Interim City Manager Ron McLemore last week unveiled a $16.2 million budget for the next fiscal year, calling it “fully funded” and “fairly aggressive.”
But McLemore’s no-millage-rate-increase spending plan also came with a warning about relying too heavily on reserves to balance future budgets, calling the practice “unsustainable.”
The concern comes amid an “anomaly” in the public-safety budget, a spike to cover salary increases caused by the recent unionization of Orange City firefighters, McLemore said Wednesday, July 12.
The city contracts with Orange City for fire services and with the Volusia County Sheriff’s Office for law-enforcement services. City Council members made it clear they were pleased with those services and they didn’t want public-safety cuts.
“I don’t want to reduce public safety spending,” City Council member Erika Benfield said.
“I agree with you, councilwoman, I will not jeopardize safety over saving a couple of bucks, no matter what,” DeBary Mayor Bob Garcia added.
Council member Lita Handy-Peters asked McLemore to look into a possible fire-protection fee, as other cities have implemented, to help bolster DeBary’s budget. The manager said he will look into some options for council members.
“Bring us everything,” Garcia said.
McLemore’s proposed $16,201,567 spending plan is roughly 2 percent larger than this year’s adopted budget.
It proposes no increase in the property-tax rate of 2.9247 mills, or roughly $2.92 per $1,000 of taxable value.
That rate would generate $4.86 million, about $135,509 more than this year’s rate.
That would technically be a tax hike because it is higher than the so-called “rollback rate” of 2.8676 mills, the rate that would raise as much property tax revenue as this year.
Under the proposed rate, a home with $100,000 of taxable value would pay $292 in city property taxes. That doesn’t include taxes and fees charged by other government entities.
In DeBary, property taxes account for just under 30 percent of the budget.
The remaining revenue is a combination of sale tax revenue, fees, assessments and other revenue.
Public safety costs for the city are projected to increase to $5.54 million, an increase of $444,393. That includes fire services, law-enforcement protection and a portion of the debt for the new $2 million fire station.
The amount proposed for fire services, $1,739,683, is a nearly 30 percent increase.
The amount proposed for the Sheriff’s Office is $3.49 million, a 32 percent increase.
McLemore stressed the city is a good position financially for the short term but it faces challenges in the future because it has “underfunded” public safety.
For example, he is proposing to use $816,000 from reserves in the next budget to pay for “nonrecurring expenses in general fund.”
That still leaves $ 2,457,000 in reserves. But at this rate, the city would only have three years left of reserves, McLemore said.
“So what this tells you is that general fund does not have sufficient growth in revenue to have a positive cash flow, which means that you are relegated to reserves to pay for nonrecurring expenditures,” McLemore said.
“So the question is what do we do?” he asked. “I’ll go back and tell you again, in this current budget year, you are totally funded. You have no issues in the current year. Everything is paid for. You have a good budget. You are going to do a lot of good things. The question is what happens in the next two, three, four, five years.”
The DeBary City Council is scheduled to set a tentative millage rate at 6 p.m. Wednesday in the City Council Chambers at City Hall,
16 Colomba Road.
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