The Flagler County Board of County Commissioners held a lengthy workshop on Monday, January 12, 2026, addressing major topics including county health insurance funding, potential state property tax changes that could eliminate millions in revenue, and the future of the county’s adult daycare program.
The workshop, which began at 9 a.m., covered multiple agenda items ranging from technical insurance discussions to long-term budget planning concerns driven by proposed legislation in Tallahassee.
Health Insurance: Self-Funded vs. Fully Insured
Benefits consultant Sherry Beignet, who has worked with the county since 2006, presented a detailed comparison of the county’s self-funded health insurance program versus a fully insured model. The county currently operates a self-funded plan covering 522 employees, retirees, and COBRA members, with a total of 1,180 individuals, including dependents.
Beignet explained that under self-funding, the county takes on the risk of claims but gains flexibility to customize plan designs and access detailed claims data. She noted the county recently received approximately $1 million in aggregate stop-loss reimbursement from a difficult claims year and expects the remainder of that payment soon.
The presentation revealed the county had some challenging years with high-cost claimants, including million-dollar claims. Beignet noted that the county’s $250,000 specific deductible stop-loss coverage helps protect against catastrophic claims.
Commissioner Pam discussed concerns about rising healthcare costs. “How long can we continue in this plan and this pattern until we can’t afford it anymore?” she asked. “And unfortunately, that’s the question of health insurance throughout the world and nationally.”
Beignet recommended the county remain self-funded, noting that larger governments in the area all operate self-funded programs while only smaller entities use fully insured coverage. She pointed out that the sheriff’s office, which moved to fully insured coverage a few years ago, has had to switch carriers repeatedly to control rates.
Interlocal Agreements and Land Use Planning
County staff presented draft interlocal service boundary agreements with the City of Palm Coast and discussed similar arrangements with Bunnell. The agreements would establish frameworks for road transfers, stormwater management, solid waste services, and development coordination between the county and municipalities.
A significant discussion centered on protecting county interests when unincorporated land is developed and later annexed by cities. Commissioners expressed concern that properties developed under county land development codes, which have different standards than Palm Coast’s codes, create inconsistencies when those properties are later annexed into the city.
Staff discussed options, including overlay districts and requiring pre-annexation agreements for certain developments. The conversation also touched on Old Brick Road, with commissioners wanting to ensure adequate protections, such as buffering and limitations on crossings, before any potential transfer to the city.
One commissioner raised concerns about environmental protections, particularly regarding the Bulow Creek, Black Creek, and Hawk Creek areas, as well as Veranda Bay. Staff indicated they would return with recommendations on conservation measures the county could implement in the coming year.
Nexus Center Community Room Fee Schedule
Library Director Holly Albanese presented a proposed fee schedule for the community room at the new Flagler County Nexus Center. The facility features a 2,500-square-foot room that can be divided in half, along with a catering kitchen.
Albanese noted that half the room is used Monday through Friday for Health and Human Services congregate meal programs, limiting daytime rental availability. The proposed fees would vary based on whether renters are nonprofit organizations, for-profit businesses, or individuals, with nonprofits receiving discounts for daytime weekday rentals.
Commissioners discussed details, including linen fees, audio-visual equipment charges, and how the rates compare to the Palm Coast Community Center and Hilton Garden Inn, which were identified as direct competition.
Adult Daycare Program Faces Uncertain Future
The commission discussed the county’s adult daycare program, which currently serves only three clients and operates at a significant loss. Joe Mayer from Health and Human Services presented updated fee structures and operational costs.
The program, which requires state licensing with registered nurses and certified nursing assistants, has struggled with low enrollment and staffing challenges. The manager position has been vacant, and the program needs additional staffing to continue operations.
Commissioners expressed frustration with the program’s financial performance. “If I opened a coffee shop and I had three customers and Starbucks is down the street and Starbucks had three thousand customers, I’d be bankrupt in two minutes,” one commissioner said. “We need to look at what’s the highest and best use for what facilities we do have.”
County Administrator Heidi Petito clarified that direction was previously given to phase out the program, though that direction was not fully implemented. Commissioners reached consensus to begin transitioning out of the adult daycare program by the end of the current fiscal year, with staff directed to develop an exit strategy and identify alternatives for current clients.
“It’s painful. It’s not a pretty thing, it’s not a nice thing, but that’s just, that’s being honest,” a commissioner said regarding the decision.
Major Budget Concerns from Proposed State Legislation
The most significant discussion centered on proposed state legislation that could dramatically reduce property tax revenues. County Administrator Petito presented analysis showing that proposed homestead exemption changes being considered in Tallahassee could result in a 47 percent loss of current ad valorem revenue.
Petito noted that 84 percent of the county’s current ad valorem revenue supports constitutional offices and core services, including public safety and emergency response. The fiscal year 2026 general fund totaled $202.7 million, with most of those dollars supporting essential services.
“If you look at the homestead exemption that’s being considered, it would be a loss of 47% of what we get today,” Petito said. “We’re ranked, I can’t remember if it was number five or six, but we are a really strong community when you look at the number of properties with a homestead exemption. It would hit us severely.”
The county faces substantial infrastructure needs that compound the budget concerns. The stormwater program identifies a gap between the $2.4 million annually currently invested and an additional $14 million needed each year for adequate maintenance. The top 20 of 58 stormwater construction projects are estimated at $85 million. Roads and bridges require an additional $5.1 million annually beyond current funding, with 28 priority construction projects totaling $260 million.
Flagler County’s population is projected to grow from approximately 140,714 to more than 172,000 residents by 2030, increasing demands on public safety, recreation, transportation, and stormwater management.
Commissioners discussed the need to explore alternative revenue sources, such as Municipal Services Benefit Units for fire rescue and other services. They directed staff to begin evaluating which services are statutorily required, which are core functions, and what alternative funding mechanisms might be available if property tax revenue is significantly reduced.
“I think we just need to stay in the same direction. Look for efficiencies. Stay with your flat millage, or if you can reduce it,” one commissioner said. “Constitutionals are going to have to hear the same thing. Efficiency.”
The budget kickoff is scheduled for February 6, 2026, and commissioners will need to guide the message to constitutional officers and staff as budget development proceeds.
Capital Projects Update
Staff provided updates on numerous capital projects, including a new 15,500-square-foot airport terminal building funded primarily by a $10 million state legislative appropriation, airport wildlife fence design, fuel facility design, and taxi lane reconstruction.
In positive news, the library roof replacement budgeted at $473,000 will instead be a recoating project at approximately $150,000, providing significant savings.
Staff noted that the EOC dispatch center expansion project is moving forward for $200,000, with dispatchers temporarily relocating to allow construction.
The workshop, which was a discussion session, did not include formal votes on the matters presented. Commissioners provided consensus direction to staff on several items to guide upcoming budget development and planning efforts.
