Sunday, June 24, 2018
News Roundup

St. Petersburg Mayor Bill Foster uses fire fee to balance budget

ST. PETERSBURG — After several years of budget cuts, Mayor Bill Foster's newest budget calls for imposing a new fee on property owners in lieu of any more service reductions.

The fire readiness fee, which the City Council hasn't approved, would generate roughly $10 million a year, about the same size as the city's deficit for next year. The fee would stave off more cuts that have trimmed 300 jobs, reduced hours for pools and libraries, and cut park maintenance over the past several years.

However, even if the council approves the fee, most city workers still won't see raises next year except those covered by union contracts. Foster also calls for culling 22.5 full-time positions.

Foster says he cut $2.1 million out of the general fund, but any further cuts would hamper efforts to revitalize the city.

"Further cuts in our budgets can only lead to deterioration of our city and the deconstruction of what we have built up over the last 20 years," said Foster, who sent his budget to council members for their review this week.

The proposal, Foster said, represents the sixth year of declining property values. Revenues from property taxes in 2013 will decline by more than $1 million from 2012. Since 2008, those revenues have declined more than $35 million, Foster said.

Still, residents likely won't see a decline in services.

Parks, libraries and pools will remain open, with no cuts to hours. Foster did not slash budgets for arts, social services, youth employment or the Codes Department. He also didn't reduce staffing for the Police or Fire departments.

Mike Gulley, president of the Council of Neighborhood Associations, said he isn't opposed to a fire fee or higher millage rates as long as services remain intact.

"If the city needs it to function properly, it's not the end of the world," Gulley said. "I don't want to see the lowest-ranking workers laid off."

However, he questions whether Foster has trimmed enough higher-salary workers from the city's ranks.

"Has he done the things he's needed to do?" Gulley asked.

In response, Foster countered that he has cut about 70 managers and supervisors since taking office.

After discussing alternatives, including raising property taxes and dipping into reserves, the City Council voted 5-2 last month to move forward with the idea of charging residents an annual fire fee that would raise about $10 million a year.

In a two-tiered approach, property owners would be charged a flat fee of $75 for each lot and 24 cents per $1,000 of the lot's appraised structural value.

For example, the owner of an undeveloped lot would pay just the $75 flat fee. A resident whose home is worth $100,000 would pay $99 a year. The owner of a building valued at $300,000 would pay $147.

Excluding government buildings, all of the city's 100,000 parcels would be charged the fee, including nonprofits and churches. City Council will take up the matter again next week.

Foster said the flat fee could range from $60 to $75, and that the variable fee could end up being lower than 24 cents per $1,000 of value. He said wants the fee only to plug the budget shortfall, not to boost city reserves.

"We want to come up with something so there isn't significant service reductions," he said. "This thing is still evolving."

Along with many residents, council members Wengay Newton and Steve Kornell oppose the fee.

Newton called for Foster to dip into the city's $40 million in reserves or to raise millage rates in lieu of the fire fee. Newton hopes more council members "come around" to oppose the fee when they vote again July 12.

"It's a travesty to balance the budgets on the backs of grandmothers, churches and nonprofits," he said. "This is just another tax. You can't put lipstick on a pig to make it a prom queen."

Foster disagreed.

The fire fee is a constant revenue stream that doesn't fluctuate with changes in property taxes, Foster said, adding: "This is a way that everybody pays something."

The city has gone at least 22 years without raising the millage rate, which dropped from $9.25 per $1,000 of taxable value in 1990 to its current rate of $5.9125.

St. Petersburg's property tax rate has been the same since 2007 despite an economic downturn that continues to drain city coffers. Property tax revenue has fallen a total of $100 million during that time, causing the tax to bring in $30 million less per year than it did in 2007.

The city has handled the shortfall mostly with cuts and limited fee increases and fines.

Now in his third year in office, Foster has a backup plan in case the City Council spikes the fire fee.

His proposal calls for a millage rate increase to 6.9125 mills — one mill higher than the current rate — to have the necessary revenue for a balanced budget.

The millage rate has to be set by July 19. Foster can lower the millage if the City Council adopts the fire fee later this summer. Public hearings on the budget are set for September.

Mark Puente can be reached at [email protected] or (727) 893-8459. Follow him on Twitter at twitter.com/markpuente.

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