September 23, 2023

Hi Everyone,

Citizen turnout at our commission meetings has been amazing, thank you all for supporting our city. Your participation is essential to its health and well-being and it’s having an impact.

Final Budget Hearing

So, the way this whole millage rate verses roll back rate is looking to me, is that our proposed millage rate is exactly the same as it was last year. What changed is the property values in our city. Overall, they have increased in the last year by about 10% (See line 27 Oak Hill DR-420), if you compare the proposed millage rate to the rolled-back rate. Apparently, the State of Florida considers this increase in revenue a tax. So, while the millage rate stays the same, taxes go up when property values go up and vice versa.

As an example, consider the new subdivision Lagoon Mist. Before it was built out, it was 40 or more half acre lots, most likely worth between $50,000 to $100,000 per lot. At $50,000 a lot, that totals out to $2,000,000. Now put a house on there worth $400,000. That makes these properties worth upwards of $18,000,000. A more typical home with little or no improvements made from year to year, would see a more modest increase in property taxes if the millage rate stayed the same but market conditions created an increase in value. Click here to review a “2023 notice of proposed property taxes and proposed or adopted non-ad valorem assessments,” of a single property. It shows that the city tax increase on that property at the proposed 5.6820 millage rate would be $4.84. Comparing last year’s city tax with this year’s roll-back rate of 5.1627 shows a savings of $40.90. The savings realized by this property owner if the roll-back rate was adopted in lieu of the proposed millage rate would be $36.15.

Google defines the roll-back rate as “A roll-back rate is the rate at which the current tax base would produce the same taxes levied as the previous year.” In other words – what would be the millage rate that provided for the increase in property value but imposed no tax increase? In the case of our budget, those two numbers are the proposed millage rate, 5.6820 and the rolled-back rate of 5.1627.

When our city creates its budget, it uses the proposed millage rate and taxable value of all the properties in Oak Hill (see line 4 Oak Hill DR-420) and a couple of other things to calculate the tax revenue it receives for the year from property tax.  What all this means to property owners, and all citizens for that matter, is that the rolled-back rate represents a millage rate that does not impose a tax increase during a period when property values increase.

After finally figuring this out, and I hope I have it right, the difference between tax revenue calculated at the proposed millage rate as opposed to the roll back rate is $100,148.39. This figure represents how much more revenue the city will receive by keeping the current millage rate. Click here to view DR-420, Certification of Taxable Value for the City of Oak Hill. Take a look at lines 22 through 27. It pretty much spells it out.

If the citizens of Oak Hill prefer a given level of service from the city without paying more in property taxes, an adjustment must be made in the budget to compensate for the difference. In our case there is a way that we could not raise taxes while maintaining the current level of services. Up until the recent adoption of an updated Oak Hill Developer Fee Schedule, our city has been using your tax dollars to cover expenses that are usually borne by developers. You can confirm this by reviewing the proposed budget, specifically line 96, planning and consulting, and line 98, Plan engineering general Click here to view this document. What you will see is that the city has budgeted for these expenses but has eliminated most of them by adopting a fee pass thru policy in the Developer Fee schedule.

The total amount of funds allocated to planning and engineering services in the 2024 final budget detail for the City of Oak Hill is $160,000. That’s $80,000 for Planning and $80,000 for engineering. If we reduce the budgeted amount for these services by $100,148.39, the difference in tax revenue generated by the adoption of the rolled-back millage rate, that would still allow for $59,851.61 of planning and engineering services for our city that do not qualify to be passed along to developers. An example of fees the city could not “pass through” might be, expenses incurred by the city as we plan for a community center. Common sense budget cuts like this can allow our city to maintain a level of service that satisfies its citizens without raising taxes. Nobody likes the idea of paying more in taxes. People like it less when a city uses that money inappropriately. Please come to the meeting. The more eyes we have on this the better off we are.

The city has scheduled its final public hearing for the 2023-2024 budget and two resolutions. The hearing is September 25, 2023 at city hall and it starts at 5:30 PM. Click here to see the agenda and the purposed budget. Time is set aside for public comment at this hearing so please come and participate. Your input will help the commission make decisions that reflect the values of our community and will shape the way our community looks in the future.

Our regular City Commissioner’s meeting will kick off right after the budget hearing.That’s September 25, 2023 at city hall. The time is 6:00 PM. Click here for the agenda pack.

Please come and let your voice be heard. Your presence and participation are how we hold our commission to account.

As always, it’s my pleasure to serve you, I appreciate your support. Please let me know what I can do to help. I’m here to represent you…

Joe Catigano
Oak Hill City Commissioner
Seat 3

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