Council Faces Tough Decisions to Balance the Budget: 'We can't continue to go on like this'

The Gulfport City Council examined and discussed concerns, ideas and questions surrounding City Manager James O'Reilly's proposed 2011/2012 operating budget. The current proposal includes: increasing the millage rate from 3.4742 to 3.8176, increasing sanitation and recycling fee's by 12.5%, increasing general governmental fees by 10% and using $622,359 from the general reserve fund.

But at Thursday's City Council Workshop Vice Mayor David Hastings proposed more drastic measures to balance the budget.

"We have to eliminate and outsource the dispatch, we have to do it. We have to eliminate and outsource the lawn care."

Hastings estimated that those items would save the city about $400,000 every year starting in the next fiscal year.

Hastings added to his proposal to increase water and sewer rates by 10%, "I think if we do that, we're gonna bring in another $350,000 each year if we do that."

"Our expenses since 2002 have exceeded our revenue. The gap is widening. Our general reserve fund balance has been on a steady and sharp decline since 2003.

We can't continue to go on like this. . . We can't continue to go on with the budget that you have proposed," Hastings said.

He also recommended raising the millage rate from the proposed 3.8176 to 4.0. During the discussion, Council members Barbara Banno, Jennifer Salmon and Mayor Mike Yakes agreed that they want the City Manager to factor in a millage rate of 4.0.

As far as the idea of outsourcing the dispatch center, Salmon said it's "worth revisiting". Banno added that she wants the council to take a look at that "a little bit more." The mayor said "we need to look deeper into that."

If the city were to outsource the it would save the city about $200,000 in the first year about about $270,000 once the maintenance and equipment is in place for dispatch services through the Pinellas County Sheriff's Office.

Also during the session, Banno and Salmon brought up ideas to generate revenue. Banno suggested looking into ways to invest money into services and projects that would pay for themselves over time, such as expanding services at the and adding space for more boats.

"Some of these ideas that we might have unfortunately cost us money. . . I'd like you to look into the dry storage that we have right now. It's 85 spots. At 100% occupancy, it's bringing in $8,500 a month. If we were to spend $15,000 to make some upgrades there and increase capacity another 25 to 50 spots. . . worse case scenario with an additional 25 spots, we're talking that might bring in another $30,000 a year. . . that would pay for itself in 6 months."

Salmon shared ideas like charging for the beach pavilions, using an automated computer telephone system for code enforcement complaints and requiring landlords to pay for a business fee.

"I think we need to do things that will improve our property values," Salmon said.

Salmon also mentioned that perhaps the city could generate more revenue by enhancing the marina rather than building a mooring field. Salmon added that the council should re-evaluate the dispatch center and parks because those are larger amounts of revenue as compared to her other ideas.

During public comment residents Bob Newcomb and Doug Hudson expressed their concerns.

"If we continue on our present course, our reserve funds will be gone in 7 or 8 years, that's alarming," Newcomb said.

"When I look at these numbers, it's alarming to me. If some really tough decisions aren't made this year . . . I'm afraid of what's going to happen next year," Hudson said.

Following the discussion City Manager James O'Reilly said he would look into the suggestions including outsourcing the dispatch center, outsourcing lawn care, increasing the millage rate and increasing water and sewer fees.

City Council members will discuss the new information at a workshop on Thursday, August 25, 2011. Public hearings are set for Thursday, September 8 and Wednesday September 21, 2011 at 7 p.m. at Gulfport City Hall.

Council member Sam Henderson was not in attendance.