Incentives head to ballot

A referendum that seeks permission for City Council to dole out tax incentives to businesses looking to relocate or expand in the city will appear on Maitland residents’ 2012 Presidential Primary ballots.

On Monday, City Council approved the ballot measure 4-1, with Councilwoman Bev Reponen dissenting.

If approved by voters early next year, the incentives program would allow City Council to give qualifying businesses, on a case-by-case basis, as much as a 100 percent tax exemption for as many as 10 years.

“It’s simply a tool in a toolbox,” City Attorney Cliff Shepard said.

But Reponen was concerned that future councils would abuse the program by giving their “friends” better deals. She also rejected the idea that businesses should get breaks while residents shoulder the tax burden, saying businesses will come to Maitland with or without incentives.

“And if you’re offering something before someone asks for it, I think everybody is going to ask,” she said.

But Councilman Phil Bonus, who spearheaded the incentives program after LSQ Funding announced its intent to move to Maitland Center, said it would be nothing more than the city’s own economic development commission.

“Just because we have the tool doesn’t mean we have to wield it,” he said. The benefits of the companies’ employees moving into the city and spending money there would far outweigh the initial revenue the city would forfeit.

Councilwoman Linda Frosch agreed, saying that the measure would make Maitland competitive with neighboring cities that already offer an incentives program such as Orlando and Winter Park.

Reponen still argued that the timing was not right because the city has 23 frozen positions and is cutting the budget each year to combat falling property tax revenue. “When you’re broke, don’t give anything away.”

Councilman Ivan Valdes said the incentives would fill empty storefronts and eventually, broaden the city’s tax base, allowing the city to offer more services to its residents. “If we don’t bring business to Maitland, then what we’re providing to them (citizens) is going to diminish.”

Reponen said it’s the Maitland Chamber of Commerce’s job to bring business in. Mayor Howard Schieferdecker said it’s also the city’s because the only way to increase tax revenue is to expand the commercial tax base.

“We need this badly,” he said. “The budget (for fiscal year 2012) comes out in a few months, and you’re going to see it.”

Pension impacts

Also at the meeting, Management Services Director Sharon Anselmo gave an overview of the impacts to employees in the state pension system resulting from the Legislature passing a bill requiring government employees to contribute 3 percent of their paychecks to their pensions.

There are 29 city employees in the Florida Retirement System or FRS. The city opted out of FRS in 1996 so its other 50 staffers are in a 401(a) plan and will not be affected. Four employees are in the state’s Deferred Retirement Option Plan or DROP, which allows them to collect retirement checks while continuing to work. They are also not affected.

In 2012, when those 29 employees begin contributing 3 percent, the city will see a projected savings of $74,800, she said. But the city is looking into delaying or deferring the amount employees have to put in.

“They are taking a pay reduction after two years of no pay increases. … It’s a significant impact to the employees that are affected by it,” she said.