By Jane Smith
Despite a proposed decrease in the tax rate and the use of federal dollars to offset some budget increases, Delray Beach property owners will still be paying more in city taxes next year.
The proposed plan that was approved unanimously by the City Commission on July 12 includes a 14% increase in property taxes, $11.3 million more than for the current budget.
While the city’s taxable property values have soared more than 15% to $14.4 billion, commissioners plan to barely nudge the tax rate down. They set the proposed tax rate at $6.56 per $1,000 of property value, down slightly from the current tax rate of $6.66 per $1,000.
The debt service tax rate also will be reduced in the financial year that starts Oct. 1. The total proposed citywide tax rate is $6.76 per $1,000 of taxable value.
If the proposed rates are adopted, Delray Beach will receive $91.8 million in property tax money, which includes $18.7 million that will go directly to the city’s Community Redevelopment Agency. The CRA also receives money from taxes assessed by Palm Beach County.
The city’s proposed operating budget is $166.1 million, an 8% increase.
The tentative tax rate had to be set in July to allow the county property appraiser to mail notices in mid-August to every property owner in advance of September public hearings on the budget. The notices cover assessed values and proposed tax rates from all the county’s municipalities and taxing districts.
The Delray Beach rates can be lowered but not raised during the city’s budget hearings in September. A second budget workshop will be held at 3:30 p.m. Aug. 22.
Where to trim?
The mayor and all the other commissioners wanted to lower the tax rate but differed in how they would achieve that reduction.
Commissioner Ryan Boylston pointed out that other Florida cities and counties are using their American Rescue Plan Act dollars — awarded by the federal government to offset expenses during the pandemic — to build affordable housing. The city’s plan is to use $3.3 million in ARPA funds to balance its budget.
“I’m not comfortable using the ARPA funds to balance the budget when our reserves are at the high end,” he said.
Delray Beach has $41.8 million in reserves, an amount equal to 27% of the operating budget, according to City Manager Terrence Moore. Boylston said reserves should be used to balance the budget.
But Mayor Shelly Petrolia looked to the proposed budget for items to cut.
She questioned whether a new mobile stage for $250,000 is needed if the current stage has another year or two that it can last.
She also challenged the need to buy $300,000 of city vehicles in the next financial year, asking whether it is possible to spread the cost over two budget years. In addition, she questioned buying a city restroom trailer for $115,000. “Couldn’t we continue to rent one?” she asked.
Petrolia also wanted to know why the Police Department needs a second patrol boat, estimated to cost $120,000 after a $65,000 contribution from the city’s fleet fund. The city Police Department currently has a patrol boat donated by the Palm Beach County Sheriff’s Office. The boat is 18 years old, will need a new engine soon at a cost of $25,000 and is not easily maneuvered, according to Ted White, Police Department spokesman.
Vice Mayor Adam Frankel agreed with finding more things to cut in the proposed budget. “Do you see any luxuries in the budget that can be cut?” he asked Finance Director Hugh Dunkley.
Petrolia praised the $125,683 cost for adding sidewalks to Andrews Avenue on the barrier island. At an April commission meeting, former Mayor Cary Glickstein described how the lack of sidewalks is a safety hazard for pedestrians. He saw an older woman fall out of her wheelchair after she was pushed onto the grass from the paved surface of Andrews to avoid being hit by a vehicle.
Other expenses were also deemed reasonable.
The city will spend $450,000 for a new phone system because the current one is not working properly. Another $200,000 will be used to create a time and attendance system that should solve problems noted by the city’s internal auditor. An audit this year found questionable payroll practices such as employees not writing down paid time off when it was taken. The city is in the process of creating a policy that requires full-time employees to note when they take paid time off.
At the Old School Square campus the city owns, sound and lighting improvements for the Pavilion stage will cost $120,000.
The Crest Theatre building that sits on the Old School Square campus needs another $1.3 million to finish the renovation work there, Moore said in his July 22 letter to the commission. He said the renovation money was included in next year’s capital budget.
As values increase, so do costs
While property values have increased, so have the city’s costs, Dunkley said. The city is self-insured for employee health insurance claims. Costs are projected to rise 19% or $2 million in the coming financial year, Dunkley said.
The city is finishing its employee compensation study to ensure its staff is paid properly. Moore asked for a $730,000 increase in his contingency fund to cover salary increases suggested by the study.
But Deputy Vice Mayor Juli Casale questioned whether it was the proper use of the contingency fund. Why not just give the money to the departments to disperse, she asked.
In action at their July 19 meeting, commissioners approved a 19.7% increase in the payments on residential utility bills — from $11.18 to $13.39 a month — to Waste Management to extend its trash-hauling contract from Oct. 1 to April 30. If the city needs another extension from May 1 to Sept. 30, 2023, the cost to residents will go up another 45.3%, from $13.39 to $19.45 per month.
The City Commission does not think the city was given proper notice about Waste Management’s wanting to end the contract at the end of September.