SPRINGFIELD — Springfield is in a state of financial emergency and new property taxes may be the only way out, Mayor Ralph Hammond said Friday.
The City Commission will meet Monday to discuss creating its first-ever property tax. Springfield government now is funded mainly through utility charges and grants.
Hammond filed a letter Wednesday with Gov. Rick Scott, the chief inspector general and the Legislative Auditing Committee, informing them of the city meeting two state provisions constituting a “financial emergency.”
“I figure a lot of cities do this and just don’t report it, and I just wanted to be legal,” Hammond said. “We’re not financially broke. We’re not going under. We’re just doing what is legally required.”
The two provisions the city has met to declare the emergency are failing to make payments to the state for an amount owed and falling 90 days behind on another account.
The city has faltered on debt payments on a state-funded sewer project under a 30-year payment plan expected to mature in 2026. The project introduced a public sewage system to Springfield residents in 1996. Every six months, the city is supposed to cut a check for about $92,000 to the state but deferred the October bill due to a lack of funds.
“We basically deferred on the principal payment and paid the interest,” Hammond said.
Another $92,000 bill hits in April.
Hammond also said the city failed to make payments within 90 days on two bills left from Springfield Cable Television totaling $35,000. However, the city is meeting all its other recurring monthly bills, he said.
The notification letter keeps state auditors from deciding Springfield’s fate on their own, Hammond said, as long as action is undertaken to make payments.
“We have a plan to keep that from happening,” he said.
One option to meet the city’s financial obligations, which commissioners will consider in a town hall meeting Monday, is introduction of a property tax. The city has about $193 million of taxable property within its boundaries but no property tax. To solely meet the nearly $184,000 annual payment for the sewer project, commissioners would need to levy a tax of at least 1 mill. A mill is equal to $1 for every $1,000 of taxable value.
“We’re still going along with day-to-day operations like we always have,” Hammond said. “The people in office right now are working hard and looking at different revenue sources.”
Hammond was confident the city would not run the course of dissolution after the city cuts expenditures where it can and implements revenue generators.
“Dissolving is an option for residents, but if they want to dissolve for an ad valorem tax, the county has one also,” Hammond said. “Cities that don’t have the luxury of a tourist tax have to come up with resources from somewhere.”
Commissioners will hold a workshop Monday at 4 p.m. in the Springfield Community Center, 3728 E. Third St.,to discuss commissioners’ salary and the placement of fire services on property tax bills, in addition to creating an ad valorem tax. A vote on any of the agenda items could occur at the special call meeting following the workshop.