The Baseline Was Never a Finding

A consultant’s report promises $2.4 billion in fiscal benefit from the Palm Coast MPD over thirty years. The number depends on an assumption the report defines rather than tests.

On June 23, 2026, Impact DataSource of Austin, Texas, delivered a thirty-three-page economic and fiscal impact analysis of the Palm Coast MPD, prepared for the landowner and marked, on every page, “DRAFT — FOR REVIEW PURPOSES ONLY.” The report’s headline finding: over thirty years, the development will generate $756.7 million in net fiscal benefit for the City of Palm Coast, $1,135.6 million for Flagler County, $434.4 million for the school district, and $106.4 million for other taxing jurisdictions — a combined $2,432,995,462. The figure has already been cited at the dais. It will likely be cited again at the August 4 meeting where the Western Parcel annexations, the Future Land Use Map amendment, and the MPD itself come up for first reading.

The number rests on one line item, repeated four times in the report’s own tables: Baseline Capital Costs.

A fiscal impact study ordinarily treats capital cost as something to be estimated — what will it actually cost each jurisdiction to build the roads, the pipes, the schools, the fire stations this development requires. Impact DataSource did not estimate it. For the City of Palm Coast and Flagler County, the report defines Baseline Capital Costs as equal, dollar for dollar, to what each jurisdiction currently collects in impact fees. Not a projection derived from engineering estimates of what growth will cost. A restatement of what the existing fee schedule already charges.

For the City and the County, the equality is exact, not approximate, and it holds category by category within each jurisdiction’s table — fire and rescue, parks, transportation, water capacity, wastewater capacity, and connection and inspection fees each match their corresponding cost line precisely. The report’s own methodology section states the logic plainly: “the cost of capital improvements associated with the MPD are estimated to be equal to the county’s current impact fees.” The same sentence, adjusted only for jurisdiction, appears in the City’s section.

The school district’s Baseline Capital Costs figure does not match its impact fee line the same way, and the distinction is worth stating precisely rather than folding it into the pattern above. The report’s methodology defines the schools’ capital cost as equal to the education impact fee plus the capital-outlay portion of the property tax rate and the sales tax rate — a broader formula, not a single-line equality. It is still capital need defined by reference to existing revenue streams rather than independently estimated, but it is not the identical arithmetic performed for the City and County, and this report will not claim otherwise.

The report calls its own approach conservative on a separate but related point: it assumes no increase in impact fees for the full thirty-year period. Combined with the Baseline Capital Costs methodology, the assumption underneath the entire $2.4 billion figure is this: whatever Palm Coast and Flagler County charge in impact fees today is both adequate to cover the capital costs of growth and will remain unchanged, dollar for dollar, through 2055.

Neither half of that assumption is settled.

The fee schedule the report treats as adequate is not old enough to have a track record. The City Council adopted the current rates in June 2025, after an outside consultant found that under the prior schedule, developers were covering somewhere between 43 and 54 cents of every dollar it cost the city to serve new growth — the balance landing on existing ratepayers. This outlet documented that finding in detail before this study existed. The council raised fees by triple digits in some categories that same June, specifically to close the gap the rate study had found. A fee schedule adopted to correct a documented shortfall is not, by that fact alone, evidence that the correction was exactly right. It is evidence that the prior number was wrong. The new number has not yet been tested by time.

It has, however, already been tested in court, and the outcome remains unresolved as of this writing. The Flagler Home Builders Association, five local builders, and a city resident sued Palm Coast in Flagler County Circuit Court on October 1, 2025, seeking to have the June 2025 fee ordinances declared invalid and the fees collected under them refunded. The suit argues the increases exceeded the fifty-percent statutory ceiling on a single adjustment without adequately demonstrating the extraordinary circumstances the exception requires. The city moved to dismiss; Circuit Judge Sandra Upchurch granted that motion in part on February 11, 2026, narrowing but not ending the case. A hearing scheduled for later that month on the builders’ motion for summary judgment and a temporary injunction was itself delayed on the city’s emergency motion, with the judge on the record declining to risk a procedural error that could hand either side grounds for appeal. The fees have remained in effect throughout. The litigation has not.

A thirty-year fiscal projection that holds a fee schedule flat is making a claim about the future. A fee schedule presently the subject of active litigation over its legal validity is not a settled fact to hold flat. It is a number currently before a judge.

The capital-cost assumption fails on its own terms even before the money is examined, because the report’s baseline never asks whether the physical capacity to serve this development exists at all. This outlet’s own reporting on the city’s wastewater system establishes the following, independent of anything in the Impact DataSource report: Water Wastewater Treatment Facility No. 1 is permitted for 6.83 million gallons per day and is currently operating 2.4 million gallons per day over that permitted capacity, under a Florida Department of Environmental Protection consent order requiring the city to achieve compliance by December 28, 2028. Some 13,381 residential units already approved but not yet built are in the pipeline feeding that plant. The city’s own planned expansion of the system — construction not yet begun — adds four million gallons per day. The city’s own Wastewater Master Plan work, under the Jacobs engineering contract, found that the westward expansion alone could generate demand of up to six million gallons per day — more than the entire planned expansion accounts for, before any other approved development is counted. A third treatment plant is now in preliminary engineering. No public cost figure for it yet exists, and no council discussion has yet addressed whether one is needed at all.

City staff have said, on the record, that none of this capacity is reserved for anyone. At a March 7, 2025 special workshop, the mayor asked staff directly whether the utility system could support the roughly 19,000 residential units already approved. “Oh, no, sir,” came the answer. Even accounting for both bond-funded expansions already underway? “No, sir.” At an August 12, 2025 workshop, a staff member stated plainly: “We do not reserve capacity in the utility system.” On November 4, 2025, an attorney representing the developer of the Town Center DRI — not a critic of this MPD, a different developer with land of his own already vested and paid for — told the council his client could not build because there was no sewer or water capacity available, and that his client was suing the city over it.

None of this means the Impact DataSource report’s arithmetic is wrong. Given its assumptions, the report’s math is likely internally consistent; that is not the claim being made here. The claim is narrower and, this outlet believes, sufficient: the $2.4 billion figure rests on a capital-cost baseline that was defined rather than derived, built on a fee schedule adopted thirteen months ago specifically to correct a documented shortfall in its predecessor, presently the subject of unresolved litigation over its own legal validity, and applied to a utility system that city staff describe, without qualification, as having no reserve capacity at all. A number built this way is not a false number. It is an untested one, arriving at a City Council meeting seven days from now with the appearance of a finding it has not yet earned.