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City looks for ways to pinch its pennies

Both the Financial Advisory Board and some city commissioners want to avoid another property tax hike.

By SHANNON TAN
Published March 23, 2005

LARGO - Property tax rates already have gone up twice in the past two years.

Now the city staff says more tax increases may be needed in fiscal 2008 and 2009. To prevent that, the city will have to trim expenses or increase revenues.

That means reviewing all salary raises. Watching out for those health care premium increases. And forget about any major new initiatives.

Given the current projections for the next five years, an increase of 50 cents for every $1,000 in taxable value would be needed in 2008, said Kim Adams, management services director. A year later, there could be a hike of 25 cents for every $1,000 in taxable value. Currently, homeowners pay the city $4.75 for every $1,000 of taxable value.

"Revenue's not growing as fast as certain expenses and we're adding new services," Adams said. "You can't pin it on any one thing."

The new $21-million library and computers for police cars mean larger staffs are needed. But while property tax revenue is projected to grow by 40 percent in fiscal 2005 because of last year's rate hike, the drop in annexations will slow down revenue growth.

The Finance Advisory Board does not want a tax increase. Neither do several city commissioners.

At a Tuesday night work session, commissioners picked apart the 40-page, long-term financial plan and haggled over the 15 new projected positions for the next two years. Department heads showed up to justify their proposed projects.

The same scenario plays out yearly in this budget-conscious city. Largo has long prided itself for providing services "cheaper than cheap."

The city's property tax rate stayed the same for 11 years before it was raised in 2003. Until last year, solid waste collection rates were unchanged for 11 years, while drainage and sewer rates hadn't increased since 2001.

"I'm not in a big hurry to do two tax increases in the next five years again," said Commissioner Pat Gerard.

"It's an early warning system," Adams said earlier. "It's not saying we have to have a tax increase."

But the numbers are alarming.

If there are no property tax increases, a negative general fund balance is projected by fiscal 2010. Officials would then have to eliminate all new positions after 2006, and even cut existing positions.

"I think we are insulting the public by saying you might as well forget about tax increases," said Vice Mayor Gay Gentry. "We might as well be upfront and honest."

Waiting to deal with financial challenges will require more drastic actions later, she pointed out.

Commissioner Andrew Guyette suggested trimming capital improvement costs or spreading them out instead of cutting current positions. And Commissioner Mary Gray Black proposed taking a straw vote on major capital programs so city officials can plan for the future.

Renovating the golf course will cost $1.8-million. Upgrading the radio system from analog to a digital format: $1.34-million.

Getting a new bucket truck and chipper for an additional tree crew would cost $125,000.

"I wonder why we continue to put so much money into (the golf course)," Black said, "Particularly when nearly half the people who use it are not Largo residents,"

Gentry recalled that the golf course used to be a "cash cow."

"It's our own fault it's the condition it is," said Commissioner Jean Halvorsen, who suggested applying for grants to fund the improvements. "We need to maintain it."

Shannon Tan can be reached at shtan@sptimes.com or 445-4174.

[Last modified March 23, 2005, 00:55:18]