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Thursday, Nov 23, 2017
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Proposed Tampa tax increase prompts second thoughts about Riverfront Park spending

TAMPA — Julian B. Lane Riverfront Park has a $35.5 million price tag with something for everyone, including a rowers' boathouse, a sheltered cove for beginning paddlers, an event lawn, a community center with sweeping views of downtown and all kinds of athletic courts — even pickleball! — when it opens next spring.

But a majority of City Council members say the park might have turned out differently if they had known when they voted on it last year what they know now.

And that is, starting next year, the city will have to pay off two long-deferred debts from the mid 1990s. The smaller one amounts to about $6 million to be paid next year. The bigger one will mean making several years of $13.6 million debt payments starting in 2019.

To meet those commitments, Mayor Bob Buckhorn proposes to raise property taxes. His proposed tax rate would be 15.7 percent higher than this year's rate. It would be nearly 22.6 percent higher than if the city accounted for the growth of property values by rolling the rate back to a point where it would generate the same amount of revenue as this year.

Council members said they weren't told about the 1990s debt until they got budget briefings with Buckhorn's staff a month or so before he formally presented it on July 20.

Had they known, several said, they might have cut features out of the park when they voted on it in May 2016. Or they might have phased construction. And they likely would have pushed to spend less of the city's $20 million BP oil spill settlement on the park.

"I want the park to happen, but not at the cost of raising the property tax," council Chairwoman Yvonne Yolie Capin says.

Watch for this issue to be part of the discussion going forward. The council has asked for a budget-related staff report on Thursday.

"The biggest issue that people are raising about this is, 'Why did you vote for the park with this sitting out there?' " says Harry Cohen, whose South Tampa council district would see the biggest impact from the tax increase. To which he responds: "I have to be honest with you, and say I didn't know about it."

• • •

The 1990s debts are not the only thing driving Buckhorn's proposed tax increase.

Health care costs have risen. City Hall forecasts growth in its pension obligations. Meanwhile, as residents have gotten rid of their landline telephones, the city has lost millions of dollars of revenues from a tax on communications services.

Looking ahead, the Legislature has scheduled a referendum next year on expanding the homestead exemption. It would cost the city up to $6 million a year. Buckhorn expects it to pass.

So Buckhorn is proposing a $974 million budget that would raise Tampa's property tax rate 90 cents per $1,000 of assessed property value. For the home of average value, about $166,579, the city tax bill for a resident with a homestead exemption would rise about $140.

On Riverfront Park, Buckhorn said he felt the BP oil settlement money should be spent on something that would benefit the city for decades to come.

"We made a decision that Julian B. Lane was in the best long-term interest of the community," he says. "We knew that it was going to be expensive … but we also recognized that it was a once-in-a-lifetime opportunity that would have generational impact.

"You really don't want to use one-time revenues to pay off recurring debts," Buckhorn said. The BP money could have retired about 1 ½ years of what he expects to be a five-year obligation, but "when you weigh the long-term impact of (the park), it was a worthwhile investment. I think, over time, people won't remember who did it, but they'll be thankful."

• • •

During the first few years of Buckhorn's first term, the city's revenue shortfall was so big — $34 million for his first budget — that the focus was on finding the money simply to cover that year's expenses.

In mid to late 2014, city officials were looking at the possibility of saving money by refinancing city debt when they became aware that they faced the balloon payments. One consists of $6 million owed on a federal loan for Centro Ybor. The city also faces several annual payments of $13.6 million on money borrowed in 1996 to pay for buildings and equipment for the Police and Fire Departments.

The police and fire bonds are especially problematic, Buckhorn said, because they were not "callable," which makes them next to impossible to refinance. The city did manage to restructure one piece of the bond issue in 2015, effectively putting off the start of the repayments until the 2019 fiscal year, but city chief financial officer Sonya Little said it would have been impractical and expensive to refinance all of the debt.

At the time of the partial refinancing in 2015, Buckhorn said his staff told the council that the problem wasn't solved entirely. And he said the deferred debt has been a part of budget briefings for the council the last couple of years. So they should not be surprised now.

"We told them that we had a looming problem out there as a result of the previous bond deal that was done and that we were working to try and find a solution," Buckhorn said, though he also said the discussions didn't delve into all the details of the bond issue. "It was part of the discussion over the refinancing."

No, council members say, it wasn't.

"He better have it in writing," Capin said, "because it didn't happen."

He doesn't. Asked whether there were emails, memos or briefing papers shared with the council, Buckhorn said, "There was no paper trail."

Either way, the mayor and the council now have to figure out what's next. Along with the report on the budget Thursday, council member Charlie Miranda has asked for a staff report on whether the city could charge some sort of service fee to nonresidents who come to Tampa and use or benefit from city services.

"If everyone had known," the park decision "might have been different," Miranda says. "But it is how it is. So now all of us are looking at something that's hard to swallow, hard to do, but somehow we've got to fix it."


If you go

The city will hold two public hearings on the proposed budget and tax rate in the City Council chambers on the third floor of Old City Hall, 315 E Kennedy Blvd.:

• 5:01 p.m. Sept. 13

• 5:01 p.m. Sept. 26

The city's 2017-18 budget year begins Oct. 1.

If you go

The city will hold two public hearings on the proposed budget and tax rate in the City Council chambers on the third floor of Old City Hall, 315 E Kennedy Blvd.:

• 5:01 p.m. Sept. 13

• 5:01 p.m. Sept. 26

The city's 2017-18 budget year begins Oct. 1.



If you go

The city will hold two public hearings on the proposed budget and tax rate in the City Council chambers on the third floor of Old City Hall, 315 E Kennedy Blvd.:

• 5:01 p.m. Sept. 13

• 5:01 p.m. Sept. 26

The city's 2017-18 budget year begins Oct. 1.

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