Gardens budget: What you pay and where it goes

Tapping its vast reserves and federal COVID relief money allows Palm Beach Gardens to propose no change in the tax rate for the seventh straight year. 

City Manager Ron Ferris’ budget blueprint calls for adding 11 positions, including a police officer, firefighter and seven jobs at the yet-to-be-built Par 3 golf course at Avenir. 

While the tax rate remains flat at $5.55 per $1,000 of assessed value, taxpayers will pay more because of rising property values. 

To raise the same amount of money from property taxes this year as last year’s $69.3 million, the tax rate would have to drop to $5.42, a rate it hasn’t reached since 2009-10. At $5.55 it is expected to bring in $71.7 million, two-thirds of the city’s $108.8 million general fund.

For homesteaded owners, whose valuations are capped at 1.4 percent, a home assessed at $450,000 as of Jan. 1 would be charged $2,255 in taxes to the city, an increase of $35, the city calculated.

For owners of commercial properties and those without homesteads, the citywide average rise in value is 2.3 percent, the city said, translating to a $57 annual tax hike. Owners whose property values drop, like the Gardens Mall, will see a decline on their tax bill.

Payments to the city are less than one-third of a typical property tax bill, which also includes payments to the county and the school district. 

Overall, property values in the city rose by 3.56 percent to $13.5 billion, the fourth-highest in the county but 14th-highest on a per capita basis. 

Unlike other cities, Gardens charges no electricity or water fees and does not assess residents for stormwater collection or firefighting. However, it does charge franchise fees expected to raise $5.3 million on electricity and $300,000 on garbage collection as well as a $1.86 million communication service tax on phone bills.

One of the largest revenue increases comes in building permits, buttressed by construction of homes at Alton and Avenir and expected to rise 41 percent to $5.9 million.

The budget also anticipated $3.3 million in mobility fees collected from developers, a 262 percent increase. The city is defending those collections in court against a county lawsuit. 

The city’s Budget Oversight Review Board reviewed the proposed spending plan on July 22 and will finalize its report to the city council on Aug. 26. The council considers the budget at hearings on Sept. 8 and Sept. 22. It must be approved by Oct. 1. Tax bills go out in late October.

Adding 11 positions

The 11 new positions increase total employment at the city to 550. Overall personnel costs, which include 6 percent raises for most workers and pension payments, are rising by $2.5 million to $72.1 million.

One of the new positions will be a director of mobility, a response to a resident survey that listed traffic as a top concern. The city also will add a police officer in its traffic unit, a fire plans examiner to keep up with development and a mechanic. 

Golf course revenues will pay for the seven jobs at the 18-hole Par 3, which include an assistant superintendent and a golf pro. Most won’t start work until July 2022. 

The course, on 115 acres provided by the Avenir developers next to the city’s Sandhill Crane Golf Club, is scheduled to get a one-time $700,000 infusion from the general fund. 

Payments on the course’s $14 million debt will come from recreation impact, public facility impact and course fees, the budget document says. 

Police, fire budgets increase

Overall spending for city departments, excluding a $40 million reserve fund, would rise by 9.3 percent to $108.8 million. Revenues come in at $106.8 million, requiring a $2 million infusion from budget stabilization reserves.  

About $32 million of the $108 million goes to police, a $1.47 million increase over this year’s budget. Another $29.3 million goes to the fire department, a $1.59 million increase over this year.

Among the largest increases is a $2 million rise in spending for the catchall area of general services, which includes a 3 percent rise in garbage collection fees to $3 million, a 5 percent increase in electricity payments to $1.3 million and insurance costs of $1.1 million, up nearly 12 percent.

Spending on recreation is expected to drop by $417,000 to $1.27 million, with the biggest declines in the aquatics and general and teen programs. Parks would see a $205,000 rise to $4.7 million.

More for city council

The budget for the city council would rise by nearly $49,000 to $594,053, with salaries accounting for $167,348, a 3.2 percent increase.

The largest increase in the five-person council’s budget is for “contributions and donations,” which rose to $40,000 from $20,000 last year and $7,000 two years ago.

The budget says the money will go to: “Memorial contributions, donations in lieu of flowers, pavers, trees, benches, project graduation, recognition plaques, life savings awards, donations to the Palm Beach North Chamber of Commerce for Arti Gras and donation to the Veterans Golf Tournament, Homeless Coalition Palm Beach County (and) Sponsor Level ‘Opening Doors.’”

The city clerk’s $972,723 budget would rise by 9 percent, including a $50,000 increase to $190,000 in the cost of holding elections. 

The budget for police and fire overtime at the Honda Classic golf tournament would rise by $60,000 to $194,000. 

To make the budget balance, finance officials tapped $2.8 million from the city’s $9.8 million budget stabilization reserve account. But the city also increased by $800,000 a $2.9 million reserve fund containing federal money to fight COVID, for a net decline in those reserve accounts of $2 million.

COVID-relief money

In May, the city received $2.9 million, its first of two federal 2021 COVID relief payments. Through a complicated federal formula, officials determined that $2.1 million could go toward city expenses and the remaining $815,000 could be placed in reserves.

As the difference between the decline in revenue caused by COVID-19 grows, the formula would allow the city to apply the entire remaining amount, $3.7 million, to city expenses next year, Finance Director Allan Owens told the Budget Oversight Review Board on July 22. 

In a 10-year budget projection, Owens says to maintain a $5.55 tax rate and spend $6 million on a new western fire station, the city will drain its budget stabilization reserves by 2024-25 but the buildout of the 4,000-home Avenir will help rebuild that reserve account to $2.5 million by 2030-31.

However, those projections are built on 3 percent employee raises, not 6 percent as called for in existing contracts, Owens told the budget board.

The city’s unassigned reserves, at $26 million, remain little changed over the 10-year period and far above the 17 percent of expenses required by the city council.

© 2021 Joel Engelhardt. All rights reserved.