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Rising costs add up to lean budget for Dade City

Higher fuel, utility and insurance prices overshadow an increase in property values and tax revenue, officials say.

By GINA PACE
Published August 10, 2006

DADE CITY - Despite an increase in property tax revenue and a dramatic bump in the city's property values, City Hall is facing a lean budget year.

Increased costs are eating up most of the new revenue as the city predicts a huge jump in insurance prices, rising fuel costs and higher utility prices, City Manager Harold Sample said as he presented the first draft of the nearly $10.6-million budget to the City Commission on Tuesday.

Although Dade City has grown by 25 percent in the past two years by annexing land, much of that area has yet to be developed, causing a delay in increased tax revenue.

"Development is possibly doubling our city's population in five to 10 years," Sample said at the budget workshop. "But we still have not reached a point where we are seeing financial benefits."

City planners also fear that the development wave that has swept over the rest of Pasco County will miss Dade City. The budget estimates building permit fees for only 100 more single-family homes than were built this year, at least until the building slowdown can be better evaluated, Sample said.

City staff created the budget based on a tax rate of 7.84 mills, the same as this year's. A mill is $1 of tax for every $1,000 of taxable property.

But because the city's tax base has grown, that tax rate will raise more money next year than this year -- meaning the city must advertise a proposed 22.6 percent tax increase.

Proposed spending increases for next year include a 5 percent salary boost for city employees, as opposed to this year's 2 percent raise, as well as almost $223,000 to restructure the Police Department so that all shifts are covered by a sergeant, two patrol officers and two dispatchers.

"As we prepare to take the city to a new level, we have to address funds that have been postponed or delayed for many years," Sample said.

Most of the capital improvements, including police cars and sidewalks, will be covered by the Penny for Pasco, a 1-cent-on-the-dollar sales tax to build schools, improve roads, buy conservation lands and pay for other city projects. Sample said that without the expected $815,189 in revenue from the Penny for Pasco next year, it would be difficult for the city to maintain existing levels of operations.

Commissioners will meet several times in the next six weeks to discuss and revise the budget. Public hearings on the budget are set for 5:30 p.m. Sept. 7 and 21 at the City Hall Annex.

[Last modified August 9, 2006, 23:03:57]