BELLEAIR BLUFFS – The city of Belleair Bluff’s financial outlook took a negative turn this year, due mostly to a looming payment of pension benefits to its former firefighters, which could now total up to $1.2 million.
Money has been set aside in the budget for the pension payout, the exact amount of which is still undetermined. Auditor John Houser in his annual evaluation of the city’s financial condition said the looming pension payout was the city’s most significant financial liability. The obligation has caused the city’s unrestricted fund balance to fall from $2 million to $700,000.
Houser gave his report at the Jan. 28 City Commission meeting.
At the end of 2011, the city had reserve funds that would provide 18 months of operating expenses. In 2012, that had dropped to eight months, due to the fire pension obligation, Houser said. The city’s unreserved net assets fell from $2.4 million to $1.1 million, with the pension issue again to blame.
Houser said the city’s revenues are similar to last year’s, but “the fallout” from funding the pensions has caused the overall financial situation to tighten considerably.
“The accrual of the fire pensions, that’s the big item,” he said.
The main effect of the pension obligation is that, though the funds needed have been set aside in the bank, the city has much less money available for other needs and projects, Houser said in a comment following the meeting.
Public Works Director Robert David said after the meeting that he did not expect the city would have to cut out any projects over the coming year.
“There is nothing planned that is not funded,” he said. “We will continue to find the dollars to fund the projects as needed.”
Not discussed was the possibility of a hurricane or other disaster requiring extra funds that would not be available.
The pension plan arose as an issue in 2009 when the Belleair Bluffs fire department became a part of Largo Fire-Rescue. The city had hoped Largo would take the Bluffs firefighters into their pension plan, but that did not happen.
The city then waged a lengthy battle with its fire pension board over annuity payments to the firefighters, offering less expensive “substitute trusts,” which are backed by the city rather than insurance companies, instead. The pension board rejected that offer.
Appeals to the state followed, during which time the cost of paying out the pensions escalated from around $700,000 to well over $1 million. The city’s total obligation in the matter, including legal fees, could now total $1.5 million or more, former pension board member Dave Fynan estimates.
The city’s finances have suffered a definite blow as a result of the pension issue. But auditor Houser pointed out after the meeting, “It’s still a lot cheaper than running a fire department.”
Officials meet on new fire station, but questions remain
Belleair Bluffs, Largo and county officials met to discuss the building of a new fire station on city-owned property across from city hall, Mayor Chris Arbutine reported. Arbutine said the meeting was focused on funding the estimated $2.7 million cost of the station.
The county wants to put a cap on the amount it will pay, and needs more information to determine what the total cost of the project will be.
Three options for placement of the building on the property were presented at that meeting. Belleair Bluffs favors an option, “2A,” which puts the most distance between the residential properties behind the station and the fire apparatus, to reduce noise from the station. It also places the firefighters’ living quarters at the back, nearer the residences.
“I told them we believe 2A to be the most acceptable,” Arbutine said.
As a result of the city’s preference, Arbutine said there was some consensus at the meeting toward option 2A. However, critical questions remain to be answered. The county has not said how much they will contribute toward the station cost, and Largo does not know what direction to go with the station.
“We’re still in the preliminary stages (of building the station),” Arbutine stressed. “More detailed site plans are needed before exact costs can be determined,” he said.
Resident Darlene Kavanagh complained that the residents are not having any input into the station’s design. All of the station options have exactly the same building – one story, about 6,000 square feet, City Clerk Debra Sullivan told Kavanagh. The only question is the placement of the station on the property, she said.
Arbutine said Largo Fire Chief Michael Wallace is satisfied that any of the options would work. The favored option 2A would put the fire trucks and the generator farthest from all residents, he said.
The station also would have a 6-foot wall around it, Arbutine told resident Wanda Rusinowski, who was concerned about sound buffering. “That’s low,” Rusinowski responded, noting the fire trucks are higher than that. City ordinances prohibit walls any higher, Public Works Director Robert David pointed out.
Arbutine promised to get more resident input as the station plans progress.
“We don’t have a set of plans yet. We need to have a better idea of what (the station) will look like. Right now we don’t have a clue,” David said.
Meanwhile, the station’s construction schedule is lagging far behind an estimate given by Chief Wallace last October, when he said work could begin in January.