No Winners in Clearwater's 2010 Budget ForecastBy Carl Wagenfohr CLEARWATER – "They don't say, 'did you really want to preside over the elimination of your city government', but for all practical purposes that's the question that's being asked," said Councilmember John Doran of the queries he's fielded recently from citizens about the Council's task of reducing the city's 2009/10 budget. "These are extremely rough times," Doran said of the effects on municipal government of what he called "the global crash of the world economy." Exactly how rough was outlined by Budget Director Tina Wilson during the February 12th Budget Worksession. "Per County Administrator Bob LaSala, our values are estimated to decrease by as much as ten to fifteen percent," Wislon said of the taxable values of properties in the city. That decline would place the city's tax roll at between $8.6 and $9.2-billion, about the level they were in 2007 and down substantially from 2007's peak of $11.1-billion. "What we're looking at next year is as much as a $7 to $13-million deficit," Wilson said. She explained that the city's 2009/10 millage rate would have to increase in order to limit the deficit to the $7-million range, maintaining revenues at 2008/09 levels. If the 2009/10 millage rate remained unchanged, the estimated deficit would grow to the $13-million range. Included in Wilson's grim forecast were two substantial cost increases. The city will be upping it's contribution to the employee pension plan to 20-percent of salary to cover last year's steep decline in pension asset value. Wilson estimated the budget impact of the additional contribution at $3.8-million (See the December 5, 2008 Gazette , City Pension Fund Assets Fall 34-percent). An estimated 10-percent increase in the cost of the city's property insurance is also included in the projected deficit. While Wilson's figures were only estimates, it's clear that there will be no winners in Clearwater's 2009/10 budget process. And the losers will include employees, some of whom will lose their jobs, and residents, who will see a reduction in the levels of city-provided services. With 65-percent of the city's $121-million 2008/09 general fund budget attributable to personnel costs, a reduction in city employment is certain. "It's clear that the existing staffing level is not supportable by the revenues, so we should ask ourselves how we bring that workforce in alignment with the revenues," said Councilmember Paul Gibson. A hiring freeze has already been put into effect this year, and incentives are being considered to encourage the city's 200-some retirement-eligible employees to leave. Employee benefits will likely suffer. For 2008/09, the city did not increase its contribution to employee health care, leaving employees with higher co-insurance costs, deductibles and co-pays. In 2009/10, employees will again bear the burden of any increase in the cost of the city's medical benefits. Clearwater Mayor Frank Hibbard offered his perspective on city employment; "We're not going to see the wage increases over the next year or two that some of our employees have been accustomed to in the past," he said, "It's better to have a job with little to no pay increase than to not have a job." With fewer employees, the city will be unable to maintain the level of services that its citizens have come to expect. Among the cost-cutting actions offered by Wilson in a so-called "Tolerance Test" of City Council priorities were eliminations or reductions in:
"You could do everything on this list; you're not even close," said Assistant City Manager Jill Silverboard of the minimum $7-million budget reduction target, "These were just some isolated tolerance items that we thought the Council would benefit from having conversation. Our gap is much, much greater." Noticeably absent from the list of "Tolerance Test" items were any cuts in the city's Police or Fire/Rescue departments. City Manager Bill Horne observed, "Our greater employee cost is in public safety. So as long as we're not going to address those kind of numbers, then it is going to be difficult shrinking the rest of the government to get there." In an ironic turnabout, homesteaded city residents who have long enjoyed the protection of the Save Our Homes cap will likely be facing a property tax increase while non-homesteaded properties, courtesy of their declining values, will likely receive a flat or lower city tax bill. If the values on the city's property tax rolls fall by 10-percent, Wilson estimated that a millage rate of 5.2504 would be required to maintain 2009/10's tax revenues at the 2008/09 level, a rate increase of 11-percent. With a 15-percent valuation decrease, Wilson projected a flat-revenue millage rate of 5.5593, an 18-percent increase over 2008/09. |