CLEARWATER — This time last year, Clearwater finance officials were planning for the worst. The pandemic was raging, businesses were closing, and tourists were scarce. They said there was the potential for a $9 million shortfall in general fund revenues and the city would need a significant property tax increase in 2025 or risk running a deficit in the reserves.
Those same officials painted a much brighter picture May 25 during an early budget forecast for the City Council.
“The general fund forecast reflects a significant improvement in forecasted reserves as of Sept. 30, 2021, versus the previous forecast, as revenues through the pandemic prove to be more resilient than forecasted,” Finance director Jay Ravins said.
Ravins said there still might be some residual effects of the pandemic on property values, so the city is still taking a conservative approach moving forward.
But the good news is that the 0.7 mill increase, from 5.955 to 6.655, won’t be needed until fiscal year 2031 — six years later than last year’s projections called for, he said.
One mill is equal to $1 or every $1,000 of assessed property value.
Helping that delay is the $22.5 million the city is slated to receive from the federal government as part of the American Rescue Plan Act.
Ravins said the city already received half of it — about $11.2 million — last week and is expected to receive the rest in one year.
The city has until Dec. 31, 2024, to commit the money to projects and until the end of 2026 to spend the money.
Ravins said the COVID-19 relief money hasn’t been allocated for anything yet, but staff plans to put together a list and present it to the council.
He added that it does have some funding restrictions, but he doesn’t think the city will have a problem spending it.
“Especially with the caveat that there are water and sewer projects that are permitted, and those are big projects,” he said.