage improvement projects.
• Information Technology Enterprise (-15%): Planned use of funds for fiber projects at City Hall and new fire stations.
• Emergency Communications (+11%): Savings for a new radio communications system.
• Facilities Maintenance (-13%): Planned use of funds for operational expenses.
• Information Technology Operations (-14%): Planned use of savings for new equipment and software.

The General Fund: $67,601,395

When residents say “the city budget,” they usually mean the General Fund. It’s the main tax-supported operating account. Personnel and day-to-day operating costs drive most of the spending, and the largest single revenue source is property taxes, also called ad valorem taxes.

Where the Money Comes From

Property taxes make up $42,698,778 of the $67.6 million total, far and away the largest line.

Where the Money Goes (by Category)

Pay and benefits ($33,203,318) plus operating costs ($30,511,313) account for almost the entire General Fund.

Where the Money Goes (by Service)

Public Safety, police and fire, is the biggest General Fund function, a touch over 40%.

The Five-Year Forecast

Palm Coast also published a forward-looking forecast for the General Fund stretching from actual 2024 results (2024A) out through 2031 projections (2031F). The 2026 column (2026B) matches the current budget.

In the 2026 budget year, the city’s revenue lines in that forecast include property taxes ($42,698,778), sales/use/fuel taxes ($4,344,751), telecommunication service tax ($3,009,154), local business tax ($502,425), permits/fees/special assessments ($2,770,155), intergovernmental revenue ($1,448,963), charges for services ($7,514,905), fines and forfeitures ($658,183), miscellaneous revenues ($793,194), interest revenue ($343,919), and transfers in from other funds ($1,367,533).

For 2026, the spending side is broken out by department as: City Council $449,077; Administration $7,776,439; Public Works $10,321,742; Financial Services $2,267,599; Community Development $7,957,150; Fire $16,002,655; Law Enforcement $11,181,587; Engineering & Stormwater $1,482,102; Parks & Recreation $10,163,044.

The big takeaway is straightforward: in the city’s own outlook, expenses climb faster than revenues. Under those assumptions, the General Fund’s beginning balance flips negative by 2030 (-$2,426,250) and the annual gap grows year after year, reaching a projected shortfall of almost $19.5 million by 2031 if nothing changes. As a share of revenue, that swing moves from a +3.0% surplus in 2024 to -26.6% by 2031.

Special Revenue Funds

Special Revenue Funds are for dollars that, by law, are boxed into specific uses. Altogether, these total $15,308,107.

Community Development Block Grant Fund

This fund is where federal Community Development Block Grant dollars are recorded.

Police Education Fund

This pays for police education and training, funded with a share of court fines and forfeitures.

Disaster Reserve Fund

This is the city’s disaster savings account, intended to cover hurricane or other emergency costs. For 2026 there’s no budgeted revenue or spending — the fund is simply projected to hold $6,827,834.

Special Events Fund

This tracks revenue tied to recyclable materials sales and community special events.

Streets Improvement Fund

This fund captures fuel tax revenue and pays for the street improvement program, also drawing on a piece of state revenue sharing and roadway-related grants.

Old Kings Road Special Assessment Fund

This tracks special assessments paid by property owners and the related work to widen Old Kings Road from Palm Coast Parkway south to State Road 100.

American Rescue Plan Act Fund

This fund tracked pandemic-relief dollars under the 2021 American Rescue Plan Act for water, sewer, and broadband work. The city shows no activity in 2026 because the money has already been spent.

State Road 100 Community Redevelopment Fund

Established after the city created the redevelopment area in June 2004, this fund tracks redevelopment revenue and related spending.

Neighborhood Stabilization Fund

This fund tracks federal grant dollars used for housing programs.

Capital Funds

Capital funds pay for large construction and expansion projects. Combined, they total $100,271,658.

Capital Projects Fund

This is the city’s main capital project account.

Recreation Impact Fee Fund

Supported by recreation impact fees, this fund can buy park land and build parks, but it can’t pay for day-to-day operations. It used to be called the Park Impact Fee Fund.

Fire Impact Fee Fund

Fire impact fees can pay for land, stations, or added equipment, but not operations, and not replacing existing facilities or equipment.

Town Center Impact Fee Fund

Impact fees reserved for expanding the Palm Coast Town Center.

Transportation Impact Fee Fund

Transportation impact fees can expand capacity, but they can’t pay for routine maintenance or repairs. Prior to October 1, 2004, Flagler County handled these fees.

Development Special Projects Fund

This fund reflects developer contributions set aside for specific needs such as traffic signals, street lighting, and sidewalks.

Enterprise Funds

Enterprise Funds are fee-based operations and, in Palm Coast, they make up the overwhelming majority of the budget: $482,460,031.

Water/Wastewater Utility Fund

This is the city’s water and sewer utility, serving city residents and some nearby county areas.

Water/Wastewater Utility Capital Projects Fund

This is where the budget spikes hardest. It logs impact fees, renewal and replacement transfers, and bond proceeds tied to major utility construction, and it rises sharply because of a sizable bond issue.

The $286,394,000 in bond proceeds is what drives the projected 530% balance increase. That borrowing is tied to Water Treatment Plant #3 and expansions at Water Treatment Plant #1 and Wastewater Treatment Plant #1. A large portion, $197,417,607, is parked in contingency reserve until construction spending ramps up.

Collection and Sanitation Fund

This fund covers the city’s contracted solid waste service. The current single-family residential monthly rate is $34.37.

Stormwater Management Fund

This fund pays for stormwater system operations, renewal and replacement work, and major capital upgrades.

Building Permits Fund

Created in 2010, this fund exists so permit revenue is spent only on the building permits and inspection division.

Information Technology Enterprise Fund

This fund records revenue and expenses tied to cell towers and the city’s fiber network.

Internal Service Funds

Internal Service Funds are support operations that bill other departments. Together, they total $30,803,136.

Self-Insured Health Fund

This pools employer and employee premium payments to cover employee health benefits.

Fleet Management Fund

This fund maintains the city fleet and builds savings for replacements.

Emergency Communications Fund

Set up in 2016, this fund is meant to protect future funding for emergency communications.

Information Technology Operations Fund

This covers IT support provided to other city departments.

Facilities Maintenance Fund

Also created in 2016, this fund pays for maintenance services across city facilities.

The Bottom Line

Palm Coast’s current budget is utility-heavy. Nearly 70 cents of every dollar in the $696,444,327 total runs through Enterprise Funds, and the major driver is the water and sewer construction push funded by $286,394,000 in new borrowing. Meanwhile, the tax-supported General Fund, the portion most closely tied to property tax bills, represents 10% of the total at $67,601,395, with Public Safety as its largest single expense.

The city’s longer-range outlook also sets up the next debate: projected General Fund spending grows faster than projected revenues. If those trends aren’t altered, the city’s own forecast shows the General Fund balance dipping below zero by 2030. That’s the context as officials begin the early work of shaping next year’s budget.

Disclaimer: This article relies on public records. All figures come from the City of Palm Coast’s official budget document posted on the city’s website. Any deeper or more detailed budget information would have to be requested through a public records (FOIA) request filed with the city.

Another budget series for Palm Coast will be published when the budget hearings have been completed, outlining the budget for the fiscal year 2026-2027.

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