Delray’s Lauzier Steps Up, and Updates on Budgets, Lawsuits and Boca National

Delray Beach Mayor Shelly Petrolia

Delray Beach Mayor Shelly Petrolia made yet another attempt to cut the city’s tax rate. She failed, but her attempt led to a revealing discussion about the city.

Three days before the Sept. 6 budget hearing, Petrolia signaled her intentions with an email titled “Money Matters.” In the email, Petrolia questioned the need for an increase from $118 million to $132 million in the general fund budget. It covers most of Delray Beach’s basic services, such as public safety and parks, and gets the largest share of property taxes.

During earlier discussions, the commission had already lowered the tax rate by a small amount. Petrolia wanted more. Perhaps the commission could shift money from reserves, which Petrolia complained are too high. Perhaps City Manager Mark Lauzier could make cuts.

Though Petrolia called her four colleagues “well-intentioned,” she also implied that they don’t work hard and care less about the public than her.

“It is understandable,” Petrolia wrote, “that part-time elected officials have inadequate opportunity to examine” the 400-page budget book. So they base their decision on a one-page summary. The staff recommendation “often comes with pressure to go along.”

Not Petrolia.

“I see every opportunity to lower the millage rate more than we have in the past.”

The tone and content sounded much like emails the commission has received in recent years from resident Ken MacNamee. He regularly excoriated former Mayor Cary Glickstein, who ignored MacNamee’s arguments for tax cuts. Administrators also pointed out the mistakes in the emails. Petrolia has said she consults with MacNamee on issues related to city finances.

Reading Petrolia’s email, one might have thought that residents were ready to revolt against high taxes. Yet at that first hearing, not one resident spoke about the budget. So the commissioners did.

Commissioners Bill Bathurst, Ryan Boylston and Shirley Johnson noted that residents had been more frustrated by the city’s inability to complete projects, notably those for such essentials as streets and sidewalks. Where Petrolia had talked about “giving back” money to taxpayers, Bathurst said, “I think we give back by getting things done.”

Petrolia and others also have griped regularly—with good reason—about weak City Hall management. Indeed, Lauzier is the first city manager since 2013 who has shown competence and a willingness to be on the job and around Delray Beach for a while.

“We have not had direction,” Johnson said.

So, yes, Lauzier’s proposed budget contains more staffing in the city manager’s office. But that’s for the improved management and oversight the commission has been demanding. According to Lauzier, the budget includes just 35 percent of the staffing requests from department heads. Delray Beach isn’t about to start on a hiring spree.

Still, Lauzier also will add staff “to meet basic service delivery needs,” especially for water and sewer. He will focus on improving communication with the community redevelopment agency to better coordinate spending. That has been another commission priority, and now the commission sits as the CRA board.

As I read it, the extra $14 million is to get more things done and make the city run better. In addition, the commission has its own requests for more spending. They want to improve the golf course so more people will play more often. Johnson wants a new City Hall.

Overall, though, Lauzier is cautious. He rejected a request for eight more firefighter/paramedics—putting three on every rescue vehicle—because he wants to determine if the money would be worth it. He’s a data guy.

“I like analytics,” he said.

He also is dealing with years of neglect. The Marina District plan, Lauzier said, is a decade old.

Only Commissioner Adam Frankel sided with Petrolia.

“My goal,” he said, “was a 5 percent reduction” in the tax rate, offering no reason why he had picked that figure.

Frankel did suggest that the city could make more money on fees, such as one for owners of transient rental properties. That’s a bad idea, since the commission wants fewer transient rentals in the city. That would mean less money coming in.

Petrolia is correct that Delray Beach property values almost certainly won’t always increase more than eight percent, as they did between last year and this year. The city could lose $1.2 million if voters raise the homestead exemption in November.

But Delray Beach has many needs—far more than Boca Raton. Lauzier’s priority is for the city to start meeting those needs and to add projects only if they seem necessary and doable. In that, Delray Beach finally may have the city manager it has needed.

Boca budget

There was almost no disagreement last Thursday when Boca Raton held its first budget hearing. City Manager Leif Ahnell proposes a general fund budget for 2019 of roughly $175 million, up from $168 million last year and from $161 million two years ago.

Representatives of roughly two dozen non-profit groups took up most of the roughly three-hour hearing with their annual appeals for money. All serve clients who live in Boca Raton, even if the group is based outside the city.

For those who still believe that Boca Raton is home only to those who have it easy, the pitches were revealing. Example: Wayne Barton, the former city police officer who now runs his eponymous study center near Pearl City, said 100 students at Boca Raton Middle are failing and need his organization’s help. Bob Rollins, who normally appears before the council in his role as chairman of the Greater Boca Raton Beach and Park District, was there on behalf of Alzheimer’s Care.

Boca Raton allocated $433,000 worth of grants to 40 non-profits in the current budget, which expires Sept. 30. Forty-six have applied for money in next year’s budget. The council will decide at the second hearing on Sept. 24.

And that “fire fee”

One speaker did criticize Boca Raton’s fire assessment fee. It will be $135 per home in next year’s budget, with a higher rate for commercial property owners.

The fee began in 2006 at $20. As one resident noted, that’s a 675 percent increase. Since the money goes toward fire-rescue services, which the general fund budget covers, the speaker argued that the fee amounts to a tax. Therefore, he said, let the property tax rate reflect the $12 million that now comes from the fee.

Ahnell responded that property tax revenue from within the downtown community redevelopment agency must be spent only within the CRA’s boundaries. The fee raises $1 million from downtown. Without it, the city would need another $1 million from outside the CRA toward the $51 million annual cost of fire services and the fee likely would be higher.

Fair point. But it still seems like a tax.

Boca National plans

Plans for the new public golf course in Boca Raton are starting to emerge.

At its meeting Monday, the beach and park district board approved a layout that will put 18 holes west of Northwest Second Avenue with a driving range, training facility and a few other holes on the east side. The former Ocean Breeze course is in the middle of the Boca Teeca community north of Yamato Road. Second Avenue roughly bisects the subdivision.

Many Boca Teeca residents had wanted the layout to be 27 holes, with a full nine holes on the east. They liked the aesthetics better. But Beach and Park District Bob Rollins, correctly, said his agency based its decision on “a communitywide perspective.”

After all, Boca Teeca is getting what amounts to a public bailout. The former Ocean Breeze closed because fewer and fewer residents were playing. Though the site looked terrible, Boca Teeca residents generally opposed residential redevelopment. The new course will bring much improved green space that will raise property values.

The district’s architects preferred this option. Rollins said moving the driving range will give designers “more flexibility” on the west side. Though a 27-hole layout would provide an alternative during maintenance on the primary 18 holes, Rollins said similar layouts such as Deer Creek in Deerfield Beach “do fine. And we had a 27-hole layout (Ocean Breeze) that failed.”

And the cost

Rollins also told me that the Beach and Park District is “very, very, very close” to deciding on how much the agency will seek from Boca Raton toward construction of the new course.

The city underwrote bonds for the $24 million purchase of the roughly 200 acres. Council members had expected a similar request for construction—last estimated at between $14 and $15 million—but district board members then said they wanted cash. Though Rollins wouldn’t give any numbers, he believes that the request will be “not as much as we had thought.”

Delray split on building height lawsuit

While Boca Raton deals with one Bert Harris claim and anticipates another, Delray Beach is trying to settle a similar claim.

William Himmelrich and David Hosokawa own the two properties across from Old School Square on the north side of Atlantic Avenue. In 2015, the city commission unanimously restricted new downtown projects to three stories, saying they wanted to preserve Delray Beach’s small-town character. Those properties are on the edge of the area to which the restriction applies.

The owners filed a Bert Harris claim, alleging that the restriction amounted to an unconstitutional taking of their property rights. When the two sides couldn’t resolve the issue, Himmelrich—who owns the very popular Old School Bakery—and Hosokawa filed a lawsuit seeking $6.9 million in damages. According to the Palm Beach County Property Appraiser’s Office, the combined 0.38-acre site has a market value of about $7 million.

On Sept. 4, city commissioners and Delray Beach’s legal team met in executive session to discuss a settlement offer from the plaintiffs. They would drop their lawsuit—without being able to refile it—in exchange for the properties being exempted from the restrictions.

Commissioners Ryan Boylston, Adam Frankel and Shirley Johnson voted to accept the offer. Mayor Shelly Petrolia and Commissioner Bill Bathurst disagreed. The settlement is contingent on the commission approving the changes, which must happen at a regular meeting.

City Attorney Max Lohman hopes to schedule that meeting soon. Lohman told me Monday that the crowded September schedule because of budget hearings has delayed things. He needs about three weeks notice.

Lohman said the city responded to the lawsuit and has filed a motion to dismiss.

“I believe our case is strong.”

Like all lawyers, however, he acknowledged that judges and juries are unpredictable.

“A settlement,” Lohman said, “does give you control.”

Given the close commission vote and the strong sentiment in Delray Beach over downtown height, I would expect a lot of comment when the commission debates the settlement. I will update this item before that meeting.

And that tennis center lawsuit

Delray Beach’s other notable lawsuit is by the city against the promoters of the annual professional tennis tournament. The city wants out of the 25-year contract, which was signed in 2005. The event costs Delray Beach more than $1 million annually, with increases built in.

The commission held a separate executive session this month on the Match Point lawsuit. City Attorney Max Lohman told me that the city and Match Point had “informal settlement discussions (Monday) and will meet Friday for a formal mediation session.

“We will discuss a great many things,” Lohman said.

One compromise might be a shorter contract. Another might be a lower price. I will have an update next week.

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