PINELLAS PARK — Officials have not even kicked off their budget process but they're already expecting to come up millions short of the money they need to run the city next year.
The shortfall — projected to be between $2-million and $3-million — is a combination of many factors: the long-term effects of Amendment 1, decreasing property values and the sinking economy.
Those are the same factors city officials faced with the current $50.9-million budget, which they adopted just 3½ months ago. They solved that in part by borrowing about $1.3-million from reserves, the account set aside in case of hurricanes, tornadoes or other disasters.
There have been hints recently that perhaps that solution had not worked ideally but had left Pinellas Park officials to struggle financially.
Officials have left positions unfilled and late last year talked about withdrawing $17,448 in funding from the Business Assistance Partnership Program. The city's funding pays one-third the cost of a business assistance program specialist, or BAPS, based in the Pinellas Park/Gateway Chamber of Commerce. The program helps local businesses that need it and encourages others to move into the city. The county and the chamber pay the other two-thirds of the program's cost.
The projected amount of the shortfall became clear during a Dec. 29 department heads meeting. City Manager Mike Gustafson said then the coming budget, which would kick in Oct. 1, would be a "challenge" because of the expected shortfall. Gustafson told the department heads he would meet individually with council members about two ideas. After talking with the council, he would then meet individually with administrators.
It is unclear what those plans might be. Gustafson was away from the city Tuesday and could not be reached for comment.
Pinellas Park spokesman Tim Caddell said trying to handle shortfalls can be tricky. Unlike businesses, the city can't simply cut salaries because of union contracts, he said. Trying to cut salaries would reopen negotiations.
Caddell conceded that administrators are not under union contract and could have their salaries cut, but doing so would be unfair if cuts could not be made across the board.
The city could always take the money from the contingency fund, Caddell said. That fund, which has about $9-million, is set aside for emergencies, such as hurricanes or other disasters.
"We're in good shape as far as (reserves) go," Caddell said.
Caddell said officials are not ruling out salary cuts, borrowing from reserves, or any other solution. But, he said, it's really too early to tell what, if anything, will be needed. And, in any case, salaries would likely not be the first thing officials would look at cutting.
Council member Ed Taylor said it's too early to tell how much of a shortfall, if any, the city will face. Taylor said he was confident that, when it comes time to discuss the budget, Gustafson will have some choices for council members. But Taylor said he hopes the cuts won't come from places like recreation and the library because those are services taxpayers enjoy and can use when money is tight. He also would not like to see a huge chunk come out of reserves because of the chance of a tough hurricane season.
"We've got some hard choices," Taylor said. "We'll hopefully be able to find the things that are the least painful."
The projected shortfall, Caddell said, is based in part on a state estimate of the monies the city will receive as its portion of sales taxes, which are down because people are not buying as much.
"We don't know for sure those numbers are accurate," he said.
The possible shortfall was raised during the department heads' meeting as a way of keeping staff members informed so they could better prepare for the future.
One small bit of savings might come from the city's wellness program. Pinellas Park pays Work Our World gym $18,000 a year for city employees. The employees who participate have $10 a month, or $120 a year, taken out of their salaries to pay for the membership. That money goes to reimburse the city.
Currently, the program is operating at a loss of about $90 a month, or $1,080 year, because only 141 employees are taking advantage of it. City officials are re-evaluating the program to see if there is enough interest in keeping it, but Caddell said that decision has nothing to do with the budget problems.
And, on a positive note, Pinellas Park just received a check for $83,274 from the Florida Municipal Insurance Trust. The trust provides insurance of all kinds for municipalities and, if it has more money than it needed to provide the insurance, it reimburses the excess to members, said Lori Kifer, spokeswoman for the trust. As a member, Pinellas Park qualified for part of that reimbursement.
Here are some numbers from Pinellas Park's current operating budget.
|Amount in reserves||$9.8-million|
|Amount budgeted for the Police Department||$13-million|
|Amount budgeted for fire and EMS||$10.5-million|
|Amount budgeted for streets and drainage||$2.9-million|
|Amount expected from property taxes||$14.9-million|
|Amount expected from sales taxes||$2.7-million|
|Source: City of Pinellas Park|