From Staff Reports
In Summary:
City staff is recommending a rate of 5.1876 mills, but the proposal requires a unanimous 5-0 vote. If unanimity remains out of reach, 4.6761 mills is the highest rate that could pass with four votes, while the rolled-back rate of 4.2510 could pass 3-2. Even at the highest proposed rate, Apopka would need approximately $11.38 million in spending reductions to maintain a 20% reserve.
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The Apopka City Commission will make another attempt Monday to set its preliminary property tax rate after commissioners deadlocked over a proposed three-quarter-mill increase earlier this month.
Related: Developing Story: Apopka delays preliminary tax-rate vote after commission deadlocks over proposed 0.75-mill increase.
Related: Apopka City Commission gets second chance to set preliminary millage rate after budget deadlock.
During the July 27 special meeting, commissioners will be asked to recognize the City’s rolled-back rate of 4.2510 mills, approve a proposed operating millage rate and schedule a tentative budget hearing for September 3.
City staff is recommending a rate of 5.1876 mills, which is 0.75 mills above the current rate of 4.4376 and 22.03% above the rolled-back rate. The proposal requires a unanimous 5-0 vote.
The same rate failed to gain sufficient support July 15 after Commissioner Nadia Anderson said she could support a half-mill increase but not the full three-quarter-mill proposal.
If Anderson maintains that position, the commission will need to find a lower compromise. However, a half-mill increase to 4.9376 also would require a unanimous vote because it is 16.15% above rollback.
According to the staff report, 4.6761 mills is the highest proposed rate that could pass with four votes. That rate is exactly 10% above rollback and represents an increase of 0.2385 mills over the current rate.
Anything above 4.6761 would require all five commissioners. The rolled-back rate could pass with a simple 3-2 majority.
The difference between a quarter-mill increase of 4.6876 and the 4.6761 compromise rate is only 0.0115 mills, or approximately $101,000 in projected General Fund revenue. Despite the small financial difference, the higher rate would cross the state threshold requiring unanimity.
The staff report contains conflicting language about the 4.6876 rate, describing it as requiring “a two-thirds vote (5-0).” Because it is 10.27% above rollback, the 5-0 requirement appears to apply under Florida law. Staff may be asked to clarify the discrepancy during the meeting.
Higher rate would not eliminate budget cuts
The proposed millage rate will establish a ceiling for the city’s budget discussions, not the final tax rate.
Commissioners can lower the rate as the budget is revised. Increasing it later would trigger additional state notice requirements, including individual mailings to taxpayers at the city’s expense.
At the recommended 5.1876 rate, the city projects approximately $104.46 million in General Fund revenue. The preliminary General Fund expenditure budget is approximately $121.14 million, leaving the city needing to cut about $11.38 million to maintain a 20% reserve.
At 4.9376 mills, General Fund revenue would fall to approximately $102.26 million, and the required cuts would increase to $13.58 million.
At the 4.6761 compromise rate, revenue would be approximately $99.95 million, requiring nearly $15.89 million in reductions to preserve a 20% reserve.
Keeping the current 4.4376 rate would require a 4-1 vote and generate approximately $97.85 million. The city would need to cut nearly $17.99 million.
Approving the 4.2510 rolled-back rate would produce approximately $96.21 million in General Fund revenue and require about $19.63 million in cuts to maintain the same reserve level.
Impact on property owners
One mill represents $1 in taxes for every $1,000 of taxable property value.
For a property with $300,000 in taxable value, the City portion of the annual tax bill would increase by approximately $225 under the proposed three-quarter-mill increase. A half-mill increase would add about $150, while the 4.6761 compromise rate would add approximately $71.55.
Maintaining the current millage rate would not necessarily keep individual tax bills unchanged. Property owners whose taxable values increased could still pay more. The current rate is 4.39% above rollback and is projected to generate approximately $4.45 million more in property tax revenue.
Deadline approaching
The city must submit its proposed rate and required Truth in Millage documents to the Orange County Property Appraiser by August 4.
Under Florida law, a local government that fails to submit the required information on time cannot levy more than the rolled-back rate for the upcoming fiscal year.
The commission has scheduled special meetings for July 27 from 5:15 to 6 pm and July 30 beginning at 5:15 pm. The tentative budget hearing is proposed for September 3 at 5:15 pm in the City Hall Commission Chambers.
Whatever rate commissioners approve will not settle the budget. It will determine how much property tax revenue remains available and how deeply the city must cut spending before adopting its final budget.
The staff report describes 4.6876 mills as requiring “a two-thirds vote (5-0).” Those two descriptions conflict. Because the rate is 10.27% above rollback, the unanimous 5-0 requirement appears to be the applicable one under Florida law. City staff should clarify that language during the meeting.
The difference between 4.6876 and 4.6761 is only 0.0115 mills — about $101,000 in projected General Fund revenue — but crossing that line changes the required vote from 4-1 to 5-0.
In practical terms, if one commissioner remains opposed to a unanimous rate, 4.6761 is the highest proposal the other four can approve.
Three ways the vote can go
The commission now has three principal paths.
First, all five commissioners can agree on a rate above 4.6761. That could be staff’s recommended 5.1876, the half-mill proposal of 4.9376 or another unanimously supported number.
Second, four commissioners can establish a rate at or below 4.6761. That would preserve a partial rate increase while allowing the commission to move forward without unanimity.
Third, a three-member majority could approve the rolled-back rate of 4.2510. Under Florida’s Truth in Millage process, that is the rate designed to generate approximately the same aggregate revenue from existing property as the previous year, excluding factors such as new construction. It does not mean every property owner’s bill would remain unchanged.
The commission has special meetings scheduled for July 27 from 5:15 to 6 p.m. and July 30 beginning at 5:15 p.m. The city’s required millage documents are due to the Orange County Property Appraiser by Aug. 4.
That deadline has real consequences. Florida law provides that a taxing authority that fails to submit its proposed rate, rolled-back rate and hearing information on time is prohibited from levying more than the rolled-back rate for the coming fiscal year.
This is a ceiling, not the final tax rate
Mayor Nick Nesta emphasized during the earlier discussion that the proposed rate was not the final budget. That is correct, but the preliminary vote is still consequential.
The commission may lower the rate as it works through the budget. Increasing it above the rate initially reported to the property appraiser is possible, but it triggers additional notice requirements, including individual first-class mail at the city’s expense. A final rate also cannot exceed the rate tentatively adopted during the September hearing process.
Setting a higher preliminary rate therefore preserves flexibility. Setting a lower one restricts how much property-tax revenue the commission can ultimately use.
That is the central tradeoff: A higher ceiling does not require commissioners to spend every available dollar, but a lower ceiling forces spending reductions before the complete budget debate has concluded.
What it could mean for a property owner
One mill equals $1 in tax for every $1,000 of taxable property value.
Compared with the current 4.4376-mill rate, the city portion of the annual tax bill on a property with $300,000 in taxable value would increase by approximately $225 at 5.1876 mills, $150 at 4.9376 mills, $75 at 4.6876 mills or $71.55 at 4.6761 mills.
Those examples use taxable value after applicable exemptions and address only the City of Apopka portion of the bill.
Keeping the rate at 4.4376 also would not necessarily keep tax bills flat. If a property’s taxable value rises, its city tax may rise even when the millage rate remains unchanged. The city calculates that the current rate is still 4.39% above rollback and would generate approximately $4.45 million in additional property-tax revenue under its budget projections.
The rate alone will not balance the budget
The most important finding in the staff report may be that none of the proposed rates eliminates the city’s budget problem.
The preliminary General Fund expenditure plan remains approximately $121.14 million under every scenario. Even at the highest proposed rate, the city would need to reduce spending by approximately $11.38 million to maintain a 20% reserve.
At a half-mill increase, the required reduction grows to $13.58 million. At the rolled-back rate, it reaches $19.63 million.
If commissioners want a 25% reserve, the necessary cuts range from $17.43 million at the highest rate to $25.69 million at rollback.
The millage vote therefore will not settle the budget. It will determine the boundaries within which that budget must be settled.
A 5-0 vote would preserve the widest range of options. A 4-1 compromise at or below 4.6761 would narrow those options and require additional cuts. A 3-2 rollback vote — or a failure to act by the deadline — would create the smallest revenue ceiling and the largest spending challenge.
The immediate question is what rate can obtain the required votes. The larger question — what Apopka is prepared to fund and what commissioners are prepared to eliminate — will remain even after the preliminary rate is set.
Key Points:
- The proposed 5.1876-mill rate is 0.75 mills above the current rate and requires a unanimous vote.
- A rate of 4.6761 mills is the highest proposal that could pass with a 4-1 vote.
- The rolled-back rate of 4.2510 mills could be approved by a 3-2 majority.
- Required cuts range from approximately $11.38 million to $19.63 million, depending on the rate selected.
- The city must submit its proposed rate and TRIM documents to the Orange County Property Appraiser by August 4.
