INDIAN ROCKS BEACH — There are more than a few red faces at City Hall as commissioners scramble to re-do a vote that threatens the city's financial future.
On Tuesday, the City Commission is scheduled to vote for the third time on its millage rate and 2008-2009 budget.
"Mistakes happen. When there is an error, we have to correct it," said Mayor R.B. Johnson.
At issue is the 4-1 vote split when the commission approved last week a 2.0 millage rate that represents a 20 percent increase in property taxes.
That was illegal under state law. For that kind of an increase they needed a unanimous vote.
But no one — not the city manager, not the city attorney, and not the city treasurer — spoke up to remind commissioners that a unanimous vote was vital to approve any millage rate of more than 1.89 mills, the original amount recommended by the city staff.
"It was a very unfortunate mistake by the city. I don't know how to say this in a nice way. It shouldn't have happened, but it did," said Commissioner Daniel Torres, whose single vote against the millage and the budget created the problem.
Now the commission is forced to call a special meeting at 7 p.m. Tuesday to fix the illegal vote.
If they don't, the city faces losing more than $100,000 in state funds.
"We have to have a unanimous vote if the millage rate is above 1.89," Interim City Manager Danny Taylor confirmed Thursday.
He said the error was discovered when a staff member started filling out an official form to report the city's approved millage rate. That form included instructions on the type of vote needed to increase the city's property tax rate.
Now, unless Torres is willing to change his vote, the commission must lower its millage rate to either 1.89 mills, which requires a super majority 4-1 vote, or even further to the rollback rate of 1.6531 mills, which requires only a simple majority.
Setting the millage at 1.89 mills would mean a drop of about $100,000 in revenue, a shortfall that could be covered by reserves, according to Taylor.
The rollback rate would result in a more drastic revenue shortfall, forcing the commission to either virtually eliminate all reserves or make significant cuts in its budget.
The city's reserves currently are very low because of more than $1-million in loans made in previous years to the city's sewer and waste collection funds.
Recently approved rate increases for sewer and garbage collection services will eventually pay back those general fund loans but it will take several years.
Instead of tapping reserves, one major spending item that may be considered for cuts is law enforcement.
The commission had considered significantly reducing patrolling on weekends, but rejected that last week by paying the $88,000 cost out of reserves.
That decision could be reversed and the money put back, Taylor said.
"We will have to negotiate among ourselves. One commissioner could hold us hostage, but I hope it doesn't happen," said Johnson.
Torres, who voted against the millage and the budget last week, indicated Friday that he is willing to vote for the 2.0 millage rate, mostly because he does not want to see law enforcement services cut back.
"I am not closing out my options. I had pushed for increasing sheriff's coverage. I think I will be willing to approve 2.0 mills," said Torres.