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City budget: Revenue sources debated

By Staff | Jun 12, 2015

Now that the city manager’s “three-legged stool” approach to financial diversification has been put in place, the city council had its first opportunity to talk budget for the 2016 fiscal year Wednesday.

And there was one member of the council at the workshop who wanted to take one of those so-called “legs” away.

City Manager John Szerlag presented the numbers for his proposed 2016 budget, with Burton & Associates presenting a model of what the scenarios would mean for the city.

As previously promised, the proposed $152 million budget would lower the current millage rate by .75 points, from 7.7070 to 6.9570, with a very tentative rollback rate of 7.3915.

This would be coupled with the 7 percent public service tax and the 64 percent cost of operations fire service assessment that finally was approved by the State Supreme Court last month.

Szerlag said those who live in a home with a taxable value of $100,000 would pay roughly $148, about 50 cents less than last year and near the target $150 Szerlag proposed when he first sold a plan that added two new taxes while promising a reduction in the property tax.

Burton & Associates brought its model so council could plug in numbers to see possible scenarios over a 10-year period.

Councilmember Rick Williams wanted a scenario where there was no public service tax and the millage was kept the same, especially in light of the fact property values were expected to rise more than 6 percent.

“I don’t advocate eliminating the PST. Just put it on the shelf in the event we need it,” Williams said.

The net impact would be $126.83, with the lowered millage and PST almost cancelling each other out.

Williams was warned by Assistant City Manager Michael Ilczyszyn that the diversification provides the city with a steadier revenue stream.

Others, such as Councilmember Richard Leon, saw the proposed pay increases to city workers as something that could bring the numbers down, as it was pegged at 10 percent for this year and 5 percent for the following four years.

“I’d rather see 3 percent and have it drawn out more. That’s what I’m asking for,” Leon said, adding the three-pronged diversification plan has been great to get capital improvements done around the city.

“Tonight was the first view of what the budget might look like. We’re looking into areas we can cut and enhance,” Leon said. “We want the service in the city to remain the same.”

In other business, utilities director Jeff Pearson gave an analysis of the utilities water and sewer rate structures, with the help once again from Burton & Associates.

In the executive summary, it was recommended that no rate adjustments be made for FY2016, adding that current projections did not identify the need for increases for the foreseeable future.

An increase in the irrigation rate, however, is an option included in the proposal. The potential adjustment plan calls for a $1 increase to the monthly charge, which would provide an estimated $500,000 in revenue annually.

At least one resident wants a closer look at the rate structure.

During the public input phase near the conclusion of the meeting Steve Good, a resident of Coral Cove Condos, expressed his displeasure at what he says is the unfairness of the rate structure, which penalizes people who live in large communities with a single meter, as opposed to single-family homes that also use one meter.

“What you see in some of these bigger developments is that builders put in a single meter at a smaller cost. Unfortunately, the way the rate structure is, instead of one house they’re serving 289 (like Coral Cove),” Leon said. “These people are paying more than what they would if they were single-metered, which has artificially lowered the rates for single-family homes.”