CLEARWATER - "It's important to give the citizens an opportunity to talk about the budget," said Clearwater's Mayor Frank Hibbard introducing Monday night's special public meeting on the city's 2006/07 budget. But despite the city's ample efforts to publicize the event, only about twenty citizens were in attendance.
Budget Director Tina Wilson summarized some of the major impacts that contributed to the planned $12-million increase in the city's General Fund budget for the coming year. Several are quite familiar to the city's taxpayers, including increases of $800-thousand for fuel costs, $1.1-million in the city's utility bill, and $1-million in property/liability insurance.
Nearly $2-million of the increase is the result of the Beach Walk project, having $1-million of annual debt service, and causing the loss of $1-million in Clearwater Beach parking revenue that had been used to support the beach lifeguards and the Jolley Trolley.
But with personnel costs representing 67% of the General Fund budget, it is not surprising that the bulk of Clearwater's increasing budget is attributable to employee salary and benefits. Although the city's headcount will grow by only 3 firefighters next year, the payroll across all city operations, including both General Fund and the city's several enterprise funds, will grow by $4.2-million (5 percent) to a total of $90-million.
While the city forecasts that medical insurance costs will remain at the 2005/06 level of $6,400 per employee, the city's contribution to the employee pension plan will grow by $2.8-million, or 37 percent, across all city operations. Because of lower than expected fund returns in recent years, the city's actuary recommended a contribution of 20 percent of payroll, or more than $15-million in 2006/07.
But the city's planned $10.3-million pension contribution, 13 percent of payroll, falls short of the amount recommended by the city's actuary. The difference will be taken from fund reserves in 2006/07, with the city planning to gradually increase its contribution to the recommended 20 percent over the next several years.
Ad Valorem taxes on real property would provide 42 percent of the city's general fund revenues. While Clearwater has proposed a .33 mill reduction in its tax rate for 2006/07 to 5.42 mils, the city's Ad Valorem tax revenue will grow to $51.94-million, an increase of 15.7% over 2005/06. The increase is fuelled largely by the increased taxable value of existing properties.
But that 1/3 mill reduction was not enough to satisfy the citizens who attended Monday's meeting. Suzanne Boschen is the owner of a small rental apartment complex on Clearwater Beach. "Five years ago I paid $6-thousand per year in property tax; now it's $18 to $21-thousand. There's no way I can pay $21-thousand on seven rental units," she said, asking why the city couldn't hold the line on budget increases. Hers is a commercial property, not subject to homestead exemption or the Save Our Homes cap.
Herb McLaughlin, cast a critical eye on the city's pension contribution, saying, "I don't know of any business that pays 20 percent of payroll for retirement benefits."
Countryside resident Will Perry said, "Government at all levels has an insatiable appetite," and called on the city to be sensitive to separating essential and non-essential functions. "Police and fire are essential," he said, "Beach Walk and the Library - we could do without those." He predicted that Clearwater's citizens would continue to see 20 percent budget increases until the city learned to distinguish between the essentials and non-essentials.
Perry explained the plight of those living on a fixed income in these times of rapidly increasing costs. "I can forego property insurance, buying gasoline, dining out and elective medical services, but I can't forego paying my property tax; my house will get sold out from under me," he said.
While Perry welcomed the proposed 3/10 mill reduction in the city's millage rate, he said, "It was virtually offset by the 3 percent increase in assessed value; it was basically a zero-sum." He compared his city tax last year with the 2006/07 tax estimate from his TRIM notice and found only a $19 savings. "If the city's budget stayed the same," he said, "it would save me $115, a sixfold increase in my tax savings."
"Everybody's got to do some belt tightening these days," Perry said, "and the city has to tighten its belt, too."
Asked during Monday's meeting to commit to a reduction in the city's planned 2006/07 budget, Councilmember Bill Jonson said, "there are some things I'd like to work on between now and the end of September." But he did not make any promises; "that would disenfranchise the members of the public who choose to speak at the public hearings," he said.
Public hearings are scheduled for Clearwater's 2006/07 budget on September 5th and September 21st.