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St. Pete Beach proposes 7.49 % property tax hike

ST. PETE BEACH — The City Commission wants to know what services and programs its residents want and whether they are willing to pay higher property taxes to get them.

Last week, the commission tentatively approved a 7.49 percent increase in next year's property taxes.

Whether the property tax hike becomes permanent largely depends on what residents tell the commission.

"It's hard to keep providing the level of service you guys expect from us," Commissioner Beverly Garnett said as she asked residents to write, e-mail and attend the commission's budget workshops Tuesday and Wednesday. Both meetings start at 2 p.m. and will last about two hours.

"We need to hear from the people," said Commissioner Marvin Shavlan, who pushed for setting the tax high enough to cover any additional spending either the commission or residents may decide they want.

Commissioner Jim Parent joined Garnett and Shavlan in approving the higher rate.

"I don't think we should tie our hands without hearing from residents," said Parent.

Mayor Mike Finnerty and Commissioner Al Halpern were opposed, arguing instead to hold property taxes either to the same level or even to cut them slightly.

The 2.9612 tentative millage rate would provide the city with $452,000 more than was raised this year.

Under state law, the final property tax rate, which must be approved before Oct. 1, can be lower but cannot be any higher than the tentative millage rate.

The city's property tax rate is actually two taxes — one for operating expenses and another to pay off the cost of the city's police department. The 2010-2011 debt service tax, which will end in 2013, is projected at 0.0894 mills.

Because property values dropped 6.6 percent this year, keeping the property tax rate unchanged at the current 2.5588 mills would mean a $414,000 revenue loss for the coming year.

A mill represents $1 in taxes for every $1,000 of assessed non-exempt real property. Therefore, a home with a taxable value, after exemptions, of $200,000 would pay $200 in city property taxes. The proposed rate increase of 0.4024 mills would mean an additional $80.48 in annual taxes for that home.

The proposed $13.7 million 2010-2011 city budget is based on raising property taxes to the rollback rate of 2.6718 mills, the amount needed to raise the same money next year as was raised this year.

The budget calls for maintaining the current service levels, according to City Manager Mike Bonfield, who cautioned that any additional spending would require either raising the property tax rate or dipping into reserve funds.

Ideally, the city's undesignated general fund reserves should be equal to about 25 percent of operating revenues, according to finance director Elaine Edmunds.

Instead, the city has a little over 12 percent — only enough to pay the city's bills for six weeks, rather than the three months recommended by the city's auditor.

In dollars, that means the city's current reserve fund of $1.607 million should actually be more than doubled to $3.275 million to provide enough money in the event of a major hurricane or other emergency.

Bonfield's proposed budget calls for cutting the equivalent of three positions in public services, information technology, and the City Clerk's Office. Other spending cuts were taken across the board in all city departments.

It also includes a 2 percent cost of living increase for city employees and about $2.5 million on capital projects — including $290,325 for street repairs, $100,000 for landscaping on the Bayway Bridge causeway, $200,750 for roadway improvements on Blind Pass Road, $195,000 to complete purchase of land adjacent to Egan Park, and $500,000 for sewer system repairs and maintenance.

The budget does not include nearly $100,000 in spending on the City Commission's wish list compiled last spring.

That list includes an extra $25,000 for legal fees above the $200,000 budgeted, as well as $28,000 for holiday decorations that were eliminated last year, $25,000 for additional park landscaping maintenance, and $10,400 to re-open the city library on Mondays..

St. Pete Beach proposes 7.49 % property tax hike 07/31/10 [Last modified: Friday, July 30, 2010 6:17pm]

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