TREASURE ISLAND — In these days of declining property values, raising the tax rate doesn't necessarily mean higher tax bills.
That was the case in Treasure Island when the commission unanimously voted Tuesday to tentatively raise the rate from $2.4999 to $2.7576 for every $1,000 of taxable property value.
Because property values in the city dropped 9.3 percent, the city would have had to raise its property tax rate to 2.8172 mills just to collect the same amount of revenue for next year's spending.
Instead, the approved rate means the city will lose about $60,000 next year.
Consider a home with a taxable value of $200,000 whose owner paid about $500 in local property taxes this year. Assuming its value dropped the same amount as the city's average decline, the increased property tax rate would result in a 2.12 percent lower tax bill for the owner, a savings of about $11.
City Manager Reid Silverboard told the commission that balancing next year's budget was a "challenging" task, given "falling property values, the slowdown in construction activity and reduced collections" from sales taxes, state revenue sharing, user fees and building permits.
At the same time, he said the city's streets, bridges, sewer lines, and storm drains are nearly 50 years old and need more maintenance each year.
Replacing the bridges to the Isle of Palms and Capri Isle will cost the city up to $5 million. Replacing wastewater transmission lines to the mainland will cost more than $7 million. Then there are the miles of deteriorating sewer pipes and storm drains, residential roads that need resurfacing and aging city-owned seawalls.
"Keeping up with infrastructure need is and will continue to be very challenging," Silverboard said in the cover memo to his proposed $15.3 million 2009-2010 budget.
To balance the budget, Silverboard said, all departments pared not only fat but "muscle and bone from their operations."
During the past two weeks, Silverboard and the City Commission met for more than 12 hours to pore over the budget, virtually line by line, to find where more expenses could be cut and where revenues might be boosted.
"We have been working diligently to reduce expenditures," Commissioner Ed Gayton Jr. said Tuesday.
In the process, the commission boosted revenues and cut expenditures to create a surplus of about $243,000 in the proposed budget.
"It is safe to say we will decrease the millage" before the budget becomes final, said Commissioner Alan Bildz.
Silverboard is proposing freezing salaries, reducing at least four staff positions, cutting health and other insurance costs, requiring special events to generate enough revenues to cover their costs and limiting beach raking to seaweed washed ashore.
The city is also exploring sharing costs with nearby cities for such services as recreation, building inspection, marine patrols, fire-rescue, traffic fatality investigations, utility billing and police records management.
Consolidation within the Public Works Department is also expected to save more than $100,000.
The commission cut expenses further by eliminating one of two projected referendum elections, and is also debating spending $4,700 to replace the city's Christmas tree.
Overtime costs for weekend police patrols on Sunset Beach were increased from $177,550 to $225,000. Of that amount all but about $50,000 is expected to be offset by revenues from hiring officers to work at special events and at Caddy's on the Beach.
The commission plans to again discuss the budget at a workshop session at 5 p.m. Aug. 18.
Public hearings on both the budget and the final tax rate will be held at 6 p.m. Sept. 9 and 23 at City Hall, 120 108th Ave.