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St. Petersburg moves forward with new fire fee to close $10 million budget shortfall

ST. PETERSBURG — The years of cutting services to make up for declining property tax revenue look to be over in St. Petersburg.

In a rare 5-3 vote, the City Council approved a fire fee that is expected to generate roughly $10 million a year, about the same size as the city's deficit for next year.

The so-called fire readiness fee would eventually be added to property tax bills and charged to any property owner, including churches and charities. It would stave off more cuts, which have trimmed 300 jobs, reduced hours for pools and libraries and cut park maintenance over the past several years.

Council members Wengay Newton, Steve Kornell and Charlie Gerdes voted against the fee, a rare show of dissension among a group usually known for 7-1 votes with Newton opposed.

Residents will have two chances to support or oppose the fee at public hearings Sept. 13 and 27. The council could still choose not to implement the fee after that.

Mayor Bill Foster said the fee is an equitable way to raise revenue because every property owner would pay. He also acknowledged that it would be accurate to call the fee a tax.

Cutting more services, Foster said, would devastate the city.

"It's a reliable source for public service," Foster said. "This is a tool. It's the cost of doing business."

In a two-tiered approach, property owners would be charged a flat fee of $75 for each lot and then an additional $0.23 per $1,000 of the appraised value of any structures, such as a house, on the lot. There would be an exemption for low-income property owners.

St. Petersburg's desire to raise taxes isn't unprecedented in the Tampa Bay area. As cities and counties across the region face another year of budget shortfalls, many are beginning to find that the risk of cutting deeper into budgets and services is too great.

Pasco and Pinellas counties are considering property tax increases. Brooksville is eyeing a fire fee similar to St. Petersburg's.

That doesn't mean residents agree.

St. Petersburg resident Vince Cocks went to Thursday's meeting to voice his opposition to the new fee.

He said wealthy people living in $5 million homes wouldn't pay a fire fee that is 100 times higher than people in $50,000 houses.

"This assessment will place an inequitable tax on homeowners, the middle class and the poor," he said. "This is very, very inequitable."

David McKalip, a local surgeon and activist, urged council members to forgo the fire fee and instead rein in spending.

"It's always been about too much spending by you folks," he said. "It's time to stop treating taxpayers like walking ATM machines."

Foster has until the end of September to impose the fee before next year's budget is set. Other options would be to increase millage rates to cover the shortfall, dip into city reserves or cut services.

Gerdes said he thinks it is time to increase revenue instead of make more cuts, but he believes the way to do that is to raise the millage rates.

"I'm opposed to adding another method to reach into the wallets of folks," he said.

Kornell and Newton were opposed to making residents pay more via a fire fee.

Council member Jim Kennedy, who voted for the fire fee, said dipping into reserves would be an ill-advised move.

He called the fire fee "a good tool to put in the toolbox."

Newton questioned why the council had to act on Thursday.

City attorney John Wolfe said the fee has been talked about for 15 years and the city has spent thousands of dollars to reach this point. If the council hadn't voted to move forward, the fee could not be used for next year's budget, he said.

Wolfe urged the council to approve the fee, but also cautioned them that they could ultimately decide not to implement it after hearing from citizens at the public hearings.

In response, Newton countered: "If you give government something, they are going to use it."

As a formality, a circuit judge will have to approve the fee before it's passed on to residents. If implemented, the council also would have to renew it each year.

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.

Foster sent his proposed budget two weeks ago to the council for its review. He submitted a balanced budget with money raised from the fire fee. He also submitted a higher millage rate in case the fee is spiked in September.

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

Figuring out the fee

Here's how the fire fee would work in St. Petersburg:

In a two-tiered approach, property owners would be charged a flat fee of $75 for each lot and 23 cents per $1,000 of a lot's appraised structural value.

Excluding government buildings, all of the city's 100,000 parcels would be charged the fee, including charities and churches.

Of those 100,000 parcels, 6,984 don't currently pay any municipal taxes. Some examples: A resident whose home is worth $100,000 would pay $98 a year. The owner of a building valued at $300,000 would pay $144. The owner of an undeveloped lot would pay just the $75 flat fee.

Mayor Bill Foster said he is exploring ways to lower the fixed cost to $65.

How they voted

In favor of fire fee: Leslie Curran, Jeff Danner, Bill Dudley, Jim Kennedy and Karl Nurse.

Against the fire fee: Steve Kornell, Wengay Newton and Charlie Gerdes.

St. Petersburg moves forward with new fire fee to close $10 million budget shortfall 07/12/12 [Last modified: Friday, July 13, 2012 12:14am]
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