Proposed tampa tax increase prompts second thoughts about riverfront park spending gas in back shoulder

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.

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.

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.

"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."

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.

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.

"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."

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."

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.