City commissioners move toward property tax hike


Gainesville City Commissioner Randy Wells, left, Mayor Ed Braddy, center, and Commissioner Todd Chase take part in a Gainesville Regional Utilities budget meeting on Thursday in this image from the city's online video of the meeting.

Published: Thursday, July 25, 2013 at 11:08 a.m.
Last Modified: Thursday, July 25, 2013 at 6:21 p.m.

For decades, the transfer of revenues from Gainesville Regional Utilities has been a significant lifeblood for the city's general fund.

More evidence of the impact the utility's finances has on the city's coffers was on display at Thursday's City Commission budget meeting.

One of the moves that GRU has made to ease the impact of a rate increase from the soon-to-be-operating biomass plant has been a reduction in the base-rate portion of electric bills. That was done because the other part of the bill, the fuel charge on customers, which will cover the purchase of power from the biomass plant, was rising significantly.

Since Gainesville, like other cities and counties in the state, charges a utility tax on base rates, the move to cut the base rate for electricity led to a $712,000 loss in revenue for general government — a late-in-the-game revelation conveyed to commissioners Wednesday afternoon.

"Quite frankly, we just did not anticipate this magnitude of a change," Administrative Services Director Becky Rountree said, referring to GRU and general government budget staff.

The news did not sit well with Mayor Ed Braddy during the early hours of Thursday's meeting. Braddy said it was a "major" accounting mistake that resulted from unprecedented "financial gymnastics" that GRU finance staff had been required to perform in order to deal with the rate and financial impact of the biomass plant.

Braddy then criticized city commissioners and charter officers that he felt "dismissed" members of the public and other elected officials, specifically Commissioner Todd Chase and himself, who had pressed for details on the steps GRU was taking to deal with the biomass contract.

Through the day, the hit to the utility tax revenues, which still brings in more than $10 million for the general fund, led to a series of moves to balance the budget.

The things that were altered to accommodate the loss in revenue included:

-- $300,000 that Commissioner Yvonne Hinson-Rawls sought for a disparity study looking at the city's track record of hiring and contracting with minorities and women was eliminated.

-- Employee raises were reduced from 2 percent to 1.5 percent.

-- The property tax rate was increased by some 1.8 percent.

The commission also dipped into reserves for $88,000.

In the end, the property tax rate and a nearly $107.2 million budget received tentative approval in two close votes, with the makeup of the majority changing each time.

In a 4-3 vote, the City Commission raised the property tax rate from the current budget year's amount of a little less than $4.50 for every $1,000 of taxable property value to just under $4.58. That's the so-called "rolled back" rate projected to bring in the same amount of property tax revenues that the city received this budget year.

Susan Bottcher, Hinson-Rawls, Lauren Poe and Randy Wells were in support and Braddy, Todd Chase and Thomas Hawkins in opposition.

With the biomass plant pushing electric rates to among the highest in the state, Braddy said it would send the "right message" to hold the line on property taxes, even if the commission dipped deeper into reserves to balance the budget.

Hawkins, conversely, favored an increase in the property tax rate to add programs to the budget. His primary focus was an additional $500,000 — whittled down from an initial $1 million — to fund the first year of a $5 million plan to improve pedestrian and cyclist safety.

The pedestrian/cyclist plan would, among other things, include installation of traffic signals at midblock crosswalks, more sidewalk construction and bicycle ramps at roundabouts.

The initial vote on the budget, which has to come back to the City Commission in September, also passed 4-3, with a different majority.

Bottcher, Braddy, Hinson-Rawls and Wells were in support and Chase, Hawkins and Poe were in opposition. Chase said the city needed to make significant cuts with the biomass plant coming online and the transfer of revenues from GRU, the single largest piece of the budget at $38.1 million, likely to decline in future years.

"It's hard to make hard decisions," Chase said. "We're not making any."

Like Hawkins, Poe would not support the budget because he wanted to see more things funded. They included the disparity study, the bicycle and pedestrian safety program and more service improvements to the bus system.

"I'm devastated that we didn't fund the bike ped safety program," Poe said. "To me, that's such an issue of public safety, literally of life and death."

In balloting during the day, Bottcher, Hinson-Rawls and Wells each supported adding items that did not make the budget or eliminating things that stayed in it. In the end, they did vote to move forward with the total budget.

Debate swirled around raises. Chase said GRU and general government would have a combined $3.8 million more to work with if not for raises in recent years and sought to eliminate them to hold the line on property taxes and to reduce the transfer from GRU.

Hawkins said he saw Chase's point but favored raises to keep up with cost of living increases and to be competitive in hiring and retaining employees.

Nathan Skop, a commission candidate in 2012, noted that the commission and mayor had received larger percentage raises than employees the last two years under an ordinance that has their salaries rising or falling with the consumer price index. Skop pushed commissioners to repeal the ordinance.

At Bottcher's request, the ordinance was referred to a commission committee for review.

The budget does improve bus service on several east Gainesville routes and staves off service cuts to a route serving Santa Fe College. Among other things, it funds positions at the Reichert House for at-risk youth and additional school resource officers in elementary schools.

It includes scheduled 5 percent increases in 10 city fees, including those for stormwater, solid waste building permits, false fire alarms, land development code applications and programs offered by the Department of Parks Recreation and Cultural Affairs.

The costs for parks and cultural affairs programs, except youth and children's programs, would actually increase more substantially — by 15 percent — under a surcharge recommended in the department's long-term master plan.

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