Punta Gorda eyes job cuts, new fees to fund 2014
PUNTA GORDA — The City Council considered a long-range financial plan Wednesday that suggests eliminating four positions and levying new assessments on all property owners instead of property taxes on some to pay for firefighting and road repaving.
The council approved those alternatives to help fill a projected $1.2 million gap in the 2014 budget, after a presentation by city controller Sharon Knippenberg laying out a financial plan for 2013-2017.
Councilwoman Carolyn Freeland suggested the city, which now pays for firefighting and roads from its general fund, instead assess all property owners either a flat fee or charge by the square foot for the paving program. She called it a “fairness issue.”
Freeland cited information in the plan noting that churches, nonprofit organizations, the owners of properties valued at $50,000 or less and others who qualify for multiple homestead tax exemptions pay no property taxes.
Those exempt properties represent $44 million in nontaxable property value.
“It’s not fair that there are residents here that are paying for our roads and others who don’t (pay) that are getting the luxury of using them and having a beautiful community,” said Freeland.
City staff also suggested in the plan all property owners be levied an assessment instead of the property tax to pay for the fire department.
Mayor Bill Albers said he was willing to consider that suggestion. However, depending on how the assessment is crafted, it could wind up reducing the amount paid by the owners of the biggest houses and shifting their burden to the owners of the smallest, he warned.
“There are people that are going to say they’re the people who can least afford it,” Albers said.
The financial plan assumes property values declined in 2012 by 2 percent. That would result in a decline in ad valorem tax revenues of $135,000 for fiscal year 2014. The city expects to collect $6.7 million in ad valorem taxes this year to help fund the city’s $18 million general fund.
The plan also assumes the tax rate will remain the same as this year, 3.2462 mills. A mill is a $1 tax on every $1,000 in property value.
Even if salaries aren’t increased, the rising cost of pensions, health insurance, workers compensation and property insurance will drive up expenditures by 3 percent. That would result in a deficit of $1.2 million next year, Knippenberg said.
The plan forecasts property values will level off in 2015 and rise by 1 percent to 1.5 percent in 2016-17. That would still result in annual deficits of up to $2.8 million.
“The general fund cannot support itself beyond the existing year without an increase in revenues or taking funds from reserves,” Knippenberg said.
The council endorsed City Manager Howard Kunik’s recommendations to eliminate one position in each of the following departments: clerk’s office, finance, police and public works. That would save $263,000.
The council also agreed to draw $150,000 from an infrastructure sales tax fund instead of the general fund to pay half the cost of a $300,000 reroofing job at the city’s public works and utilities complex. The other half would come from a utilities fund.
The elimination of the public works position would stem from a cut-back on mowing. “That will be public-service affecting,” noted Albers.
Kunik, however, pointed out the council’s decisions substantially pared down the looming deficit.
“So, again, we’re well on our way,” Kunik said.
The council will next discuss its budget in April.