Manager’s numbers sound good to council, will get further study
By Larry Barszewski
It’s not clear yet if Town Manager William Thrasher’s proposed formula for paying for flood protection and sea wall restoration in Briny Breezes is innovative math or wishful-thinking algebra, but Town Council members are interested in seeing if his numbers really do add up.
Thrasher says that using his calculus, the town could cover the cost of critical projects — $8.55 million to completely restore its sea walls and $3.5 million to install an advanced drainage system to reduce flooding — and still have $10.2 million available for other needed improvements.
“This is extremely complicated, but more interesting than anything I’ve ever worked on,” Thrasher told Town Council members at their Jan. 26 meeting. His proposal is still early in the development stage and he called his figures “soft numbers” because more study is needed.
However, some of his equations are striking.
The town would have to borrow only $2.5 million to generate the $22.25 million needed for the projects. The borrowed money would be combined with $1 million in reserves to leverage much larger grants that would cover the bulk of the project costs.
At the same time, the town would cut its property tax rate more than 60%.
The tax rate drop would be offset possibly by the creation of a special assessment residents would pay for police and fire-rescue services, so the change would be a wash for residents. The change is needed to open up room in the town’s property tax revenues — already assessed at the maximum level allowed by the state — to cover the cost of future loan payments.
“In order to invest into a sea wall and obtain a loan, you’re going to have to lower the millage rate somehow,” Thrasher said. “I’m suggesting that you direct me to find a way, either voluntarily through the corporation, or through a special assessment, fire assessment, to generate room in the millage rate in order for the town to apply for and receive and then make payment of a $2.5 million loan, or in that range.”
Council President Sue Thaler and other council members, including Mayor Gene Adams, encouraged Thrasher to discuss the tax rate reduction and special assessment ideas with the corporation.
“I think we have to do it, because you have to get started somewhere. If you don’t lower the millage rate, you’re not going to get any kind of loan to be able to take care of it,” Adams said.
“I think this is some very, very good information,” Thaler said.
Thrasher also received support for beginning to meet directly with residents to explain his proposals and answer any questions they might have.
Since 2009, the Briny Breezes tax rate has been at the state cap of $10 for every $1,000 of taxable value. The way Thrasher sees it, the rate could be lowered to about $3.83 for every $1,000 of taxable value if there were a separate assessment — or a transfer from the corporation — to cover public safety and emergency services.
The drop may seem dramatic, but it’s basically the reverse of a step the council took in 2009, when it almost tripled the tax rate to hit the cap. In the years before that increase, the town’s corporation had been making transfers to the town budget that usually covered between 70% and 80% of the town’s fire, EMS and police costs, Thrasher said. With the higher tax rate, the transfer dropped to 29% of those costs in 2009.
Back then, residents received an income tax advantage from being able to deduct the higher property taxes, something they did not receive when paying for the services through the corporation, Thrasher said. That tax advantage for itemizing deductions isn’t really there now for many residents given the changes in tax law over the past decade, he said.
As for taking out a loan to pay for needed work, Thrasher said borrowing money would not be unheard of in the town — even if it might be unusual — and it makes fiscal sense.
“We would be able to leverage what money we have to the greatest possible extent. That would be something we would use the loan money for,” Thrasher said. “Briny has borrowed money before. I didn’t realize it until studying some of the records. Briny borrowed approximately $1 million to fund upgrades to the water/sewer back in 1994.”
Thrasher emphasized the impact of the money would go far beyond a 50-50 match, where each local dollar is matched by a grant dollar. Using other available grants — possibly from private sources, Palm Beach County, the U.S. Department of Transportation or the Federal Emergency Management Agency — as matching dollars for Resilient Florida program grants, Briny would only have to pay about 151/2 cents for each dollar matched, he told council members.
In other action, the council decided to switch banks again, leaving PNC bank to return to TD Bank, which Thaler said is offering higher interest rates that could produce more than $62,000 in additional income for the town over the next year. In the past, the town had been with TD Bank before switching to PNC bank, officials said.