By Mary Hladky
In maintaining the city’s long-standing emphasis on keeping taxes low, the City Council on Sept. 22 approved a tax rate of $3.68 per $1,000 of taxable property value that is unchanged from last year’s rate.
While the rate is staying the same, it amounts to a modest tax increase because the city’s property values rose 3.8% this year.
Council members also unanimously approved a $559.4 million operating budget, up from last year’s $503.2 million.
The increased amount is due in part to the cost of reopening city facilities temporarily closed because of the pandemic and restoring expenditures for items such as travel and equipment replacement that fell by the wayside as the city hunkered down.
Police department salaries and benefits increased by $1.8 million, fire department salaries and benefits by $2.2 million, and police and fire pension costs by $2.4 million. General and executive employees salaries and benefits increased by $3.5 million, but their pension costs decreased by $171,700.
City Manager Leif Ahnell alerted City Council members to the rising police and fire pension costs in April, saying the pension plan’s investment returns are underperforming the market considerably. The city does not control how the pension board invests its money.
The city is adding 23 new employees, including a second assistant city manager. The city now has two deputy city managers, but George Brown will retire at the end of next year.
Six of the new hires will help operate and maintain the Boca Raton Golf and Racquet Club, a 167-acre country club donated to the city last year by The Boca Raton. Their salaries will total $369,500.
The club will replace the city’s municipal golf course, which will be sold by Nov. 1 to GL Homes. The $65 million the city will realize from that sale is included in the budget, with $7.8 million of it to be used for improvements and renovations at the country club.
The city is slated to receive $12.2 million from the massive $1.9 trillion American Rescue Plan Act, although officials say the revenues the city lost because of the pandemic totaled far more than that.
The city will put $7.2 million of its allocation in the general fund to replenish lost revenue, and $5 million in the capital improvements program.
The city will hire three employees at a cost of $253,000 to implement its new building recertification program, enacted after the Surfside condo collapse, that will require buildings taller than three stories to be inspected when they are 30 years old.
The City Council’s decision in 2019 to continue providing garbage collection and recycling services, rather than outsourcing them to a private company, continues to strain the budget as Boca Raton makes needed replacements of equipment and vehicles and adds employees.
The city is raising sanitation rates 71 cents to $24.29 per month for single-family homes and 43 cents to $14.70 per month for multi-family units. The sanitation rates also increased last year.
The annual residential fire assessment fee will remain at $145 this year.
One looming problem is that the revenue the city gets annually from the Community Redevelopment Agency is about to dry up and officials will have to decide soon how to plug that budget hole.
The city will get a $15 million CRA payment this fiscal year and a much smaller amount in the following year.
When that source of funds is gone, the city faces raising the tax rate, cutting expenses or drawing down on its reserve fund — a move Ahnell does not recommend.
Ahnell has warned City Council members about this for several years, and emphasized it again in a budget summary given to council members and made available to the public.
In bold typeface, Ahnell wrote that once the CRA money is gone, “the city will need to consider alternatives to replace this revenue source in order to balance the city’s budget.”