Water pipe project could be accelerated
By John Pacenti
Newly minted Town Manager Michelle Lee Heiser said Ocean Ridge, basking in good financial news, can expect to keep the property tax rate steady in the newly proposed $13.3 million budget.
With municipalities required to set the upper end of a new tax rate by the end of July, Heiser recommended keeping the rate the same as last year’s $5.40 per $1,000 of taxable property value. Commissioners unanimously approved the rate — which can still go down during the final public hearings on the budget in September.
But just because the rate stays the same doesn’t mean that residents won’t be paying more taxes. That’s because taxable property values increased in Ocean Ridge by 10.14% this year — leading all nearby municipalities.
For homesteaded properties, the state caps the increase in taxable value at 3% per year. For an Ocean Ridge home worth $1.5 million last year, that translates into $243 more in town taxes.
Last year, Mayor Geoff Pugh said, he got bombarded with phone calls when the commission set the tentative rate at $6.00 per $1,000 of taxable property value, before whittling it down over the summer.
“The past thinking was if we had anything happen, we would be at the max” in case the town needed the additional revenue, Pugh said at the commission’s July 8 meeting. “And then we can always bring it down later, right? With our present financial situation, it doesn’t make any sense” to set a higher rate.
Commissioners at the meeting heard praise from an auditor and financial consultant, saying that Ocean Ridge’s finances are in a good position to accelerate the town’s top capital improvement project — replacing water pipes — and launch some others.
Town auditor Ronald Bennett told commissioners they had an unassigned fund balance of $9 million to spend at their discretion due to a variety of factors, such as increased property tax revenues and investment income.
“The town embarked on a new investment program, and it paid great dividends, almost half a million dollars in investment income,” he said.
Bennett said the town’s reserves are in such good shape that it could theoretically “pay almost a whole year’s worth” of expenses without additional revenue.
“That’s one of the highest I’ve ever seen,” Bennett said. “Way back when I first started doing this, 30 years ago, we used to tell people, ‘Well, you need at least two months’ worth of money on hand.’”
The town’s financial consultant, Holly Vath, highlighted that $34.4 million in new construction had been added to the town’s tax rolls, representing approximately 2% of its total property value.
If the new construction were not taken into account, a rollback rate of just under $5.00 per $1,000 of taxable property value would generate the same tax revenue as the current fiscal year, she said.
If commissioners keep the $5.40 per $1,000 tax rate, new construction will generate about $185,000 in additional tax revenue.
Heiser, the town manager, stated that by maintaining the current tax rate and utilizing the additional tax revenue it will generate, both from higher property values and new construction, the town can expedite the timeline for the water main project. “We’re going to move this eight-year plan down to within a five-year result, a completion date,” she said.
Heiser, who just signed a contract to become town manager, said there isn’t much more to talk about when it comes to revenues.
“We can pretend like there’s a lot more, honestly, but we’ve got it nailed down,” she said.
She said that she wants the commission to discuss capital projects at its August meeting, “so that the general public knows how much work is going to get done in this next fiscal year.”
Heiser noted that part of the discussion will be about whether to take out low-interest state loans for some of the projects.
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