Frostproof residents may get utility bill break

FROSTPROOF — The City Council on Monday instructed staff to find up to $5 in savings off the combined bill for municipal utilities.

The directive came during an afternoon workshop to review municipal enterprise funds for the 2018-19 budget, which begins Oct. 1.

An enterprise fund supports city services, such as water, sewer and garbage collection, through fees paid by the users.

City Manager Lee Evett reviewed the city's proposed $1.5 million in enterprise funds covering water, sewer, garbage collection and stormwater runoff collection for the new budget year. It's part of a proposed $8 million budget for 2018-19.

The new enterprise budget represents a 6.3 percent increase from $1.4 million in the current budget. Most of the increase stems from reallocating personnel costs away from Frostproof's general fund, which supports police, fire and other services, into the enterprise funds, Evett said.

The minimum residential bill for all four utilities totals $87.02 per month, he said.

The issue of high utility bills ranks among the top complaints council members hear from residents.

“We are a poor, isolated, rural town. People have to pay a lot for services,” Mayor Martin Sullivan said.

Councilman Rodney Cannon proposed shaving $5 off that total bill to give residents a break.

That's the amount council shaved off the average sewer bill last year, he said.

Taking another $5 off the sewer bill would impact services and the city's ability to pay off debt, Evett said. He proposed a smaller savings, perhaps $1, or spreading a $5 savings among all four utilities.

The sewer fund is the largest utility at a proposed $432,720 in 2018-19, according to the city manager presentation, followed by garbage collection through a private company, Republic Services of Polk County, at $389,790. The city also will spend $276,220 on sewer debt service next year.

Council instructed Evett to come back to the Aug. 6 budget workshop with an across-the-board rate reduction plan.

Council also discussed possible savings on municipal property taxes.

The property tax is based upon the Polk County Property Appraiser's determination of $127.7 million value of taxable property within the city limits, according to municipal records. That represents a $3.3 million increase in value, up 2.6 percent, from last year's value.

At the current property tax rate of $7.50 per $1,000 of value, the city collected $932,479 in revenue. With the increase, the city would need a property tax rate of $7.30 per $1,000, the so-called “rollback rate,” to collect the same amount of revenue.

Under the rollback rate, the owner of a $100,000 home would pay $365 next year on its municipal property tax bill after accounting for $50,000 in homestead exemptions.

Council had previously discussed holding the Frostproof property tax at the $7.30 rollback rate, but Councilman Austin Gravley discussed going lower. He noted a proposed increase the Polk County Commission is considering in its 2018-19 property tax rate.

“I want to go below the rollback to give relief to Frostproof citizens because of the county increase,” he said.

Gravley proposed going down to $7.15 per $1,000 of property value, which would reduce the tax bill to $357.50 on a $100,000 home after exemptions.

Melody Sauerhafer, the city's finance manager, told the council the $7.15 rate would reduce property tax revenues by about $26,000 next year.

Council came to no consensus on the property tax rate. Cannon said he could support a further decrease but wondered how much of an effect it would have.

“You're talking $26,000 in an $8 million budget. That's not doing a whole lot,” he said.

After arguing on the need to reduce spending on the county level and to hold the line in the Frostproof budget, Sullivan noted a reduction below the rollback level could make for tough political decisions for a future council.

“If you reduce it beyond the rollback, it would be hard to raise it in five years if there's no growth and the city needs money,” he said.

Kevin Bouffard can be reached at kevin.bouffard@theledger.com or at 863-802-7591.