TREASURE ISLAND — In what officials here describe as a "perfect storm," the city is facing a possible 17.25 percent property tax hike unless the City Commission severely cuts the proposed $16.78-million 2008-09 budget.
"We have got to cut not just tens of thousands of dollars, but probably in the neighborhood of a half-million dollars out of this budget (to avoid a tax increase). There is not any way to do that without cutting departments," City Manager Reid Silverboard told the City Commission during a Tuesday workshop discussion.
Commissioners will begin discussing the proposed budget at workshop sessions at 1 p.m. Tuesday, Wednesday and Thursday. A special meeting may be called either Thursday or Friday to set the tentative millage rate for next year.
That rate, which must be submitted to the county Property Appraiser's Office no later than Aug. 4, sets the upper limit of the final property tax rate that will be set in September when the city approves its final budget. The final rate can be lower than the official tentative millage rate but cannot be higher.
Silverboard is recommending the city's property tax rate be set at 2.7998 mills, to generate $4.4-million in property tax revenues, or about $107,000 more than was raised in property taxes this year. The current property tax rate is 2.3878 mills.
"Everybody has got to be aware of what the city manager is asking for. This is a 17.25 percent increase over the current millage rate," Commissioner Ed Gayton Jr. said.
"We have had a collection of factors that put a severe strain on our general fund." Silverboard told the commission.
He cited in particular the loss of toll revenue when the new Treasure Island bridge was built. The causeway and bridges still cost "us close to a quarter-million dollars a year and we do not have a corresponding revenue source to pay for it."
Silverboard said the recent sharp $130.9-million decline in city real estate values has exacerbated the problem.
Add to that the impact of Amendment 1 on taxable property values and other changes to property taxes, and the city's tax base is 10.45 percent lower than last year.
Next year's property tax rate would have to increase to 2.7327 mills just to generate the same level of income as the current year, he said.
Other sources of income are declining as well, Silverboard said — from utility tax collections, to lower permit fees because of the "moribund" construction industry, to less money from various state revenue-sharing programs including sales taxes.
He is proposing raising fees for recreational programs and facilities, marina slips, community center rentals, as well as imposing new fees for review services relating to development projects.
Then there are the additional operating expenses affected by rising fuel, energy and commodity costs.
"Development of the budget this year has taken place facing a perfect storm of negative factors," the city's finance director, Ruth Chapman, said.
The proposed budget is $2.86-million higher than the current year's budget, largely because of increases in PSTA, fuel and electricity costs, and a wastewater treatment rate increase.
Despite the increase in spending, the budget suspends any raises beyond a 4 percent cost-of-living adjustment, eliminates the police marine patrol, holiday decorations, and Fourth of July fireworks.
Four city employee positions were also cut from the budget — one each from the public works, sanitation, water pollution control and finance departments.
Other cuts include no longer providing plastic bags at "pooper scooper" stations in city parks, limiting beach raking to only areas immediately adjacent to the water, and cutting street sweeping from twice to once a month.
The city also has asked the Sheriff's Office for a cost estimate for taking over dispatch, records, evidence collection and storage and detective services from the city Police Department.
Silverboard described his recommended spending plan and staffing levels as "prudent and responsive."
Final approval of the budget and the property tax rate will not occur until September. Public hearings are scheduled at 6 p.m. on Sept. 3 and 17.