City Manager Dale Martin pulled a subtly clever stunt on his commissioners and the mayor to illustrate the minor impact of next year’s tax change on their bills. He prepared a chart for Wednesday’s budget workshop showing how much more each will pay. “I randomly picked five city commissioners and one city manager from the city of Flagler Beach to try and keep it somewhat anonymous,” Martin said. “I only refer to these people by their initials.”
The result: the increase in the elected’s city tax bills will range from $22 for Commission Chair Eric Cooley to $148 for Mayor Patti King, who’s really the outlier in the bunch: she owns a new million-dollar home, which has no benefits of accumulated homestead protection, while the others have more modest digs and homestead protection (the taxable value on Cooley’s house is $132,548). Martin himself will pay $42 more, and the others are not far off from that.
The median tax bill in the city is $1,500, pretty much in line with the median for the commission.
The chart does not project how the city will be affected if voters approve a proposed constitutional amendment in November that would raise the homestead exemption to $150,000, and to $250,000 next year. Should that happen, city property tax revenue will drop by about 30 percent next year, and more the following year.
With that in mind, the Flagler Beach City Commission, like the county and Palm Coast, is taking a muted approach with its budget and tax rate for next year.
“I hear from those in the community that want to tie the potential passage of the amendment in November to this year’s budget,” Commissioner Scott Spradley said. He wanted to make it clear that “this year’s budget is not affected by whatever happens on the agenda item on the constitutional amendment concerning homestead, although we will be doing our job to prepare for that to trim where we can.”
If it passes, Martin said, the city will have 10 months to prepare for the following year’s budget.
The city’s total staff of 114 will increase by one or two positions overall. But one of the new proposed expenses is $68,000 set aside to extend health insurance for city commissioners. Should commissioners elect to take the insurance, it would cost about half of that, Martin said, because of the provider the city secured. That’s assuming all commissioners opted in. Some won’t: some are on Medicare.
Commissioner John Cunningham said the $68,000 would better be divided up into salary pay to attract better commissioners to the job. But that would have to be a voter-approved charter amendment. Cooley told him the addition of health benefits itself might attract better commissioners in the future. “We don’t do this for the money,” the mayor said, “but an added benefit, given the amount of time that we dedicate would be very helpful, I think.”
The commission agreed to try it in the coming year. Martin said the budgeted amount will likely be $35,000 or less.
Martin submitted a $16 million general fund budget that would keep the tax rate at $5.45 per $1,000 in taxable value. It has been at that same rate since 2022, when it increased from $5.42. If you own a $300,000 house with a $50,000 homestead exemption, you will pay the city $1,362, in addition to your school, county and a few other taxes.
The $5.45 rate is a tax decrease under Florida law, which does not define tax increases by rates going up and down, but by total general fund revenue collected, year over year. If the revenue (excluding revenue from new construction) is higher, then it’s a tax rate. If it’s lower, it’s a tax decrease.
Since property values declined slightly this year, the tax rate would have to be higher ($5.5521) just to stay even. By keeping it flat, Flagler Beach property taxpayers will theoretically see an average 2 percent decrease in their city tax bill, though as noted with the city manager’s chart of commissioners’ properties, values have not decreased uniformly. For those who have seen an increase in value, the tax bill will increase slightly.
The general fund will still see an increase overall because new construction generated extra revenue, as have other miscellaneous sources of revenue.
The Fire Department and the Police Department alone account for $5.5 million of the general fund, or a third of it. The Police Department is adding a full-time and a part-time uniformed position. Commissioners are concerned about overtime costs.
The general fund is only a fraction of the total city budget, which is $72 million. But only the general fund includes property and other taxes. The rest is made up of self-supporting funds, such as the water and sewer utility, debt service, the pier (and pier construction), garbage collection, and impact fee revenue.
Development impact fees are the one-time charges levied on new construction to defray the “impact” of new residents or businesses on city services such as fire, roads, parks, the library. The water and sewer impact fee fund will generate nearly $1 million.
“The City’s historic Pier is scheduled to be completed this year, restoring this community icon to its place of prominence in Flagler Beach and the region,” a letter summarizing the budget Martin wrote to commissioners states. “The new Pier will have been funded through federal and state contributions. Additional improvements related to the Pier remain under design: expanding the facilities under the ‘A’-frame, constructing an open-air deck for public and private events, and rebuilding the waterfront boardwalk. These additional projects are likely not to begin construction within two years.”
The letter refers to “successful staffing and retention efforts,” but during Wednesday’s meeting, Martin said “we’ve actually had a lot of employee turnover in several departments for a variety of reasons, and so what I’ve encouraged the chief and deputy chief to do is keep the recruitment process going.”
The workshop revealed that the city can no longer get insurance for its walkovers, which are often damaged or destroyed now that storms are getting more violent, beaches are getting narrower and the sea is rising. A full replacement walkover cost $68,000 to $70,000 a few years ago. “When we got reimbursed through FEMA on the dune walkovers,” City Clerk Penny Overstreet said of the Federal Emergency Management Agency, “the requirement on that is to maintain insurance going forward. We cannot get insurance anymore. No one will write us. So we don’t know how that will be approached by FEMA as if it may be seen as a hardship that we’re not, we can’t. We’ve tried. We can’t get insurance. That’s an unknown. We don’t know until we get there.”
See the full proposed budget book here.
Leave a Reply