CLEARWATER - The Clearwater City Council last week adopted a tentative millage rate of 5.42 mills for fiscal year 2006/07, down from the 2005/06 rate 5.753 mills. The tentative millage rate will be included in the TRIM Bill notices sent to taxpayers in early August and cannot be increased without special mailing.
The reduced tax rate coupled with an expected 3 percent increase in the taxable value of a homesteaded property would result in a savings of $34 in city taxes for the owner of a home valued at $250,000 in 2005/06. If the city had instead adopted the rolled-back rate of 4.7326 mills, that same homeowner would realize a $194 reduction.
While the proposed tax rate will decrease, the city's tax revenue will increase. During last week's council work session, Budget Director Tina Wilson explained that taxable values in the city have increased by $2-billion since 2005/06, and as a result the city's General Fund property tax revenues at the proposed millage rate will increase by $7-million to $51.9-million.
Wilson said that the general fund will absorb some expenses formerly covered by the city's parking fund, including a $257-thousand subsidy of the Jolley Trolley and $675-thousand to support the beach lifeguard operation. A reduction in beach parking revenues is the result of Beach Walk construction.
Wilson explained that the city's property and liability insurance costs are expected to rise by up to 100 percent in 2006/07. The proposed budget covers only about 2/3 of that increase, she said, adding that the city's finance department may be able to close that gap by reducing or eliminating some coverage.
Increases in fuel and energy costs inflate the budget by nearly $2-million, with a $1.1-billion increase in the city's utility bill and an $800-thousand increase in vehicle fuel cost planned.
While the city staff will increase by only three firefighters next year, the cost of supporting the city's employees will increase by about $6-million. Employee pension costs will rise by nearly $2-million to $10.2-million in 2006/07, Wilson explained last Tuesday. The city will make payments into the pension fund amounting to 13 percent of payroll next year, but Wilson said that the city has an objective to increase its contribution to 20 percent annually.
The city has scheduled a public meeting on the budget on August 21 at the Main Library. Public hearings are scheduled for September 5 and 21. During last Thursday's council meeting, Mayor Frank Hibbard asked for a budget workshop in addition to the scheduled meetings. "I think it's one of the cleanest budgets I've ever seen since being on the council, but there are always questions that we need to address and I think a special session is needed," he said. That session will be conducted as part of the July 31 council work session.