TEMPLE TERRACE — After City Manager Charles Stephenson cut more than $545,000 in city expenses for the next fiscal year, the Temple Terrace City Council tentatively agreed on a budget that slightly raises property taxes and taps about $856,000 from the reserve fund.
City finance director Angela Atkinson did not have the final budget figure ready at press time, but it's expected to be higher than this year's budget of $43.5 million. The council plans to cast its initial vote on Wednesday evening.
The proposed budget calls for a property tax increase of a quarter mil to $7.205 per thousand dollars of property value. It includes a 4 percent raise for police and general city employees and a subsidy of nearly half of the 14.5 percent rise in employee health insurance.
Cuts Stephenson made include a $54,000 drop in reimbursement for employee cellphone use; $95,000 out for temporary laborers; and $117,000 out for overtime pay.
Beginning Oct. 1, employees will be reimbursed for half instead of the full charge on their personal cellphones, Stephenson said.
He hopes to eliminate the use of temporary laborers and consider overtime on a case-by-case basis so he can track how it's being used.
He indicated that any overtime the city incurred could possibly be paid by budget adjustments, but it may have to come out of the reserve fund, an action that would require a vote by the council.
Some "cuts'' came about simply because they were expenses in this year's budget that won't repeat next year. They include 60,000 paid for a storm water analysis and $14,000 for a study for the city's River Watch Task Force.
Residents will see a hike in their sewer and water bill of 4.3 percent and an increase in garbage pickup of 2.3 percent.
"We have cut just about everything that we can out of this budget,'' Stephenson told the council. "I don't know that I can cut any more.''
Council member David Pogorilich congratulated the city manager.
"You and your staff have done a fantastic job of finding areas where we can save money and do things differently to save money,'' he said.
Both Pogorilich and Cheri Donohue expressed concern about tapping into reserves. The city's goal is to have two months worth of operating expenses, or a little over $4 million, in savings.
Pogorilich said he would have trouble sleeping at night if reserves dropped below $3 million. For 2017, it's $3.3 million.
Donohue noted that the real struggle is around the corner.
"While we might have reserves this year, we have this giant elephant in the room that's waiting to come in, and it's called the loan payment,'' she said.
In 2018, the city will start having to pay principal along with interest on $24 million it borrowed more than a decade ago to buy 29 acres of land and install infrastructure for the Downtown Temple Terrace project.
The city has paid only the interest on the loan, about $600,000 per year, since the beginning. In 2018, city will be paying an estimated $1.7 million per year.
Burton & Associates, the company hired to make financial forecasts, painted an ominous picture for fiscal year 2018 if the city keeps on the same track it's on.
With the millage rate set at 7.205 for that year and nothing else substantially changed, the council would have to draw more than $4 million from reserves, leaving only $203,000.
Pogorilich said while he's against raising property taxes even a quarter of a mil for next year, he's voting for it to avoid tapping further into reserves.
"They always say the best negotiation is when everybody goes away mad. I think we're there,'' he said, drawing laughs from his colleagues.
Contact Philip Morgan at firstname.lastname@example.org or (813) 226-3435.