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St. Petersburg faces $2.8 million budget shortfall

ST. PETERSBURG — Six months after raising property taxes to plug a $10 million deficit, the city is again in the hole by nearly $3 million.

City staffers disclosed the shortfall Wednesday during budget negotiations with members of the Florida Public Services Union.

The deficit in fiscal year 2013, which began Oct. 1 and ends Sept. 30, comes from utility and communication service taxes not meeting revenue projections. The city also shifted more than $1 million from its general fund to reserves in order to meet targeted balances.

"We have problems with budget revenues this year," said Denise Labrie, budget manager.

Rick Smith, the union's chief of staff, replied: "The city has another budget deficit. People are going to be mad."

The shortfall calls into question why Mayor Bill Foster and the City Council didn't raise property taxes even more in September to create a cushion in case revenues didn't meet projections.

At the time, the council approved an increase in the millage to $6.7742 per $1,000 of a property's taxable value, up from $5.9125. Staffers and council members discussed higher rates then, but decided against it.

On Wednesday, Foster said he did not want to burden residents' wallets any more than needed.

Still, he is concerned about the current shortfall and ordered all departments to cut spending by up to 2 percent. Even though departments have money, it doesn't mean they can spend it, Foster added

He stressed that the city can only control spending, not revenue.

"We're taking action," he said. "We're doing line-item reviews. It's my intent to avoid deficit spending."

Council members are worried since the year is half over.

The $2.8 million discussed Wednesday is about $1 million higher than the deficit mentioned in a Budget, Finance & Taxation Committee meeting, Council Chairman Karl Nurse said.

"You have to make adjustments throughout the year," he said. "Are we narrowing the gap or is it widening?"

Council member Charlie Gerdes said Foster must act now to find savings. "Turning the ship around in two or three months is difficult if not possible. I plan to hold Bill's feet to the fire."

During the negotiations Wednesday, Smith asked the city to return step increases to members' paychecks, citing equal pay for equal work. Newer employees, he added, are earning less than longtime workers.

The majority of city workers have not had pay raises in four years. Smith estimated that increases would cost about $120,000 for the next six months.

"People have lost about $1,100 in real income," he said. "That's a crimp in anybody's budget."

The idea died.

"The answer is no," said Chris Guella, labor relations and compensation manager, who estimated the increase at $240,000.

Both sides bickered about the city having millions in reserves in enterprise funds for water, stormwater and sanitation services. Smith urged Guella to move money from the funds to cover the step raises instead of hoarding cash.

Guella countered: "It's good fiscal management."

St. Petersburg faces $2.8 million budget shortfall 03/13/13 [Last modified: Thursday, March 14, 2013 8:35am]
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