They did it. It was a slog, and at times a tense and acrimonious slog: one commissioner denounced another’s claim that there was a “staff conspiracy” afoot. The other commissioner didn’t walk back his statement. There were a couple of temperamental moments when one commissioner felt he kept getting interrupted.
But Flagler Beach city commissioners agreed after all to go to rollback for next year’s tax rate, which will translate to a modest tax decrease for many property owners, or some increase for those who aren’t homesteaded and whose assessed values have shot up. About half the city’s properties are not homesteaded. For the city, it means revenue will be the same next year as it was this year.
Flagler Beach will be the only local government to adopt a rollback rate for next year. (For an explanation of rollback, go here.)
Assuming the commission approves it at two public hearings this month, next year’s property tax rate will be $5.2850 per $1,000 in taxable value, down 5 percent from the current $5.5710. Taking a $200,000 house with a homestead exemption of $50,000, that means the tax bill will fall from the current $836 to $793, a saving of $43, assuming that house’s value hasn’t gone up. Even if it has, the value increase on which it can be taxed is capped at 3 percent, so the property owner would still see a minimal tax break.
It took the commissioners three full-day meetings and two full line-by-line comb-through of the city’s budgets. it took a lot of convincing on the part of Commissioners Eric Cooley and Rick Belhumeur, the staunchest proponents of going to rollback, though once they’d won over Commissioner Ken Bryan, even Commission Chairman Jane Mealy–who’d resisted rollback most–worked alongside her colleagues to get there. And it took some battling between commissioners and the finance director, Kathleen Doyle, who did her best to impress on them the importance of not falling behind with budgeting, the way the city had for the first half of the 2010s when the commission and its then-city manager, Bruce Campbell, had special affection for the rollback rate.
All of that seemed to have been resolved by the time the commission ended its second budget hearing almost two weeks ago, when a voice vote showed four of the five members, with Mealy’s exception, wanting rollback. The discussion seemed to have also made it clear that a majority of commissioners were not interested in micromanaging the budget, or picking through it to find what to cut. They wanted to set the tax rate where they wanted it, and they wanted the finance director and the city’s other department directors to pare their budgets accordingly.
Then commissioners got word that Mealy and Deborah Phillips had signed a request calling for a special, third budget hearing. Mayor Linda Provencher would later say that she would have done the same, had Mealy and Phillips not done so. The trio was not comfortable with leaving the budget entirely in the administration’s hands.
“My purpose in calling for this meeting was,” Mealy said at the beginning of last Thursday’s workshop, which would stretch over eight hours, “we reached a consensus at the end of the last meeting, but we did not discuss what the repercussions of that was. So finance director and other staff had to spend time changing the numbers in the book, and I thought it was incumbent on us to look those over.”
Doyle presented the numbers, then attempted a defense of a rate slightly higher than rollback.
“Are we going to be faced with increasing the millage in order to catch up?” Bryan asked her, assuming the city stuck to rollback.
“That is exactly what happened in the general fund over the years prior to 2016,” Doyle said.
Cooley insisted that there were no such things as cuts in the budget. If the city was maintaining the same revenue the coming year as it was taking in this year, then all departments would stay flat. “I don’t buy that. There’s no reason. We’re not cutting. We’re using the same amount,” Cooley said. “What I want to do is take out some of the wants.” His intention, he’s said all along, is to have a budget that reflects residents’ difficulties with the coronavirus, job losses and the like: if the city can avoid adding to residents’ woes, then it should do so this year. “Let’s be intelligent, let’s not put the city behind, but let’s take some of the fluff out,” he said.
That was true up to a point: it did not take in consideration the increasing cost of living, though inflation has been modest to non-existent. But it also did not take in consideration another substantial matter that Doyle and Mealy noted: property taxes account for just 62 percent of the general revenue. The rest is made up by other things such as sales taxes and user fees, which have fallen significantly because of the coronavirus emergency. Property tax revenue, in other words, props up the portion of the general fund that’s been bleeding dollars. By sticking with rollback, the fund will be more vulnerable.
“These increases are needed because of the situations we had gotten into with our general fund, mostly maintenance and things like that,” Doyle said, pressing her case for a slight bump in the tax rate that would translate to a 3.2 percent increase.
“I want to see some relief for folk, including myself, but by the same token I don’t want the chickens to come home to roost in a year and we say, sorry,” a higher tax raise is necessary, Bryan said. “I hope no one is out there saying he’s trying to promote the increase in the millage rate and this kind of thing, because I’m tired of all the scenarios and the conspiracy stories that are out there.”
Belhumeur was staring dead ahead. Bryan was needling him, making a direct reference to Belhumeur’s comment last week about “staff conspiracies.” Bryan continued: “While I’m on there, this is probably off course, commissioner, but I think it’s totally inappropriate for people to have been accusing our staff of conspiracies, because I know they work very hard, and to allege that our folks got together behind the scenes in order to conspire to do this is disingenuous and a disservice to our staff.” Mealy, laughing, said she was going to say likewise.
“I don’t find it funny, but I wish to speak to that,” Belhumeur said. “I didn’t accuse anybody of–” he paused. “With this new meeting, of conspiring. I said that the process of putting a budget together on a yearly basis is a staff conspiracy, and I’ll stand by that. That staff has an entire year to figure out what they want to do, what they want to put in the budget, and then they give us this loose leaf and give us three days to figure it out. I stand by what I said. I didn’t mean that anything about this meeting was a conspiracy. I just meant the overall process of putting the budget together on a yearly basis. It truly is.”
“Commissioner, I didn;t accuse you, but if you want to own it, so be it,” Bryan told him.
“This budget is different than any budget I’ve ever done, whether as mayor, commissioner,” Mayor Linda Provencher said. “We had covid, we weren’t meeting. We had a city manager who was ill, so he wasn’t at two budget workshops. We never had our strategic planning where we sit down with our city manager and our department heads and they tell us what projects they would like to do throughout the course of the year, and we tell them what we would like to see done, and then the budget is put together. We didn’t have any of that.”
Provencher said the administration at the previous budget workshop was left with the task of cutting over $200,000 from the budget, but no direction as to how to do it. “What else happened? Oh yes, the city manager died, who never got to explain this budget to us. And we had staff that when questioned, did not even know things that he put in, and the reasons behind them. So I don’t think it was a conspiracy by staff. Yes, they put their budget together, but there was also things that Larry [Newsom, the late city manager] that they weren’t aware, or that they didn’t agree with, and he ever got the chance to explain it.” She added: “I’m very, very angry, because I think our due diligence was to look at this budget another time before we go into our final meetings and all of a sudden, ok, we’re done, because at that point we usually are done with our budget.”
“So let’s put all this behind us, no more conspiracy theories,” Provencher said, and move on with the budget.
Doyle had cut some, but $125,000 remained to cut–out of a $6.7 million general revenue budget. Commissioners then started working on finding that money, line by line. It was noting short of finding a few thousand dollars here, a few thousand dollars there. (See a list of cuts below.)
Five hours later they were still $19,000 short. Belhumeur proposed using the city’s $5 million reserves to make up that difference. It would make all commissioners look like “heroes,” he said. “It’s $19,000. Just take it out of reserves. I know when we go through this capital stuff we’re going to find more that we can take out and add to our reserves.”
“$20,000 is not a big deal,” Doyle said. Commissioners agreed, and this time all five hands went up in agreement. Six, actually: Bryan rose both his.
Among the additional cuts to the general fund:
Police Department, Unfunded Police officer: -$59,067
General Government Financial Audit, Reserve for salary increase: -$15,000
Building and Zoning Professional services: -$10,000
Commission Operating supplies: -$2,600
City Clerk Travel/training, equipment: -$4,400
Fire Department: -$5,000
Roads and Streets: -$ 5,000
Beach: -$ 4,000
Human Resources: -$ 3,000
Finance: -$ 2,000
Library: -$ 1,000
The beauty of computer modelling, all they have to do is change the rate and kick off the SQL query(ies) and get a big number & then compare that to budget & actuals. One has to question the increases in assessments, especially after this pandemic year of 2020. As the recession gets deeper, Flagler Beach or any municipality would seriously have to consider reduction to the rollback rate even. That’s forthcoming. Takes at least 3 years to get out of any recession where it matters most, Main Street, not Wall Street.