SAFETY HARBOR — The anguish was visible Thursday night as city commissioners struggled to bridge a shortfall of hundreds of thousands of dollars in the city's proposed 2011-12 operating budget.
Should they raise property taxes? Continue to draw money from the city's healthy reserve fund? Should they make city employees forgo a planned 3 percent merit raise, or should more employees get a pink slip?
City Manager Matthew Spoor has submitted a proposed $12.8 million operating budget that contains a 3 percent merit raise for city employees and a small tax increase. Still, the budget falls $678,000 short — money that would have to be taken from reserves.
As a starting point, commissioners directed Spoor to cut another $200,000 from the budget. But that won't nearly address all of the gap, so commissioners still face some tough decisions.
"It's not reasonable to think we will be able to keep the millage rate the same," said Commissioner Mary Lynda Williams. "The best decisions are not always the easiest. We have to raise the millage rate — we have to."
Spoor said to make the $200,000 cut, he will explore every possibility, including looking at duplication of services and finding efficiencies. But he said he will not touch the 3 percent merit raise for employees.
The raise adds about $100,000 to the budget, but Spoor pointed out that there is also a $476,810 reduction in citywide personnel costs in the budget. He said city employees are a crucial element in meeting the City Commission's mandate to maintain current service levels for residents.
"It will be two years since the last merit increase, and during that time we have reduced our work force while increasing duties and maintaining a high level of service," Spoor said. "The employees deserve recognition and thanks for their dedication, professionalism and hard work."
Spoor's proposed tax rate increase would take the rate from 3.38 mills to 3.5082 mills.
One mill is equal to $1 of tax for each $1,000 of assessed, nonexempt real property. The owner of a home valued at $100,000 after any exemptions, for example, would pay $338 under the current tax rate and about $350 under Spoor's proposed rate.
Even if the commissioners approve the tax increase, the city still would have to pull more than $678,000 from the reserve fund, which contains $8.7 million.
Commissioner Joe Ayoub suggested that the city set some goals to eliminate the continued use of the reserve fund to balance the budget. He said a time frame for doing so should be set, and a minimum reserve balance should be determined.
"I think we have too much in reserve," said Ayoub, noting that the money in the reserve fund belongs to the residents.
Commissioner Nina Bandoni also believes that the city should reconsider how much it relies on its reserve fund.
Commissioner Nancy Besore was unwilling to support any budget-balancing idea that included employee layoffs. She thinks there are still efficiencies to be found in city government.
Mayor Andy Steingold said the goal is to maintain quality services for the city's residents. "If there is waste in the city or duplication of services, then I'm for it," Steingold said of reducing staff. "If we have to downsize and it doesn't reduce the quality of life of our citizens, I'm down for that, too."
Contact Demorris A. Lee at email@example.com and (727) 445-4174.