TWO BIG COUNCIL VOTES SET CITY’S COURSE

At the City Council’s regular meeting on Tuesday, September 15, the Council voted on the first reading of an ordinance to change our City Charter to allow the Council to waive the requirement for residency by the City Manager by a super majority vote, (4 votes or more).   Upon an affirmative vote on second reading, probably at the next regular Meeting on October 6, the City Council will be free to offer the permanent City Manager position to Jim O’Reilly as has been their expressed intent.

In so voting, the Council expressed their preference for leaving a residency requirement for our City Manager in the City Charter in opposition to the Charter Review Committee’s position that only residency in Pinellas County be required.  The Charter Review Committee feels that by eliminating the Gulfport residency requirement a broader group of applicants would be attracted to an opening in the City Manager’s position.  Hopefully, citizens will get the opportunity to vote on this issue in the future.  That will be up to the City council unless a proper petition is filed to change the Charter by referendum.

At a Special City Council Meeting on September 17 the Council reversed their vote on first reading of an ordinance to set this year’s mil rate at 3.4742 mils per thousand dollars of assessed valuation on second reading of the ordinance.  Their vote on first reading, by a 3-2 vote was to set the mil rate at 3.855 mils.  The final second reading vote was 4-1 with only Vice Mayor Worthington voting in the negative.

Fifteen minutes before the Meeting began almost all the seats in Council Chambers were full of citizens who were clearly opposed to setting the higher rate when the staff had presented a “balanced budget” at the lower rate.  Sure enough, at the public comment portion of the article, a steady stream of citizens spoke in favor of holding to the lower rate.  Interestingly, a vast majority of the speakers were residents of  Pasadena Yacht and Country Club,  where a substantial majority of Gulfport’s real estate tax dollars come from.

The essence of the debate appeared to be whether the City would spread small tax increases over the next few years that are universally predicted to be fiscally difficult or enjoy a small bit of tax relief this year.  A secondary issue was raised and probably requires more discussion.  That issue is about our surplus: whether we should preserve our $4,434,115 surplus for future emergencies and if we are to preserve it, how large should it be?

While the 2009-2010 budget that was adopted by the City Council is technically “balanced,” it was necessary to take almost $1,100,000 out of surplus funds and call it “revenue,” to create a balanced budget.  In other words, current revenues from all sources fell almost $1,100,000 short of planned expenditures.  The shortfall was caused primarily by a 10.2% drop in property values and the implementation of the second $50,000 Homestead Exemption.

The Administration has reported to the Council that the $1,100,000 would be leftover funds unspent at the end of FY 2008-2009 that would be placed into the surplus fund leaving our surplus essentially intact.  The Administration has not been able to provide an accounting of these funds since they really wont be known until the end of this fiscal year.

Some observers have questioned the Administration’s estimate of this year’s surplus, indicating that it probably will be closer to $700,000 than $1,100,000.  Expressing great faith in our Administrative staff, the majority of the Council Members chose to believe in the $1,100,000 figure.  Others on the Council indicated that even if the larger surplus didn’t occur this year, a small reduction in the surplus could be justified under the circumstances.

Because the city opted to take any potential shortfall out of our reserves and to face future shortages when and if they occur, it is more than likely that future raids on the city’s reserve funds are in the cards.  Raiding the reserve funds is a lot easier decision than making hard cuts in staff and services that may, in the long run, be required if current revenues continue to fall.

In an ironic twist of fate, The St. Petersburg Times published their lead editorial on the same day as the Council Vote whose headline read, “Draining reserves is no way to run city.”  In the editorial, The Times said in part, “….they should avoid spending city, (St. Petersburg), reserves on recurring expenses.  That would only dig the budget hole deeper for the following year, when property taxes and other still will be declining.”

Determining the appropriate size and potential uses of our surplus as well as improving the efficiency of operations and the productivity of the city staff almost certainly will be a continuing task for our Administration and City Council over the next few years.  Let’s hope that the citizens who came out in defense of their lower tax rate will add their considerable talents in helping the city get done what needs to be done.

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