The Longboat Key Town Commission received June 1 a preliminary 2009-10 budget, which includes a $498,740 deficit and the second, consecutive proposed millage increase to erase that shortfall.
The new budget, including capital spending, totals $14,375,036 — down 3.92% from the $14,961,643 budget in the current fiscal year. That’s a reversal from last year’s 2008-09 fiscal year preliminary budget, which showed a 4.02% increase in total spending.
The budget shows the town beginning the fiscal year Oct. 1 with a balance of $4.7 million, a decrease of 10.48%, or down $551,634 from the previous year.
The preliminary operating budget forecasts a decrease in revenues, including transfers, by 2% and a 3.92% expenditure decrease, including capital, when compared to the current fiscal year.
Overall, operating expenses, including personnel costs, have been reduced by $684,779, or 4.75%, in the 2009-10 preliminary budget when compared to this year’s budget.
For Longboat Key taxpayers, the town administration is suggesting the Town Commission erase the projected $498,740 deficit by voting to raise the tax rate 6.4% to 1.5967 mills.
And, Town Manager Bruce St. Denis is asking the Town Commission to consider adopting the rollback millage rate of 1.6751 mills as the budget process continues this summer, which would be an 11.7% increase over the town’s current 1.5 millage rate.
One mill is equal to $1 for every $1,000 of assessed valuation.
The rollback rate is the maximum amount the millage would have to be raised on new property values to bring in the same amount of tax revenue compared to last year.
The millage, St. Denis reports, needs to be raised to maintain the town’s current level of service in a budget year that includes a 10.1% average decline in island property values (see box).
If adopted, the increased millage would mark the second time in nine years the Town Commission has increased the town’s property-tax rates. The commission will set its maximum millage rate at its 7 p.m. July 6 regular meeting.
Anticipating a loss in revenues for the second year in a row, St. Denis states in his budget message that the fiscal year 2009-10 budget “has been prepared as conservatively as possible.”
Noting that sales-tax revenues and interest earnings are coming in approximately $263,000 less than anticipated in the current fiscal year, the preliminary budget for the next fiscal year starting Oct. 1 reduces anticipated revenues by 10%, or $57,000. St. Denis said the anticipated drop in sales-tax revenues this year would be made up with reserves, and an increased millage rate will offset revenue losses in fiscal year 2009-10.
To stave off a further shortfall, town administration worked to produce early-retirement options for employees that are estimated to save the town $152,500, cut health insurance costs by $85,000, cut worker’s compensation costs by $130,000 and eliminate $330,000 worth of employee cost-of-living and wage increases.
That’s a reversal from last year’s 2008-09 preliminary budget, which called for personnel costs to remain flat and included payroll grade increases totaling $184,091.
Layoffs in the Planning, Zoning and Building Department also reduced expenses by $200,000, while pension plan amortization issues with the state appear to be resolved.
St. Denis also recommends that the annual indirect cost transfer of $287,000 from the building department to the general fund be eliminated this current fiscal year to allow the department to end the year with a positive net balance. For now, the general fund reserve will be used to make up the indirect cost transfer in fiscal year 2008-09.
The building department, however, is still expected to produce a $65,000 shortfall by the end of fiscal year 2009-10. A building department rate and fee-structure study expected to be complete in September will most likely recommend an increase in the cost of permits and charges for services to maintain the financial viability of the building department, which is labeled as a town enterprise fund.
The budget also includes $2.36 million for erosion-control structures near the North Shore Road beach access, which will be funded by tourist tax funds and funds from the beach capital project fund.
And, a 44.43% increase in Longboat Key Public Tennis Center costs, or $143,385, is attributed to increased costs for the new tennis center building and the future addition of a contract tennis pro who will be brought in once the new teaching court is built later this year, according to Finance Director Tom Kelley. The tennis center, Kelley said, is expected to break even in 2009-10 and will begin turning a profit once entire fiscal years of revenues for the new facility are accounted for in future budget years.
The commission will hold its first of several budget workshops at 2 p.m. Wednesday, June 10, at Town Hall, 501 Bay Isles Road. The recommended budget will be presented to the commission in early August, and the budget will be adopted on second reading at a special meeting at 5:01 p.m. Monday, Sept. 28, at Town Hall.
To download a pdf of the Operating Budget Variance Report, go to http://www.yourobserver.com/content/LBBUDGET-18.html and click on the Download File link.