Town Council - Regular Meeting

I turned that off.

Good evening. The time is now 6 p.m. I'm going to call to order the town council workshop of Thursday, July 23rd. May we have a roll call, please?

Mayor Koretsky?

Here.

Vice Mayor Choi? Here. Councilor Geisinger?

Here.

Councilor Sundstrom? Here. Town Manager Kitzero?

Here.

Okay, just want to, and we don't have any public comments, correct?

Correct.

Okay. I just want to kind of kick this off. Normally I just turn it over to staff, but I want to help make sure that we're setting expectations to the public. The session tonight, which you'll hear, is an opportunity for the council, bound by sunshine laws, to talk about the potential implications of a ballot amendment that'll be voted on in November and could even be modified or changed or whatever based on some litigation in action. But we always review anything that comes out of the legislature Whether it's challenged or not, and then start to begin, how would we respond to that? So I just wanted to make it clear when you're hearing, we're going to have a conversation. Staff's going to present. I'm going to ask that we pause at every page, get every question or concern out, and then the outcome of this meeting for us, and it will be public record, is the list of concerns that we have as elected officials for how this might impact the town of Jupiter as it is as a local government set up to serve local interests. I do want to say this is the most impactful legislation I could have ever imagined, and we're all deeply concerned about it. So an outcome of this, again, would be a list of what our concerns are, and then we'll see how it proceeds. But we'll at least begin to start to take some action where it's appropriate to deal with this if it were to pass. So with that, I'm going to turn it over to Scott Reynolds, our finance director. Well, she'd say chief financial officer. Apologies. Is yours on? I'm not sure I was coming as clear as mine sounds. You want to tap it? Okay. Okay.

As you indicated, Mayor, we're here this evening to have a workshop to discuss the impact of the state property reform. State property reform? Thank you. I guess the light is not on, and that means the mic's on.

That's why I tap it, by the way. It's my secret.

The House Joint Resolution 1F, titled Save Our Homes from Excessive Property Tax, now is... referred to as Amendment 3. The history of the legislation, it was originated as a priority of Governor DeSantis. We've all heard that on the news. We've been watching the governor talk about it for some time. It was passed by the legislature on June 2nd in 2026. Will be a constitutional amendment on the November 3rd, 2026 ballot. It requires 60% plus voter approval to pass. if approved by the voters, will be effective coming January 1, 2027, but it will affect budgets starting in our fiscal year, 2028, which will be October 1. There is a companion bill, Senate Bill 4F. That went in effect currently. It affects the town millage. We talked about some of those impacts that started with our trim just this past Tuesday, so we did talk about that already.

Before you proceed, what I should have said, and I'm speaking to my colleagues and to the public here, generally when we get these kind of workshops, we always allow for comments page by page. Sometimes it's more appropriate or members feel it's appropriate to wait to the end. So you may see some differences, but it doesn't matter. We're all here to get our questions answered. But I do think this is so important. I'd like to have you pause at the end before you turn the page. So I don't have any comments or questions on that page.

I'm okay with that because I do think it's a lot to digest. And just a couple of clarifying questions because in the state legislature, there were eight proposals in the House. And so this has been a topic of conversation for a long time, not only by the governor, but by the House and Senate. And those proposals were materially different from the proposal that was passed in June. I remember carve-outs being different. Can you talk about what's carved out, what's not carved out in this, for example, schools, public safety, some of that?

We will talk about that in the presentation this evening, but in previous legislations, there were also some items to help disadvantaged communities, a pot of money that would be available for communities that could meet some of their obligations. That has been removed. There was also in previous legislation carve-outs for public safety, police departments specifically, and also firefighters. Those have also been removed. So there's been a number of changes over the legislative period for the final bill that actually got signed.

So the only carve-out I know of currently is the school district.

Is that correct? That is correct.

Nothing else?

Nothing else.

Thank you.

Okay, moving on. The proposed changes, primarily to the homestead exemptions, I wanted to talk about the Jupiter tax roll so you can kind of see the lay of the land here in Jupiter. We have a total number of parcels of just over 30,000 parcels, a total of just over 27,000 residential parcels. The total number of homesteaded parcels, just over 17,000 parcels of residential, percent of residential parcels that are homesteaded is 64.13%. Number of parcels with assessed values less than $150,000 is $1,740. These numbers came to us from the property appraiser. I just wanted to thank them for that because I know these are questions that we need to know as we proceed forward. The number of parcels with values that are assessed at less than $250,000 is 5,490. Percent of parcels less than $250,000, that's 31%. So that's pretty significant. What the legislation is calling for, it replaces the current $50,000 homestead exemption structure with beginning in FY28. 150,000 homestead exemption impacting that budget of fiscal year 28, increasing to 250,000 in the following year, FY29, and then thereafter will increase by the CPI from FY29 on. There's an unspecified requirement for a possible full elimination of the tax base. We talked about that the other night. with our lobbyist that was here the other day. That's kind of unclear how that's going to play out. I know there was questions about that. There's still some portions of the bill that is being interpreted. This is one of those items. There's also, for residents that are coming into the state of Florida, they think they're going to be able to receive the exemptions immediately. That is not the case. One of the things in the bill is it imposes a five-year waiting period for new residents to receive the full benefit. The way the language is written is that they need to start with the 27-year and then wait five years before they receive the full benefit.

One question on that.

I have a question on that. I do, too.

And just correct me if I'm wrong, that 31% represents 31% of the homestead homes in the town of Jupiter would not pay any tax towards services they receive from the town?

That are less than $250,000. Right. Yeah, that's 31%. So then you have the rest of the almost 70% or 69% that would be paying the rest. The care and the burden for everybody else.

Correct. Okay. All right. Thank you.

I just wanted to have a little conversation on resident. We're talking in the language here, it's new. Residents could be here as a tenant renter for a period of time. Does that qualify or add in when they purchase a property if they've been leasing for two years, which means they've been a resident?

My understanding is you actually have to file for homestead. You have to be on the record as a homesteaded property owner for five years to receive the benefit.

Interesting. Okay.

Why don't we flag that as one of the items. It's an interesting twist because I was thinking it might have been otherwise, but it certainly isn't clear. Because, in fact, I had marked up that, and then you said it, that new out-of-state residents. So that I thought somebody who was a renter, but they were in the town for, or in Florida for five years or more, that they would be eligible. So let's just list that as a question.

Yes, sir.

I wondered that. I didn't know.

I have a couple items, and just to reinforce. Number one, and nothing I say should be taken as any constructive critique, but you're kind in calling it an unspecified requirement for possible full elimination of taxes, tax base. And I say that, and I apologize to the public, I do have a reputation of being blunt on things, but I'm gonna continue that. It is clear that it appears to be a complete accountability entitlement for the state legislative government without any voter approval to eliminate entirely exemptions. It enables them. They don't have to come back for another constitutional amendment. They may not do it, so you could say it's possible, but this is not going to have to come back. If this passes as it was, it isn't 250. We've given legislative entitlement. You don't have to come back to the public. Do you agree with that?

There is some language in there that leads you to believe that, yes.

Okay, well, let's just put that down again. We don't all have to agree. What we're doing tonight is we're listing... collectively legitimate concerns that we might have. That's a legitimate concern, because I think the public does need to know if that is the intent, and that is the then, whoa, then they've, this is not about 250, it's about full elimination. Then I'll say additionally, as you had in the third bullet, increases annually, the exemption increases annually based on CPI. That means anybody that was exempt, well, first of all, even for the 250 then, anybody that was exempted remains exempted because the valuation can only go up by CPI or 3%, whichever is lower. which means that once by this bill you're exempt from property taxes as a homestead, as long as you continue to be a homestead, it's forevermore with this legislation.

Agreed? You're referring to the Save Our Homes. Yeah. Right. It does not touch the Save Our Homes initiative.

Well, this supplements it.

I'm sorry?

It supplements what the Save Our Homes was is now this adds to it, if you will. So the impact of this isn't just You know, two years, it's, you know, potentially a year later, the legislature could come back and the governor say, hey, let's go all the way. And there is no voter say about it. Just wanted to have that on. Did you have something?

I do. Just going back to the slide with 31% of parcels less than 250K. Palm Beach County and counties around the state have multiple municipalities, and we often operate in regional systems. For example, our fire departments back each other up and have mutual aid, automatic aid, all of that. My understanding is that there are municipalities with a higher percentage and that there is some risk of some municipalities risking insolvency. And there's been discussion, my understanding, at the county level, there's kind of a dual burden. There's cutting costs of the county, but also adding scope for fire rescue and for other services. should municipalities become insolvent? Is there some risk in our regional partnerships that others with higher percentages might make cuts that kind of risk our interdependency or our partnerships in providing services?

Those are discussions we would have to have with them. We can't tell what future councils are going to do relating to their cooperation with us, but those would be continuing discussions we would need to have with them. And we do have a lot of very close partners. We do it through even our 911 system. So those would be discussions we would definitely be having with them. But understand your concern. That's all over the state. For example, 67 counties in the state of Florida. You've got, I believe, over 29 of them that are in what's called critical economic concern. If you look at their millages, they're the poorest of the poor. Really and they they understand that and but but because of that designation they receive Preferential treatment on grant applications and other assistance coming in from the state to make sure that they're able to meet their constitutional obligations and other obligations of the communities So those communities specifically even counties is what I'm really looking at as well Are there they're going to be hit very hard with some of the legislation that we're seeing with the 250 and especially the rural communities. And I look out west in Palm Beach at the smaller municipals that are out there that are, again, they're rural communities. They're already at close to, if they're not already at the 10 mil cap, what are they going to be able to do? So definitely understand your question, and we will be interacting with our partners going forward because that's one of the things that we talk about this evening is embracing those partnerships to help lessen the blow going forward.

And if municipalities may risk insolvency and if counties risk the same issue, you're talking about some of these counties that would lose their budgets, What then happens if there is a hurricane or an emergency response? If they don't have the funds locally because FEMA is now pushing pressure on an immediate local response and local funding for that response, do they then have to wait on the state to fund that response? Or how does that work for neighboring counties, neighboring cities? A lot of it happens in an interdependent kind of ecosystem, especially when something big happens. So we don't know is the answer.

Well, it's not addressed. We know that.

Yeah. It's not addressed.

And for the record, we know that there's some municipalities already in Palm Beach County that are 10 mils. and the county already subsidizes municipal services because of that at a concern. Um, and then just, just makes it more difficult for if the numbers go up or for them to continue that if they lose, you know, significant and for the public, you got an excellent, I'm glad you brought that up on emergencies because we all know that if we were to have a hurricane and emergency, we don't get reimbursed anyway. for three or four years from the feds, right? I mean, that's been a track record, hasn't it?

Depending on the size of the emergency.

That means that somehow local governments, and that doesn't seem to be a concern in the legislation about that, that we have to have funds to do that. People, even if they're not paying ad warm taxes, would hope that we're out there helping in a hurricane aftermath.

And I know there are many... I know that there are a number of cities that are at risk of insolvency in Palm Beach County and I just heard recently for the benefit of my colleagues that there are 80 across the state of the 411 that are at risk.

Mr. Mayor, I'd just like to repeat on this solvency issue, you can see how open that we don't have the answers. but for our residents and those that are listening, this list, I think, once we put it together and it gets to our legislature team, the language, we don't even understand it. How can a voter understand this? But the solvency issue is huge. What happens in a disaster for any of these municipalities or towns or cities that don't have the funds to take over?

Has there been any explanation from Tallahassee about what happened with the counties or towns that became insolvent?

No, there has not. And like I said, previously, in previous legislation, there was actually talk of having a pool of funds available to help out those communities. That has been stripped away.

One thing just for the public listening, I want to be clear because we don't want to be guilty of casting, you know, incorrect information. This is legitimate for municipalities. It wouldn't be for Jupiter, you know, for at least several years. So we're not suggesting this is something if you live in Jupiter, you have to worry about because we've been fiscally prudent. But over the course of time, we could get in the same condition if we're not able to have funds for hurricanes, which happened. We've been blessed. We haven't had any in a while, but boy, remember when did you hit? And you don't get reimbursed for, you can go through millions and millions of dollars in help to the community.

We do talk about it every year. I know this council is aware of that, and specifically during the budgetary process, we analyze and make sure that we have enough reserve balances to be able to make sure that we have the funds available, that we're not waiting on Tallahassee. or the federal government. We've been good stewards of making sure that, to your point, I can't speak for other communities, but I know what we've done to make sure that if that day comes, we're able to quickly respond and take care of our residents. So I know what we've done in speaking with my partners. I feel that a lot of them, especially here in North County, are in the same spot. There are some smaller jurisdictions that... You know, they are our partners, as you indicated. We do have mutual aid contracts. We will help. But at the same time, we've been great stewards of the taxpayer dollars to make sure that we understand our number one role is public safety and making sure that we're prepared that if that day ever came, we have the cash to respond quickly and not wait for an outside agency or specifically the state of the feds. Okay, I'm gonna move on. So continuing on with the changes in the homestead exemptions, as Councillor Sundstrom pointed out, it exempts the exemption applies to all non school taxing, ad valorem taxes, cities, county and special districts. So this the school, they got a carve out. So that's, that's pretty important. Does not impact non ad valorem assessments, fire rescue, stormwater, solid waste, street lighting, other parcel-based assessments. It does not affect that. Changes to the non-homesteaded taxes, it reduces the cap. This is another item that was included in the legislation, as we all are aware. Right now, the cap on the values is 10%. That's going to drop to 5%. So like this year, our assessed values went up by 6.4%. It would only be able to go up to 5%. So just keep that in mind as we go forward through. Now, I have analyzed to try to come to see what that amount would be looking at the current proposed taxes for next year. It's a very small number, but it is something that we need to watch.

Just to add one, I think, important point to the item about, you referred to it as a, you know, schools got to carve out. The only reason they got to carve out, or one reason they got to carve out is because the state government has the overarching responsibility for funding schools. And they, in fact, determine how much locally we pay in property taxes. So we are a donor taxpaying community compared to the statewide average because they think we can afford it. So 37% of your tax bill in Jupiter, Avalon tax bill, is public schools, and the legislature and the governor are responsible for determining how that gets funded. So effectively, the car that was, they didn't deal with it. But I wish they did deal with it because I'm tired of being a donor county if they're worried about property taxes we're paying. Do it at our fair share, same as everybody else.

Question on the special districts. Is that the three most impactful to Jupiter? That would be the Florida Inlet District, is that correct? I mean, excuse me, the Jupiter Inlet District, FIND, and what, CRA? Are those the three in this area? Yeah.

Well, the CRA, that is a district, yes. That would be, but I'm not sure of the complete list of the special districts, but I can get you that. No, they all are going to be impacted.

Special taxing districts, I guess so. So I assume they'd all be impacted.

you'll see it means our inlet and our waterways are intercoastal and everything right i think you'd look at the your property tax bill right and uh every anyone that we're affected by is is on there on there there's a list there at the bottom of the special districts so i actually i brought mine here so i can refer to it because i think this is what we all see every day but um

So I belong to the northern Palm Beach County improvement district and I believe all of its funds from the vast majority are via non-adval room assessment. So that will not change. I'll continue to pay and that's many many hundreds of dollars. I mean it's over a thousand actually for a special district and that is a fee I'm paying not a tax on my tax bill. But the other districts are knowledge. So for Let's see what we've got here.

I'm glad you brought that because you just made the point that it's only special districts that are ad valorem related.

Correct. The bottom of your property tax bill, those are your fees or special assessments or non-ad valorem assessments. And then these items are the ones that are millages that are adopted. So the Jupiter Inlet District is a millage and would be impacted. The health care district would be impacted something I learned I didn't know before was they actually pay for the nurses in the schools So while schools while there's a carve-out for schools schools are being impacted because all the school nurses and public schools are being impacted As well as trauma the helicopters all of that. That's the health care millage that we pay and But higher than any of those millages is my non-advalorum assessment for Northern Palm Beach County Improvement District. So just because there's a millage doesn't mean it's going to be high. It can be very low. In fact, I pay more to my HOA than I pay in-town taxes each year, which is another fascinating find.

Another point to add to the point you made, which is a good one, on trauma. People may not know this, but by legislative decree, the health care districts were created to at least amend the trauma service. And I remember some years back, our county commissioners and I was at the meeting, we're meeting with Martin County, because they never created such a paying mechanism. And I think to this day, so Palm Beach County residents, as a result of a legislative mandate of 20 years ago, whatever to create trauma service, cover that.

And then other districts I have, I know we don't have an exhaustive list, and your districts might be different from mine, but the Children's Services Council will also be impacted, and the South Florida Water Management District. And I did hear that there may be some stop work orders associated with them from other businesses. I heard that recently at a conference.

I know I have.

When you have when you come in on Michael yeah, I'm sorry, but yeah, I I know for sure that I'm part of the northern Palm Beach improvement district, so I got to manage the canals and all that correct yeah preserves.

And that will not change because of the fee and it's not an ad valorem tax that everything else to my knowledge is so.

Just a question under the on on school taxing under other services within the school that will be impacted. I

Not fully aware, I mean JPD services for school and crossing guards, you know different communities play in different ways for different things so. You know it's not going to be the same across each municipality.

Okay, moving on. So the question that is what what is what can we pay with the alarm taxes that we will be collecting via the legislation, it's public safety, education, infrastructure, natural resource projects, local bonds, retirement benefits of local government employees, operations and administration, which is kind of a, it was added at the end of the legislative session, excuse me, kind of a catch-all on what we can spend the property taxes on. And there was some language that was also inserted that says, and all others that are allowed by law So that language kind of lends to what the mayor was hinting at earlier, that the legislature might be able to come back at a later date and restrict what the Avaloram tax could be used for at a later date.

That might. They enabled themselves by putting it in there that way. I have a couple items on this one. So on infrastructure, You know, and I asked this question the other night, but to me on a read it's pretty clear it's defined in the legislation and it appears limited to road and bridge construction and maintenance and stormwater control. So an optimist would read it like we could do more than that, but a clear read on the legislation is it could be very, it could be limited to just that. which means that what we've historically thought of as infrastructure is very narrow from a legislative and what you could even use ad valorem taxes for. That's number one. The number two in the local bonds, and when I read this, I do think that it covers two elements of bonds. One is bonds that exist, that they're gonna accept the fact that we have to pay them off. But I do interpret it as future bonds are very limited. So things that we did, for example, that overwhelmingly this community voted 70, 74% for purchase property with land, you know, land. I don't think that we necessarily will have the right to bond it based on the limitations I'm reading. And again, tonight we should just be flagging all these concerns and hopefully some of the concerns will be proven wrong, will be corrected, right? But that's a legitimate, huge impact on what this community has historically valued, that we would no longer be able to do that. And then even the operations and maintenance administration, you know, it says, you know, except as prohibited by general law, as you said, they can change that, they've entitled themselves. But what my concern is, is the language in the ballot language talks about ensuring funding for core services which they define and uh it doesn't i'm not sure that they care about for example things like parks and recreation that i don't want to alarm anybody you know because we do okay and that's not going to change but this is what we may be handcuffed and being able to use ad valorem taxes even to bond stuff by by a worse read of this and hope i'm wrong right

And I wanted to ask our finance director what he's hearing in his circles and if that is his understanding as well, or if there's any additional information you could provide around limitations around local bonds or that last item.

I was going to comment because, I mean, really, I mean, I can't speak for what the legislature is going to do, obviously, but it will affect what's going to happen in the bond market. You know, Think about if you're going to go out and borrow money just on your own. They look to make sure that you're able to pay for your bills, specifically the loan you're seeking. So if your revenue is shrinking over time, it's going to limit what you'll be able to borrow in the future and for how long of a term. So trust me, the bond market is looking. They're watching this. because it is going to have an effect going forward, especially the rates that you pay. They may allow you to pay, but you're going to pay a larger rate. So those things are being discussed, and it only makes sense that some jurisdictions that are capped out the full faith and credit of the citizens to go out and borrow money, they're going to pay a much higher rate, and They may not be able to borrow as much as they used to.

I know for all of our playgrounds recently, we had the money. We put it in CIP. We used it to advance the contracts, and we got it done on time and on budget. So if we're borrowing money, it's a longer term. We're paying interest as well. And so we're paying higher costs in the end for the same services or same infrastructure.

Okay.

Okay.

How do we go about getting a better understanding? We see these limits of property taxes, but, Mr. Mayor, you identified additional limits that may also be possible. How do we get that overall picture, what those additional limits may be on each one of these?

Well, I think to some degree, remember, other governments have already workshopped about this. We're workshopping now. Others will follow. There's challenges in the court we're not going to talk about tonight. Who knows how it might change things. We're reacting to what we're reading and expressing our concerns. We're going to punch list it. Then going forth, we see what the outcome of the core challenges are. It may address a number of our concerns or not, right? It doesn't take effect until next budget cycle. So while there's some things we might do in this budget cycle, you know, we're just beginning to prepare and make sure that we, our public knows what the implications may be on how we, you know, can provide services as they've relied upon and overwhelmingly supported in the past. It may no longer be an option, even if you overwhelmingly support it, because that may be taken away from the local government.

Okay.

Continuing on. regarding the Senate Bill 4F. Again, it took effect for this upcoming fiscal year. What the legislation actually did was it removed the per capita, per personal capita income growth factor We talked about this at length at TRIM on last Tuesday, that it took that allowance away and made the rollback rate as the max millage rate that could be approved by a simple majority vote of the council, meaning three of the five of you could approve it. Anything above that, up to the 110%, it would take two-thirds of a vote or four of the five of you. Anything above that would require a unanimous vote or go to referendum. So you can see here on the chart, we put together a chart to show what these impacts and reductions would mean in relation to the rollback and the proposed rate that we adopted last Tuesday. You can see those reductions in the overall amounts at $25.8 million at rollback compared to the millage rate that was I will preface this by saying our millage rate had to go up because of the first year of the fire rescue, the replacement rate for the Palm Beach County Fire Rescue. So what's going to happen going forward is that will plateau. Now that we're at the rate internally, the town is now adopting the rate instead of the county commission. Going forward in the next few year rate, it won't be $25 million, it won't be $23 million, the difference between the rollback and the actual adopted millage. So those numbers will go down, but that's just this one year significant review of going into 27 with that first year of funding Jupiter Fire Rescue. So I wanted to make sure to qualify that, that that will not be the case going forward once we go into FY28 discussions next summer.

I actually want to stop here because I think this is a super important slide, and I think it's in French for a lot of residents. I remember people asking me what a mill was or what millage was, and I want to assume, you know, I think part of the purpose of tonight is to educate residents about what the impact of all of this is. And so can you remind us again quickly of what a mill is, what one mill is?

It is the one mil equals $1,000 of assessed value. It's the rate that we set that will go against your taxable value on your tax bill. So one thing to make, hopefully the residents will understand is if you look at your tax bill, you'll be able to see what is your taxable value And then what is your market value of your home? There's usually a difference in that. So the market value will be what you could sell your home for or based on your area sales data. And then you have your taxable value. As we've discussed before, it could be unlimited by the state of our homes, depending on how long you've lived in the home. But the millage is based on the rate that is per thousand dollars of your taxable value. So Simple math. You can multiply your taxable value by the millage rate, and it comes up exactly with what you pay in taxes.

It's the dollars. It represents a dollar per thousand of taxable valuation, correct? That is correct.

At our millage rate, it would be $3.58 per thousand dollars of taxable value.

Correct.

So I'm looking at the taxable value on column one of my property bill. It's lower than the Zillow. that I see when I Google my house. And so the taxable value is lower if you're homesteaded, and that accumulates over time. So it's a lower taxable value. And on that taxable value, you apply a percentage, a rate to get the taxes that you would pay. So what's changed this year, and if you can help me understand, it used to be that you needed a simple majority to keep that millage rate, the millage rate flat. If you don't increase it, as long as it's flat, simple majority. But now instead of keeping the rate the same for a simple majority, you're keeping the dollar numbers the same.

From the previous year. That's what that rolled back rate is. It says what would be the amount of dollars that you would collect in the previous year. That's what the rolled back rate stands for.

So if I collected $100 last year, here's the rate at whatever valuation exists in the town today could go up, could go down as well in future years. We don't know. That is correct. So no matter what, here's the rate you need, and that could go up or down depending on the valuation to get the same number of dollars. Okay. I think that's helpful.

And in previous years, they allowed the rollback rate, and that you could increase it for the simple majority vote, they would take that personal income growth into account for the calculation to say what was acceptable for that two-thirds, I'm sorry, for the simple majority vote of the council, like the static millage. It would always be above the rollback rate, but it fell within the personal income growth that was allowed by law, so it was always a simple majority vote of the town council to continue on with that rate. Well, that has now been removed. So now the rolled back rate is the maximum rate that can be allowed with a simple majority of the council, meaning three of the five. And anything above that, you would have to go to four of the five up to 110%. Anything above that, you have to have a unanimous vote of the council or you go to referendum of the voters.

So if you keep the same, say you adopted the rollback rate every year, same dollars every year, inflation still persists. So it's eating away. If you're not indexing in a way, you're subsidizing over time, long term. So just structurally, I'm trying to understand it. And then I also just want to say, example of FY2027, I think is a bad example. It's a bad year to do an example because we're restructuring our rate. And what we're doing is replacing Palm Beach County Fire Rescue with which is on the tax bill as Jupiter Fire Rescue, but that's not our Jupiter Fire Rescue that we just started. This is still Palm Beach County until October 1st, and then it will become Jupiter Fire Rescue. So this is actually Palm Beach County Fire Rescue. And it has a millage rate of 1.7251. So we're replacing that with a lower millage.

That is correct.

So there is a savings, but this restructuring kind of makes it a bad year for a for an example, but we're trying to do apples to apples. Okay, thank you.

And that's what I'm saying for going forward in the subsequent years. This example that you see on the page, it won't be as drastic. It's only because of that first year that the town is making that decision for the millage rate. The county used to set what you just talked about, the fire MSTU rate of the 1.7%.

But I will have fewer line items on the taxes part of my bill because our millage will be rolled in, our fire millage will be rolled in to the municipality Jupiter operating item. And then Jupiter Fire Rescue as a line item will disappear from my bill completely.

It will disappear. Thank you.

What will the non-advalorum look like?

It'll be at the very bottom of the bill. If you look at her bill there, or her trim bill, it'll be at the bottom of your tax bill, along with the solid waste authority.

With the other fees, correct? Yeah, because that's exempt from this. That is correct.

And just to be clear again on the fire rescue and the increase just for this year, we are still saving $10 million.

We are still saving $10 million in the first year.

Okay, thank you.

Okay, let's talk about the impacts. First of all, I want to think, and I said it earlier, I want to say it again, the property appraiser and her staff have been great. As soon as the legislation was passed, they started trying to get us impact information along with the Florida League, the Association of Counties, but specifically the property appraiser has been getting, updating data as they have it and making sure that all the municipals have the latest and greatest information. So we've been able to use that data going forward to say, well, what is the impacts of Jupiter going to look like? The town is estimated to lose about $4.4 billion, or 24.13% of its taxable value by FY29. It goes up in increments every year. You can see the first year at $1.5 billion and then $2.9 billion in 2019. uh what does that translate to uh you can see here over the two-year period uh 16 million dollars is is the estimate now these are based on uh fy 26 uh final taxable values uh to come up with this so this uh these numbers will fluctuate uh as i was discussing with somebody this afternoon uh we all know that homes are going to be sold they will reset in their value. So there's going to be some fluctuation going forward. New homes will be built. We are a build-out, so not as much on that side. But we do know, as we saw in the trim presentation, the majority of the taxes that we do receive are based on valuation. Jupiter's values are very high. But as homes get sold, change in ownership, those kind of things will actually fluctuate this number. And then the to be determined is the reduction from the 10% to the 5%. You can tell that we have the 6.4% increase this year. When I looked at that compared to the 5%, it is actually a minimal impact. And when I say minimal, less than a million dollars compared to the $16 million estimate here. And what we discussed earlier, in previous legislation, there was a backstop for lost revenue. That had been stripped out of the legislation. There is no backstop to help communities with the revenues that will be lost. So I wanted to make sure to point that out again.

I have a few items on this page, so this is great. All your slides did an excellent job because it is enabling us to have conversation about it. One, I would just add a bullet. I want to just emphasize a point on the revenue impacts. Add a third bullet to remind that the existing Saver Homes Constitutional Amendment caps homesteaded properties valuation increase at the lower of three percent or cpi so historically um historically we've seen more than three percent and then we were capped at three percent what's the what's the highest inflation we've seen in the last five years

9.9.

Okay, so they're in it already, but that was already the existing.

And that is part of the reason why I think this came off here.

That is part of the reason why. And I want to just and we know this up here, but If you look at the past 10 years, if you've had a homesteaded property, this includes all tax entities for someone in Jupiter. The property tax has gone up 5.1% in the last 10 years versus inflation of 35.2%. So Save Our Homes has been proven to be an exceptional constitutional amendment in protection. And again, pardon just the way I am, but state government was grandstanding about homestead property tax increases, because it isn't happening. But nonetheless, they're here to help. I do want to pause to reflect. because if you look at it, it says it right here. So the impact being imposed upon us is $16 million if it only goes to the 250. But the fact of the matter is, as you've heard already tonight, that we made a decision three years ago to create a Jupiter Fire Rescue Department, and it will save $10 million this year. uh... and that's effectively ten point one percent reduction in the overall town millage rate that's our job we've been doing it without any uh... big brother or big sister nudging us to be responsible stewards of your money the public public money uh... but as you heard the formulas don't take into account that we could have done this so the calculation forces us to look at this like we're increasing taxes but we're not we're lowering them because we're taking two line items further i would say when you think about it i'm kind of somewhat specialized in contracts we had a contract for services with palm beach county fire rescue so having a contract we were bound to pay them no matter how we had to pay them uh without any so they didn't uniquely with any municipality they're providing those services If they have a contract like we had, we'd have to pay regardless of whether there's an ad valorem tax mechanism. So kind of grateful that we moved this into ours and we can manage it totally. just want to make that point and then i'm going to open this to my colleagues on this page but i also thought it's important to pause to reflect on that note um because before we turn the page and be looking at revenues because the process that the town uses and has used historically i don't want this to be misunderstood is we look at for efficiency improvements and cost reductions before we ever look at increasing revenues. Tonight, we're going to be talking about revenue increases next, only because we want to see what options we might have to deal with the loss of revenue. But I can't overemphasize I think that the teamwork, every single person on the town staff has contributed in an incredible organizational teamwork effort to create JFRD to deliver a $10 million savings. And that's why this local government is not going to have any conversations about reducing staff. We might have to next year. But it would be not appropriate the way our staff has worked up till now to be good stewards. But I don't want someone to interpret, oh, they went right into talking about tax increases. No. And I'm using fire rescue as an example. We start there in our budget process. If you watch our workshops and conversations, we start with the budget. We already had a workshop. And we see where things can be reduced and whatever. Only after we're done with that do we come and talk about what the revenue needs are.

Correct? We already run with a very lean staff as it is.

I mean, correct. I'm just trying to make sure that there's understanding.

That's the process we've always followed, yes.

I was just concerned we go to the next page because in our list of things to do, before we talk revenues, we always do look at these other things, and I don't want it to be misperceived when you turn the page talking about revenues.

I think that was a good overview, Mayor. Thank you.

And you made a great point about we're not locked into the Palm Beach County fire contract next year because it's going to go up even more. So that's, you know, kind of lucky we did it when we did it, you know.

I agree it's a significant, significant savings. And it was a very heavy lift and still is until October 1. So I'm really proud of this council and everyone that helped work on it. I do think, you know, again, we have two goals tonight. One is to educate our residents. It's our responsibility and duty to you to make sure you're informed. And then the second is to respect your decision and to implement whatever you decide. And so we're talking about options to do that and how we see it going forward. Part of the education here, I really want to keep it resident focused. And one thing, I'm grateful for the percentage, Finance Director Reynolds, but and the 24% that's helpful context. But I always remember people telling me, Oh, we saved, you know, this many millions of dollars. And I would always say, what does that mean? Is that a lot? Is that a little to you? You know, your scales are so different than mine. So, um, I only know my household budget. I don't necessarily understand like all the, all the scale of this. So, um, when I go to the website and I go to the town budget at a glance for 2026, I see total budget by fund and it says total 2026 budgeted expenditures for all funds are $190 million. So our budget is $190 million. This doesn't sound like that large of a percentage of the budget. What would I be getting wrong there?

If you're looking at the total budget, which you obviously are, that includes all the capital, which includes the water utility. It includes the building fund. It includes all these other funds that we're not talking about tonight. The utilities, they generate their own revenue. And they are a side and also you're looking out over a portion for the CIP specifically over a five year period. So there's that included. But it's very important because to your point, I've heard people discuss this legislation and they're confused about how it interacts with the enterprise funds. The enterprise funds are standalone. They don't rely on ad valorem tax. The water fund, we talk about that every year, our storm water fund, they generate their own revenues. They come before the town council every year and have their rates approved by the town council. That's totally separate from this discussion that we're having around ad valorem dollars.

So the $190 million is across many different pots of money. And some pots can only be used for one thing. The water utility can only be used for the water utility, nothing else. It's like a small business. It's off on the side. It's standalone. It must fully pay for itself. We can't lend it money. It can't lend us money. They can't transfer.

You can do that, but there are a number of the revenues that you're referring to that are restricted.

Right.

If that's your point, that is a very true statement.

Water utility transfer funds, well, for water-related purposes. So, for example, in the Newtown Hall, we have base assigned for the water utility for a public-facing element for the water utility. But can it be used for non-water utility?

You can use the water utility funds to, say, pay for police services.

Okay.

Unless there was a benefit to the utility, meaning that they had to pay an officer to come out and run security at the utility, just like a private business. If they needed security that they wanted to hire, that's something they could do. But they're not subsidizing the police department budget.

Correct.

They are restricted from doing that.

And we have a number of restricted funds that can only be used for one purpose or a limited number of purposes. So what does this impact? Which fund gets impacted by these cuts?

The legislation, specifically the ad valorem, is the general fund. That is the primary fund of the town. That is the largest benefactor of the ad valorem dollars. If we proceed forward with the non-ad valorem assessment, the fire fund is held separately. They are also the second largest fund to receive benefit from the ad valorem dollars being generated. And then the third, and it's because of how the town parses out its ad valorem dollars, the third would be the CIP for the capital improvements element. We carve out 15% of ad valorem dollars received in the general fund to go towards the capital improvements element of the budget.

Okay, so... The general fund has police in it. It has fire rescue. It has what goes to our capital budget, our infrastructure, all of the capital projects around town. It has finance. It has human resources. It has code compliance. So there's some things that are distinctly touched by this, but some are not. You're saying less impacted or not impacted at all would be the water utility.

The water utility, the stormwater utility, the building fund. that generates their own revenue as well.

So those are not impacted. We're talking about a very specific fund and more limited to police, fire, code compliance, capital projects. And that fund is kind of self-contained. So if we were to protect at 100%, which is often recommended, police and fire, we don't want to touch public safety, then there's a multiplier effect. Is there not? If there's a cut on that fund and you protected 100%, the two largest parts of that fund, you have a multiplier effect and are having, in fact, much steeper cuts on anything that's not being protected 100%.

Sure, obviously. Right.

It's helpful to put that together. I think there's so much swirling around to stop and think about. those impacts is really important. And some of this stuff, and we're still digesting it. I'm learning new things every day. And that I learned or thought about more recently. So this is important to think about. If we protect anything at 100%, they're not sharing the burden. That burden is being shifted within the fund to other departments.

Can I just piggyback on that? What is the percentage of the 194 fire and police? I'm sorry, what is the protection amount for fire and police in the 190?

Or in the general fund, the percentage of general funds.

Just over $21 million in ad valorem was projected for next year.

And the reason I ask this, and to play devil's advocate, if you're a resident and you're saying, well, I want my taxes reduced or eliminated, having this education to understand what else you're going to lose, So there's multiple sides to this dialogue tonight, is to educate on the plus side if you view not having taxes. But from this side of the dais, there's a lot that you would lose if it goes through. So I think this education portion for all of us is very, very critical.

And the departments are interdependent as well, right? So just as I had spoken about how municipalities depend on one another through various agreements, interlocal agreements, districts, the school district has agreements with the town for recreational facilities, and those could be impacted. So it's the same with the departments, I would say, and I would argue. our police department depends on human resources for its hiring. And if we have vacancies or extend, look at what we just did with fire rescue. How many people did we hire and how much of a lift was that? Um, so police maybe while not directly financially impacted and that's a local decision that we have to make, um, you know, is still being impacted in other ways, I would say. So we have to think about the interdependency of different departments and then within our town system and then interdependencies within the county system as well.

So there's always the motivation to protect fire, police, you know, public safety services, but what about things kind of twisting the wind like parks and recreation, even road improvements, all that, where does all that, that's all general fund also, correct?

That would be, you know, the roads, public works, the engineering department, that is all centered in the general fund.

Which are not enterprise funds, obviously.

They are not enterprise funds.

So that's all, they'll basically be fighting for dollars or will be scrambling to try to fund them, correct?

Well, they would have to carry a larger burden if we decided to trim back, if police and fire were exempted for that. Okay.

One thing to add to the point, Councillor Delaney, you brought up an item. So the legislation includes somewhat I'll call protection for roads and maintenance of roads from an infrastructure standpoint. So at least the legislature acknowledges that. But I just want to share a point because I had been contacted recently by the media and they were asking me about something and I just want to bring. We had... flexibility to meet local needs and I'll use my example we went ahead and funded turn it about four million dollars to FDOT to complete in Indian Town Road improvement now years ago it used to be state to the state roads the county did the county roads and the town did the town roads and that's changed okay the state doesn't have enough money they weren't going to get to that road for you know forever and uh... the only way we can act upon it is we make a decision on behalf of residents who are just don't are tired of that congestion to put up four million dollars where did it come from ad valorem taxes so you could argue it wasn't our accountability. Some people say you shouldn't have done it, but people are not sitting in as much gridlock today. I just wouldn't bring that up. So it just, I'm not trying to make this complicated, but just share how this eliminates, uh, meeting locals once, uh, because quite frankly, we're not, we wouldn't be able to do that if we're really, we would have to, painfully probably not go forth with a project like that and then FDOT wouldn't you couldn't get it in the budget because if you're subsidizing their cost in a way you move up a little bit it works that way so I just wanted you brought up thank you but so there is some legislative protection but it doesn't really address the purpose of local government to influence with public money.

And I think the point being the quality of life in Jupiter is why people are here and the services that we provide. That lack of state funding that we put forward is what they want. We certainly thought that, right?

Exactly. And if we're not making decisions, they can run us out of office, but that's what local government is supposed to be about.

And we have the local knowledge being here on the ground, but the town needs and should we kick him for a project like that? And, you know, with the shrinking of the funds, that'll probably disappear as we won't have the flexibility to do it. Yep. So this is just a just a plethora of unintended consequences at it. So I'm up to me and her through it anyway.

Okay, and we'll move on to the next slide. So We started talking about this a little bit in our earlier discussion, that one of the things we'll be discussing this evening is possible funding sources to make up for that $16 million over time. And again, it's an incremental decrease over a two-year period that's being projected. So what we wanted to point out first is, what are some of the things that are under town control? You talked about local partners, the state, the counties. Some of those things are not under our control, but these things are. What are the things that we can use to mitigate what may be coming our way? Certain things like new non-Avalorum assessment fees, if you wanted to do that. Increase in town fees for service, user fees to full cost recovery. For example, recreation fees, facility use fees, false alarm fees, engineering review fees, planning and zoning fees. Those are fees that live within the general fund. We talked about the difference in the funds and the restrictions. These are funds that directly impact the general fund to help make up for some of those avalorum dollars that may be lost. Establishing property-based assessment programs for neighborhood sidewalks, road paving, and infrastructure projects. For example, currently every year the town council appropriates funds for our street repaving, our maintenance program, and we use Avaloram dollars for that. We could, if we wish, use it for the main arterial roads, but if a neighborhood wished to have their community repaved or their sidewalks done, we could do a property-based assessment to help pay for those. Reduce the annual CIP contribution. We talked about that a little bit earlier. Currently, the split is 85-15, so when we receive our Avalorum tax, 85% of that goes to pay for the capital contributions every year. If you wish to reduce that, which we've done that during recessionary periods, a very short period of time, we reduced it to a 90-10 split. So what would that look like? In today's dollars, that would be about $2.2 million less that would go over to fund CIP projects and more funds for town operating in the general fund. We, a few years ago, got rid of the business license fee. We could look to see what it would take to reenact the business license fee if we wished. That brought in a half a million dollars a year at the time. but we had staff members also that would manage that program, so there's a cost to it. Also, borrow funds. Here's something, you know, I haven't really heard a lot of my colleagues talk about, but if we wish to go forward with some capital projects instead of using the ad valorem dollars, we've always been good stewards of doing a PAYGO program, type scenario for all of our CIP projects. It's not until only a few years ago we went out and borrowed some money for environmentally sensitive land. That was a voter referendum approved by the voters. Previously, we've borrowed money for capital improvement projects. Years ago, we have since paid those debts off. We could go out and we could go to market and borrow some money to free up some ad valorem dollars for general use. The millage would be, if we wish to increase the millage, I've heard some of my colleagues talk about increasing the millage. to help offset some of the impact of what you see here, the $16 million. I will tell you, if we wish to do that, I did a calculation to see what the millage would look like to replace the whole $16 million. That would be, the millage would be 4.4750 based on the assessed value of what it would look like in 29. But again, this could be raised over a two-year period. And it doesn't have to be exclusively one of these line items. It could be most likely a combination of different things to make up for that loss in revenue.

Director Reynolds. When you refer to other colleagues, you're referring to your counterparts and other municipalities you're talking to, not Jupiter. That is correct. Okay, I just want to make sure we're clear on that. Thank you.

A chief financial officer collaborates with a whole bunch of, chief financial officers on how to best address, and they learn best practices from each other.

I thought that, but I just want to make sure the residents understood that.

I have a number of items, and I just want to kind of repeat that, you know, and I hope it's coming across this way. We're not crying wolf. You've had expectations public. We've had flexibility, and local governments, there was a home rule that is being threatened here. And so first I'll just talk about, you know, when we created Riverwalk, we have in our comprehensive plan that no paid parking so in riverwalk despite the fact that harborside has paid parking the reason you have the first two hours free is because we thought that every resident should be able to go with their family with brown bag lunch and picnic for nothing So the values that we have in Jupiter, okay, you could say we've been fortunate based on, you know, available funds, but that's why two nights ago we officially passed a resolution and I signed earlier the letter that we agreed upon to the county that we're opposed to beach parking. That's exactly this item here. That's exactly what it would be. And so these are last resort items, okay, that we wouldn't want to do, and it would change who we are as a community. This thing about recreation fees, we increased a few recreation fees, and oh my gosh, you know, you are... The thought of full recovery, first of all, what would happen would be there'd be families that couldn't afford it. So this would be a spiral. There'd be families that couldn't, let's be real about it, right? Full recovery, people wouldn't be able to afford it. That's what we agonize about here with that balance. So while it's on there, I'm particularly speaking to our staff because it's premature for us to be even talking about that we're just realizing what menu we'd have to go to to make tough decisions but you're also hearing just by our defense of no paid parking on the beach is that we still believe that's a quality of life issue that should be a local decision to be made and until such time that this were to pass and we lose the options of how we think we should be representing the community's interest. We're going to kind of hold to that. And if you're getting to the point you think otherwise, then, you know, gee, let us know. But I just wanted to point that out because I'm really concerned. I don't want our staff to be yet worrying about this. These are really legitimate items to talk about. Interestingly, reinstate the business license fee. we eliminated it in the COVID era to help businesses. Oh, my gosh. You know, to be going back just kind of would kind of break me personally about that. But this is the things you'd have to do. I know I'm speaking for everybody. I know everybody agrees. The referendum, this is the one that's, let me first go back. Interestingly, the calculation says And I learned this in the League of Cities presentations that the rollback calculations recognizes an actual roll up. because when you lose the four million dollars in tax base it recognizes the fact that the rate would go up and they call that ironically a rollback rate just to expect but that means that those costs are passed on no inflation but they're passed on to who businesses and renters you know people in our community Quite frankly, one of the bigger concerns I have is this referendum. This would be an unintended consequence in that this is not a stretch. We've relied on referendums, and again, I asked our town clerk to get the voting results and the last two referendums passed 71% and 74%. So does that not speak to the values that voters have had? And that was for buying, you know, park property and open space property. So locally, we feel reasonably confident that there's things that we could go to but we put it out to a vote. And I think that that is in jeopardy of becoming no longer a possibility. And the reason I'll say this is just think about it. If you go back a few slides, how many people are exempt from any property tax? I can't imagine it's not going to be litigated that how can 10,000 voters that don't have a stake in the game because they're totally exempt from adverum taxes be allowed to vote to tax not themselves but others. So, you know, it's a question, and quite frankly, I know we're at least at risk of people litigating that, right? So I think one of the most important things that local government could do with regard to referendums on ad valorem tax, I think it's a risk of being lost. I hope nobody in this room thinks this is crying wolf. It's real, because you think it's fair?

Your point is well taken on the pool of voters. They're not impacted.

Yeah, if they're not impacted, then gee, if you were in another pool where it's going to go up, you're going to challenge that and saying, gee, is that fair? That had never existed before, but it would exist now. So just, you know, again, we're putting these concerns on the table, but we have that down as an option, which if it wasn't in jeopardy, it is an option. We've used it. It's a good way to get, you know, local government feedback, but maybe this legislation, if it was the referendum, if it passed, the states decided we should no longer have it. They probably don't realize that's a consequence, right? But it's a big one.

And I think, again, I think you gave another great example for interdependency within the county because the county is going to have its own problems. It might even have a greater burden than we do because, as we said, they could be receiving cuts but also taking on additional scope. And so we did pass a resolution and we did send a letter and we are opposed to all paid parking in the town of Jupiter because if there were paid parking for non-residents or residents, that will impact the town parking spaces that exist in Jupiter by the beach. People will not go to the parking spaces with the app. They're going to go to our town lots and they're going to fill our town lot. So they're going to go to lots near businesses and take those spaces, you know, Assessing that is a heavy lift. And again, that's not something we have full control over because we operate in an interdependent system and impacts to other municipalities to the county will be felt by us as well. So.

Okay. Councilor Geisinger, I just wanted to say thank you for having me qualify that statement. The legislation that we're talking about this evening is one of the most important things that myself and my colleagues, other finance directors, chief financial officers will be facing coming our way. And we feel that it's our duty that we do network to help find solutions. The list that you're seeing in front of you are ideas. obviously to spark discussion and deliberation with the council members, but thank you for making that qualification. So again, going on with some possible funding sources going forward that are under town control. rebate of the CRA tax increment. Not a lot of people know this, but at the end of the calendar year, if there are leftover funds, we could refund those funds back to the town and to the county. We would have to do both. We couldn't be selective just for the town and have to go to the town and the county. We could use existing reserves. That's a one-time use. If there was a stopgap measure that was needed over the next couple of years to get a program up and running to generate additional revenue, if we needed a stopgap funding measure for one-time use, the reserves are there for that. We also have a number of escrow funds in the town. This is, again, these are one-time use monies. Right now there's approximately $3 million in escrow funds that have accumulated over time. Some of them are very old. For example, if there's a development, I know the council knows this because you talked about one the other evening where they make capital contributions to to the town. Those uses could be very restrictive in nature based on how the development order is written that those funds that are collected could only be used for a very specific purpose and sometimes those purposes may not materialize for a number of years. So right now we have a number of escrow funds. Now, we do look through those funds every year. We look to see what those restrictions are and see if we can use them for capital projects in the town to make sure that they're still viable. So we are aware of them. It isn't like it goes on a list and we forget about it. So during specifically the budget season, we are reviewing those funds to see if we can use them in any way. But they are restricted. That may be something that we could look at maybe trying to find a way that we can unrestrict some of those funds to be used for general CIP purposes possibly.

And these options that you're going through are options we consider every year.

We look to see if we can definitely use the funds.

We've done this. This isn't like, these aren't new, but what you've done, and thankfully, we thank you for that, is you're putting it all here so we can remember. These are the tools in the toolbox we have to deal with fiscal challenges we might have.

Again, things that are in the town's control. We wanted to kind of list that first. things that you can act on and do in the future. So again, this is a list to spark discussion and deliberation. The other one that we talked about earlier, we started talking about cost reductions. Capital funding is a big one. We transfer approximately just over $6 million a year to our capital fund. That's one of the options going forward is to change that distribution and do something different with that. Here's the cooperative efforts, future items to consider. A little bit more of a heavier lift takes a little bit more time. working with other municipalities to reinstate the infrastructure surtax. If you remember right, we went to the voters and got approval for an infrastructure surtax throughout the county. The town was definitely a beneficiary of that. We collected approximately $45 million off that small tax that everyone paid into, not just the taxpayer, people from out of state, anybody that purchased here in Palm Beach County paid into the tax. So we were a beneficiary of that, and it helped pay for this building here, the police facility, and other improvements. So that's something that if the council so wished, could work with other municipalities to try to reinstate if they so wish, but again, it would require voter approval, but that's definitely something to think about. Also, something very interesting, For example, the stadium here in the town, the major improvements that are being paid for there is through the tourism development tax. That's what's paying for the bonds that were used to do that development. Well, that's traditionally and overwhelmingly a funding mechanism that's only exclusive to counties. There is one jurisdiction in the state of Florida, and I have no idea how they got into the legislation, but years ago is the city of Surfside down in Miami. They are a municipality that is allowed to collect their own tourist development tax. So there are things that we can lobby the legislature for as well. to help generate revenue that we can bring back and use locally for our own projects. So that was, again, that was something I felt was very unique. I wanted to add it to the list. Just to emphasize, you know, we can lobby the legislature to create new revenue source opportunities for the municipalities, including the town of Jupiter.

You know, again, phenomenal list for us to just supplement it with words that in most cases you already know, but just among ourselves we're discussing it. You know, the infrastructure surtax going forth or this amendment to pass, there already is competition for those kind of sources. People have a limited tolerance to now going ahead and increasing sales tax, so For those that may not realize it, there was some interest in having a collaborative sales tax agreement With the school district and they decided to go ahead, you know without this so While it has been a solution in the past and still remains a valid one The challenge will be because I know that for example we already heard Or we got an email confirming that the county is proceeding to vote for a bond for the libraries I think they were going to vote for a bond for county parks. And that's already going to be on November. So all these things and, you know, collectively, you know, people are only going to vote for up to a certain limit. And they're going to say, you know, enough is enough. And to some degree, you know, local governments with our county have tried to really balance that and have if the timing wasn't right, but I know that the county is doing a county transportation plan because they were looking for a funding source for transportation that doesn't exist. So again, I just think it's good to have it on the list, but I just would caution that the likelihood of it becomes less and less when you have the competing priorities. I'd be more for the infrastructure surtax, but there's other areas of the county that think the transportation is an important item, you know, and so be more challenging to get, you know, kind of a consensus, you know, on that. so just you know wanted to kind of make sure I'm putting we're putting that out there that we're thinking about but again we want to list total but they're not some of them are now going to be less likely options going forth while they were great options you know in the past and hopefully they still will be but other comments on this page

I would just say, I think you're right. Um, if a resident goes to the ballot box and sees 20 different asks for different bonds, um, and additional millages to apply, they would get tired of that. Um, I know the county recreation master plan includes some projects in Jupiter, the Jupiter aquatic center, the west Jupiter community center. So when you typically go for a referendum for a bond like this for the library or for recreation, you provide a list of projects that you believe it would fund. And we would do the same. And so it seems that those projects are now contingent on that funding more than ever, which is something that's changing. So what we may have been able to count on for recreation, we may need to put out to voters, and it will be contingent on that. But as the mayor said, the issue is some people will be voting for programs that others will pay for.

A significant amount.

I know. I mean, the cost of this is one thing. But for me, it's the structure, the restructuring of how government works at all areas of local and state government that creates so much uncertainty with so little time to adjust. And that's if, knock on wood, things go well with storm season this year and next year and the year after. That is my biggest concern is just our structuring and how we're going to work together with our partners.

I just don't think looking down the road into the future that this was well thought out. Like you said, they're kind of throwing it at us and we're scrambling because, you know, I'm sure some towns could cut significantly, some less amounts. I know we run a very tight ship here. I think the mayor called us spin thrifts a few meetings ago and we've been, you know, we spend money, we provide services to people that what people demand in Jupiter. But we've held off on parks and rec, and I've been here a while, and people have been, like, we didn't do the parks, but it's expensive, a lot of money, so we had to figure it out. So, you know, it's just, the money has to, for some of these, a lot of these items that we provide through taxpayer money, money has to come from somewhere, and we're just going to scramble to find out how to do it. So I just think this was ill-conceived.

I think the most important takeaway is, first of all, we're blessed. We're in Jupiter. That's not going to change. Right. And what potentially would change here would be the timeliness that we could respond to and ask. For example, families would like the athletic fields to be upgraded while their kids are still kids. I mean this sincerely.

It's true.

And it may just be the case, sorry, but we can get to your grandkids, you know, because it's going to be slower. And if that's the way it is, your local elected officials will work with whatever is here. That is our job. That's why we run for local office. It's just this is such a staggering change in what used to be home ruled that would be taken away from us that we really just need to make sure that there's an understanding. First of all, we understand it because you would kind of – I don't want to be telling people – I have grandkids. I don't want to be able to say – I don't want to be saying, well, it isn't until my – Great grandkids, you know. Can we get to the fields? I was pretty passionate about getting going on fields that are 20 plus years old last year. I'm no less passionate now.

Count on that, right? Our former mayor, he was always pushing indoor gym space, and me and I was always behind him on that. And we had one conversation, so he said, you know, our kids will never see it. They're going to cycle out by, and we still don't have it, what we wanted. But, you know, it takes a long time. It's going to take longer.

But, again, if this were to pass, we're all going to just understand that local control and influence has been lessened, and we'll figure out a way to still work it all out.

I think another important thing is that we're assuming costs remain the same, that costs aren't escalating around us. And they are for families. I mean, our health budgets are facing all kinds of pressures. But the council pays for the same gas or diesel. And so we see the cost, too, but then Oftentimes when we're talking about inflation or how we'll adjust for inflation and population, no, Jupiter has not grown very much. I think we grew 2% and we aren't building a lot to lead to that. But in terms of inflation, you know, CPI, the basket of goods are eggs. Consumer electronics, those aren't things we're buying. We're not buying eggs. We're buying asphalt, and we're paving roads, and our basket of goods is different from the basket of goods in a household. And so, Finance Director Reynolds, I just wanted to ask about what we're seeing in terms of costs. What indices do we look to? CPI, you know, you go to the Bureau of Labor Statistics, and we talk about this in the budget frequently. But there are others that more accurately collect and reflect the cost that government pays for different projects.

We're looking at that every day. In fact, we're facing it every day because we have to come back before the council and explain why these costs have gone up over time. So we are constantly reviewing that. For example, one of the ones resurfacing. standard 1.5 inch asphalt resurfacing with incidentals used to be $125,000 per mile and that was in 2020 that's now $225,000 per mile that's an 80% increase so just that alone commercial institutional buildings used to be back in 2020 $350 per square foot, you remember those days, has now escalated to $650,000 a square foot, so another 86% increase. Our utility director specifically, we looked at the utility projects that they've been facing. Amanda Barnes and Rebecca put together some great slides where they look at the utility indexes compared to CPI. The utility indexes for construction are far outpaced the CPI in these years. So we're looking at like a 30% to 40%, even up to 70% increase on some of the construction costs relating to the utility. So these are uniquely municipal issues that we're facing over that time period. Everybody can remember what happened during COVID. There was supply chain issue. And other issues, well, those costs have increased along with the cost of gasoline. Everybody knows just by going to the pump what that is. Hence the loaf of bread discussion. You've seen those increases with loaf of bread. A lot of it is directly related to gasoline. But overarching, when the supply chain issues started getting resolved, you still saw these increases for construction. And a lot of it has to do with labor costs. Material costs have gone up. due to transportation costs. But you can see these anywhere between 30% and 70% increases on these construction-type activities. And we're facing that with our CIP projects every day. When we're going out to bid, we try to be as competitive as possible. But specifically, the South Florida market is a lot more expensive than when you look at the average, the national average.

I think that was hard, too. I remember previously, budget cycles where people were talking about inflation being 4, 5, 6%, that is extremely high. But then when you look at local inflation, specific to the West Palm Beach area and the Bureau of Labor Statistics measures all of this regionally, it was much, much higher than the national average. And so looking at the local data and local impacts is what has been impacting our budget. For the employment cost index, also at the Bureau of Labor Statistics, Miami is one of the highest rates in the nation for employment. And so these are the costs that we have been absorbing far above CPI. And so we will continue to face those costs and even to provide a Cola to employees to remain competitive with the private sector with others, um, is going to be difficult when you stay with the same dollar number. And so, you know, again, for me, I'm just focused on the structure and how can we secure our services for residents long-term in a structurally sound way and reduce uncertainty. And I just feel like we're in the wild west of budget development. I mean, I know the enabling legislation for the health district. I was looking at how it was impacted earlier today. Their maximum millage is two mil. So we have 10 for municipalities and that rate is two for them, but they also have a maximum amount. They can increase it. They can't do more than a quarter mil each time. And that, I mean, I wouldn't, I would say you never know what to expect in future years and what changes could be made, not only constitutionally that we're seeing, but statutorily too. And so just to get ourselves in as good a position structurally, not fixing just short-term problems, but long-term structural soundness of the town as we surf the waves of this. Yeah.

If I might, I'd like to just ponder a little bit back on the funding sources. There's a trickle-down effect on this, and yes, you could add into a tourist industry tax that we already have. What happens then, this part of our REVENUE SOURCES IN ANY MUNICIPALITY WILL START DECREASING IF THE COST TO A TOURIST GETS HIGHER THAN THEY WANT TO PAY. BUT WHAT THEN THAT DOES, IT AFFECTS BUSINESSES, PARKS, YOU COULD ADD FEES FOR SERVICES, CHILDREN, FAMILIES WHO CAN'T AFFORD IT. WHAT HAPPENS, THE TRICKLE-DOWN EFFECT, WE'RE NOT GOING TO NEED THE STAFF WE HAVE. IT CAN GO ON AND ON AND ON AND A LITANY OF ALL THESE POSSIBLE SOURCES THAT, YEAH, WE COULD ADD A FEE, WE COULD ADD tourism taxes but that's not the quality of life can it be sustained in jupiter versus other towns probably we don't want that but all that being said this is part of the bigger discussion there is always a trickle-down effect and we don't even see it here yet

Just number one to add to what Mr. Reynolds said about looking at it all the time. We on the council are looking at it all the time because every time you come in with a contract to renew a service like landscaping or whatever, I was asking you always provide how much it was in last year. So every time we renew a contract for something we service, a service that we provide, we know what it is in the change and rarely, and it has sometimes, but rarely has it ever gone down. And then I just wanna, and again, we will work with whatever is the outcome of this But again, I want to repeat, because when people are hearing us being concerned, we're not resisting if this is what the public wants, but I just look at my home ownership. I've been blessed. I got homesteaded property protection. And in the last 10 years, inflation's gone up 35%, but my property tax increases have gone up 5%. It's not the cost of where the precious is. My homeowner's insurance has gone up 229%. So if you go back historically over time, you know, yes, let's remember, where is the opportunities? And I know the legislature has done some stuff and is a minuscule, you know, reduction. But let's realize that in my mind, for those of us that have been blessed to have Saver Homes Protection, This really is an issue. It's really, quite frankly, it's the non-homesteaded properties we always agonize about because we realize that they've been, you know, getting increased, and that's people that are renting and what have you. But I just can't overemphasize that point. And so, again, we're going to deal with whatever's thrown at us. That's why you elected us. I can't overemphasize that. We can get better. We will work to get better. But just the scope of this is just, I just couldn't have had, I could never have, you know, when we made the decision on fire rescue, I thought I was just dealing with, we were just dealing with the most impactful benefit that could ever have happened to this public that we deserve. And this amendment, Oh my gosh. You know, so it would be a stretch beyond anything I could imagine. And that's where we're just expressing concerns, looking for options, preparing. And further, because we already had a workshop, I just want to say, because I've weighed in, we all have in that workshop next steps. So this is the first time it's a normal annual process where And I already said that we don't know what the voters will decide, so I don't want to get into be talking about increasing user fees large amounts and alarming people like the beach paid parking did. And I'm not finding fault in saying that, but we're not going to do that here. I know that my colleagues agree on that. I'm really speaking for all of us. as I normally do, but we can and should, I believe, pause on some of the capital spending because once and just for the year until we know. So we're going to do something different in our capital planning this year. I think we're going to agonize about it because I said already, I've been trying to get, you know, fields improved that need to be improved, but I'm okay with at least planning that will hold off pending the result of the referendum because then the responsible thing to have done is to hold off because it just may be we can't afford to upgrade and we have to live with that and so I just want to emphasize that is one step make sure you heard that that we will take in the normal process and then I want to emphasize that, you know, I'm a fiscal conservative, and for many, many years I professed that we shouldn't increase more than inflation and population growth. And I've come to learn that was a flawed thinking, and I'm going to use my example. Our base budget didn't include things that were being built by new construction. Abacoa was built. We never had a budget for paving Abacoa streets. We had a budget for paving all the other streets. Our parks, a lot of them were built by impact fees 20 years later.

No impact.

Okay. Never were in a base budget. So I submit. I've learned there's a lag with population growth to where those costs show up. How many of us have not heard from abacoa neighborhood about hey when are we going to pay what are you going to pay wall street it's been 20 years and that's a fair question but that represents a budget increase because it was built it was never added because we weren't there So I just, you know, these are the things that we have to deal with. I just want to emphasize that, right? And we're going to really agonize and painfully hopefully come to an agreement, but probably not. It's not possible realistically. But I think the capital is, at this point in time, a capital pause. We have a five-year plan, so we should mark up in the CIPs as we go. These are pause items. Public have been asking for it, but we're going to pause on spending that money because if this hits then the next year, we have the money that we wouldn't otherwise have. And I don't know if you want to go to the next sheet or anybody want to say anything?

So that comes to the council direction. Consider policy direction on addressing potential lost revenue. What items would you like for staff to pursue and bring back or take action on, kind of hits on some of the things you were just saying, Mayor, about the 27, 28 budget, you know, looking forward, maybe as we get into this, if the legislation does pass, maybe do a early workshop for the budget so that we can go ahead and flesh these things out based on recommendations from the council on policy direction that you would like us to concentrate on as staff and come back and implement into an early budget. so we can have those workshops early, early in the year and start preparing? Or is there other council ideas that maybe you've been pondering that we just didn't list? So, you know, you've been very good tonight to express your thoughts and some of the ideas going forward. So, again, what we're seeking tonight is What would you like us to do going forward or things that we should be concentrating on that you would like to see? I heard one from you just now, Mayor, but the rest of the council.

Well, to clarify on that one, because you got that as your last bullet. So we have two budgets. We have a capital budget. We have a, I mean, simplistically, a capital budget. We have a operating budget. And the capital side, we can already be preparing for. When we go through it, we'll be talking about it. These are important to us, but let's pause it, pending if we have funding to do that.

We have a CIP workshop coming up in August.

Right, and I do think then the outcome of this budget process would be our CIP would be clearly marked up because we wouldn't be kicking something out of the plan, but we would just be designated as a pause. And then, but then we're, I think we don't want to get into preparing the operating budget because the impact doesn't happen for a year because we don't wanna be, you know, klein wolf early or or getting into some of these extreme measures we might have to um so that one i we agree well we'll start the process earlier next year if the referendum were to pass right and then quite frankly what i'm expecting this is the first time we've talked about this we've listed a bunch of concerns and whatever there is litigation before a judge that may change things. And so that needs to, and you're not, you didn't present nor should you have what is being litigated and what may be impacted. So I would hope that there's going to be some changes. When that is understood, we would come back and hopefully this list that we've had of concerns will I'm just an optimist. Some of those concerns might go away. And if they do, then we just take it off the list, right? And that's like, it's then looking, not just as we do with legislation, where's the unfunded mandates? it'd be after the voters have after the uh the first step is after a court's were to decide is this or isn't this like maybe it may come up about a referendum no longer being a possibility the legislature maybe call me naive but might want to correct that if there were time left you know But it's going to be what it's going to be. And then when the voters act, that's when. So to me, I'm just laying down. It's a continuum. We've started down the path here tonight, but it may change. We need to be fluid. What we now know tonight or have questions on, some of those may be answered.

What's the cutoff date for the final language for the November ballot?

I'm not sure. I thought it was August, but I'm not sure. Because they have to print the ballots and distribute, and there are voters overseas and all of it.

I think it goes to the judge, though. Right, that's where I'm going with that. In the end of the month, doesn't it? Do you know? No, sir, I do not.

Could the lawsuits delay that?

That's what I was referring to. I thought I read the hearing was set July 28th, 29th. I could be wrong.

I didn't know what the date was, but it's soon.

But then, because what will happen at that hearing, the judge may say the ballot language has to be changed and he may rule on other things.

What if it passes and then the commission that meets every 20 years to look at the tax structure of the state determines another course is best? How is that resolved?

It's in the Constitution now.

Yeah. And it would have to be... Because this isn't a statute, I mean, when the legislature passes a law, they can amend it the next year. They have glitch bills, things like that, so they can tweak it and improve it over time based on feedback if something goes wrong. But for a constitutional amendment, the only way to fix this, if any single provision causes any unusual impact or outsized impact, the only way to fix it is another referendum? I thought...

Well, if the voters were to decide they want this entitlement of free government without taxes, you're not going to get them to vote to increase the tax back again.

I mean, I see wisdom. I see wisdom in property tax reform. And I see, you know, I absolutely understand the benefits in some ways. But this specific solution with all of its provisions, I think, has a lot of consequences that are unknown. There's too many legs going here. We're not voting on something generally. We're voting on a very specific thing that has many, many specific provisions with specific impacts. And if any one of them causes a major issue, we would have to go back and get another 60%. And the cost of the campaigns, the uncertainty for these groups, it's a lot.

Should have been that 20-year look that they do would be comprehensive, but it is what it is.

It's just that every town has different needs and wants and revenues, and to just kind of cookie-cutter this thing through, it's just going to be tough on everybody. We're blessed. We're Jupiter. We're very solvent, but I really feel for the smaller towns and counties that are not going to be able to deal with this, so.

Yeah, just getting to exist.

Right.

And, you know, we can talk about Jupiter is blessed, but it comes down to the reality of what's fair. Is this a fair way to present something without, I mean, it's not even clear. That's why we're sitting here tonight. So, yeah, blessed is one thing, fair is another.

It's definitely not fair to those 69% that are fair and the cost of the other 31% won't pay. that will not be paying any property tax should this go through in 2029.

Well, actually, don't forget, it could go up to what, not just 31%, because the legislature has empowered themselves to go down to nothing for homesteaded properties, in which case, what was it in your presentation, Scott?

It's not just the legislature, there's language in there that allows local jurisdictions to also allow for that.

64%. It's possible that 64% This enables 64% of residential properties, all residential properties in the town, to be exempt from paying ad valorem taxes. Based on the homestead? Based on homestead. That's what's before the voters. And so then if you had a referendum, then they'd be able to say, do I want something? The other 36 are paying?

The other thing to consider here is you have 67 counties, and if it passes, you could have 67 different business models coming out of with changes, fees, whatever it might be. So you could come back, you're going to have a portion of those towns failing. So somebody's got to pick it up. So again, that whole trickle down, 67 different ways financing a town or municipality. It's mind boggling.

400 municipalities, 500 local governments.

And I think even, you know, we're not coming into this as strong as we would otherwise. Recent legislation had a budget impact of $1.4 million at least. So we have a $1.4 million hit that we're working through this year. Even before Any additional cuts?

You're talking about the surcharge issue. Is that what you're talking about? Yeah. It's really only a quarter of that total. The 1.4 is what we collected annually.

Well, it's a quarter because it doesn't take effect until the fourth quarter. Right. But if it's not resolved...

It would eventually go away if we didn't do the study.

Okay. Okay.

Excellent job. You've created your presentation and your thoroughness as you always do. All the staff that helped created an environment that I think we had the most, we all collectively learned and had dialogue. So we all learn something from each other, from you, and we have a list of concerns that we can punch list to make sure that we're prepared to deal with this if it passes.

Mayor, as usual, the council has done their homework ahead of time. You all had a lot of very good questions. And to make sure that I understand the direction of is that we're going to be looking at the CIPs coming in August. That's step one. And to go through the list of the CIPs, if there's ones that you all would like to go ahead and freeze going forward. But we'll start with the CIP process in August and then wait to see what happens in November and then do some kind of early workshop or discussion on the upcoming budgets if the legislation were to pass.

Well, one caveat others may have, but I suspect staff's gonna help us and gonna be proposing items to be paused, right? So we talk about it, like you always do, right? I'm sure you're already doing that, I know that. I wasn't questioning that, but just people hearing this know staff is, as they always do, already working to respond before it ever even gets to us. And I know you were doing this already, but I just, Yeah, it'll come back in the public venue in August. Yes, thank you.

And we've had a budget workshop before this for those watching. So we've already talked about some of what we expect to do ahead. And we have talked about our CIP. And I had said before, I absolutely support that. We just need to make sure that we have criteria for what we're doing, some kind of logic on how to prioritize these projects. Certainly, we'll probably be deferring a grid number But like I said earlier, we're getting a number of appropriations from the state. So those require matching funds. Certainly we'll prioritize those so we get them done. And we've learned recently that the state really values that and that impacts our future ability to get funds. So just looking at, I think we should all be thinking through our logic as to how to approach these capital projects and prioritize them. And I know staff is doing that as well. In previous years, I remember we've done some pretty deep scrubs of CIPs. So you've brought back recommended projects to scale back or defer. It's been very helpful. So thank you.

I think CIP is the simplest and, for now, the least painful route to take. I don't want to start looking at other fees.

We're not going to. That's what we said. I know.

But I'm just saying, putting it out there, that's the last thing I want to think about right now. But let's start with CIP.

But I think on the CIP, emphasizing, because, yeah, you're going to want items. We're going to have the CIP contain all the projects that we would normally do in the budget. Therein will reach consensus like we always have. But some of them, and I would submit a large portion of them that we would be committing to between now and the referendum, would be marked a pause. So I'm going to want athletic field renovations done, but I'm going to accept the fact that it's a pause. I'm also affecting the fact that they were line item vetoed because The state doesn't seem to care about athletic fields. So I'm accepting that. And it's not addressed as covered in this package. So I'm no less going to want it in there with a pause. But then what would happen is then if it passed, then it's likely those pauses then get extended.

They get extended.

You know, and then subsequently, so they just won't get done in that calendar year, and then next year, they'll wind up being pulled out of, some of those are gonna be painfully pulled out of the CIP. That's what would happen, right? So I don't know why we wouldn't get an agreement on that, right? Because everybody could still get items in there, but it's just good business, good representation of the public that if that's what they want,

then we're prepared to stop spending on things they've asked for well when it comes down to where the you know you know push comes to shove it comes down to you know least essential services but the general public may call least essential. Somebody said, no, that's very essential to me. I want my kid to play in the field and all that, but it's going to come down to the things, uh, safety wise, the lower priority on that scale, it's going to hurt some people and it's just, just the way it's going to be. Hope it doesn't happen that way, but you know,

But again, one thing I've tried several times tonight is recognizing our staff that have worked so hard that match what we believe the community needs, that I don't want them to take a message. Even now when we begin to pause stuff, hopefully they understand, right? We'll figure out a way, but we've got to hold on every dollar we can, not knowing what's going to be confronted with. That's my point. Thank you. Great job.

Thanks, Scott.

Appreciate it.

The time is now 7.57, and I'll adjourn the meeting.