The alternative could be cutting city jobs and services as expenses keep rising, especially for staff benefits.
By JENNIFER FARRELL
Published January 16, 2004
CLEARWATER - The city is facing a $2.6-million budget shortfall next year.
That means one of two things: cut city jobs and services or raise property taxes, city officials say.
For at least the next five years.
Early forecasts show shrinking revenues and increased staff expenses, especially for medical insurance costs, which continue to skyrocket. Next year alone, insurance bills are expected to spike by 19 percent, or more than $1-million.
Recently negotiated labor contracts with the city's police unions and a proposed deal with the firefighters union also are expected to drive up staff expenses.
City Budget Director Tina Wilson said the tax rate would need to jump by nearly 7 percent next year to keep pace with expenses. And more increases would be necessary for the following four years, she said. The other option is to cut jobs and services.
But the cuts would need to be drastic to make any real impact, according to Wilson.
"We've got some work ahead of us," she said. "You can't save money unless you're actually going to shut down a facility and stop doing things."
Bracing for thorny budget talks, City Manager Bill Horne is planning a public discussion with city commissioners early next month to establish priorities. The conversation would include a look at what factors are fueling increased expenses and would serve as an early warning for commissioners.
As the staff begins building the spending plan for next year, Horne said he wants to know up front whether commissioners are willing to raise taxes.
"I want to have a rich discussion," he said. "A reasonable increase may be appropriate."
On Thursday, City Commissioner Frank Hibbard said he is willing to consider an increase, but all city services should be reviewed.
"Everything that we offer comes with a price," he said. "We're eventually going to have to start making decisions between wants and needs."
In 2002, the city raised the tax rate by 4.5 percent, the first increase in three years.
This year, Clearwater held the tax rate steady at $5.75 for every $1,000 of taxable property value. Under that rate, the owner of a home valued at the city average of $91,740, qualifying for a $25,000 homestead exemption, pays about $384 in city taxes.
To help balance this year's budget, Horne had recommended closing the Clearwater Beach branch library, but a divided City Commission overruled him. He said the beach library will not be considered as a cut next year.
But the library system in general, Horne said, will be among the list of departments under review. With the new, 90,000-square-foot main library scheduled to open in downtown this year, library director John Szabo said he expects a discussion on services throughout the five-branch system. In a tight budget year, he said, closing one branch is a realistic, if painful, possibility.
"It is unusual to have branch libraries within such close proximity to our main library as we do," he said.
City officials said no decisions have been made about closing any city facilities.
Having the discussion early will give the public time to weigh in on what, if anything, they might be willing to sacrifice, City Commissioner Hoyt Hamilton said.
"This is the gorilla we're wrestling right now," he said, adding later: "This is a quid pro quo type thing. You've got to give some to get some."
Mayor Brian Aungst said he is confident the city's property tax revenues will continue increasing, helping to offset expenses. But it might be that citizens are willing to pay more to keep their services, he said.
"We'll have to take a good hard look at our options," he said.
