By Larry Barszewski
Delray Beach property owners could see their city tax rate drop again this year — the 11th consecutive year the rate has been reduced or stayed the same — though many homeowners and businesses would still end up paying more taxes because of rising property values.
The goal of city commissioners to reduce the tax rate is being assisted by another strong increase in property values this year, which are estimated to be up 13.2% or $1.9 billion.
At a June 13 budget workshop, Mayor Shelly Petrolia and Vice Mayor Ryan Boylston took the lead in supporting a tax rate reduction even greater than City Manager Terrence Moore was considering.
Either way, taxpayers likely will be warned of a proposed tax increase when tax notices go out in August, since the proposed reductions in the tax rate could still be more than offset by the increased tax revenue from higher property values.
Commissioners said they would be willing to dip into excess emergency reserves to inch the tax rate lower if they can’t find budget cuts to make up the difference.
Finance officials typically recommend having two months’ worth of expenses in reserve, which averages out to 16.7% of the city’s operating budget. Delray Beach uses a higher benchmark — reserves equaling 25% of the operating budget — to cover the potential of a crippling emergency, such as a hurricane pummeling the city.
The city’s unrestricted reserves, projected at $45.5 million this year, are about $10 million more than even that 25% level, officials said.
The city manager had suggested a combined tax rate — including the operating tax rate and the debt tax rate — of roughly $6.60 for every $1,000 of taxable property value.
Moore reached that recommendation in part by lowering the operating tax rate from last year by $.05 per $1,000 of taxable value.
Petrolia and Boylston said they would like to see a further operating rate reduction, to a total of $.15 per $1,000 of taxable value if possible.
“We’ve raised the rates on water. We’ve raised the rates on storm-water, not to mention the inflation everybody is feeling in their pockets from insurance to going to the grocery store,” Petrolia said. “To balance it out, I kind of feel like the way we can do that with our citizens is to lower that rate as much as we can without affecting any services.”
Moore said he would take those views into consideration in preparing his proposed budget, which will be discussed by commissioners July 11.
Once the proposed tax rate is set, the commission can make a further reduction during September’s public hearings on the budget, but officials are generally prohibited from raising that rate.
Minimum wage raise suggested
Commissioners said they want to raise the city’s minimum wage of $13.23 an hour. It would cost about $295,000 to lift that wage to $15 an hour, which would cover 16 employees now making less than that amount, and to provide 4% increases for another 149 city employees near the bottom.
While commissioners would like to see a change soon, they said they would defer to the city manager on how best to proceed.
Petrolia said she would support going even above $15 an hour. But she didn’t want the commission to completely open the union contract — which still has a year left on it — to renegotiation. “When we open up that can of worms, it takes off in different directions,” she said.
Boylston said the change is needed because low wages cause turnover that hurt maintenance and services in the city.
“I think this is critical. If there’s any place that I can spend $200,000 to $300,000, it would be addressing this need,” Boylston said. “Look at what our residents are asking for, look at the complaints you get in your emails. It is directly connected. If we want to be able to maintain our city and do all the things that our residents expect us to do to make Delray Beach even better than what it is, we need people. We need people to stay in these positions and we need to be able to staff up. Otherwise, nothing is going to change.”
During the workshop, city officials told commissioners the budget includes Highland Beach’s paying for only seven months of fire rescue services before that town starts its own fire department in May 2024. Moore said there should be no impact on the city’s bottom line.
In another area, Petrolia was concerned that no money from the city’s Urban Development Action Grant was being used to buy land that could then be offered to build affordable housing, a great need throughout South Florida and the country. City officials weren’t certain the grant money could be used for land acquisition, but they agreed to check and report back to commissioners.
“We had $3.8 million sitting out there that could have been invested in land, that we could then have leveraged with these builders that are required to build a certain amount of [affordable] housing units,” Petrolia said.
“I would like to see us purchase land to be able to, again, like I said, flip over to these developers that are required to build and let them build at their expense houses in our town. … If we don’t leverage that, we’re going to miss that boat and it’s just going to be gone.”