The Loxahatchee Groves Town Council held a joint meeting with its Finance Advisory & Audit Committee (FAAC) on Tuesday, Aug. 20 as the town hammers out its spending plan for the upcoming fiscal year.
The town is going through a challenging budget cycle, trying to come up with the right balance of tax increases and spending cuts to close what was originally an estimated $500,000 budget shortfall.
The total proposed budget for fiscal year 2025 is approximately $10.5 million, or $8.2 million when excluding capital spending, interfund transfers, charges and use of reserves. That is already a decrease from the fiscal year 2024 budget of $12.3 million.
Early in the budget cycle, the council set its preliminary TRIM (truth in millage) property tax rate at 4.00 mills, up from 3.00 in the current year. The assessment for roads and drainage was set at $250, up from $200, and the annual solid waste assessment was set at $450, up from $400.
Through the budget process, the council has been working to lower at least two of those numbers. While there appears to be a consensus to stop subsidizing the solid waste assessment and set it at its actual cost of $450, there is little desire to change the roads and drainage assessment from $200.
While some increase in the property tax rate may happen, it will likely be much closer to the 3.00 mills from last year than the TRIM rate of 4.00.
To start the meeting, FAAC Member Manish Sood gave a financial overview from the committee to the council, summing up several meetings that the board held regarding the budget. The consensus of the board was that the town needs to find alternative revenue sources while cutting as much as possible out of the current year’s budget.
“For this particular year, our expenditures are higher than our revenues,” Sood said.
He went over what he called “immediate risks and opportunities” and “long-term risks and opportunities,” noting that property values have gone up by 14 percent, which has increased revenues, but the town’s General Fund expenses have increased faster.
Sood noted that the town has brought in several new employees to improve service to the public, but that has led to increased expenses beyond what can be covered by rising property values.
He asked if the town is generating enough revenues from ancillary services, such as charging more fees, rather than spreading it across the entire town in taxes. “Our recommendation is to generate more revenue,” he said.
Sood and the committee opposed the idea of raising the roads and drainage assessment from $200 to $250.
“If you do this, you are going to hit senior citizens, veterans, homesteaded, irrespective of people who make money or don’t make money. It will hit based on the size of your property,” he said. “In our view, this may not be the most efficient way to pass on the correct revenue to the correct cost.”
By his calculations, the town needed to cut the budget by $407,000 to balance it without increases in either the millage rate or the assessment rate. Sood suggested that this could be done by delaying projects.
The FAAC did support the idea of charging residents the actual cost for solid waste collection services, rather than subsidizing it.
“Our recommendation is to balance this budget by itself, so people know exactly what they are paying for their garbage,” Sood said.
He noted that gas tax revenue is slowly going down, and money from the county is also decreasing, both of which could be a future threat to the town’s finances. He praised town staff for its money management, noting that there is an additional $90,000 in interest income, which might increase more to help offset the deficit.
The FAAC suggested an “easy path” (set the millage rate at 3.00, increase the assessment to $250 and increase solid waste to $450) and a “harder path” (increase solid waste, but not the assessment, and figure out what to cut in order to balance the budget).
Councilwoman Phillis Maniglia agreed with the idea to stop subsidizing the solid waste fee. “It is absolutely ridiculous that this town has subsidized garbage for so many years,” she said.
FAAC Member Tracy Raflowitz wanted to know how many staff positions are open and if the town can save money by not filling them.
FAAC Chair Cassie Suchi said the overwhelming consensus was not to raise the millage or the assessments. “How do you do that? There are really good cuts in the budget that we found — a bunch of items across separate funds that can be cut to save money,” she said.
Maniglia did not like some of the suggestions, including the further delay of planned road projects.
“The residents voted to pave the roads,” she said. “They were told there would be repercussions, and there are repercussions now. How are we going to pay for that?”
Maniglia also did not like the idea of cutting staff members, many of whom were just added to fix an array of problems.
“Why do you want to cut staff right after saying that staff is doing a good job, and they seem to be needed?” she asked.
Councilman Robert Shorr went over a list of items from the budget that he believes can be cut, totaling more than $700,000.
Town Manager Francine Ramaglia said that money used for capital projects over the past several years came from outside the town, not residents. That includes federal and state grant money, as well as money from the countywide sales surtax — all funds that are drying up.
“There is no money to spend on any of the continued paving and maintenance, unless we can get it from outside sources,” she said, adding that the town can cut its way through the current year, but it cannot survive long-term without finding a different revenue model.
Mayor Anita Kane said she might favor raising the millage rate slightly, but not the roads and drainage assessment. She noted that she has been exploring the idea with others of creating a business district with a special taxing structure, which could raise additional revenue.
“I know that is a several-year process, but I would be in favor of starting that right away,” Kane said.
She also listed several projects that could be deferred to save money, as well as other cuts, and also suggested creating an in-house legal department, which she believes would save $100,000 a year.
Answering a question from Vice Mayor Marge Herzog regarding money for the upcoming year, Ramaglia noted that there is more than $1 million in state money in the budget that must be used for drainage projects.
Herzog favored cutting as many projects as possible to close the gap, including planned traffic-calming efforts on Okeechobee Blvd. and plans to upgrade town hall into an emergency operations center.
Kane liked many of the suggested cuts, but favored keeping the Okeechobee Blvd. work, which she and other residents have waited a long time for.
Shorr asked for a discussion on the town’s pay structure to make sure that employees are not being overpaid, and Ramaglia said that she will put together a presentation on it.
The council then agreed to a list of items to be cut. There was a consensus to raise the solid waste fee to $450 in order to no longer subsidize it. All the council members except Councilwoman Laura Danowski agreed to consider a small millage rate increase, but not an increase to the roads and drainage assessment.
Project Coordinator Jeff Kurtz said that he would update the budget spreadsheets and have them ready for a follow-up workshop that was set for Thursday, Aug. 22 at 5 p.m.
The council members thanked the FAAC for their hard work and suggested joint meetings with them more often.
“I think this is one of the best FAAC boards I’ve seen in a long time,” Danowski said. “Thank you for your hard work.”
