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Now browsing: Hometown News > News > Volusia County

City faces funds shortfall
Rating: 1.5 / 5 (20 votes)  
Posted: 2013 Mar 01 - 06:16

By Patrick McCallister

For Hometown News

DELAND -- If everything is sunshine and roses, the City Commission will only have to work around a $300,000 shortfall for the next fiscal year. If storm clouds gather instead, it could be a $1.1 million budget hole.

Kevin Lewis, the city's finance director, said predicting which will happen this many months from adopting the 2013-2014 budget in September is a lot like looking at the five-day probability cones hurricane forecasters issue. Storms usually hit right around the middle, but they can make wild swings, too.

Mr. Lewis gave the commission its first glimpse at the fiscal weather forecast at a workshop just before its meeting, Monday, Feb. 18. He told commissioners to start figuring out how they'd like to cut about $541,000 from the general fund.

"One way or another, they have to come to a balanced budget," Mr. Lewis said in an interview after the meeting.

Michael Pleus, city manager, warned the commission the days of less painful cuts are past.

"We're at the wall," he said. "There's nothing else we can do operationally to bridge the gap."

DeLand's property values have been on the decline since 2007. That year, the Volusia County Property Appraiser's Office put DeLand's taxable value at just over $2 billion. Last year, the appraiser's office last valued the city's taxable properties at slightly more than $1.1 billion. In 2011, DeLand's taxable value was about $1.2 billion.

Mr. Lewis said property-value drops seem to have stabilized, and there is moderate new construction. Property taxes generate about $8 million of the city's $22 million general-fund budget. Other funds come from sales tax sharing, fees and other sources.

About 35 percent of DeLand's properties are tax exempt for a variety of reasons. For example, parcels owned by most not-for-profit organizations and many totally and permanently disabled veterans are tax exempt. Also, some properties have values less than their owners' exemptions. Almost 39 percent of exempt properties are residential.

Mr. Lewis said a moderate bounce back in housing is largely because of very low interest rates. That helps and hurts the city, which keeps some money in reserve accounts.

"We used to count on $300,000, $400,000 on interest," he said. "This year I'll be lucky to get $75,000. On the flip side, we've refinanced our debt as well."

Mr. Pleus warned the commission the city employees have not had raises in several years. He advised giving them more this upcoming fiscal year.

"We are losing to both public and private employers," he said. "We believe it's important to keep the talent we've got in this organization."

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