County, smaller cities grapple with who pays for services
Published: Wednesday, August 1, 2007 at 8:34 p.m.
Last Modified: Wednesday, August 1, 2007 at 12:00 a.m.
While Gainesville and Alachua County have been picking over the dollars to figure out how they can comply with state-mandated tax cuts, a few of the smaller cities actually will have more money to spend in 2008.
The situation could spark debate over payments by those cities for services provided by Alachua County, including fire and police protection.
Newberry will collect $59,437 in added property tax revenue, according to data from Property Appraiser Ed Crapo. Hawthorne will collect an additional $27,464 and Lacrosse $1,550.
The gains are attributed to new growth, but officials with both Hawthorne and Newberry said the money will not go far.
Newberry City Manager Keith Ashby said he is planning to make cuts in the 2007-08 budget to prepare for what may be larger cuts in 2008-09.
"Our increase in size overcame the (state-mandated) reductions. If we were on the same rate as everybody else, we'd be losing, too. But the others didn't have the growth rate that we did," Ashby said. "I was anticipating a reduction. I still have to believe if the worst-case scenario happens next year, there will be a significant reduction. I'm preparing for that in the 2009 budget by decreasing the 2008 budget."
Hawthorne City Manager Chad Shryock said Hawthorne's boost in revenue is due to a new pharmacy in town, which upped the value of property in Hawthorne.
"We had a new CVS store. There have been a couple of houses also, but the CVS is really the big-ticket one," Shryock said. "We are reducing our millage rate. The gross taxable value of property in the city grew, so we are actually going to collect more in property taxes than we did last year. We budgeted an increase in our police department."
Meanwhile, Alachua County is already pressing Hawthorne for more money for fire service and continuing to encourage Newberry to begin levying a municipal services tax to pay for sheriff's patrols. Taxes for general services, law enforcement and fire are already levied on unincorporated property owners.
County officials say the changes are needed because the county is having to cut its budget and because the current funding is inequitable with incorporated residents subsidizing service to the cities.
"We believe the (municipal services tax) offers a number of the smaller rural communities an opportunity to have sheriff's protection and do it in such a manner that is fair to all of the unincorporated residents as well," County Manager Randall Reid said. "The overall thrust is that in terms of law enforcement and fire, we look at having less revenues in the future and less growth. I think this is going to lead to more expedient discussions on how the smaller cities and the county, as a service provider, either consolidate or change our current operating relationships."
The Florida Legislature earlier this year ordered cities and counties to cut their budgets by varying amounts, depending on how much their property tax increased during the past several years. Only revenue from new construction during the past year could be added to the budgets. In most cases, money from new construction did not offset the cuts. But it did in the case of Hawthorne, Lacrosse and Newberry.
Deeper cuts may be needed next year. In January, voters are set to decide if the state should increase homestead exemption from the current $25,000 to 75 percent of the home's value for the first $200,000 of value. However, if the measure passes, the Save Our Homes program, which caps increases in property value to 3 percent a year, would be phased out over time. Current homeowners could opt to keep Save Our Homes until they sell the house should the measure pass.
Alachua County Fire Rescue Chief Will May said the county wants to renegotiate the agreements it has with several small cities. Hawthorne charges its residents an assessment for fire service that it uses to pay ACFR, which has a station in the city that serves both the city and surrounding unincorporated area.
"We recalculated what it actually cost to run the fire station in Hawthorne. The numbers they were paying were several years old," May said. "The distribution of emergency calls has become more prominent in the corporate limits, so that would skew the split. And there were some things in the past they had not paid for. The county cannot continue to subsidize that service."
May said the recalculated cost proposed by ACFR to provide fire service to Hawthorne is about $271,000. The previous cost to Hawthorne had been about $105,000. The Hawthorne fire assessment generates about $53,000.
Shryock said the new ACFR calculated cost is about what the city takes in from property taxes. Hawthorne earlier this year opened its own police department and could follow suit with a fire department.
"We are looking at the possibility of forming our own fire department. I'm not excited about it," Shryock said. "I wrote to (Reid) that we would be willing to pay what the county would receive in (municipal services tax) and if that is not acceptable, then I would be recommending to the city commission that we start our own department."
May said that if Hawthorne cannot reach agreement with the county, ACFR could take its truck out of the city.
"I'm trying not to anticipate that, but we don't know," May said.
Newberry has its own fire department, and Ashby said the county is considering cutting the payments it makes to Newberry for assistance in fires in the surrounding unincorporated area.
Newberry does not have its own police department. Ashby and county officials say they are continuing to discuss Newberry joining in the municipal services tax for law enforcement.
"That dialogue is still going on between the county, the sheriff and the city. A decision has not yet been made," Ashby said.
<i>Cindy Swirko can be reached at 352-374-5024 or swirkoc@ gvillesun.com.</i>
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