DUNEDIN — The city property tax rate would remain the same and staffers would receive 1 percent raises under a preliminary budget City Manager Rob DiSpirito presented to the City Commission on Monday.
However, stormwater rates would increase, the library would have to cut hours and materials, and five city employees would lose their jobs.
DiSpirito says the cuts would offset a projected $1.2 million revenue shortfall in the general fund next year.
Officials based that shortfall estimate on several factors: reports that county property values have dropped an estimated 2.2 percent; a $600,000 to $700,000 drop in electric utility franchise fee collections due to a warm winter; a $330,000 drop in revenues following Dunedin's 5 percent millage rate reduction last year, and lower than expected Penny for Pinellas revenues.
The proposed 2013 budget of $71.3 million represents a $3.8 million, or 5 percent, reduction from last year's budget.
Like last year, department heads built their budgets from the ground up, with supervisors instructed to cut only items that wouldn't affect "quality of life" amenities.
Despite the proposed cuts, DiSpirito said the city is coping well financially. This proposed budget, he said, marks the 10th year since Dunedin last raised its millage rate.
"We've kept our services largely intact and shed approximately $14 million in five years, and we will have done that without once raising taxes — in fact, we're the only city to lower them," DiSpirito said.
The library cuts are likely to be most visible to residents. The library would continue to be open seven days a week, albeit for four fewer hours on Saturday afternoon, when the facility sees the least traffic.
Library director Phyllis Gorshe also has proposed reducing spending on audio books, DVDs and other materials for the first time in 10 years. The 25 percent cut would generate a savings of nearly $53,000.
The budget calls for the city to pull $196,500, or about 1 percent, from its reserves to fund several miscellaneous items, such as replacement equipment and furniture, election expenses and aid to struggling community organizations.
That idea was resisted by Commissioner Julie Ward Bujalski during a Monday budget workshop. She said she prefers to use reserves for large purchases or projects. City policy says reserves can only be used for capital projects, debt reduction or one-time expenses.
"It's a matter of setting a policy of what you're going to use your reserves for," she said, adding, "These are things we need to fund. They shouldn't come from reserves."
However, the remaining commissioners, citing the poor economic situation and healthy reserves, cautiously supported the proposal while making clear that future commissioners shouldn't rely too heavily on the tactic of using reserves.
"I don't want something else to suffer because we're going to be insistent on moving these things back into the general fund," said Commissioner Julie Scales. "I think we've been maybe a little bit hard-lined on use of reserves, whereas the city manager pointed out they're there for a reason. They're not there not to be used."
"This represents less than 1 percent of our general fund," said DiSpirito. "Most cities in the area, if they aren't raising taxes, they're going heavily into reserves this year, including the county."
Under DiSpirito's proposed budget, 10 staff positions would be cut through attrition, reorganization or elimination of vacant positions, and five workers would be laid off — saving the city $353,000 annually. The city would add two full-timers (a civilian fire inspector and administrative assistant who would "float" between the clerk, city manager and parks offices) and four part-time positions (all at the library).
The remaining 336 employees would receive an across-the-board 1 percent raise. Commissioners supported setting aside $7,000 for a fall employee picnic to help boost morale.
However, they were disappointed at human resource director Nancy Duggan's conclusion that the $163,000 available for raises isn't a large enough pool of money to implement merit-based raises this year.
"With the 1 percent pot, it's really hard to come up with a system to divide that where somebody who really is a good worker doesn't feel slighted because they'll be getting less than 1 percent," Duggan said.
City leaders asked staff to research an avenue to perhaps offer merit-based bonuses this year or to implement merit-based raises by 2014 at the latest.
"With less money available, I think it's even more important to get performance pay, because you can have somebody who's not performing that maybe needs to get zero and somebody who's performing can get 2 percent," Commissioner David Carson said.
Residents now pay $8.80 a month in stormwater fees. The preliminary budget suggests a monthly increase of 50 cents to help fund ongoing improvement projects. Water, sewer and solid waste rates would not change under the current proposal.
The proposed budget also includes $3.2 million for a replacement government building and $534,000 for renovations to the technical services building.
City commissioners will spend the next few weeks hashing out which cuts they support for the fiscal year that begins Oct. 1. They will adopt a final budget following public hearings in September.
Keyonna Summers can be reached at [email protected] or (727) 445-4153. To write a letter to the editor, go to tampabay.com/letters.