Council rejects two tax hikes

The Zephyrhills City Council spurns increases in the property tax rate and the water-use tax recommended by the city manager.

By MOLLY MOORHEAD
Published July 27, 2004

ZEPHYRHILLS - The City Council's message was clear from the beginning: This is not the year to raise property taxes.

In a workshop Monday, council members pored over a budget draft that included a half-mill property tax rate increase sought by City Manager Steve Spina. But Spina's reasoning, that rising costs and stable revenues added up to a shortfall, got nowhere with council members.

In a meeting later Monday, they voted to leave the tax rate at 6.42 mills, the same rate it has been the past 14 years. They also rejected Spina's proposed 10 percent water-use tax.

"I don't think the answer is to raise taxes," council member Cathi Compton said.

Said member Gina King: "I think that we can tighten our belts a little bit and find other ways to save."

A mill represents $1 for every $1,000 in taxable property value. So a person who owns a house worth $100,000, minus the $25,000 homestead exemption, would pay $481.50 in city taxes.

However, steady millage rates do not mean tax bills will remain the same as they were last year. Residents whose homes are assessed at higher levels would still see an increase in the bottom line unless the city adopted what the state calls a "rollback rate." That's the rate that would generate the same amount of revenue that was collected the previous year.

The tax rate increase and water tax would have generated $309,000 in revenue. Spina said $177,000 of that can be made up with Penny for Pasco funds - money the city will collect beginning in January from a countywide sales tax increase approved by voters in March. It will pay for things like lease payments on new police cars and the first payment on the city's new fire engine. Penny for Pasco money may be used only for capital items; vehicles are considered acceptable. To avoid cutting Penny revenues from capital projects tied to residents' quality of life, the city will delay replacing fuel tanks for another year.

Other small cuts left the balance still to trim at $132,000. Some possible targets include contributions the city makes to the downtown Main Street organization, the YMCA and chamber of commerce, and compensation to volunteer firefighters.

Although they didn't discuss them, council members left new impact fees on new construction in the budget, for parks, library use, and police and fire protection. They add up to about $1,500 per home.

The current financial trouble is due, in part, to an $800,000 accounting error in the current budget in which the amount was entered twice under revenues.

King chastised the city staff for the error and questioned why those responsible hadn't been fired.

"I'm not understanding how a mistake of that magnitude can go on undetected for so long," she said.

The tone briefly turned testy.

When finance director Cathy Familo owned up to the error, Spina jumped to her defense, saying, "You don't make mistakes, Ms. King, do you?' "

Compton quickly righted the ship.

"We're not going there," she said.

If further trimming still doesn't balance the budget, council members gave tacit approval to taking more from the $3-million in reserves. Spina already had included a transfer of $500,000.

Compton warned against making that a habit.

"It's definitely not good policy to borrow from your savings to pay your operating expenses," she said.

The city will hold two public hearings on the millage rate: at 6 p.m. Sept. 13 and 27.

In the meantime, Spina must find more areas to whittle down the nearly $30-million budget.

Said council President Clyde Bracknell: "We've probably given you enough to give you a headache anyway."

[Last modified July 26, 2004, 21:57:08]