Town tax rate to rise 25.8%

The town’s tax rate will rise 25.8% next month when the fiscal year 2010-11 budget begins Oct. 1.
At the Monday, Sept. 13 regular Town Commission meeting, all but one of the seven commissioners recommended and passed on first reading a millage rate of 1.8872 mills, up 25.8% from the town’s current 1.5 millage rate. One mill is equal to $1 for every $1,000 of assessed valuation.

Total operating expenses in the new budget total $14,244,733, up $1,125,720, or 8.58% higher, from the current budget that expires at the end of the month.

The new budget, including capital spending, totals $14,723,263, up $647,000, or 4.6%, from the current fiscal year.

The recommended budget was prepared based on a 9.3% island-wide reduction in property values.
For Longboat Key taxpayers, the proposed budget includes no debt service millage for Beach District A and Beach District B property owners, because the bond for the 2005-06 beach renourishment project will be paid off this year.

Beachside property owners will see a reduction in their tax rate because they pay for 80% of a town-wide beach project.

Bayside property owners, however, will see an increase in their tax rate, because their portion of the beach project debt is only 20% and the proposed millage increase is more than what they were paying for their portion of the beach debt.

Commissioner Robert Siekmann, the lone dissenting vote on both the millage rate and the budget votes, fought the consensus of his peers for more than an hour Monday night.

“I’m not so sure why a lower tax bill is a bad thing,” said Siekmann, noting that the loss of beach debt for one year would provide residents with some relief. “That sounds like good news to me.”

But Mayor George Spoll and the rest of the commission disagreed.

“We could have a lower tax bill for one year, but we will have tremendous shock when and if we pass the new bond issue for the upcoming beach project (in November 2011) and deal with the continuing drain on pension contributions,” Spoll said.

The comments led to one underlying factor: More than $20 million in unfunded pension liabilities is forcing the town to pay an extra $1.7 million in the upcoming budget and an extra $2.8 million in fiscal year 2011-12.

Brenner made the motion and received support for the higher tax rate, which also included a caveat to set aside $1 million of the town’s $5.1 million in reserves, which could be applied to offset future rising pension costs.

But Brenner made it clear that the $1 million would only be used for the pension plans once the commission was comfortable with the way town’s three pension boards handled the pension plans and losses.

“I would not give the pension funds a dime until I was comfortable with the way they were managing their affairs in our best interests,” said Brenner, who noted the town still is responsible for making up the plans’ shortfalls.

The $1 million will only be used in 2011-12 if pension costs rise more than anticipated. The commission reserves the right to hold on to the $1 million and is setting it aside in another account.

In the meantime, St. Denis made it clear that changes to the pension plans are coming but warned it would take time to see the results.

St. Denis noted that a three-year contract is supposed to be ratified this month that allows the town to modify the police pension plan for all new members. And the town is at impasse with the firefighters because it’s holding the line on that same stance.

“It’s not an overnight fix,” St. Denis said. “We need to look more long-term.”

The commission, however, demanded, at Commissioner Phillip Younger’s suggestion, that a pension workshop be scheduled in the coming months to start addressing the pension issue.

“I never thought I would be sitting up here voting to raise taxes,” Younger said. “And if it wasn’t for the pension situation, we wouldn’t even be in this situation.”

The budget will be approved on second reading at a special meeting 5:01 p.m. Monday, Sept. 27.

Contact Kurt Schultheis at [email protected].