Funding Local Services: Inside Northern’s Budget and Assessment Process
Like all local governments in Florida, the Northern Palm Beach County Improvement District (Northern) must prepare and abide by an Annual Budget. Similar to other local governments, Northern prepares a budget for general expenses, such as administrative and overhead costs. However, it also prepares a budget for each Unit of Development. A Unit of Development is a separate, distinct area formed to receive specific services from Northern. These areas can be individual housing developments such as PGA National, BallenIsles, or Abacoa. An area can also cover several developments, such as Horseshoe Acres, Steeplechase, Arbor Parc, and Woodbine. Each Unit of Development is unique because its needs can differ widely. Currently, there are 47 active Units of Development with budgets, excluding the general fund. Northern's primary purpose is to provide stormwater control services. However, in some areas, Northern is also responsible for road, preserve, trail, and gate maintenance.
Northern's fiscal year runs from October 1 to September 30. Each January, the new budget process begins. Staff and Department Heads submit budget requests for projects, services, and equipment. The Budget Manager compiles these and creates a budget draft for Northern Management to review. As the draft forms, requests are weighed against funding to decide which projects remain in the plan for the year.
Once draft budgets are created, funding sources are considered. Budgets are funded from either Non-Ad Valorem assessments, reserve funds, loans, or a combination of these sources. The Non-Ad Valorem assessment is a fee levied on certain properties to fund the cost of specific capital improvements or services. The specific capital improvements or services must be deemed to benefit the property being assessed. Sometimes referred to as a special assessment, this assessment does not take the property value into consideration. An assessment pays for the operation, maintenance, and debt service (if applicable) for a specific Unit of Development(s). Funds from one Unit of Development cannot be used to fund expenses within another Unit of Development.
Northern maintains a policy to keep a minimum of 25% of the maintenance budget for each Unit of Development in reserves. These reserves are for unexpected emergencies, disasters, and cost increases beyond budget. Any reserves above the minimum may fund future projects or offset increases in assessments. Assessment increases are reviewed, and management determines if it is appropriate to use reserves or loans to finance larger capital projects or one-time expenses to help limit increases in the assessment rate. In some cases, completed projects or paid-off debts allow for assessment reductions in the following year.
Next, once a preliminary budget is agreed upon by internal staff, the Proposed Budget is sent to Home Owner and Property Owner Associations within Northern's jurisdiction to begin discussions about the upcoming year's budget. At this stage, budgets are reviewed with association representatives to communicate the plan for the upcoming year. Modifications to the proposed budget will be reviewed and incorporated when possible.
Following these discussions, the ultimate authority for approving the budget rests with Northern's Board of Supervisors. The Preliminary Budget is reviewed with the Board at the regularly scheduled Board meeting in May. Once the new tax roll is received and reviewed, the Board approves the TRIM rates in June.
TRIM stands for Truth in Millage and is the highest rate at which a property can be assessed. To continue the timeline, the Property Appraiser mails TRIM notices to property owners in August each year. Also in August, the Board holds a public hearing to receive and address any public comments on the proposed budget. Once public input concludes, the Board may comment. After all comments are addressed, the Board will approve the Budget. The final assessment rates are then sent to the Tax Collector for inclusion on the Real Estate Tax Bill sent to property owners in November. This leads up to the new Budget Year, which begins on October 1.
Northern’s Maintenance and Debt Service assessments appear in the Non-Ad Valorem section on the property tax bill issued by the Tax Collector of Palm Beach County on or about November 1 of each year. Northern’s Maintenance and Debt Service assessments are collected by the Tax Collector of Palm Beach County together with all other Non-Ad Valorem assessments and Ad Valorem taxes. Residents are entitled to a 4% discount on Northern’s Non-Ad Valorem assessments, other Non-Ad Valorem assessments and Ad Valorem taxes if the property tax bill is paid in November.
Finally, in light of rising prices, both the staff and the Board at Northern work hard to ensure assessments fund asset maintenance and outstanding debt, all while considering our residents and property owners. Our approach relies on the use of reserves and on projecting capital needs for the next five years, supporting stable assessments so that increases occur only when necessary and decreases when practical. For full transparency, our Budget is available at www.npbcid.org. The draft Budget for the subsequent year is posted when available. We hope you find it helpful and informative.
NPDES tip: Your neighborhood drainage system is not a garbage disposal please don’t treat it like one. Encourage all residents to take responsibility and to not dump chemicals, fertilizer, paint, oil, etc. in inlets or pipes. Discourage sweeping of lawn clippings and dirt into street drains and disposing of lawn clippings and other debris (wood, concrete blocks, Christmas trees, etc.) directly into retention lakes. Keep drainage facilities clear of vegetation, trash, improperly and illegally discarded appliances, shopping carts, tires, cars, garbage bags, etc.