ST. PETE BEACH — City commissioners voted to adopt the same millage rate the city has had since 2015, 3.15 mills, while putting an emphasis on being able to fund expensive capital infrastructure improvements during 2022 and beyond.
During recent budget workshops, Assistant City Manager/Finance Director Vincent Tenaglia told officials the city was able to weather any drop in revenue during the height of the COVID impact with a “tremendous growth in parking revenue,” as visitors flocked to the beach for entertainment, and an upsurge in building plan reviews and permits, as the city’s building moratorium comes to an end.
“Both items saw a collective increase of 300 percent in revenue,” he noted.
In addition, Tenaglia told commissioners Penny for Pinellas sales tax revenue is up 10 percent, while half-cent sales tax revenue was up 14 percent, this fiscal year over last.
City Manager Alex Rey said the fiscal year 2021-22 budget “generally holds the line on expenses, with the few areas where we are adding money related to strategic planning initiatives. Revenues in the general fund had a nice level of growth; we are basically getting about twice as much revenue growth as we have expense growth in the general fund operations. That allows us to increase the amount we put toward capital, towards infrastructure.
“Philosophically, we had talked for a couple of years about a $5 million target from general fund operations to capital to address infrastructure every year. This year we are inching our way towards that number,” the city manager told commissioners.
Rey cited “significant progress” on capital issues such as bridges, piers, road resurfacing and park upgrades.
However, short-term issues still must be addressed, he said, including a commitment to seawalls and dune crossovers.
“Of course, we have the big risk in terms of what are we doing as a result of the water threats analysis,” he said.
Mayor Al Johnson said the water threats analysis “is the thing that scares me, and we have a huge subaqueous line replacement coming down the pike, which is going to be close to $10 million.”
Rey recommended maintaining the millage rate “for this year and the next few years. We’re seeing and talking about a lot of economic development that’s going to be happening in the city. But under the best of circumstances a lot of those big projects we are talking about are going to be two-year projects in terms of planning, developing, construction, hitting the tax rolls in 2023-2024. That means it hits budget years in 2024-2025.”
Rey added, “I would say for now we are on the right track,” and the city should maintain that track and put money back in infrastructure.
Johnson asked if the city is going to be able to accurately estimate the costs for improvement projects.
Rey said he is currently working on a financial analysis to determine who and what fund pays for certain portions of the improvement fixes, based on the consultant engineers’ reports. “If we are going to borrow money at that time, we want to have surplus in the general fund to be pledged to that,” Rey told commissioners.
Tenaglia told commissioners keeping the millage rate at 3.15 will raise $10,980,696 or $714,269 more than last year, because the city’s property values rose by 5.07 percent. To take in the same amount of revenue as last year, the city’s rollback millage rate would be 2.9451. A mill is equal to $1 for every $1,000 of assessed property value, minus exemptions.
“We are the lowest millage of any full-service municipality in Pinellas County,” Commissioner Melinda Pletcher said. “It’s nice to be able to stay at the same level and still cover the costs that we have ahead of us.”
Commissioner Ward Friszolowski said keeping the millage at the same amount “allows us to make the improvements we’re trying to make, which are sort of expected, but we want to keep making things better and this affords us the ability to do that.”
Friszolowski added, “We are pretty fortunate that we are able to take money and put it towards capital improvement, and have a pretty significant unreserved, unlisted fund balance. Hopefully we don’t need it, but we might need it in an emergency.”
Public hearings are scheduled for adoption of the budget on Sept. 13 and Sept. 27.