DUNEDIN — A proposal that Dunedin raise its property tax rate next year sharply split city commissioners and led to a testy exchange during a workshop Monday.
The squabble centered around City Manager Rob DiSpirito and finance director Karen Feeney's revelation that commissioners would either have to raise the tax millage rate by 12 percent to offset a roughly $1.3 million budget shortfall, cut services or draw general fund reserves below policy level.
DiSpirito and Feeney recommended raising the millage. The increase would generate $595,000 more a year and provide a steady income stream to fund public services.
"We've used our reserves," Feeney said. "We have very few reserves left with which to operate and we do not have a plan to replace them."
However, at commissioners' request, she presented an alternative Monday that would allow commissioners to hold off on the tax rate increase next year and instead fill the budget gap by using healthy risk safety fund reserves. The move, she said, would give her time to study the issue, but she warned that an increase might still be necessary in 2015.
Mayor Dave Eggers embraced the alternative plan. Vice Mayor Julie Ward Bujalski, who objects to using risk safety reserves for expenses outside that department, wanted to schedule an August workshop to give the staff time to research additional options.
But Commissioners Ron Barnette, Heather Gracy and Julie Scales disagreed, saying either move would only be putting off the inevitable.
They noted that even with the increase — to $3.73 per $1,000 of taxable assessed property value — the city's tax rate would still be among the lowest in Pinellas County. And, according to Scales, it would still be roughly 15 percent lower than Dunedin's millage rate 15 years ago.
"We've reached the point of no return," said Barnette, adding that there's a public misconception that the city is flush with cash. "I, for one, want to look square in the eyes of the residents and say the services you expect are going to be maintained but there's going to be a cost to that."
For several minutes Monday, he and Eggers went back and forth as Barnette vehemently advocated his point.
However, Eggers refused to budge, saying "every dollar makes a difference" for residents. He acknowledged that it was his "wishful thinking" that the economic picture will improve enough by 2015 to not warrant a millage increase.
"I'm looking for a reason not to do it, avoid it," Eggers said.
A subsequent 3-2 vote gave city staffers permission to include the rate hike as they continue to crunch budget numbers. Among the highlights:
•Commissioners unanimously endorsed 2 percent raises for city employees who receive satisfactory evaluations.
•Public Works director Doug Hutchens would be promoted to assistant city manager, reinstating a position that had been eliminated after the previous one, Harry Gross, retired in 2009. DiSpirito says having an assistant manager would allow him to focus on solidifying partnerships and seeking grants for the city.
•An extra $10,000 added to the law enforcement budget so the city can reinstate providing security at special events. Staffers said that $4 million departmental budget is still more than $1 million under what Dunedin paid before eliminating its police force and contracting with the Pinellas County Sheriff's Office in 1995.
At several commissioners' request, city staff will continue researching whether it's possible to finance replacement of Fire Station 61, as well as make donations to the Dunedin Fine Art Center and Dunedin Historical Museum with cash or a 30-year loan rather than a high annual payout spread over only 15 to 20 years.
At their meeting Thursday, commissioners will set a maximum tax rate that will go on Truth in Millage notices to taxpayers.
The public gets to weigh in on the proposed $73.5 million budget at the commission's Sept. 12 and 26 meetings. The final budget will be adopted Sept. 26 and the new fiscal year starts Oct. 1.
Keyonna Summers can be reached at (727) 445-4153 or firstname.lastname@example.org. To write a letter to the editor, go to tampabay.com/letters.