WPB Begins Budget Belt Tightening For FY 2014
July 15, 2013
(West Palm Beach, FL) – “None of this will be easy.” That was how West Palm Beach Mayor Jeri Muoio opened today’s budget hearing at City Hall.
The public process to come up with a budget for next year began today with finance officials going over the numbers and the Commission starting the discussion on what to pay for and what to cut.
Before the discussion began, Mayor Muoio went over a brief summary of the past few budget years.
“We have cut $25 million over the past two years. We have cut 250 employees. Our employees have not had raises in four years, and we currently have no capital money in the budget,” said Muoio. “We need to tighten our belts, but we need to be responsible to provide necessary services.”
Within the past week, city budget officials already started the process of closing a projected $8 million dollar gap. Nine new requested fire department positions are not being funded, leaving the total number of firefighters the same as last year. In addition $300,000 set aside for the library has also been eliminated.
For the first time, a department-by-department breakdown of each budget proposal was also released.
The largest projected increase is from the police department, which is seeking an increase of almost $5 million dollars. Of that $5 million dollars, the largest expense is due to hikes in pension costs.
Commissioner Keith James, referring to pension costs, said solving the problem is not as easy as simply cutting staff or other expenses.
“This train is headed for a station called disaster,” said Commissioner James. “We can’t emphasize enough the impact pensions are having on our budget. Our hands are tied.”
The city is also currently looking at the possibility of raising the fire assessment fee for the first time since 2008 as a way to generate additional funding to close the budget gap. The current fee of $25 dollars is less than one-third of other comparable cities. The proposed increase to $85 dollars brings the City of West Palm Beach in line with what many similar cities charge.
During the hearing, commissioners discussed various areas that should be looked at during efforts to close the budget gap. Today’s discussion was the first of several before the final budget is voted on in September.
Also part of budget talks today was a decision to set the range for next year’s millage rate.
Every city is required to set a maximum possible millage rate at the start of its budget process. It’s not the final millage rate, but it is a ceiling set by governments and used by the county to calculate your possible taxes for next year. As cities finalize their budgets, they have the option of picking a millage rate at or below the ceiling that is set.
The Commission voted to set the ceiling at 9.3465, one point above the current rate.
But commissioners wanted to ensure the public understands that the decision to choose 9.3465 does not mean it will be the final rate. They emphasized the vote was only to allow them flexibility when looking at the millage rate along with all the other options available to close the budget gap.
The millage rate is just one tool that can be used to balance a budget.
Between changing the millage rate, changing the fire assessment fee, making cuts in services, or other possible options, there are several areas to look at to close the budget gap. None of them, according to Commissioner James, are easy decisions.
“There are no comfortable choices. We need to make some uncomfortable choices,” said James.
Commissioner Kimberly Mitchell acknowledged that even seeing a ceiling millage rate set above 9.0 makes many people nervous.
“Nine point anything is frightening, but it is a reality if we don’t change. The public needs to hear where we are and help prioritize.”
Setting those priorities will be the task of the Commission over the next several months.
Commissioners asked to see several variations of the budget, looking at how much of the budget gap would be closed at different millage rates, different fire assessment fees, various cuts in services, as well as other options.
The final budget must be approved before the start of the fiscal year in October.