Friday, December 15, 2017
News Roundup

Projected budget deficit in St. Pete Beach calls for tough decisions

ST. PETE BEACH — City commissioners face a hard choice this year: to drastically cut vital services such as police and fire or to sharply raise property taxes.

The reason is a projected budget deficit of $1.25 million caused mostly by a $752,000 increase in pension fund costs.

"The big gorilla in the room is the pension contribution," finance director Elaine Edmunds told the commission during a prebudget work session last week.

City Manager Mike Bonfield is reviewing all department budget requests. And following up on a commission discussion, he is planning to meet with the Pinellas County Sheriff's Office to find out how much it would cost to contract for law enforcement services.

The police department's budget alone is $4.56 million. A referendum, however, would be required to change the city's charter to eliminate the police department.

According to Bonfield, even if negotiations with police, fire and employee unions bring some relief, it wouldn't be sufficient savings for several years.

"You can't fix an ongoing problem with one-time revenue," Bonfield said to suggestions by some commissioners to delay some capital projects in order to reduce the deficit.

Cutting employees is not a real option, either. The city now has 30 fewer employees than it did in 2003, saving the city about $1 million since then.

"The property tax is the only revenue we have any control over," Bonfield said. "We would have to cut a lot of people to make any significant dent (in the budget deficit). You are talking about some significant changes in services."

Currently, the city's portion of homeowners' property tax bills is set at 2.8569 mills ($285.69 per $100,000 in taxable assessed property values after all exemptions).

That is only slightly below the 2.9 mill rate levied in 2009 and significantly under the 2.3764 rate levied in 2008 and 2009.

And although the sharp fall in property tax values of the past few years appears to be at an end, Bonfield cautioned that property tax revenues will not increase significantly any time soon.

The city's tax rate is among the lowest for similarly sized cities that operate both police and fire departments, he said. Those services now make up 52 percent of the city's budget.

At first, commissioners were strongly opposed to any increase in property tax rates, but as they heard more about the city's financial situation, that attitude began to change.

"If you (Bonfield) say you can't close the (budget) gap, and if other options are unacceptable, then I would be willing to look at the tax rate," Commissioner Jim Parent said. "How could you not?"

Bonfield said the city would need to increase taxes up to a half a mill to balance the budget without other serious cuts in personnel or services.

"We just need to look under every rock," Commissioner Marvin Shavlan insisted, adding that a tax increase would be his last option. The city's 2011-2012 budget was $22.7 million.

The city's legal bills, nearing $50,000 a month, will be one major cost the City Commission plans to review in the coming months.

"In February we went through the attorney's budget for the entire year," Edmunds told the commission, adding that she will ask the commission to approve a $250,000 increase for attorney fees at its Tuesday meeting.

That prospect did not please Commissioner Bev Garnett, who called for an independent audit of the attorney's bills.

"We just need to make sure we are getting our money's worth," she said.

The notion of considering eliminating the police department Commissioner Parent said, "… is a touchy subject, but we need to look at every single area."

Shavlan agreed, saying considering law enforcement costs is the commission's "fiduciary duty."

Ironically, the debate over the future of the city's police department comes just as the additional voter-approved property tax of 0.0895 mills for paying off the police station debt is about to end.

The city is projecting to spend nearly $1.9 million on capital projects next year, mostly to maintain the city's current facilities and infrastructure.

Not yet on the spending list is $875,000 in priority projects including designing reconstruction of Pass-a-Grille Way, streetscaping Corey Avenue west of Gulf Boulevard, a new gymnasium floor, rehabilitation some city alleys and a new phone system for City Hall.

Other capital projects the commission has discussed doing in the future are not on the list either: creating of a traffic couplet in the Corey Avenue area, reconstructing Gulf Winds Drive, rebuilding Pass-a-Grille Way, replacing or renovating two fire stations, expanding the city library and improvements to Hurley and Egan parks.

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