CLARIFICATION: Daniel Priotti, president of Agua Pools and Spas, asserted at a June 1, 2021 Palm Coast City Council meeting that a detail about his company on the city’s now-scrapped Difficult Citizen List was untrue. We updated the 24th and 25th paragraphs of this article on June 4 to reflect Priotti’s concern and a comment from the city.

PALM COAST, Fla. — Amid a government in chaos, they had to discuss what to do about their impending city manager vacancy. But they decided to first figure out what to do about a secret “naughty list.”

So it went for members of the Palm Coast City Council on Tuesday evening when they abolished a so-called Difficult Citizen List that a previous administration created several years ago, apparently to protect city workers from residents whom the city deemed difficult or threatening.

The Daytona Beach News-Journal last week revealed the existence of the list, to the surprise of residents — especially those on it.

Current city council members said Tuesday they also knew nothing of the list, which reportedly held 33 entries, including one resident accused of throwing a spear-like object at an occupied city truck, the News-Journal reported.

“I realize that list was put together possibly with good intentions to protect our city workers,” City Council Member Ed Danko said during the Tuesday meeting. “But a secret list is no way to do that. It’s like something out of East Germany, as far as I’m concerned. Governments do not have secret lists and put citizens on it without giving that citizen a due process.”

City council members voted unanimously to scrap the list. Then they appointed Denise Bevan, the city’s chief of staff over infrastructure, as interim city manager, subject to an agreement.

Those two actions highlighted a board meeting that featured a packed room of about 70 people, some of whom attended to receive council recognition. Others spoke with passion or anger about the naughty list, the outgoing city manager or the state of the city, Flagler County's largest.

The city last week announced the resignation of City Manager Matthew Morton, nine days after the resignation of Mayor Milissa Holland.

Holland’s resignation left the city council with four members, including Acting Mayor Eddie Branquinho, and sparked a July 27 special mayoral election that already includes multiple candidates.

“Tonight we find ourselves 130 feet under water,” candidate Alan Lowe told city council members.

The resignations of Holland, who cited a need to care for a daughter who had experienced major health problems, and Morton came after reports of “unruly” council meetings and a question about an alleged possible conflict of interest involving Holland. The Daytona Beach News-Journal reported last June that two former city employees said the FBI had interviewed them about Holland’s connection to Coastal Cloud, a business-services tech company that the newspaper said employed Holland and did work for the city.

As for Morton, several high-level city employees had resigned, been fired or received severance since his 2019 hiring, according to reports.

Morton’s agreement with the city required that he give 30 days’ notice. But with the conditional appointment of Bevan, the city council moved to relieve him of that requirement. That could happen by the end of this week, Morton told council members.

“I don’t think it’s fair to ask someone to sit around as a lame duck who potentially, anything he’s involved with will be tainted,” City Council Member Nick Klufas said during Tuesday’s meeting. “And I mean that in the most respectful way. It’s just the public opinion on how things have moved.”

Jason Giraulo, the city’s former digital communications coordinator, asked council members to “terminate Matt Morton immediately.”

“I think you need to leave a blemish on his record,” Giraulo said. “Matt has cost me and others their careers.”

Giraulo told Spectrum News 13 after the meeting that “basically, it was an environment where if you weren’t 100% loyal to him and to the former mayor, you were either asked to resign or you resigned on your own because you knew it was coming, and that was my situation.”

Giraulo said he resigned about two years ago after nine years with the city. He started his own marketing business, he said.

Outgoing City Manager Matt Morton (left) took the position in 2019. Since then, several high-level managers have left their posts. (Spectrum News 13/Pete Reinwald)

Two audience members accused Morton of elections tampering or interference. Asked by a council member if he wanted to respond to those allegations, Morton said, “I have no idea where they’re coming from.”

Morton did not reply to an email Wednesday from Spectrum News 13 asking him to provide a reason for his resignation and to respond to allegations raised at Tuesday’s meeting.

His fans include Daniel Priotti, president of Agua Pools and Spas, who praised Morton to the city council.

“I’ve been dealing with this city for 20 years in the contracting aspects, and it has been a nightmare to work with,” Priotti told Spectrum News 13 afterward. “Since he took over, they have answered the phones; they have helped us in all ways possible. He came in and changed the culture of the attitude of the employees to work with the public, not against the public.”

Priotti also spoke to the council about having been included on the so-called naughty list.

He referred to a TV news report that he said revealed details about the list, including a notation about past suspensions of his contractor’s license, which he asserted Tuesday wasn’t true. He said the news report prompted phone calls and lost business over concerns about his license.

Adam Mengel, Palm Coast’s growth management director, told Spectrum News in an email several days later that “as best I am aware and based on available records,” Priotti “has not been suspended in Flagler County.”

At the city council meeting, Priotti asked for an apology from the city, including on news organizations and on social media.

“Litigation could come from this, which would cost the taxpayers a lot of money,” he said.

Priotti told Spectrum News that he suspects his name got added to the list because of a code-enforcement dispute that he got into with a city official who since has left the city. He said he called the official an “unethical (S.O.B.)” and warned that he would complain to the city council.

“So I think how I got on (the list) was I fight for everything,” he said.

He said he thinks news of the Difficult Citizen List put Morton, the city manager who had nothing to do with its creation, “over the edge.”

Morton called him the morning he resigned, Priotti said.

“He says, ‘Dan, I just want to personally apologize for what took place,’" Priotti said, referring to the list and emphasizing that he was paraphrasing Morton. “He’s like, ‘I just wanted to let you know I’m resigning. I tried to fix... but I can’t fix this stuff.’”