Office of Management and Budget

Frequently Asked Questions

• What is the purpose of the City budget?
• How and when is the budget prepared?
• When and where were the public meetings for the Fiscal Year 2008/09 Budget?
• Who establishes the rules by which the City of Clearwater adopts its annual budget and property tax rate?
• What is the property tax rate?
• The total property tax rate for 2009 on property in the City of Clearwater was 20.3679 mills. How much of that was paid to the City?
• How do I compute my property tax?
• What is Homestead exemption?
• What is the difference between ad valorem tax and property tax?
• What is an Operating Budget?
• What is a Capital Improvement Budget?
• What is a fund?
• What is an Enterprise Fund?
• What is an Internal Service Fund?
• What is a fiscal year?
• What is a budget appropriation?
• What is a budget amendment?
• Where does the City obtain its revenues?
• What are utility taxes and franchise fees, and why does the City of Clearwater levy them?

Q. What is the purpose of the City budget?

A: The budget is an annual financial plan for the City of Clearwater. It specifies the level of municipal services to be provided in the coming year and the resources, including personnel positions, capital expenditures and operating expenses needed to provide those services. It reflects the policies and priorities set by the Mayor and City Council.

Q. How and when is the budget prepared?

A: Each spring, City departments submit their plans and needs for the coming year to the Office of Management and Budget which compiles a proposed budget. This is reviewed by the City Manager. The City Manager then submits the recommended budget to the City Council. The Council reviews the budget, holds two public hearings to obtain citizen input and make changes. Finally, the Council adopts the approved budget along with an ordinance establishing the property tax rate required to fund the budget.

Q. When and where were the public meetings for the Fiscal Year 2008/09 Budget?

A: Meetings were held on Thursday, September 4, 2008 in City Hall at 6:00 p.m. and on Thursday, September 18, 2008 in City Hall at 6:00 p.m.

Q. Who establishes the rules by which the City of Clearwater adopts its annual budget and property tax rate?

A: The property tax rate and budget adoption process are governed by both the City Charter and State Statutes.

Q. What is the property tax rate?

A: When the City adopts its annual budget, it determines the tax rate that must be applied on property in order to generate the necessary revenue in addition to all other sources which are available. The approved tax rate for the City of Clearwater is 4.7254 mills or $4.73 per $1,000 of taxable value. The taxable value of all property in the City is established by the Pinellas County Property Appraiser. The City has no control over the taxable value of property; it only has control over the tax rate that is levied.

Q. The total property tax rate for 2009 on property in the City of Clearwater was 20.3679 mills (thousands). How much of that was paid to the City?

A: Only 4.7254 mills of the 20.3679 mills levied in Fiscal Year 2009 are paid to the City. This represents only 23% of the total property tax bill. Other taxing agencies in Pinellas County include the County Services, Pinellas County School Board, the Juvenile Welfare Board, and the Transit Authority.

Q. How do I compute my property tax?

A: One mill is equal to $1 for each $1,000 of assessed property value. With a millage rate of 4.7254 mills, property taxes on a $100,000 home to which the $50,000 homestead exemption is applied, would be $236.27.

Q. What is Homestead exemption?

A: Homestead Exemption is a constitutional benefit of a $50,000 exemption from the property's (principal residence) assessed value. The first $25,000 is entirely exempt. The second $25,000 is to be applied to the value between $50,000 and $75,000, and does not include school taxes. After property is appraised by the County Property Appraiser, the complete exemption is subtracted from the appraised value leaving what is known as taxable value. The taxable value is that amount upon which the property tax rate is applied.

Q. What is the difference between ad valorem tax and property tax?

A: There is no difference. They are different names for the same tax.

Q. What is an Operating Budget?

A: An operating budget is an annual financial plan for recurring expenditures, such as salaries, utilities, supplies, insurance and equipment repairs.

Q. What is a Capital Improvement Budget?

A: A Capital Improvement Budget is a financial plan for the construction of physical assets, such as buildings, streets, sewers, and vehicles and equipment.

Q. What is a fund?

A: A fund is a separate accounting entity within the City that receives revenues from a specific source and expends them on a specific activity or activities.

Q. What is an Enterprise Fund?

A: An enterprise fund earns its own revenues by charging customers for services that it provides. It receives no tax funds. The City of Clearwater operates its water and sewer utilities, solid waste and recycling collection activities, gas, stormwater, marina, airpark, parking operations, and the Harborview Center as enterprise funds.

Q. What is an Internal Service Fund?

A: An internal service fund earns its own revenues by charging other City departments for services that it provides to them. Examples of internal service funds within the City of Clearwater are the Garage Fund and the Administrative Services Fund, including such operations as Information Technology (computer services), vehicle maintenance and utility billing.

Q. What is a fiscal year?

A: A fiscal year is a 12-month operating cycle that comprises a budget and financial reporting period. The City's fiscal year, along with other local governments and special districts within the State of Florida, begins on October 1 and ends on September 30.

Q. What is a budget appropriation?

A: A budget appropriation is a specific amount of money that has been approved by the City Council for use in a particular manner.

Q. What is a budget amendment?

A: A budget amendment is an ordinance adopted by the City Council which alters the adopted budget by appropriating additional monies to a particular department, decreasing appropriations to a particular department, or transferring funds from one department to another.

Q. Where does the City obtain its revenues?

A: All monies are ultimately derived from citizens in the form of local, state and federal taxes; fees, fines and licenses; and payments for municipal services such as recreation fees, parking meter collections and utilities services (water, sewer, gas, garbage collection, and stormwater).

Q. What are utility taxes and franchise fees, and why does the City of Clearwater levy them?

A: A utility tax is a tax levied on utility bills, to be paid by the utility purchaser. It is similar to a sales tax, except it only applies to utility bills and not to any other purchases.

The franchise fee is a charge levied by the City on a utility to operate within the City and to use the City rights-of-way and other properties for locating pipes, wire, etc. The state allows utilities to pass on the franchise fee directly to customers on their bills.

The City of Clearwater, like most cities in Florida, relies very heavily on utility taxes and franchise fees for revenues rather than on the property tax, which is usually much lower than property taxes levied in other states.