The Loxahatchee Groves Town Council on Tuesday approved a Truth in Millage (TRIM) rate of 2.6 mills, almost twice the town’s current tax rate, primarily due to increasing costs for law enforcement.
The Palm Beach County Sheriff Office’s cost for services will go from about $294,000 to $610,000 annually, which would put full-time deputies in the town 24 hours a day, resulting in the tax rate jumping from the current rate of 1.4718 mills to about 2.6 mills.
The council also approved a solid waste assessment unchanged, but with a payback to residential but not commercial consumers in an attempt to put a bigger burden where council members felt the primary responsibility lay, on growing commercial interests in the town.
Town Manager Bill Underwood pointed out that the town has managed to keep tax levels down despite the 2008 recession when property values and corresponding tax revenue plummeted.
He pointed out that even though the taxable values have gone up, they are still lower than they were before 2008 by about 20 percent.
“The adopted millage rates look really bad,” he said. “I would love to tell you there’s a different story, but there’s not. We’ve gone up to 2.6 mills in this budget. That accommodates the sheriff’s budget, which we added to the existing millage rate.”
Underwood also noted that the solid waste assessment started out high early in the town’s incorporation but dropped in 2013 and has remained steady at $256.27 the past three years for residential properties.
Underwood also noted that when the economy struck bottom from 2008 to 2010, the rollback rate would have been above 2 mills, which would have generated the same amount as previous years, but the council chose not to go with the rollback rate but remain below it.
“You’ve stayed below the rollback rate basically except for this year,” he said. “Ad valorem taxes paid the town this year will be the first time you’ve exceeded the beginning year.”
The tax increase was mitigated by a property value increase of about 20 percent in the past year, but also an increase of about 20 percent in the amount of tax-exempt agricultural land, Underwood said.
The total proposed budget for fiscal year 2017-18 is about $13 million, which also reflects inclusion of the $6 million bond approved by voters, which was moved into the capital improvement fund.
Ad valorem taxes jumping from about 20 percent to about 40 percent of general fund revenue will mark the first time that ad valorem tax revenue has been the town’s primary source of revenue. The PBSO budget will also be the biggest cost to the town, Underwood said.
The average tax increase for a homesteaded property will be about $150, which will generate about $365,960 more in revenue, he said.
The town would fund its Waste Pro solid waste contract for $100,165 of the total $429,000, which he said is down slightly from the previous year due to the elimination of some expenses, although the contract increased 2 percent.
“We’re plugging in the $100,165 to the general fund to keep everybody’s current rate at $256.27,” Underwood said.
The town will receive about $213,000 from the recently approved 1-cent infrastructure surtax.
“You’re going to have to make a decision early on what you want to spend that money on,” he said, explaining that the money should not be used to pay toward the town’s bond issue.
Underwood explained that there will be two more budget meetings in September where the council can reduce the tax rate, but not raise it.
Vice Mayor Ron Jarriel was concerned about such a big jump in the ad valorem tax rate.
“I think in the last two years, this town has seen probably the best two years that we’ve had,” Jarriel said, adding that the town has the $213,000 coming in from the sales surtax that can be used for capital improvements, and money could be moved from the capital improvement fund to pay for the increased PBSO cost. “If we build a road with that, we don’t have to pull it from our other funds.”
He favored the improvement in PBSO coverage, but had asked Underwood what would happen with the PBSO contract if the council did not raise taxes.
“He said that if we don’t raise taxes this year and maintain what we’ve got at 1.4, and I would be in favor of 1.5, which would be a minimum increase, that in four years, our bank account would be gone,” Jarriel said.
Councilman Dave DeMarois read from a prepared statement that with only a few days’ notice, the council is being asked to tax residents almost double what they are now paying. DeMarois asked that the Finance Advisory & Audit Committee schedule an emergency meeting to advise the council what action to take, and report their findings to the council in an emergency meeting, but the council took no action on that request.
Mayor Dave Browning said he did not want to raise taxes, but felt it was necessary in order to control crime in the town. He pointed out that he had sat on the Loxahatchee Groves Water Control District Board of Supervisors for 11 years, where the board opted to spend down its reserves rather than impose assessment increases, until they had no money and were faced with a historically high assessment increase.
Councilman Todd McLendon made a motion to approve the solid waste assessment, which carried 5-0.
Councilman Ryan Liang made a motion to approve the TRIM rate of 2.6 mills, which carried 4-1 with DeMarois dissenting.