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Madeira Beach keeps strength in reserve fund

MADEIRA BEACH — Unlike many beach communities suffering with fiscal maladies, Madeira Beach is fairly healthy.

The city is starting the 2008-2009 fiscal year with a 10 percent cut in property taxes and $7.8-million in reserves.

Madeira Beach's financial health "goes back years," according to Mayor Pat Shontz.

"We have always been conservative and watch how we spend the taxpayers' money," she said, crediting the expertise and management provided by the city's administration and employees.

"All we have to do is just look to north and south and realize how lucky we are," said Shontz, citing the financial difficulties facing Treasure Island and Indian Rocks Beach.

In Treasure Island, the city did lower property tax revenues by about 8 percent, but, in the process, cut out all funding for the Gulf Beaches Public Library, eliminating four staff positions, and making across-the-board cuts in departmental spending.

Yet Treasure Island City Manager Reid Silverboard has warned that the city's reserves are dangerously low and, without replenishment, the city could be out of money in only a few years.

Indian Rocks Beach, facing virtual depletion of its emergency reserves, opted to raise property taxes by about 20 percent and decrease spending, including law enforcement services. Even with that increased tax revenue, and increased sewer and garbage collection fees, it will take years to rebuild the city's reserves.

In comparison, Madeira Beach's $4.8-million reserve was boosted to $7.8-million when the city decided to sell its sewer system to Pinellas County. All but about $500,000 of that reserve is unencumbered and can be used for any purpose.

"We haven't had to dip into our reserves at all to fund the budget and actually put in a $265,000 contingency fund," said Madeira Beach finance director Monica Mitchell.

In approving its $5.6-million operating budget, the commission saved about $85,000 from current spending by eliminating the community policing officer position and a similar amount in reduced insurance premiums.

The property tax rate for the coming year was set at 1.7954 mills, a 10.23 percent reduction from the rollback rate of 2 mills.

Mitchell, who has worked for the city for about five years, said the city's finances were "in good shape" even then.

"We have been very careful, very conservative," she said.

For example, paying for street paving, sidewalks and curbing replacement was shifted from local revenues to Penny for Pinellas funds.

Commissioner Nancy Oakley raised a note of caution regarding the city's finances. She voted against the millage rate and the budget.

She argued that the city's practice of charging enterprise funds, like the city's Marina Fund, for services provided by the city administration is excessive and artificially boosts the general fund.

Perhaps one of the city's greatest cost savings began in 1995 when the city decided to disband its Police Department, which then cost abut $1-million a year.

Despite normal inflation pressures in more than 10 years, the city's policing costs have yet to hit that mark. The city will spend about $883,000 for sheriff's deputies to patrol the city for the next year.

Madeira Beach keeps strength in reserve fund 09/27/08 [Last modified: Sunday, September 28, 2008 1:41pm]
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