Politics & Government

Gulfport Faces Nearly $400,000 Budget Shortfall

Gulfport, how would you balance the budget?

Cherlene Willis's profile picture
Cherlene Willis, Patch StaffVerified Patch Staff Badge

At "first blush" of the budget, City Manager Jim O'Reilly estimates a budget shortfall of $389,565 during fiscal year 2014.

On June 18, during the last city council meeting, O'Reilly explained to councilors that the city would be short nearly $400,000 if no changes were made. He shared the city's total budget, including expenditures, revenue, and possible solutions to the shortfall.

Gulfport, what do you think can be done to help balance the budget?

Let's take a look at the numbers:

  • Total estimated expenditures for fiscal year 2014 = $11,279,934
  • Total estimated revenues for fiscal year 2014 = $10,890,369
  • Estimated budget shortfall for fiscal year 2014 = $389,565
The follow contributing factors to the shortfall were included in O'Reilly's presentation to councilors on June 18. (The full powerpoint presentation is attached to this article.)

1. A proposed 2% wage increase for city employees = $175,000

2. Pension Costs = Increase of $417,143 for police, fire, and general city employees.
  • Fire: 24.20  % of salary = $188,055 compared to last year's total of $107, 273
  • Police: 27.20  % of salary = $496,402 compared to last year's total of $391,285
  • General: 20.90  % of salary = $556,329 compared to last year's total of $325,085
Note: Management staff will remain @12%

3. Employee Health Insurance = Estimated cost of $532,357 an increase of $69,341. The current cost is $462,279. Presently budgeted at a 15% increase.

Possible Solutions: 
City Manager Jim O'Reilly presented the following initial steps to councilors, but is looking forward to councilors suggestions throughout the process.

1. Adopt a roll forward rate of 4.039 to generate Ad Valorem revenue of $2,488,576 in fiscal year 2014. The current milage rate is set at 4.039, but it is considered a "roll forward" rate even when keeping the same rate because the Pinellas County Property Appraiser is estimating property values will increase. According to May reports, Gulfport homes are slated to increase by .77% during the next fiscal year.

2. Additional staff adjustment/assessment of Operational Costs/Revenues for fiscal year 2014.
  • Employee Health Insurance Costs
  • Personnel Re-Alignment/Additions
Other Available Options:
1. Increase PILOT, where available
2. Raise millage rate beyond roll forward rate; 1 Mil. = Est. $625,000 in tax revenue
3. Utilize Reserves
4. Reduce or eliminate proposed employee compensation enhancements.
5. Identify potential cost restructuring/savings and their associated impacts to service/staff or contracting for staffing and/or services.
6. City council proposed enhancements or expenditures.

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