Palm Beach Town Manager Kirk Blouin is proposing a $124.7 million operating budget for 2025-26 – an increase of about $5.5 million, or 4.6 percent, over this year.
Mayor Danielle Moore and the Town Council are scheduled to take up the spending plan and a proposed lower property tax rate at a budget workshop on Thursday, July 10, beginning at 9:30 a.m. in Town Hall.
Final approval of the budget will occur at two public hearings before the council on September 8 and September 18 at 5:01 p.m. in Town Hall.
The budget, for the year that begins October 1, calls for adding 13 new jobs, which would increase the town’s workforce to the full-time equivalent of 397 employees.
The new positions include four police officers and two police service aides to help meet safety and traffic needs. The four police officers would bring the number of full-time sworn officers in the town to 81, according to the police department.
Blouin told the Palm Beach Civic Association there’s been a request for more police officers from members of the council and community over the last five years.
“I have been adding officers incrementally throughout the years,” said Blouin, who’s been town manager since February 2018. “This year, it was more of a justifiable concern because of the traffic and security when the president is in town.”
Other new positions include a fitness supervisor in the Recreation Department; a deputy town engineer and a maintenance coordinator in the Public Works Department, to address capital improvement and asset management needs; and a building fund project engineer in the Planning, Zoning and Building Department.
The fitness supervisor and building fund engineer would assume duties previously handled by contract labor, which has become so expensive that it is more efficient in some cases to hire new employees, Blouin said.
Other new positions include two park attendants, a crew foreman, a police officer and ½ parking enforcement officer, all dedicated to Phipps Ocean Park after the renovation of the park is complete and it reopens around November 2026. The budget includes two months of funding for each of these jobs, which would not be filled until late in the fiscal year. The council previously agreed to create additional jobs to meet the expanded needs of the renovated park.
The new jobs would be partially offset by the elimination of an administrative assistant post in the People and Culture Department and a reduction of part-time labor in the Recreation Department.
Lower tax rate
Blouin’s budget proposal calls for lowering the property tax rate to $2.53 per $1,000 of taxable value, or 3 percent less than the current rate of $2.61 per $1,000.
Under the lowered rate, property tax revenue paid to the town would increase by $3.6 million, to $83.1 million, because of a nearly 8 percent average increase in taxable property values on the island, according to a preliminary estimate from Palm Beach County Property Appraiser Dorothy Jacks’ office.
Under the lowered rate, homesteaded property owners, whose annual increases in taxable values are capped at 3 percent, would pay the same amount in property taxes to the town, per $1 million of taxable value, as last year.
Non-homestead owners would pay an increase of $120 per $1 million of taxable value, based on the 10 percent cap on annual increases in their taxable values.
Roughly half of the property owners in town are homesteaded, according to Bob Miracle, deputy town manager for administration and finance.
About 17 cents of every property tax dollar paid by owners on the island goes to the town. The remainer goes to Palm Beach County, the county schools, and other taxing districts.
Employee pay and benefits
The budget proposal earmarks $1.6 million to pay for increased employee pay, including the workforce expansion, merit and step increases, and a 2.6 percent, lump-sum cost-of-living payment.
Additional pay adjustments will ensure that police and fire-rescue personnel and general employees remain competitive in the local job market, according to Blouin’s budget message to the mayor and council.
The total cost for salaries and wages would rise to more than $38.5 million, an increase of nearly 4.5 percent over this year.
The cost of employee benefits (excluding pensions) will rise by $2.4 million to a total of $12.3 million, an increase of nearly 25 percent. Nearly all of the increase is due to higher health insurance costs.
Pension fund
The actuarially determined and legally required annual contribution to the town’s employee pension fund will increase by $1.5 million to a total of $16.3 million during the 2025-26 budget year. The $1.5 million increase is due to fund investment losses in 2022 and pension plan updates in 2024.
The $16.3 million is in addition to the $5.42 million annual discretionary payment the council has mandated to reduce the pension fund’s long-term unfunded liability. The plan is currently funded at around 73 percent, according to the budget message.
Blouin said the required annual contributions to the fund “will go down substantially” during the next few years, and that the fund could reach a 90 percent funding threshold by 2032.
Town Marina
The Town Marina, which reopened in November 2021 after an extensive renovation, continues to generate multi-million surpluses each year. Revenue is expected to increase by 4.5 percent, or $655,000, to a total of more than $15.3 million during the next fiscal year.
The town has relied on surpluses from the marina to help meet the cost of burying all overhead utility lines on the island, a 10-year project scheduled for completion in 2027. The budget calls for a transfer of $8 million from the marina enterprise fund to the underground utility fund during fiscal 2025-26.
The town-owned Par 3 Golf Course is expected to perform slightly ahead of last year’s record levels, with gross operating revenue of $1.8 million.
Coastal protection and capital projects
The town’s coastal protection and capital improvement funds are separate from the general operating budget, and receive annual transfers from the operating budget based on financial needs.
The transfer from the operating budget into the coastal protection fund would increase by 10 percent, or $579,000, to nearly $6.4 million during fiscal 2025-26. This will help cover the future Midtown seawall replacement, shoreline fortification, sea-turtle nesting monitoring, and Reach 8 dune and beach construction.
The capital improvement fund contains $22.5 million in projects for 2025-26. These projects will be funded in part by a $13,750,000 annual transfer from the operating budget.
Highlights include $1.5 million for town-wide sidewalk and curbing work; $4.2 million for street paving related to utility undergrounding; $1.4 million for canopy drainage work on North County Road; nearly $3.4 million for sanitary sewer improvements at the Atriums of Palm Beach condominium complex; $2.2 million for police renovations; and more.
Fiscal outlook ‘pretty good’
The town’s overall fiscal outlook is “pretty good,” according to Blouin.
“Inflation, especially in construction projects, seems to have stabilized after several years of dramatic increases,” he said. “The biggest threat is always going to be hurricanes.”
Mark Zeidman, chairman of the Civic Association’s Tax and Finance Committee and a member of its Executive Committee, said he looks forward to the council’s budget meeting on Thursday, July 10.
“The council has some difficult decisions to make in reconciling the need to finance the high quality of public safety and municipal services that we all enjoy with the need to keep property taxes in line,” Zeidman said.
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