News

By Rich Pollack

Highland Beach residents likely will see a slight drop in the municipal tax rate this year even as the town incurs more than $700,000 in start-up expenses as it moves to create its own fire department.
During a June 21 special meeting of the Town Commission, Town Manager Marshall Labadie unveiled a $14 million general fund budget for 2022-23 that is an increase of $832,000 or 6% over the current budget.
If there are no major changes to the proposed budget, the town’s total tax rate will dip from $3.62 per $1,000 of assessed value to $3.59 per $1,000 of assessed value, due solely to a reduction in the debt service rate.
“We’re financially positioned to remain strong here in Highland Beach,” Labadie said. “We’re going to hold our operating tax rate flat while we reduce our debt service tax rate while working to enhance our three miles of paradise.”
This will be the fourth consecutive year the town has levied $3.23 per $1,000 for its general fund rate. Labadie said that Highland Beach will continue to have one of the lowest tax rates in Palm Beach County as well as in the state.
While the rate will be dropping, that might not translate to lower taxes for most residents largely because property values increased significantly.
Overall, Highland Beach saw a 13.8% increase in values, from $2.7 billion to just over $3 billion, according to the county property appraiser.
That increase is expected to generate about $10.5 million in tax revenue for the town — about $909,000 or 9.5% more than was received this fiscal year. In Highland Beach, property taxes are almost three-fourths of general fund revenue.
To keep the operating tax rate flat, the town is pledging about $375,000 from reserves, most of which will be used to offset the impending costs of starting a fire department.
Should that money be taken from reserves, the town would still have almost $10 million in reserves with $3.62 million still earmarked to offset charges associated with implementing a fire department.
The town, which has been receiving fire and rescue services from Delray Beach for decades, will not begin operating its own department until May 2024 but will incur start-up costs in the next fiscal year while continuing to pay Delray Beach for service.
In all, Highland Beach will be spending more than $6 million for fire rescue service in the next fiscal year, the town’s largest single expense.
Payment to Delray Beach of about $5.35 million — an increase of about 4% over the current fiscal year — accounts for the bulk of the cost, but the town will also spend money on salary and benefits for a new fire chief and on a new rescue vehicle in the fiscal year beginning Oct. 1.
Also in the additional fire expenses are costs associated with designing a new station that will accommodate an additional rescue vehicle and fire truck.
As the planning for a fire department continues, the town has created a new shared support services department, which will track services provided between departments and funds.
In addition to the fire chief, the town will add an assistant town manager, a management analyst and a custodian to its staff.
“We’re taking all these steps during unsettled economic conditions,” Labadie said.
Overall, salaries and related expenses will represent about 37% of the town’s budget. Labadie also anticipates providing non-union employees with a 5% cost-of-living increase and is exploring a one-time employee payment to address the cost of inflation and other external economic factors.
Commissioners and members of the town’s Financial Advisory Board will continue to review the budget throughout the summer, with the town setting its tentative maximum tax rate on July 19. A public hearing will be held in September, before the budget is finalized Sept. 21.