City Proposing Higher Millage Rate

New Port Richey city officials are proposing a higher millage rate in the coming fiscal year.  In fact, the city finance director is suggesting the council consider the idea of raising the millage rate as high as it’s allowed to go.

Hang with us here because it’s going to get complicated.

New Port Richey’s taxable property value took an 11-percent plunge this year to $498 million.

The city's proposed budget for fiscal year 2013 is balanced using a proposed millage rate of 9.43 mills, city finance director Doug Haag told city council members at a work session Tuesday. This new rate, an 11 percent increase over the current year, would generate a total of $4.4 million in tax revenue. That's about the same amount generated as this current year.  The current millage rate is 8.38 mills.

However, raising the millage to the maximum rate allowed by state statute, which would be 10 mills, would generate about $267,000 more in revenue than would be generated with the proposed rate.

“We may want to approve a tentative rate of 10.000” mills when the city council sets the tentative millage rate July 24, Haag suggested in a memo. That would “provide the maximum flexibility” until the city adopts it fiscal year 2013 budget. 

"I'm not sure if that's the best solution right now, but I think we need to discuss it," Haag said.

On Tuesday, Haag just presented the numbers to the city council. Officials will entrench themselves in the matter of millages and fee increases next week.

Raising the millage to its maximum rate could generate $4.73 million in revenue.

Haag said that if the maximum millage is set as the tentative rate, it could still be lowered before the final budget is approved.

Under Florida Statute, raising millage to its maximum rate requires a super majority of four-out-of-five city council members to vote in favor of the increase.

City Council members didn’t really give any clear indication of what they intended to do regarding setting the millage rate.

"Faced with a 17 million dollar shortfall over the next five years, the city's reserves begin to look pretty puny," Deputy Mayor Rob Marlowe wrote in an e-mail.  "Going to the maximum allowed rate would get us one more year down the road before we exhaust those reserves."

Financial Worries

Confronted with dire financial projections, city officials are proposing a $16.5 which starts Oct. 1, 2012. The general fund pays for police, fire, public works, parks and recreation and other common services. To balance that budget, the city manager is proposing cutting 24 city positions. Fifteen of those positions would be layoffs.

The general fund is also balanced using $130,000 in reserves and a small contingency of $250,000. There's a host of other sources of revenue that are used to fund the budget, including taxes and fees, Haag said.

The city deficit could reach $17 million in 2017 if some financial holes aren't plugged.

The city’s tentative millage rate is going to be discussed at a July 17 city council meeting. City council members are being asked to set a tentative rate July 26. A final rate hearing for fiscal year 2013 is set for Sept. 26.

Updated with a quote from Deputy Mayor Rob Marlowe.