Referendums over growth issues forced city to raise taxes, group claims

In its campaign to discredit a ballot initiative giving voters more authority over land use, a statewide political action committee says voters only need to look at tiny St. Pete Beach and its problems since adopting a similar policy.

Amendment 4, which will appear on ballots in November, essentially would give citizens veto power over major development proposals and land use changes. Opponents say a similar citizen initiative on growth and planning in St. Pete Beach has resulted in government run amok.

"The seemingly endless lawsuits (as a result of the changes) decimated the city's legal budget and forced the city to raise the property tax rate. Now this idea threatens every town in Florida," a narrator states during a 2 minute, 15 second Web ad produced by a group called Citizens for Lower Taxes and a Stronger Economy. The group is an offshoot of Floridians for Smarter Growth, which is funded by developers, home builders, U.S. Sugar, and other business groups.

We'll begin by noting that there is considerable debate between supporters and opponents of Amendment 4 if St. Pete Beach's experiences are truly analogous to the statewide ballot proposal. We plan to examine the analogy in a future Truth-O-Meter item. But because the advertisement is now on the Web, we'll still examine the individual claims.

For this item, we need to go way back in time, back to the day that developers actually were interested in building condo high rises, back when developers wanted to cram as many units as they could onto a property, back when people actually could flip condos for substantial profits. Yep, way back to 2005.

Back then, St. Pete Beach's five-member City Commission was considering changing the town's road map for growth, the Comprehensive Plan. The commission considered incentives to lure additional hotels that could increase the density of a development and change the allowed uses.

The talk of change didn't sit well with many residents, who formed a group called Citizens for Responsible Growth. They collected enough petitions to get a proposal on the ballot that would require voter approval for height increases and other changes to land use plans.

It got contentious. The city sued to stop the vote, and appeared to have won, but then lost on appeal. A developer also sued saying the petition process was costing him money.

Voters narrowly approved most of the changes to the City Charter in November 2006, making St. Pete Beach the first town in Florida where residents directly controlled development decisions. Voters also elected two members of Citizens for Responsible Growth to the City Commission, giving them a majority.

That prompted a pro-developer group -- Save Our Little Village -- to start its own petition drive to amend the city's comprehensive plan. The city's elected officials -- who had gone from being largely pro-development to anti-development -- tried to stop them.

It got even more contentious. Save Our Little Village sued. The city's attorney resigned under pressure from the commission.

Then, another election, another change of power and eventually, another referendum. This time, the pro-development side won. By December 2009, the city was involved in six different lawsuits prompted by the policy.

Now there's another lawsuit and talk of another petition drive. Whew.

Again, we're not ready to address the question of the similarity between the beach policy and Amendment 4. We're here to examine the policy's impact on the city's tax rate.

And yes, in 2009, the city did increase its tax rate .107 mills (or $0.107 for every $1,000 of taxable value). The tax rate increase raised about $255,000 citywide, according to the city budget.

During the Sept. 21, 2009, meeting where the tax rate increase was approved, there were two main reasons cited:
 

• Declining property values. City Manager Mike Bonfield said that property values have decreased more than 10 percent, and that as a result, the town would still be taking in $385,000 less in property tax collections -- even with a higher tax rate. The tax rate increase is needed "to fund a variety of services we provide in the city," Bonfield said.

• Legal fees. City Commissioner Jim Parent suggested the city might increase its legal budget from $200,000 to $250,000 to pay for potential litigation related to development issues and a possible lawsuit with Pinellas County over emergency medical services. The city already had budgeted an extra $100,000 for fiscal year 2010, according to budget documents.

Parent said he was worried that after the city overshot its legal budget in 2008-2009 by about $100,000, that it would do so again.

"Without additional budgeted funds, it could force us to reduce some other things," said Parent, who suggested the city's Fourth of July fireworks display could be impacted. But after discussion, and after consultation with City Attorney Michael Davis, commissioners decided to to leave the legal budget the same.

After reviewing the discussion and interviewing Bonfield, we conclude that declining property values appeared to be the most significant factor, although the cost of legal fees was also discussed.

"I guess you could attribute the extra legal fees as a reason why we needed to raise millage," Bonfield said. "But nobody said we need to raise this millage to put it in a fund for legal. I wouldn't say there's a direct correlation."

In its ad, the group Citizens for Lower Taxes and a Stronger Economy says St. Pete Beach's local version of Amendment 4 resulted in "seemingly endless lawsuits (that) decimated the city's legal budget and forced the city to raise the property tax rate."

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Yes, there were lawsuits, but they weren't the only costs mentioned for the city legal department. Yes, the city slightly raised its rate in 2009 -- although the net result still was a decrease on most homeowners because of sharply falling property values.

But the discussion at a town meeting indicates that the decision was motivated by several factors, most notably the decline in property values, as well as legal fees. So we find the claim Half True.