Ormond Beach City Commissioners cut budget to reduce tax rate increase to 7.66%

Ormond Beach City Commissioners cut the city's proposed property tax rate for the next fiscal year by about 0.04 mills during their workshop on Tuesday, Aug. 19.


Ormond Beach City Hall. Photo by Brian McMillan
Ormond Beach City Hall. Photo by Brian McMillan
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While Ormond Beach residents are likely to still see an increase in their taxes, it won't be as high as expected. 

Ormond Beach City Commissioners cut the city's proposed property tax rate for the next fiscal year by about 0.04 mills during their workshop on Tuesday, Aug. 19. The new rate — 4.4797 mills, or $4.4797 per $1,000 in taxable property value — is 7.66% higher than the current tax rate.

But, lower than the 10.2% tax rate increase, and millage rate of 4.5220 mills originally proposed in late July. 

"I think we all want to do the lowest possible [milage] with the highest quality," City Commissioner Lori Tolland said, adding that certain public safety needs like police wages and collective bargaining agreements were "non-negotiable."

Those two needs alone would raise the tax rate.

"... I do acknowledge and I know all of you have probably heard it — the Tallahassee goal to be fiscally conservative and I think we're all struggling with that as well," Tolland said. "We all want to be conservative."

Cut from the millage rate was funding for:

  • Heavy-duty vehicle and equipment replacement — $260,000, at an additional millage rate of 0.046. Rather than funding this increase using property taxes, the city will use its reserves to fund the remaining dollars needed to purchase the vehicles outlined in the budget (two Public Works vehicles, three Leisure Services vehicles and two Engineering vehicles. One of the Public Works vehicles is over 55 years old.
  • IT analyst position — $100,000, at 0.0175 mills. City staff said it would reassign duties for two currently vacant positions. 
  • A Consumer Price Index Adjustment for the city's landscaping contract — $50,000, at 0.0088 mills. The city's contractor, Yellowstone Landscaping, asks for a CPI adjustment every year. This will come before the commission for approval at a future date, but if approved, it won't be funded through property taxes.


PUBLIC SAFETY NEEDS

Four public safety expenditures were brought before the commission as possibilities to cut: $1 million to fund fiscal year 2024's police wage increases, $1.8 million for anticipated collective bargaining agreement costs, $100,000 for public safety vehicles and equipment replacement, and $60,000 for a new security guard for City Hall.

The four expenditures totaled 0.3905 mills, or 39 cents per $1,000 in taxable property value.

Ormond Beach Police Chief Jesse Godfrey spoke about the budget items, highlighting the need for a security guard in particular.

The department conducted a security assessment last year following some incidents that left some city staff employees "on alert." Coupled with City Hall's open layout, the assessment recommended security improvements, including an armed guard. 

Godfrey referenced a 2019 Virginia Beach shooting where an ex-employee left 12 people dead at a municipal building.

"There's some things that happened here that mirror what we have going on today here at City Hall, and I believe that it would definitely increase employee safety and also make our employees feel protected," Godfrey said.

Commissioners opted not to cut any of these items, citing a need, not a "want" for public safety.

"I don't think we can afford to not have it, to be honest," Commissioner Kristin Deaton said. "We're living in different times right now where people act quite erratic."


PARKS STAFF

Also placed on the chopping block were two new positions for parks maintenance, at $110,000, or 0.0195 mills.

Leisure Services Director Robert Carolin said the city has seen a drastic increase in park usage since the COVID-19 pandemic, which has created a lot of wear and tear on the city's parks and related infrastructure — playgrounds, boardwalks, garbage pickups.

"We've done as much as we possibly can to keep up, but we've realized that there's areas that we need to be more proactive on," Carolin said.

Playgrounds being one of those areas, he explained. Currently, staff is able to look at the city's 14 playgrounds anywhere from once a week to twice a month, and aren't able to do a comprehensive check on what needs maintenance. 

Additionally, the two maintenance positions would help the city be able to pick up trash at its parks more frequently, Carolin said.

In its parks division, Leisure Services currently has four full-time employees and two part-time employees. 

Commissioners opted not to cut the proposed positions.

"Our residents expect when they use our parks, they're going to be safe," Commissioner Harold Briley said.


THE TIME FOR IDEAS

Though the commission reached a consensus on the possible cuts brought to them by staff, Ormond Beach Mayor Jason Leslie wanted more budget cuts — $2.4 million's worth, to be able to fund the budget with the same rate as last year's budget.

When the commission asked him about other ideas to lower the tax rate, the mayor said he'd need time to think about it.

The city's first budget hearing is scheduled for Wednesday, Sept. 3.

"Just so we're clear, we're going to bring to you this rate at your next meeting in September, and we do not want to do public math on the dais because we could make a mistake," City Manager Joyce Shanahan said.

Commissioner Travis Sargent said none of the commissioners want to raise taxes.

"I've put so many spreadsheets together this way, that way and I mean, to China, and I don't see anywhere else to cut," Sargent said. "And I would like to know where. I mean, obviously, I would like to say, 'No taxes, let's go to rollback.' I don't think that's feasible, and I don't think it's feasible to vote no on a budget without proposing some ideas."

The workshop was the time to do that, he said.

It's a tough situation, Leslie said, as some of the budget needs were inherited from previous fiscal years. 

"We have a little over 100 plus million dollars that's going in and out, and it would take somebody way above my pay grade to really go through each line item," Leslie said.

His biggest issue with a tax rate increase, he said, is the inconsistency in assessments in neighborhoods — some are assessed higher because they bought their homes in recent years, compared to longtime residents. 

Yes, houses are reassessed when sold, Briley said. But, homestead exemptions also play a large role, and the legislature has given additional breaks in recent years. 

"What rollback really means is you're — no matter what your millage is, millage may go up, it may come down — but you're collecting the same amount of money this year that you collected last year," Briley said. "Well, when you keep getting homestead exemptions ... the tax increase is because you're actually collecting less because of the new exemption."

Under the new proposed millage rate, the average homesteaded resident with a taxable property value of $250,000 will see an increase of $87.44 a year. 

How homes are assessed is part of a bigger picture, Tolland said. The city's discussion revolves around providing services to the residents. 

"I do respect the fact that you don't want to raise, you want to look at different things, but we have to make decisions and move on," Tolland said. "We can't keep postponing it, so if you have ideas, we really need to hear them.

"I'm not trying to call anybody out," she said. "I'm just trying to get to a good answer and as our mayor, you've got to bring us all together. Your job is consensus and collaboration and so we need your leadership right now to help us get to that answer."


NOT ENOUGH TIME?

Previous mayors have voted no on tax increases, Leslie said.

"If I'm not comfortable with what I see and there isn't enough time," Leslie said. "For me to go through this thing, I'd have to really go line through line through line."

In a rare show of frustration, Shanahan said the commission had a month to go through the budget; the City Commission received it on July 9. 

"I don't think it's fair to staff to put them on the spot at the last minute," Sargent said. "... Where do you want this budget to go? Do you want to go to rollback, and how do we get there? Mayors previously, yes, they did vote no for it, but they had ideas, and I think we need those ideas to hash this out for the residents of Ormond Beach."

Leslie said they were all part of the same legislative body.

"Out of five people here, nobody has an idea?" Leslie asked.

Finance Director Kelly McGuire said staff brought to them line items that they felt could be negotiable.

"If you want to go beyond this particular millage rate that we're proposing, then you have to enter the world of reducing service," McGuire said, adding that would lead to cuts in parks and recreation. "... And when we talk about that, to get to almost another $2 million for where we're at right now, we're talking about not just eliminating services, but possibly having to actually close the facility, because those facilities in and of themselves are expensive."

 

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