By Rich Pollack
Highland Beach commissioners got their first glance at a proposed budget that is larger than the previous one — thanks mainly to the creation of a new fire department — but does not require an increase in the tax rate.
“This is a balanced budget with no millage rate increase and no need to pledge money from reserves,” Town Manager Marshall Labadie said.
Unless there are major changes as the budget weaves its way through the commission review process, the town will hold its total tax rate at $3.58 per $1,000 of taxable property value.
Overall, the town’s general fund budget, which addresses most operational needs, increased by about 9% from about $15.6 million to $17 million. The town’s overall budget, which covers other accounts including water and sewer and building department funds, as well as the partial cost of building a new fire station, increased from $21 million to just under $30.5 million, or about 45%.
The proposed budget shows a very slight decrease in the operating tax rate and in general debt service but includes a separate, slight increase in the debt service tax rate to cover a bank loan being used to build a new fire station.
While the proposed budget reflects a decrease in the overall tax rate, it is likely to be offset by a significant increase in property values.
Property values throughout the town increased by about 13% — more than town leaders had expected — making it easier to increase services without boosting the tax rate.
Property taxes, which are expected to increase by about $1.4 million, account for about 58% of the town’s overall projected general fund revenues.
The town also expects to see a significant increase in investment earnings, which are projected to grow by a little more than $50,000.
The town’s transition to its own fire department will have the biggest impact on the budget with about $12 million allocated to the new department. A little over $4 million, which is coming from a bank loan, will be used to complete construction of the new fire station while about $8 million will cover operating expenses.
The $8 million is misleading, however, since it accounts for the seven months the town will continue to pay Delray Beach for fire rescue service until the new department is operational on May 1. Also included in that number is the cost of having the full 24 fire rescue personnel on the payroll beginning in March for training, and preparation for the transition.
“We’ll be operating two fire departments for a while,” Labadie said.
Overall, public safety accounts for 55% of the town’s proposed general fund budget, with the Police Department showing an increase of almost 17% to $3.5 million. That increase is due largely to the new union contract.
Also having an impact on the budget is the cost of trash and garbage removal, which increased dramatically as a result of a new contract with Waste Management. Solid waste expenses rose from $492,000 to $1.02 million, an increase of 105.6%.
Salary increases for town employees, excluding union members, average about 5%, according to town staff.
Although the town has allocated $6 million from its reserves for the fire department, it still has about $6.2 million available.
“We’re not only financially healthy, we’re financially healthy moving into times of economic uncertainty,” Labadie said.
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