Holmes Beach city commissioners are a vote away from adopting a new budget ordinance and millage rate reduction.
But that reduction does not equate to a tax cut.
City commissioners voted 4-1 Sept. 11 on motions to approve first readings for a $25,233,596 budget and 1.99 millage rate for fiscal 2024-25, which begins Oct. 1.
Commissioner Dan Diggins voted “no” to both motions and called for a lower millage rate.
The proposed 1.99 millage rate will be a 2.93% reduction from the city’s current rate of 2.05 mills, but it amounts to a tax increase since it does not fall below the 1.8489 rollback rate.
The millage is the amount per $1,000 of property value used to calculate property taxes.
The adoption of a rollback rate would result in the city collecting the same ad valorem income as fiscal 2023-24, and any lower rate would result in a tax reduction.
This year, the municipality collected $6,172,693 in ad valorem property taxes.
While the proposed 1.99 millage rate is lower than the current 2.05 millage, that rate would raise $530,850 more than the city collected this year due to a $376,347,814 increase in total taxable property value in the municipality.
The owner of a property appraised at $500,000 with the city’s current 2.05 millage rate pays $1,025 in property taxes.
The owner of the same property would pay $995 in property taxes under the proposed 1.99 millage rate and $924.45 at the 1.8489 rollback rate.
Diggins called for the city to try reducing the millage rate down to the rollback, or as close as possible, by cutting “fluff.”
“I think it’s time we stop growing government here a little bit,” he said. “Just for one year, I’d like to see government stop growing. … It’s time to save our residents some money.”
He said the city could implement the rollback rate if they cut spending for each department by 1.9%.
During public comment, commission candidate Carol Whitmore encouraged the city to scrap its $307,000 budget for an aquatic skimmer vessel so the millage could be further reduced.
The city’s Clean Water Committee has called for the municipality to purchase such a skimmer vessel to serve as an algae harvester to clean local canals and waterways of algae blooms like red tide and Lyngbya wollei, also known as “brown gumbo” algae.
Mayor Judy Titsworth noted that the budget item was only a placeholder that would be explored if the city received grant funding for its purchase and operation, so it did not impact property taxes.
Commission Chair Terry Schaefer also expressed hope that there would be cost sharing with the other two island cities for cooperative use of the algae harvester. And the county has a harvester, which the city could borrow.
The other four city commissioners expressed hesitation with lowering the millage beyond the proposed rate.
Schaefer said it was difficult for the city to further reduce the millage without incurring the loss of services, but encouraged the city to explore reductions in future years.
Commissioner Greg Kerchner moved to approve a first reading for the proposed 1.99 millage rate.
Commissioner Carol Soustek seconded the motion, which passed.
The city’s proposed $25,233,596 spending plan is smaller than this year’s $25,492,838 adopted budget but a little more than $100,000 larger than the $25,121,957 actual budget.
The proposed budget includes $75,000 for potential land acquisitions, $100,000 for two T-end clean-water aerators and an air curtain to test water quality improvement methods, as well as $150,000 to relocate a historic cottage that was recently donated to the city.
While proposed expenditures for personnel services are set to increase by $999,834, those for operating expenses and capital outlay will decrease by $213,993 and $906,614, respectively.
The city’s proposed $2,357,400 capital improvement budget for fiscal 2024-25 includes $614,900 for three projects — phases J and K of work installing stormwater infiltration trenches and the municipality’s Resilient Gulf Drive project.
Phase J would involve the installation of stormwater trenches at the intersection of Palm Drive and 85th Street just south of CrossPointe Fellowship.
Phase K would cover Gulf Drive, between 45th and 52nd streets.
The Resilient Gulf Drive project would involve sea level rise mitigation improvements along Gulf, from Holmes Boulevard to Palm Drive.
Work could potentially consist of raising the roadway and installing and/or upgrading stormwater trenches in the rights of way along Gulf Drive.
The proposed budget also includes $7,157,500 in general unassigned reserves — money that can be used in emergencies.
Kerchner moved to approve a first reading for the proposed budget.
Commissioner Pat Morton seconded the motion, which passed.
The city was set to hold second readings and final hearings for the proposed budget and millage ordinances on Sept. 24, following The Islander’s press deadline.
Into the numbers…
2023-24 adopted budget
Total taxable property value: $3,169,033,544
Total budget: $25,492,838
Ad valorem revenue: $6,172,693
State revenue: $942,787
Local revenue: $9,511,001
Stormwater revenue: $3,269,702
Total carryover and reserves: $11,330,956
Total operating revenue: $14,161,881
Total operating expenses: $5,158,613
Personnel services expenses: $7,149,041
Capital outlay expenses: $4,904,514
2024-25 proposed budget
Total taxable property value: $3,545,381,358
Total budget: $25,233,596
Ad valorem revenue: $6,703,543
State revenue: $863,720
Local revenue: $10,707,552
Stormwater revenue: $1,890,353
Total carryover and reserves: $11,317,006
Total operating revenue: $13,916,590
Total operating expenses: $4,944,620
Personnel services expenses: $8,48,915
Capital outlay expenses: $3,997,900
— Ryan Paice