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Clearwater faces tough choices to cut $9-million in budget

Clearwater City Manager Bill Horne said there's one way to shave more than $9-million in expenses from the budget without layoffs or shutting down recreation centers and libraries: raising taxes.

"I think that's the only way … especially if the City Council doesn't want to lay off firefighters or police officers," he said. "There are options, but they may not be politically correct options or politically acceptable options, but they exist. Should we take them into account? I don't know the answer to that."

Horne and a number of his lieutenants, including the city's budget director and human resource director, will meet Friday to decide just how much each department will have to cut and just what areas they do not want to see cut.

He said public safety is the city's "number one priority" so he doesn't expect the police and fire department, which make up almost 50 percent of the city's general operating budget, to get hit as hard as others. However, he said, they will be affected.

That means quality of life departments, such as the parks and recreation department and the city's library system, are looking at the biggest cuts.

But some of the loss could be offset by raising the property tax rate.

Property tax rates for the upcoming fiscal year can be set by the City Council to bring in the same amount of money as the current year under state law.

Horne said he's not banking on a tax increase and stressed his focus now is cutting $9.2-million in expenses from next year's recommended budget, which should go before the City Council in June. City leaders say that's about how much they expect to lose in revenue collection next year because of the Jan. 29 state-wide passage of Amendment 1, which gives homeowners tax breaks, but places new limits on local governments.

The estimated revenue loss also includes the city's expectations that taxable property values will fall 15 percent this year.

The city won't get an estimate from the county property appraiser's office until May. Officials there say they expect some reduction, but right now they don't know how much.

The City Council at this point is not considering a millage rate increase. But it's something they admit they can't ignore. The city has lowered taxes the past two years.

"I think it's too soon to say because we need to see a list (of what will get cut) and what the property values will drop by," Mayor Frank Hibbard said. "We have to be realistic about what we have to do, but also we can't panic. That's why this is a fairly long process."

He acknowledged that residents "would not be happy" with a tax increase, adding that they "clearly said they wanted a reduction on Jan. 29, so now it's our job to show them what that means, because it isn't going to happen without a reduction in services."

Councilwoman Carlen Petersen said she wants the public to know "what the real impacts are" before deciding whether taxes should be raised. At this point, though, she said "it's too early to guess."

Even if taxes were raised, the city more than likely would still have to make cuts, because other expenses, such as fuel, insurance and labor contracts will increase.

Additionally, it's not known at this point how much taxes would have to be raised — if they were — and what the effects would be to a homeowner's wallet.

"I believe it's premature to take anything off the table right now," Councilman Paul Gibson said. "But voters made it extremely clear (in January) that they did not want taxes increased."

Vice Mayor John Doran agreed, saying he wanted input from residents before committing to an increase.

The city's general fund stands at $123.2-million with property tax revenues making up 38 percent. The rest comes from a number of areas, including fines, fees and sales tax.

Councilman George Cretekos said last year's round of cuts, which eliminated some jobs and trimmed library and recreation hours, "was relatively easy."

He said he wasn't ready to support raising taxes at this point, but "if we eliminate all these programs we're going to be left with only police and fire and we'll look like every other city."

Mike Donila can be reached at or (727) 445-4160.

.Fast facts

What's next

City Manager Bill Horne and subordinates, including the budget director and human resource director, will meet Friday to decide how much each department will have to cut and which areas they do not want to see cut.

Clearwater faces tough choices to cut $9-million in budget 02/27/08 [Last modified: Wednesday, February 27, 2008 8:51pm]
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