By Rich Pollack
Highland Beach town commissioners will spend the next few weeks looking for ways to trim about $450,000 out of a proposed 2019-2020 budget in hopes of avoiding either slightly raising the tax rate, borrowing from reserves or a little of both.
In July, commissioners approved a maximum tax of $4.05 for every $1,000 of taxable property value, up 9 percent from the current rate and 13.2 percent from the rollback rate of $3.58 per $1,000.
Town leaders, however, made it clear that they have no intentions of setting the tax rate at that level but needed to set a “not-to-exceed” rate by the end of the month to comply with state law.
“We’ve already started the process of reducing expenses,” Town Manager Marshall Labadie said. “We’re in great shape and confident that we will not be at that rate by the end of the process.”
But Labadie told commissioners that it will be difficult to balance the budget only by cutting expenses.
“We can’t make up the difference with just cuts without impacting services,” he said. “We’ll have to have an upward adjustment of the tax rate or pledge the use of reserves.”
Labadie, who has been working closely with Finance Director Matt Lalla to find ways to trim the gap between expenses and revenues, will be looking with commissioners in upcoming weeks for more cost-cutting opportunities.
“The upward adjustment of the tax rate and/or the use of reserves will be very minor by the end of the process,” Labadie said. “We’re hoping to get to a number that will be palatable for everyone.”
Mayor Rhoda Zelniker said she hopes to avoid reaching into the town’s more than $5 million of unrestricted reserve funds in the coming fiscal year. She pointed out that the town pledged close to $1 million from the reserves over the past two years.
“We can’t constantly take money out of reserves,” she said.
In addition to taking money from reserves for the current fiscal year, commissioners raised the operating tax rate for the 2018-2019 fiscal year from $3.07 per $1,000 of taxable value to $3.12 per $1,000.
Were the town to go to the maximum tax rate approved last month, which is not likely, the operating tax rate would be $3.43 per $1,000 of taxable value while the debt service rate would be $0.62 per $1,000.
That would still be lower than the 2016 operating tax rate of $3.50 per $1,000 of assessed value.
Property tax revenues are the biggest source of income for the town, generating about $10.1 million or about 80 percent of the overall general fund revenue.
On the cost side, public safety continues to be the biggest expense, with fire service provided by Delray Beach expected to cost $4.47 million, about a 5 percent increase over last year.
The cost of operating the town’s police department is expected to increase about 2.1 percent to about $2.6 million.
Labadie said that one of the pluses for the town as it plans for the coming year is that health care costs for town employees did not increase.
As he and members of the commission prepare for budget workshops this month, Labadie assured town leaders and the public that Highland Beach is on strong financial footing.
“The town is in great shape,” he said.