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Clearwater staring at bleak budget choices

City leaders are bracing for yet another year of painful decisions.

Closing recreation centers, shutting libraries, even raising the property tax rate — almost nothing is off the table to offset what could be a $7.6 million shortfall in the general fund budget.

That's what City Council members told staffers at a work session Tuesday.

The figures are preliminary, but about $5 million of the shortfall is linked to an estimated 12 percent loss in property values, said budget director Tina Wilson.

"How I long for the good ol' days," said Vice Mayor Paul Gibson.

This is the fourth year property tax legislation and the flailing economy have forced the city to consider staff and service cuts. And city leaders have no idea when the climate will improve.

"Really what we're dealing with, and I'm sick of the term, is the new normal," said Mayor Frank Hibbard.

Hibbard and other council members expressed anguish over the idea of cutting services that they say set Clearwater apart. And they worry how that will affect the city down the road.

"To me the question is: What are we going to look like in four or five years when things do stabilize?" Hibbard said.

Council member John Doran proposed cutting three recreation centers and three libraries, but he did so chiefly as a starting point for discussion. Together, those cuts could save the city about $1.75 million. "I hope we don't end up there," Doran said.

The council also discussed how revenue losses could be eased by raising the property tax rate next year. And all members of the board were willing to consider doing so to some degree.

Because revenues are projected to drop so much, the city could raise its tax rate for next year and still bring in less revenue than this year. Using current estimates, even if the city raised its rate more than 13 percent next year, it would bring in the same revenue as this year. But none of the council members seemed eager to go that far.

And only one specified exactly how far he'd go. Gibson said he would be willing to raise the tax rate no more than the inflation rate, or 3 percent, and only if that were absolutely necessary.

"The majority of people are saying we don't want you to raise the taxes," said Gibson, according to what voters told him during his recent campaign.

Council member Bill Jonson said he heard something different when he knocked on doors. Yes, people were concerned about property taxes, as well as property insurance and medical costs, he said. But they don't want the city to cut back too much. And some were even willing to pay more to keep their services, he said.

The possibility of salary decreases was also floated.

But salary reductions for union employees can't be done with a stroke of the pen, said Joe Roseto, the city's human resources director.

City Manager Bill Horne reminded council members to be sensitive to city workers as they continue budget discussions in the future. "Please keep in mind our staff morale is pretty tender," Horne said. "It's not going to get any better."

Carlen Petersen, who is departing the council because of term limits, also offered advice. She warned council members not to make drastic cuts to the services that draw people and businesses to Clearwater. "If we really start cutting, there's nothing that's going to attract anybody to the city," she said.

The council will discuss the budget again in early July, after staffers prepare a proposed budget.

Lorri Helfand can be reached at lorri@sptimes.com or (727) 445-4155.

2010-11 preliminary general fund budget projections

General fund: about $120 million

Current property tax rate: $5.15 per $1,000 of taxable property value

Estimated deficit next year with the same tax rate: $7.6 million

Clearwater staring at bleak budget choices 03/16/10 [Last modified: Tuesday, March 16, 2010 7:38pm]
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