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St. Pete Beach seeks fix for budget crunch

The city considers a tax increase, job cuts and using the reserves to combat a shortfall of up to $645,487 next fiscal year.

By AMY WIMMER, Times Staff Writer
© St. Petersburg Times
published August 18, 2002

ST. PETE BEACH -- The city is faced with dipping into its reserves for a third consecutive year to pay for employee salaries and balance the budget.

St. Pete Beach could increase taxes as much as 12 percent to meet expenses. That's on top of the additional $400,000 the city will collect next year from property owners because of increases in property values.

City commissioners will meet next week to discuss the budget and whether they can navigate the city through the year without a tax hike.

"Obviously, we're going to spend next week looking at how we can do without that," City Manager Mike Bonfield said.

Each year, St. Pete Beach spends more than $1-million of its $11.2-million budget paying off debts on items such as the police station, built in 1993, the new City Hall, built just last year, vehicles, and the pay station parking meters in Pass-a-Grille.

Bonfield became the city manager in January. He has also been the city manager in Madeira Beach and a department head in Gulfport -- two communities that do not borrow money for projects. Even in his public job interview with St. Pete Beach, he questioned the city's finances.

"Legally, are we at the cap of what we can borrow? I'd say no," Bonfield said. "But practically, I'd like to get away from borrowing money, especially on smaller items."

The amount of the deficit continues to fluctuate as city officials adjust the budget, but the shortfall could be as much as $645,487 unless substantial cuts are made or commissioners increase taxes.

Bonfield already has cut four full-time and three part-time jobs from the budget he will present to commissioners. Those jobs were eliminated through attrition, but the city may consider more job cuts if commissioners choose to not use the $1.8-million reserve fund to pay salaries.

Any cuts aimed at balancing the budget likely would come from personnel costs because those make up 70 percent of the budget. The other 30 percent is set aside for mostly fixed-cost items, such as the city's electric bill and the approximately $145,000 it will pay the Pinellas Suncoast Transit Authority next year to be part of the beach trolley route.

St. Pete Beach also is limited in how much it can cut employee raises because of union contract restrictions, Bonfield said.

Some highlights of the budget include:

The city will make the first of 10 payments of $302,000 on its new City Hall. Money for the payment comes from Penny for Pinellas, a sales tax approved by the voters countywide.

St. Pete Beach plans to use Penny money to make payments until 2011, even though the tax is scheduled to expire in 2010. If voters do not renew the tax, Bonfield said, the city probably will use additional Penny money to pay off the building before the tax discontinues.

Bonfield said he expected residents to point to the new $3.6-million City Hall as an expenditure that was unnecessary during a budget crunch. But Bonfield defended the building Friday, pointing out that it would be paid for with Penny money, not with general fund dollars and property taxes.

Penny money can be used only for capital projects, such as infrastructure improvements, new parks and other new amenities, such as the new library some city residents are lobbying for.

Bonfield said residents could not argue that the City Hall project kept the city from being able to pay employee salaries. An argument could be made, however, that the money spent on City Hall prevents the city from funding sidewalk improvements and other capital projects.

Bonfield is preparing a "comparison report" that stacks up the cost of operating police and fire departments in St. Pete Beach next to that of other communities with similar demographics.

His research is still in progress, but the bottom line is clear: Compared to other beach and inland communities, St. Pete Beach spends more to protect its residents from crime and fire.

The city spends $339 per resident to operate its police force and $229 per resident for the fire department. Preliminary figures suggest that those amounts are higher than almost any other community in the county.

That's not necessarily a strike against the city, Bonfield said. If St. Pete Beach wants to offer a higher level of service to its residents and is willing to pay the price to do that, the city could take pride in those numbers.

But residents with questions about the budget -- and a reluctance to reach farther into their own pockets to pay for the shortfall -- might see the situation differently.

After a brief hiring freeze imposed by the City Commission shortly after Sept. 11, St. Pete Beach hired three firefighters just last year. Their combined annual salaries, including benefits, totaled about $135,000.

Critics, particularly those who ran against incumbents in last year's city elections, began questioning the hiring of the firefighters after the firefighters' union endorsed incumbents in this year's election. The City Commission also authorized $40,000 in unanticipated overtime charges for the fire department.

The city will take a close look at all facets of the budget next week, including personnel.

"It's just an attempt to look at the organization and say, "Is this an area where we can consolidate work and not affect service?" Bonfield said.

* * *

The budget hearings in St. Pete Beach begin at 4 p.m. Monday at City Hall, 155 Corey Ave. Other budget workshops are scheduled for 6 p.m. Wednesday and 6 p.m. Thursday.

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