By Joe Capozzi
Ocean Ridge property owners can expect higher tax bills next year. How much higher depends on whether a majority of commissioners follow through on a tentative desire to set the highest tax rate in town history.
In July, the commission voted 3-2 to tentatively raise the tax rate to $5.65 per $1,000 of taxable value to help balance a proposed $8.8 million budget for the next budget year, which begins Oct. 1.
Commissioners Geoff Pugh and Steve Coz voted against the increase after saying they might be willing to consider raising the rate to $5.50 per $1,000.
For the owner of a home valued at $1 million last year, a rate of $5.65 per $1,000 would add $543 to the tax bill.
If the commission votes to keep the rate at $5.35 per $1,000, taxes would still go up because, based on town projections, property values increased 4.3% over last year to $1.15 billion. On average, the owner of a property valued at $1 million last year would see about $230 more in taxes.
Commissioners can lower the rate and tweak the budget before voting on a final version in September. But if they vote to keep the current rate of $5.35 per $1,000 of taxable value, they’d need to tap $439,404 from reserves to balance the budget, a strategy that didn’t sit well with a majority of commissioners.
The tax rate has been $5.35 per $1,000 for the past nine years except for 2018, when it dropped to $5.25 per $1,000.
Last year the commission earmarked $706,421 from reserves to cover the expected shortfall. The actual amount used won’t be known until the end of the year, but it could be less than $706,421.
“I think we are being fiscally irresponsible by not considering a millage increase,” Mayor Kristine de Haseth said at a July budget workshop.
“I think the time was long overdue probably about five years ago and the level of service that this town has and demands is going to do nothing but increase.”
The first budget workshop was held as Hurricane Elsa approached South Florida. The region was spared, but the mayor noted that Elsa was one of the earliest-forming storms on record.
“Given the scare of Elsa, that’s kind of a wakeup call for all of us that storms are going to happen eventually,” de Haseth said. “It’s not the percentage of the budget we have in reserves. It’s how much, how far will those reserve monies go and sustain us.”
Town Manager Tracey Stevens’ proposed spending plan is nearly 6.1% higher than the current budget mainly because of capital improvement projects, bridge repairs, drainage projects “and uncontrollable increases in general operating expenses” such as insurance and retirement rates and raises for employees, she wrote in a memo Aug. 2.
The extra costs add up to $493,656, with $365,000 going to improvements mandated by the Florida Department of Transportation: $240,000 for bridge repairs and $125,000 for replacing street lights on Ocean Avenue.
Also driving the increases are insurance rates in workers’ comp and general liability claims and contract increases for police, fire and emergency medical services.
Stevens’ first proposal called for using $653,540 in reserves. The latest plan, tweaked through four workshops, calls for $216,130 from reserves.
She reminded commissioners that she expects the reserve fund to be replenished by unused money at the end of the next budget year.
“Town Reserves have typically increased over the past several years by the end of the fiscal year due to staff turnover, or short-staffing which causes projects to not be completed by the end of the fiscal year,” she wrote.
Commissioner Martin Wiescholek said he is not in favor of tapping too much from the reserves every year. “The prudent thing is to replenish reserves or attempt to,” he said at the July budget meeting. “We are living in a town with a lot of services, we have to pay for it.”
Public hearings are Sept. 7 and Sept. 21.