Building the Future: Palm Coast Lines Up $459.5 Million in Capital Projects for 2026, 62% Backed by Bonds

Part 17 of a series looking at the City of Palm Coast budget, using information posted on the city’s website.

Roadwork, fire stations, water and wastewater plants, parks, stormwater lines, plus the vehicles and heavy equipment needed to keep everything running — that’s the territory of Palm Coast’s Capital Improvement Program (CIP). For Fiscal Year 2026, the city’s capital plan adds up to $459,532,281 spread across eight funds. The biggest single piece of that funding comes from bonds: 62%, and entirely tied to Utility Capital Projects.

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

How the Process Works

The CIP starts the same way every year: departments send in project requests. Those requests aren’t casual; each one has to spell out what the project is, why it’s needed, how much it’s expected to cost, what it will do to the city’s yearly operating budget, and when the work is supposed to happen. From there, the city’s Infrastructure Team reviews the submissions. That group includes project managers, planners, division managers, and the Financial Services Director, and it reports straight to the City Manager.

Planning happens on three clocks at once. One is the “Ten-Year Capital Project Lookout,” put together yearly and brought to City Council so staff can get guidance on longer-range needs. Another is the five-year CIP, adopted each year by Council as required under Chapter 163 of the Florida Statutes. In that five-year view, projects have to be labeled as funded or unfunded, and if they’re unfunded they still get a priority level. That schedule is linked to the Capital Improvements Element (CIE) within the city’s Comprehensive Plan. Then there’s the tightest view: a one-year timeline presented at the start of the fiscal year, with quarterly updates.

That first year of the five-year CIP is what the city treats as the Capital Budget, adopted along with the operating budget. Past that first year, the city stresses there’s no promise of spending.

In this context, “capital improvements” means physical assets that are built or bought, cost at least $5,000, and are expected to last at least two years. It covers new or expanded facilities, major rehab or replacement work, big-ticket equipment meant to last, equipment needed for new public facilities, engineering and architectural studies, and buying land for things like parks, roads, or sewer lines. What usually doesn’t make the cut are routine replacements and recurring renovations under $5,000.

Where the Money Comes From

Palm Coast pays for capital work using a mix of revenue streams. That includes general revenue, property taxes included, where one mill equals $1 per $1,000 of assessed value, and a small part of the millage goes toward stormwater work each year. It also includes federal Community Development Block Grant funding; Local Option Fuel Tax money, which state law limits to transportation spending; and the Small County Surtax, a countywide 0.5% sales tax that replaced the Local Government Infrastructure Surtax after that older surtax expired on December 31, 2012.

Utility-side projects draw from monthly water and wastewater service charges. Stormwater work is supported by the stormwater utility fee, in place since July 2004 and restricted to stormwater uses. For projects in the SR100 Community Redevelopment Agency area, the city uses Tax Increment Financing through the CRA fund. Another major piece is impact fees charged to new construction, covering water, wastewater, transportation, fire, and recreation. And then there are the smaller, catch-all categories: contributions (public or private) and developer commitments.

On top of that, the city runs a Fleet Replacement Program. When a department buys a vehicle, the following fiscal year an internal allocation begins, spreading the future replacement cost (including inflation) over that vehicle’s expected life. A five-year vehicle, for instance, has its replacement cost divided into five yearly allocations, billed monthly. The Fleet Supervisor reviews the fleet each year, and City Council signs off on the full replacement program cost during the budget process.

Capital projects also show up later in the operating budget. Once a new facility goes live, ongoing costs typically get added. Some costs can ramp in during construction — staffing a new fire station is one example. And when the city borrows money, debt service lands in the operating budget too, with the reminder that the share of the budget devoted to debt service has to stay within reasonable limits.

The Big Ticket: FY 2026 Funding by Source

For FY 2026, the $459,532,281 capital plan is funded this way: bonds at $286,394,000 (62%, all within Utility Capital Projects); grants at $37,707,615 (8%); appropriated fund balance at $44,781,053 (10%); transfers in at $40,553,772 (9%); charges for services at $24,563,697 (5%); impact fees at $14,625,474 (3%); the Small County Surtax at $5,318,571 (1%); state revenue and the Local Option Fuel Tax at $2,966,790 (1%); other sources at $2,090,588 (1%); and ad valorem taxes at $530,721 (which rounds to 0%).

By fund, total FY 2026 revenue is shown as: Streets Improvement at $9,632,495; Transportation Capacity Projects at $54,683,995; Recreation Capacity Projects at $9,069,560; Fire Capacity Projects at $12,326,600; Capital Projects at $18,671,128; Utility Capital Projects at $326,390,581; Fleet Capital at $4,755,968; and Stormwater Management at $24,001,954.

Looking closer at the table, grant dollars include $36,365,917 for Transportation Capacity Projects, $1,201,698 for Recreation Capacity Projects, and $140,000 for Capital Projects. Impact fee revenue includes $9,088,311 for transportation, $4,356,047 for recreation, and $1,181,116 for fire.

Charges for services are listed as $15,561,772 in Utility Capital Projects, $3,823,661 in Fleet Capital, and $5,178,264 in Stormwater Management. Transfers in include $72,275 (Streets), $100,000 (Transportation), $3,292,489 (Recreation), $2,162,958 (Fire), $10,716,260 (Capital Projects), $24,107,567 (Utility), and $102,223 (Fleet). “Other” revenue is broken out as $50,000 (Streets), $155,000 (Transportation), $50,000 (Fire), $175,000 (Capital Projects), $327,242 (Utility), $830,084 (Fleet), and $503,262 (Stormwater).

Appropriated fund balance is shown as $6,543,430 (Streets), $8,974,767 (Transportation), $219,326 (Recreation), $8,932,526 (Fire), $2,321,297 (Capital Projects), and $17,789,707 (Stormwater). The $530,721 in property tax revenue goes to Stormwater Management; the full $5,318,571 in Small County Surtax revenue is assigned to Capital Projects; and the $2,966,790 in fuel tax and state revenue goes to Streets Improvement.

Capital by Type

Grouped by what the spending is for, FY 2026 includes: Utility Capital Improvements at $326,390,581 (71%); Transportation at $54,683,995 (12%); Other at $37,042,075 (8%); Stormwater at $24,001,954 (5%); Government Facilities at $15,882,106 (4%); and Recreation Facilities, Parks and Trails at $1,531,570, totaling $459,532,281.

The Five-Year Outlook

Across the full five-year CIP, planned spending is listed as $459,532,281 in FY 2026; $259,618,812 in FY 2027; $231,147,337 in FY 2028; $120,661,011 in FY 2029; and $134,090,009 in FY 2030.

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.

The post Building the Future: Palm Coast Lines Up $459.5 Million in Capital Projects for 2026, 62% Backed by Bonds first appeared on Flagler County Buzz.