By Rich Pollack
Highland Beach commissioners last month approved a $30.5 million budget, which is 31% higher than last year while at the same time holds the overall tax rate steady.
Bloated largely by the town’s decision to create its own fire rescue department and the need to build a new fire station, the budget includes a total tax rate of $3.58 per $1,000 of taxable property value and does not require the town to pledge money from reserves.
That means that the owner of a home with a taxable value of $500,000 would pay just under $1,800 in Highland Beach taxes.
The tax rate is the same as last year’s and slightly lower than the previous year’s.
“This is a smart and financially prudent budget,” Town Manager Marshall Labadie said. “It positions us on strong financial footing moving forward after the fire department implementation.”
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 $23 million to just under $30.5 million, or about 31%.
The 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 the firehouse.
While the 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 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 are the costs of having the full 24 fire rescue personnel on the payroll beginning in March for training, and preparation for the transition.
The budget reflects a reduction in the cost of health insurance for employees, which resulted in $250,000 earmarked in the town’s proposed budget being moved into a reserve fund specifically for future fire department apparatus needs.
Also included in the budget is a 6.5% pay increase for non-union employees and increases for employees in two collective bargaining units.
The budget includes a 10% salary increase for Labadie, the maximum allowed under his current contract.
Commissioners praised the town manager for the work being done on preparing for a new fire department, as well as for his overall performance, with some saying they wished they could give him more than 10%.
With the increase, Labadie is now paid $232,000 a year.
“Marshall is really the wheel that turns Highland Beach,” Commissioner Donald Peters said.
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