The Rules Behind the Money: How Palm Coast Handles Cash, From a $1 Swipe to a $15 Million Obligation

Article 18 in a series reviewing the City of Palm Coast’s annual budget, using documents posted on the city’s website.

Everything the City of Palm Coast does with money — spending it, borrowing it, investing it, even parking it in reserves — runs through a written set of financial policies. In the city’s budget book, there are seven policies spelled out — balanced budgets, capital assets, debt, reserves, investments, purchasing, and grants — and the city says it currently meets every one of them. Below is what those rules amount to in plain English, with the figures left intact.

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

Why These Policies Are There

Palm Coast says the City Council has chosen what it calls “a conservative approach” to finances. The point of the policies is to steer big decisions, keep costs and financial exposure down, keep revenue rules evenhanded, protect the city’s ability to meet needs now and later, produce timely and accurate financial reporting, make sure cash is there to cover debt, lock in legal spending through internal controls, and keep coordination working with other governments and private partners. The city also says it will follow all applicable federal law and Florida state code tied to these policies.

In the budget document, any policy tied directly to the budget is tagged with a checkmark to show compliance. Each of the seven listed carries that mark.

1) Balanced Budget Policy

Adopted December 31, 1999. Latest revision October 21, 2025.

Florida law, Chapter 166, requires a balanced budget. In practice, that means all available money, taxes, fees, other revenues, plus carryover from prior years, must match what’s allocated for spending and reserves.

What the budget process is supposed to follow:

Essential services get funded first. If reductions are ever necessary, lower-priority items are the first on the chopping block. Current expenses must be paid with current revenue. Long-term borrowing is not for day-to-day operations. The city says it will steer clear of tactics that shift today’s bills into later years, like deferring necessary spending or rolling short-term debt forward. Maintenance, repair, and scheduled replacement of facilities and equipment must be funded, and annual debt service must be fully covered. If cuts become necessary, the city says it will try to avoid layoffs of permanent staff by leaning on attrition. The budget has to comply with Florida’s TRIM law under Chapter 200.

Timing and required postings:

Palm Coast’s fiscal year runs from October 1 to September 30. The city holds two public hearings. The first adopts a tentative budget and tentative millage rate, and that tentative budget must be online at least 2 days beforehand. The second hearing adopts the final budget and millage rate, and the final version has to be posted within 30 days after adoption. Any amendments must be posted within 5 days after they’re adopted.

Ongoing checks:

Departments sit down with the City Manager quarterly to review how the budget is performing. If revenue drops mid-year, the City Manager must tell the Council about the estimated shortfall without delay, and the Council can cut appropriations by resolution. The City Manager can also make emergency appropriations to protect life, health, property, or public peace. Debt-service appropriations cannot be reduced or moved. At year’s end, unused appropriations expire, except for capital projects, which stay available until the job is completed or abandoned.

2) Capital Assets Policy

Adopted August 7, 2013. Revised November 2023 (shown as November 15, 2023 in the policy table, with City Manager approval noted as November 13, 2023).

This is the city’s rulebook for tracking the physical and long-lived items it owns — vehicles, buildings, roads, computers, and similar assets — under Chapter 274 and accounting guidance tied to GFOA and GASB.

A capital asset is defined as tangible or intangible property valued at $5,000 or more with a useful life beyond two years. For recording purposes, the city uses these thresholds:

Other figures worth noting:

A capital improvement is spending of $25,000 or more that extends useful life or boosts capacity or efficiency. Leases above $50,000 in present value follow GASB 87; leases under 1 year are excluded. Donations above $5,000 get entered into the asset system and must be accepted by City Council. Computer software is amortized over 3 to 5 years. Annual renewals and standard upgrades are treated as operating costs. Physical inventories are done every two years, and departments count their own items. Everything except land is depreciated on a straight-line basis over its useful life. If something is missing and believed stolen, a police report has to be attached to the disposal record.

3) Debt Management Policy

Adopted by ordinance November 5, 2013. Revised November 12, 2024.

The headline limits:

Borrowing is for capital spending, not operating costs. A debt term cannot outlast the asset’s expected life. Debt beyond three years or above $15 million cannot be issued without voter approval unless it’s funded. Reserves of at least fifteen percent (15%) must be maintained in the city’s four operating funds.

Palm Coast says it generally prefers pay-as-you-go capital funding, city-generated funds plus grants and contributions from other governments. Short-term construction financing is allowed, but it can’t be longer than a three-year amortization schedule. General obligation bonds, backed by the city’s taxing power, require voter approval under the City Charter and state law.

Other details in the policy include these preferences and definitions: competitive sales when issuing bonds, fixed-rate borrowing to keep payments predictable, and credit enhancements only when they lower costs by more than they cost. Each year, management must present a 10-year capital infrastructure plan along with the five-year Capital Improvement Plan. Refunding is weighed when it saves money; a refunding that increases costs is off the table unless there’s a compelling legal or public-policy reason. An advance refunding happens more than 90 days before the old debt’s maturity or call date. Commercial paper maturities run 1 to 270 days. The city reviews the policy and can revise it each year.

4) Fund Balance Policy

Adopted July 21, 2009. Revised March 15, 2016.

This sets minimum reserve levels, the city’s required cushions, for major funds:

General Fund: unassigned year-end balance must be between 10% and 20% of the next year’s budgeted expenditures. Anything over 20% can be shifted to the Disaster Reserve Fund or Capital Projects Fund. If it drops under 10%, the city must adopt a plan to bring it back to at least 10% within three years. During a temporary revenue dip, up to 50% of the amount above the 10% floor can be used to close the gap, but reserves cannot be used to cover a permanent structural deficit.

Utility Fund: unrestricted net position between 10% and 20% of next year’s budgeted operating expenses. Over 20% may be moved to a rate stabilization fund or utility capital projects. Under 10% triggers a three-year restoration plan.

Stormwater Fund: between 10% and 20% of next year’s budgeted expenses excluding capital, with the same three-year restoration requirement.

Solid Waste Fund: between 10% and 20% of next year’s budgeted operating expenses, again with the same three-year restoration requirement.

Disaster Reserve Fund: must hold at least 0.02% of the just value of all city property as of July 1 of that year. If it falls short, the General Fund has two years to transfer enough to restore it. The reserve is meant for hurricanes, tornadoes, other major weather events, large-scale infrastructure failures, and other disasters, whether natural or man-made.

Self-Insured Health Fund: must hold at least three months of claims to meet the Florida Office of Insurance Regulation’s standard for actuarial soundness. If it dips under, a three-year restoration plan is required.

Fleet Fund: must maintain a minimum equal to expected fleet replacement cost divided by the fleet’s average life. If it falls under that threshold, a three-year restoration plan is required, using increased internal lease charges.

Other funds, including Special Revenue and Capital Project funds, do not have a required fund balance target.

5) Investment Policy

Approved by City Council resolution in December 2012 (the table lists December 12, 2012; the policy closing note lists December 4, 2012). Revised August 16, 2022.

Under Section 218.415, this governs almost all city cash other than pension funds and certain debt-related funds. The priorities are spelled out in order: protect principal first, keep liquidity second, and only then seek yield.

Portfolio limits by investment type:

Extra constraints layered on top: Federal Instrumentalities plus MBS together cannot exceed 80%. Any single federal agency exposure, counting both agency debt and agency MBS, is capped at 40%. Commercial paper plus corporate notes plus ABS together cannot exceed 40%. Single-“A” corporate notes are capped at 15% of funds. Florida PRIME, money market funds, and investment pools must be rated “AAAm” by S&P or an equivalent.

Other safeguards and time limits:

Operating funds must be invested with maturities no longer than 24 months. Core, non-operating funds, like bond reserves and construction funds, should not exceed 10 years, and no investment may exceed 30 years. Repurchase agreement collateral must be valued at 102% of the agreement, and the collateral securities must mature in under 5 years. Broker-dealers must have at least $10,000,000 in capital and a minimum of five (5) consecutive years doing business in U.S. government and agency securities. At least three (3) qualified institutions or primary dealers must be invited to bid on purchases. The Finance Director and staff must complete at least 8 hours of annual continuing education on investments. The Finance Director provides a quarterly investment report to the City Manager and a written annual report to City Council for all invested funds. Derivatives and reverse repurchase agreements require specific City Council approval.

6) Procurement and Contracting Policy

First adopted by ordinance in December 2002. Revised July 2017, October 5, 2021 (Ordinance 2021-23, with the policy table listing adoption December 17, 2021), and most recently August 19, 2025.

This is the city’s playbook for buying goods and services. The basic matrix looks like this:

Purchasing cards (P-Cards): employees can receive city credit cards with preset limits, but any single transaction above $1,499.99 still needs a purchase order in advance. Cardholders must pass training exams with 100% correct answers at issuance and every year after. Receipts are due within three (3) business days. Cash advances, cell phones, gift cards, weapons and ammunition, personal items, construction and consulting services, and legal or medical services are prohibited. Alcohol is allowed only for the Parks & Recreation Director or the City Manager, only from a wholesaler, and only with proof of a city liquor license.

Advertising and timing for formal bids: solicitations at $50,000 and up must be advertised in a major local newspaper. Minimum bid windows are 7 days for most ITBs, RFPs, and RFQs, with recommended ranges of 14 to 21 days or 21 to 45 days. Construction bids from $200,000 to $500,000 require at least 21 days; construction above $500,000 requires 30 days. Ads have to run at least 5 days before any pre-bid meeting, and for construction over $200,000 the legal ad must also be published at least 5 days before the pre-bid conference under Section 255.0525(1).

Other thresholds and deadlines:

Evaluation committees must have at least three members and must be an odd number to prevent tie votes. Public notice must be posted at least 24 hours before evaluation meetings. Sole-source purchases above $35,000 must be posted electronically for 15 business days. Piggybacking, using another government’s competitively bid contract, is allowed, but add-ons are capped at $49,999.99 without new competition, and total terms, renewals included, are limited to five (5) years. If a renewal pushes a piggyback above $49,999.99, City Council approval is required. Written contracts are required once goods or services hit $1,499.00 and above. Service purchases over $50,000 require a formal contract signed by both parties. Vendor payment disputes have to be opened within 45 days and resolved with a final city decision within 60 days of the invoice under Section 218.76(2)(a). Project managers have ten (10) business days to resolve issues before escalation. If mediation is required, it must finish within 30 days, and the mediator’s fee is split. Blanket purchase orders under $5,000 for as-needed buying do not require quotes.

This policy also addresses surplus property disposal under Section 274.05, grant-funded buying, and public-private partnerships under Section 255.065.

7) Grants Management Policy

Approved by the City Manager February 14, 2025.

The newest entry governs all grants the city takes in, federal, state, county, and private. Departments must get City Manager approval before applying, record grants in the city’s financial system, and obtain formal acceptance from the City Manager and Council for each award. No grant dollars can be spent until both parties sign the agreements. Federal grants are audited under the Single Audit Act (31 USC 7505) and OMB Circular A-133; state funds follow Chapter 215.97 and Auditor General Rules Chapter 10.550.

A Track Record the City Cites

The budget also points to awards the city says back up its financial practices. GFOA has given Palm Coast the Certificate of Achievement for Excellence in Financial Reporting for every Annual Comprehensive Financial Report since FY 2003, and the Distinguished Budget Presentation Award for every annual budget since FY 2003, most recently for the FY 2024-2025 budget. The city also says it holds GFOA’s “Triple Crown Winner” designation for receiving all three top honors: excellence in financial reporting, popular annual financial reporting, and the distinguished budget award.

Outside finance, the budget lists other recognitions. The Southern Recreation Center received LEED Gold certification, the first in Flagler County, with 64 points in review, and it was named Best New Tourism Asset/Product at the 2025 Flagler County Annual Tourism Meeting. The 18th Annual Intracoastal Waterway Cleanup brought out 287 volunteers who collected 1,600 pounds of litter, described as a 60% increase from the prior year, helped by a $5,000 Florida Inland Navigation District grant that brought that agency’s contributions to $90,000 since 2008. Other items mentioned include an Outstanding Private and Public Partnership award for the Palm Coast Disc Golf Course, planned at nine to 18 holes and built with developer-generated park impact fees and no property taxes from the broader community, two planning awards for the “Imagine 2050” Comprehensive Plan update, a 20th straight Tree City USA designation, “Best Tasting Drinking Water” in the region on November 6, 2024, six CPR Life Saving Awards and three Unit Commendations for the Fire Department, and the 2025 Outstanding Achievement Award for Stormwater Projects for the London Waterway Project, a 13-acre lake finished in February 2025 with two boardwalk docks and two island areas, funded by the St. Johns River Water Management District, ARPA, and the city’s Stormwater Management Fund.

Bottom Line

Taken together, Palm Coast’s financial policies add up to a tight grid of thresholds, deadlines, and percentage targets meant to keep the city stable, transparent, and answerable to the public, from the $1,499.99 cap on a routine card purchase to the $15 million point where voters get a say on new debt. The city says it complies across the board, revisits the policies regularly, and can revise or add to them as needed.

Disclaimer: All information above is public record taken from the City of Palm Coast’s website. More detailed budget material would need to be requested through a FOIA/public-records request.

The post The Rules Behind the Money: How Palm Coast Handles Cash, From a $1 Swipe to a $15 Million Obligation first appeared on Flagler County Buzz.