7/08/16: Utility Undergrounding Initiative Project (Status Update #3)
Utility Undergrounding Initiative Project
Status Update #3
July 8, 2016
Calculating Your Estimated Cost
We are ready to count your vote on undergrounding our utilities. If you’d like to review any of the materials again before you vote, they are available for review from the mail or on the website: www.palmbeachshoresfl.us/undergrounding
We all want to know: “How much is this going to cost me?” Our estimates are $138 to $382 per year. It could be more or less than that but this covers almost all of us. For the full cost, multiply those numbers by the 15 years of the loan so between $2,000 and $5,700 per property.
To determine your estimated cost, let us explain how we expect to finance the loan payments. We are not planning to use an assessment and liens to pay for the bank loan. Instead, we plan to use a utility consumption tax to pay for approximately 60% of the loan costs. The balance of 40% will be funded within the Town’s operating budget by property taxes or other Town revenues.
We believe that this method is the fairest way to allocate spending across the Town for two reasons. 1) The utility consumption tax is a surrogate for how much each of us uses the Town’s utility resources. So non-Homestead Snowbirds are likely to pay less utility taxes than a full time resident because they are gone during the summer when utility bills are highest. 2) This difference in the utility consumption tax payments should help offset the generally higher taxes that non-Homestead properties will pay on the 40% generated through property taxes. Each group pays their fair share but through different allocations.
For purposes of this calculation, we are going to assume a “worst case” scenario. That the project costs $5.2 million dollars and the bank loan is for 3.5% for 15 years. We believe that we can deliver it for $4.3 million but let’s assume the worst case.
To figure out your particular estimated contribution, we need to gather a couple of numbers. Don’t worry, it’s easy and we’ll talk you through it.
Step 1: Determine Your Utility Consumption Tax Amount
As we described in the Q&A, about approximately 60% of the project should be funded by a 10% utility consumption tax. Each of us, including the commercial properties, will pay according to the amount we use the utility services in town.
We need to determine your average monthly utility costs. Total up one month’s electric, water and gas bills. Multiply that number by 12 to get your annual cost. Now multiply that number by 10%. This is how much you would likely pay in utility consumption tax each year for 15 years.
For example, your monthly utility bills total $125. $125 x 12 = $1,500 x 10% = $150
Step 2: Determine Your Property Tax Contribution
You will need to know your property’s TAXABLE value. Remember, your Taxable Value can be very different from the price that you could get selling your property so be sure to use the correct number. You can look at your last property tax bill or go to the Property Appraiser’s website: www.pbcgov.com/papa and find your information. Directions on how to find this number are on the Finances tab of the Town’s Underground webpage.
Multiply that number by .000355. That is your estimated annual property tax contribution.
For example, your property’s taxable value is $250,000. $250,000 x .000355 = $88.75
Step 3: Add Those Two Numbers Together
In our example, $150 + $88.75 = $238.75 each year for 15 years.
(For those of you curious about your “Best Case” cost, multiply your Taxable Value by .000183. Add that number to your Utility Tax Cost and that’s your Best Case estimate. In our example, that would be $150 + $45.75 = $195.75 per year.)
Town Hall Meetings
We have scheduled two “Cake with Myra” meetings to review the project details. The Engineer, Danny Brannon, will be there to answer project questions. We will also review this financing information. Staff will be available to help you figure out your particular costs. The meetings will be in the Town Hall Commission chambers:
Thursday, July 14 from 6-8 PM
Friday, July 15 from 11 AM – 1 PM
Meetings will be broadcast via GoToMeeting.com
July 14 Meeting: https://global.gotomeeting.com/join/815743157
(or dial in +1 (646) 749-3131, access code: 815-743-157)
July 15 Meeting: https://global.gotomeeting.com/join/406371445
(or dial in +1 (408) 650-3123, access code: 406-371-445)
So now it is up to you, the tax payers, to decide if the benefits of improved safety, reliability, aesthetics and communications network are justified by the estimated cost to you.
Remember that your vote must be submitted to the Auditor by 5 PM, Friday August, 5, 2016:
Nowlan, Holt & Miner
Attn: Straw Poll
515 N. Flagler Drive, Suite 1700
West Palm Beach, FL, 33401
No fax or email ballots will be accepted so plan accordingly.
Thank you for your thoughtful consideration of this important decision on the future of our Town. If you have questions, be sure to read all of the materials available on the Town’s website. You may also email or call the Mayor at Town Hall.