As the budget season arrives for local taxing authorities the estimates are turning into hard realities.
For Port St. Joe commissioners on Tuesday, they chose to delay any hard decisions until a preliminary budget is placed before them.
But, they also left the regular bi-monthly meeting with sobering reminders of the task ahead.
Commissioners are likely to maintain the current millage rate at least one more year, a millage, 3.5914, that has remained the same for more than a decade.
“We feel, from staff’s viewpoint, that we are pretty good position,” said financial officer Mike Lacour. “But there are a lot of unknowns still out there.”
Commissioners must make a decision on a tentative millage rate before the end of the month but there compelling reasons to leave the millage alone this year despite pressing financial issues, from health insurance to filling two openings at the police department.
The central rationale, City Manager Jim Anderson said, is a grant from Triumph Gulf Coast to help offset ad valorem tax losses.
According to the tax roll released last week by Property Appraiser Mitch Burke, the city’s tax base declined by nearly 7 percent.
In dollars, that translates into a decline of roughly $75,000 in revenue based on the current millage rate.
That Triumph grant, submitted in collaboration with the county and school district, brought roughly $84,000 to the city, which would “make (the city) whole” this year despite the loss of taxable value
Anderson added that should the city increase the millage rate it would likely have to pay back a part or all of the Triumph grant dollars.
A component of the grant agreement was that millage rates would not be increased and the grant funds represented a good faith estimate of what the taxing authorities would lose in property tax revenue.
“(The estimate) was just about on the mark,” Anderson said.
The Board of County Commissioners, while taking no formal action, has indicated the countywide millage rate will remain the same for the coming fiscal year, 7.100.
The major problem for the city in all that mathematics is that property taxes are just one component of funding city services.
Of greater concern are utilities and the loss of customers and revenue at the same time the price of operating water and wastewater plants continues to grow.
As of this week, after reporting to be roughly 400 customers down after Hurricane Michael, the city remains down 257 utility customers compared to pre-Michael.
That, roughly speaking, translates into a $300,000 annual drop in utility revenue.
Buzzett noted the Triumph funds are a one-time occurrence; the utility issues will continue.
“Next year we are going to be in a bit of a hole,” Buzzett said. “We need to think long-term.
“I don’t want folks out there to feel we are doing well and we are not … We need to find 250 customers.”
Utility costs are also increasing, Buzzett noted.
He requested staff reach out to Duke Energy on the potential and viability of moving to solar power for the wastewater and water plants; the city pays roughly $200,000 apiece in electric bills to operate the plants.
“There is room at both places for (solar panels),” Buzzett said, adding that Madison County has an array of panels providing a significant amount of power to the county.
“So it must be more viable financially than it was a few years ago,” Buzzett added.
In addition, costs at the water plant will continue to rise due to the cost of chemicals to treat the water.
Estimates for chemical costs for the coming year are inching to $200,000, a cost Buzzett said the city can not afford to shoulder.
“I would like to get that down to $150,000 or so,” Buzzett said.
He said he would like to go out for bid on the three most expensive chemicals in use at the plant, adding the city had been using the same vendor for years and maybe could get a better price by bidding.
Commissioners will first take up the preliminary budget and determine a millage rate during their next meeting July 16.