ST. PETE BEACH — At a time when revenue from property taxes is expected to be down more than 6 percent, the projected city budget for the next fiscal year is up nearly 3 percent.
Spending for city operations, services and capital projects is expected to total $21.8 million, an increase of about $557,000.
Property values and corresponding tax revenues are dropping by about 6.29 percent, or about $350,000.
Nonetheless, the 2011-2012 budget proposed last week by City Manager Mike Bonfield is predicated on keeping the city's property tax rate unchanged — about $2.62 for every $1,000 of assessed, taxable value. That's $262 for a home valued at $150,000 with a $50,000 homestead exemption.
Many homeowners could see a lower tax bill because of falling property values.
The revenue shortfall would be made up, in part, by expected increases in franchise and utility taxes, parking revenues and tickets, Pinellas County contributions for emergency medical services, Penny for Pinellas tax receipts, and increases in sewer and reclaimed water fees charged residents and businesses.
The commission will set the tentative tax rate at its July 12 meeting. Whatever rate is set at that time can be lowered but not raised when the commission approves the final 2011-2012 budget in September.
The amount of money raised through property taxes — the largest single revenue source but only about one-third of the money needed to fund general city operations — will largely determine the city's spending priorities.
Bonfield's $14.3 million general fund budget includes $5.3 million in property tax revenues.
Most of the budget is devoted to police and fire ($7.5 million or 52.77 percent), with another 10-12 percent each spent on public services, parks and recreation and general government.
According to the proposed budget, the city also has $4.6 million in reserves.
Major changes to proposed general fund spending include: $212,000 to cover a 2 percent cost of living adjustment and a 2 percent merit pay increase for city employees (firefighters will get step increases defined in their union contract); an increase of more than $351,000 in pension payments; a drop of $33,125 in electrical costs because of efficiency measures; and a $100,000 cut in attorney's fees.
"I had hoped we could cut legal expenses even more," Mayor Steve McFarlin said Monday.
The city has spent nearly $1 million over the past few years, mostly to defend lawsuits challenging the city's development regulations. Several of those lawsuits are still being appealed.
The general fund budget also calls for a cut of the equivalent of two full-time positions and several part-time positions.
The library will lose $5,000 for books, while $60,000 more will be spent for repair and maintenance for small streets, sidewalks and alleyways, and $108,967 will be spent for planning and engineering for an extensive citywide stormwater master plan assessment.
The city plans to spend $2.2 million on a variety of capital improvement projects, including: $302,000 for the final debt payment for City Hall; $305,000 for landscaping and development of a beautification plan for Gulf Boulevard; $470,000 for street rehabilitation; $445,000 debt payment for the community center; $375,000 for sewer repairs and projects.
"The budget is balanced and does not reduce any level of service currently provided to the residents," Bonfield said in his letter accompanying the proposed budget.
The budget will be reviewed by the city's Finance and Budget Review committee during the next few weeks and will be discussed in depth by the commission during workshops in August. Public hearings on the budget and property tax rate will be held on Sept. 14 and Sept. 25. Once approved, the budget will go into effect Oct. 1.