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Madeira Beach officials say proposed tax increase is justified

 
Published July 29, 2015

MADEIRA BEACH — A proposed 10 percent property tax rate increase to fund a $21 million budget is justified, city officials say, because of the progress made in the past few years, continuing capital improvements and the need to replenish the city's savings.

"It will raise my taxes only about $48. I'll pay it all day long for this city," Mayor Travis Palladeno said, noting the newly opened city center, plans to bury utilities along Gulf Boulevard and ongoing improvements to roads and sewers.

City Manager Shane Crawford, who has shepherded the city during the past two years of rebuilding its infrastructure, said the increase — the second since 1989 — is needed "to help provide sustainable services for years to come."

Not increasing property taxes would "limit the city's ability to complete projects that have been on the shelf for a multitude of years," he said.

Those projects include upgrading the city's stormwater system, major dock replacements at the city marina, building a transient dock in John's Pass Village, improving city streets and parks and burying utility lines along Gulf Boulevard.

"The city is at a critical juncture," Crawford said in his budget letter to the commission. "We need to either tax at a rate that funds the wish list of accomplishments … or begin to eliminate projects off the wish list.''

He said the rate is "modest for what we do here" and told the commission that "progress costs money."

His proposed $21 million budget includes a 4 percent pay hike for employees and several new positions, particularly in the area of code enforcement.

City Finance Director Vincent Tenaglia said the operating budget is "fairly stable" and increases in spending are primarily for capital projects.

The proposed rate of $2.20 for every $1,000 in assessed, taxable value will not be official until it is voted on during public budget hearings Sept. 3 and Sept. 17. A home valued at $150,000 with a $50,000 homestead exemption would pay $220 in city taxes.

Currently, the city's rate is $1.99 per $1,000.

Proposed tax rates in nearby beach communities are significantly higher: Treasure Island, $3.30; St. Pete Beach, $3.15; and Gulfport, $4.

Tenaglia confirmed that this 10.6 percent tax rate increase, when combined with an 8.5 percent increase in property values, results in an effective property tax increase of about 19 percent.

Despite this proposed increase in revenues, Tenaglia said the city's savings will "decrease significantly over next five years," largely because of planned capital projects.

Spending over the past two years for major building projects, including a new city hall, fire station and recreation complex, the city has seen its savings drop from over $5 million to about $3.8 million and planned debt jump to nearly $14 million.

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The last time the city had any debt was in 1987 when it borrowed about $1 million, Tenaglia said.

Currently, the city has $3.8 million in unassigned savings, or about 71.5 percent of its annual operating budget. That number is expected to drop to about $900,000 over the next five years.