County takeover would affect Ocean Ridge, Briny Breezes and Gulf Stream
By Larry Barszewski
Coastal towns relying on Boynton Beach for their drinking water or for fire-rescue services could find themselves dealing with Palm Beach County instead if the city moves forward with a plan unveiled by City Manager Dan Dugger in May.
Dugger, who told city commissioners they “have the possibility to create a municipal utopia,” suggested the way to do so includes selling off the city’s water utilities to the county and merging the city’s fire-rescue department into the county’s.
Money gained from the sale and merger — potentially upward of a half-billion dollars — could be placed into a “municipal endowment fund,” with the city using about $25 million to $40 million in annual interest from the fund to pay for city projects and to reduce property taxes until they eventually are eliminated, Dugger said.
“The endowment fund means a stable income even if our tax base does shrink,” he told commissioners. “The ultimate goal is to lower our millage rate continually, year after year after year, while maintaining the same level of services.”
He also said no city employees would be laid off under the plan that calls for a smaller workforce. Those affected would be transferred to the county, while other positions would eventually disappear through attrition.
The commission will have to determine if Dugger’s plan is the “no-brainer” that Vice Mayor Thomas Turkin said it was, or if the math behind the city manager’s “transformative property tax reduction” doesn’t add up.
The fire-rescue merger would create net annual city property tax savings of about $20 million, Dugger said, though a separate municipal services taxing unit (MSTU) would be created and would offset any of those savings for property owners. However, the city would be able to eliminate a $145-a-year fire assessment fee charged to homeowners — a fee that Dugger said may need to rise to as much as $350 a year if no merger takes place — and about $100 million from the sale of fire-rescue equipment and buildings to the county could start amassing a city endowment fund.
Dugger estimated the endowment fund would get another $375 million to $470 million or more by selling its water utilities to the county. If the county doesn’t take over the water utilities, the city could face a $300 million bond issue in the not-too-distant future to pay for needed upgrades.
Dugger said the endowment fund, in addition to other possibilities, could also be used to buy up land in the city — to give the city more control over what gets developed and to reduce the impact of state laws that have made it harder for cities to prevent high-density housing developments within their communities.
The changes would impact three coastal towns that get or plan to get services from Boynton Beach: Ocean Ridge and Briny Breezes receive their water and fire-rescue services from the city; Gulf Stream is planning to tap into Boynton Beach’s water supply beginning in about a year.
There’s a long way to go before any plan is reality.
“I envision that we will have lots of conversations with the residents about this,” said Commissioner Aimee Kelley, while acknowledging some of the motivation behind the plan, including state efforts to cut back on how much municipalities — except for public safety — use property taxes to cover their costs.
“Being up here over three years, you know we hear the common thread, that of ‘don’t raise the taxes but keep providing services. We want more, but we want to pay less,’” Kelley said.
Dugger’s plan includes elements for restructuring the city’s Community Redevelopment Agency, which would see its city property tax revenues reduced. It also addresses city pension liabilities and having the city switch the services it continues to provide to more of a fee-based model.
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