INDIAN SHORES – Town councilors began discussing whether they should adopt a rolled-back millage rate for Fiscal Year 2018-2019 during their July 10 workshop.
Councilors were provided a comparison of millage rates to consider – ranging from the current rate, 1.87, to the rolled-back rate, 1.7449. The comparison chart presents a dozen potential millage rates and includes “what (the town) would generate with ad valorem revenue and how much we would need to transfer from reserves based on that millage rate in order to meet proposed expenditures,” said Town Administrator Bonnie Dhonau.
The higher, current millage rate would require the town to transfer only about $90,000 from reserves to meet expenses, while the rolled-back rate would require a transfer of $205,000.
Outside two “big ticket items,” which include about $73,000 for police department salary increases, the town should only see a 2 to 2.5 percent increase in expenses next year, Dhonau added.
When setting the millage rate, what it comes down to is how much money the city should keep in reserves, said Mayor Patrick Soranno.
“What is the right, optimum number for reserves? We are in a very fortunate position, we’re probably the only town in Pinellas County that has more in reserves than the annual budget,” he said.
The financial outlook for the town is positive, he added. Penny for Pinellas was approved by county residents a fourth time and the town will see a significant increase in new, taxable residences – more than 60 over the next 18 months, he said.
“The long-term outlook for the town of Indian Shores is excellent,” he said. “What do we do now based on what we know … Do we go down to the rolled-back rate? Do we stay at the 1.87? Part of the solution we have is how much is enough for reserves, and unfortunately, we don’t have an answer from an actuary.”
Dhonau said that town staff hasn’t “really begun any earnest work on the capital improvement budget yet.” She expects that the town will need to draw from reserves for several of these projects, including $99,000 for police department equipment and $130,000 for the public services department.
Councilor Mike Hackerson said the council “shouldn’t think of (town reserves) as a slush fund.”
Vice Mayor Diantha Schear agreed.
“We have money in reserves, but it’s for specific things. We shouldn’t consider it extra money,” she said.
Hackerson also felt that the millage rate should remain at 1.87.
“I think with 1.87 … we’re still drawing from the reserves. It’s a factor in my mind,” he said. “Why change it? Why not keep it?”
Councilor Michael Petruccelli felt residents would appreciate a lower millage rate.
“Every year, we talk about, well, if we do (lower the rate) and there’s a downturn, then we will be caught short,” he said. “We’ve been doing this more than a few years and property owners have had no relief, but a promise of services in the future. I think we should consider that a rollback will be appreciated, whether it’s $1 or 2 percent, and we will have the opportunity at the next election to really delve into it.”
Schear expressed concerns about “lower(ing the millage rate) this year and then rais(ing) it” next year.
The mayor agreed.
“As much as I want the rollback rate, I don’t want to create a roller coaster,” he said.
He suggested the council and town staff work to create “a forecast” of the city’s finances for the next five years and then use that information to determine the millage rate.