Ocoee residents might see their property taxes lowered for the upcoming fiscal year.
In a budget workshop meeting on Aug. 8, city staff presented a budget for the 2019-20 fiscal year with a proposed millage rate at 5.25. This proposed rate is a reduction of 0.25 mills from the current millage rate of 5.5. Although a lower millage rate has been proposed, the budget for the upcoming fiscal year still has to undergo two public hearings before the commission can take action. Those budget hearings are scheduled for 6 p.m. Sept. 11 and 25. Additionally, the budget workshop scheduled for Aug. 14 has been canceled.
The millage rate is used to calculate property taxes, and it represents the amount of every $1,000 of the assessed value of a property. The total taxable value of a property is multiplied by the millage rate to calculate the property taxes.
Finance Director Rebecca Roberts presented the budget to commissioners. She said with a budget for the upcoming fiscal year balanced at 5.25 mills, ad valorem revenue will be higher than what is projected in the current fiscal year.
“Our ad valorem revenue is projected to be $15,226,165,” Roberts said. “That’s still $1.9 million higher than our projected (ad valorem) revenue for the current year, even though we are reducing the proposed millage rate.”
The extra $1.9 million was used to help balance the budget, and made it to where the city can be less reliant on reserves. Total revenues are budgeted at $82,718,492, but that number accounts for an expected increase in the city’s restricted funds, Roberts said.
“Our restricted funds — such as our impact fees (and) our capital charges — those particular revenues are a little more difficult to estimate early in the year,” Roberts said. “By the end of August … I will meet with all of our department heads once again to fine tune these revenue estimates. It’s just very difficult to estimate those early enough to produce a budget book, so we will revisit those. We don’t expect them to go down. We only expect that those will go up from where they are.”
City leaders have previously said that growth has allowed for the city to lower the millage rate. As part of her budget presentation, Roberts highlighted the recent growth and increase in property values within the city.
“We experienced a tremendous growth in our taxable value this year,” Roberts said. “Our property values went up by about 15%. Last year, we experienced about 2.6% growth in total property values. The median home sales price increased by 4.9%. Now, that was a percentage point lower than what was forecasted this year, but it still is terrific growth for the city. What was forecasted was 5.9%.”
Roberts also highlighted the city’s low unemployment rate of 2.7%, which is lower than the state and nationwide unemployment rate of 3.7%. Although property values are up and unemployment rates are low, Roberts said that the recent growth in the area has led to an increase in construction costs.
“What we are experiencing, locally, is about a 30% increased cost to construction,” Roberts said. “That’s the one — I would say — downside to so much growth in our city is it cost more, now, to produce.”
In addition to increased costs in construction and an increase in overall revenues, the city’s expenditures are expected to increase as well, Roberts said.
“As do the revenues go up, so do the expenditures,” Roberts said. “As I mentioned earlier, the cost of everything is getting higher, and therefore, the cost of doing business and the cost of providing the services that are necessary to our constituents gets higher as well.”