The Palm Coast government administration certified in late March to the governor’s office that the city has not encountered any of five criteria suggesting “financial emergency or distress” since 2018, and does not anticipate any ahead.
Acting City Manager Lauren Johnston sent the letter confirming the fact to the governor’s so-called “Department of Government Efficiency” team on March 20. “The City confirms that it has not encountered any instances of financial emergency or distress, nor does it anticipate any such distress in the near future,” Johnston wrote.
Johnston noted that the city’s independent auditor had just completed its annual audit, reporting no concerns on the city’s financial condition or its management.
The letter is prompting some inaccurate and likely politically motivated speculation that the city manager was “declining” the state’s offer to audit the city, as one commenter put it in FlaglerLive comment that was not approved (its falsehood violated the site’s comment policy). There was no such offer absent financial issues.
The comment suggests that Johnston’s letter has been disseminated enough either to feed fabrications, undermine her authority, or further pressure the City Council to conduct a “forensic audit” of the city’s finances, even though a city consultant, the city’s annual audits and city officials have repeatedly said that there’s no evidence suggesting that such an audit is necessary. Forensic audits are extremely expensive.
In late February Gov. Ron DeSantis, mimicking his patron in Washington, signed an executive order “ensuring government efficiency” and creating a so-called “doge team” within his administration’s Office of Policy and Budget. The order did not specify a budget for the team, so the extent of its work, beyond sending form emails to local governments, remains unclear.
Palm Coast received one such email on March 18. The letter, mostly cut and pasted from parts of the executive order, informed the city that the “doge team” was using publicly accessible data “to identify, review, and report on unnecessary spending within county and municipal governments and recommend legislative reforms.” That did not implicate the city, and the team was not asking for the city to provide any information in that regard.
The letter also noted that the team was “assessing compliance with the financial management requirements” of state law, which defines financial emergencies requiring corrective action. Those criteria include failure to repay short-term loans or make debt-service payments of any kind, including repayments to creditors, failure to transfer required funds to Social Security contributions and retirement funds, or having a deficit in the reserve fund.
Palm Coast has not had any such issues in its 25-year history, and is currently carrying a reserve of over $20 million.
“If your municipality has encountered any of these conditions since State Fiscal Year 2018-19, or anticipates potential financial distress in the next six months,” the letter stated, “please provide a written response in keeping with your obligations under [law], detailing the specific circumstances, any corrective actions taken, a point of contact, and any additional information relevant to compliance with statutory financial obligations.” The letter’s electronic version was oddly, ominously signed by a “doge” seal rather than by a human being.
Johnston did not necessarily have to reply, since the city has encountered no such issues, but did so anyway, and informed the City Council. Johnston also included a link to the city’s 2024 audit. The Doge team did not make inquiries about inefficiencies created by political posturing.
