At the city’s final public hearing on the 2011-12 budget, commissioners voted 3-1 to increase the millage rate to 2.05 mills and approved the $2.22 million budget by the same vote.
Commissioner Dale Woodland said he would not support a budget that increased the ad valorem tax rate from 1.7882 to 2.05 mills.
It’s the first time since 2006 that Anna Maria has increased its ad valorem millage rate. It is not, however, the first tax increase.
This year’s increase was needed because the taxable value of Anna Maria properties declined the past few years, resulting in less revenue, city treasurer Diane Percycoe said.
Woodland said that at the end of the fiscal year, the city’s reserve account could be “in great shape” if the $78,000 contingency fund goes unused. Woodland argued unsuccessfully that the contingency fund be allocated $10,000 and the balance go into the reserve account.
The city’s contingency fund is a line item in the budget that can be used in an emergency or when the city needs funds for a large purchase or project. The reserve fund, usually 35 percent of the city’s total operating expenses, is not part of the budget and is maintained in an interest-bearing account.
Woodland said he could “almost support the rollback rate” of 1.881 mills, which would be the millage rate needed to bring in the same amount of ad valorem revenue as the current budget.
Percycoe said passing the rollback rate would not add any funds to the city’s reserve account, which is now about $540,000, or 24.3 percent of the budget. City auditor Ed Leonard has consistently recommended the city’s reserves be a minimum of 35 percent of the budget.
The reserve account declined in 2010-11 because some of it was used to pay off the city’s stormwater improvements loan, saving the city $50,000 in bank administrative fees, Percycoe said.
Commissioner John Quam, however, said he viewed $50,000 of the proposed contingency fund as reserves. If it’s not used during the coming fiscal year, it will go into the reserve fund. Percycoe said if the revenues and expenses go “as planned” in the proposed budget, reserves will be at 29 percent by the end of the budget year.
Quam said if the contingency fund goes back into reserves, the commission next year should definitely consider lowering the millage rate.
“In two years, we’ll be back to 35 percent” in reserves, Woodland said. “I think we are in great shape if we reduce the contingency fund.”
Quam said he believed the city is in “excellent shape” with $78,000 in the contingency fund. Commissioners Jo Ann Mattick and Gene Aubry agreed.
The increase in millage from the rollback rate of 1.881 to 2.05 is considered an 8.9 percent tax increase by the state of Florida. The state uses the rollback rate to determine tax increases or decreases, not the millage rate.
The city has had a 1.7882 millage rate since 2006, but keeping that percentage rate can result in tax increases.
Commissioners did not seek any changes to the budgeted line items. Of those, the largest is the city’s contract with the Manatee County Sheriff’s Office for law enforcement, which is $663,922 in the 2011-12 budget, a 1 percent decline from the 2010-11 budget.
Quam noted that the stormwater utility account is $195,000 and suggested commissioners reduce that amount at next year’s budget meetings or sooner. Woodland, who spearheaded passage of the stormwater fee, agreed. He said he envisioned maintaining about $120,000 in the account.
Commission Chair Chuck Webb did not attend the meeting.
The following figures represent the changes to Anna Maria’s budget for the 2011-12 fiscal year.
Budget year 2010-11 2011-12
Millage 1.7882 2.05
Rollback 1.9450 1.881
Ad valorem revenues $1.100 million $1.153 million
Total revenues $2.14 million $2.220 million
Total expenses $2.885 million $2.14 million
An Anna Maria homeowner with a house with a taxable value of $500,000 and with the maximum of $50,000 in homestead exemptions would pay $922.50 in property taxes for the 2011-12 fiscal year.
At the rollback rate of 1.881, the same Anna Maria homeowner would pay $846.45 in property taxes for 2011-12.
City treasurer Diane Percycoe has said that the city receives back about 11 percent of the total taxes paid by a property owner to Manatee County.
The final budget hearing for Holmes Beach was scheduled after presstime for The Islander at 6 p.m. Tuesday, Sept. 27. A report of that hearing will appear in the Oct. 5 edition of The Islander.