Sarasota’s next city spending plan made its debut Friday afternoon, July 6. Finance Director Chris Lyons presented the $178 million budget. Of that amount, less than one-third lies in the “general fund,” with the other two-thirds sequestered away for debt service, utilities and other non-discretionary expenses.
Budgets are estimates of income and expenses in the future. A department may not spend all of its budget. Income may increase. Because personnel costs account for roughly 80% of the spending, elimination of positions is the fastest way to trim a budget. Since 2007, the city has cut one-quarter of its employee positions; it has reduced its overall budget by one-third since 2008.
Despite the long-awaited stabilization in property values for tax purposes, overall revenue estimates are down again for 2013, led by a nearly $1 million reduction in state funding and grants. Investment earnings in this poor financial climate dropped by one-third.
Other revenues, such as gasoline and sales taxes, were off as well, as was the fraction of property tax revenue devoted to the city’s Community Redevelopment Agency; property values for that purpose fell another 1.7 percent.
As already reported, the net taxable value of property in the city increased this year for the first time since 2005, jumping up slightly less than 1% (the actual figure is 0.88%). Even so, Lyons pointed out the estimated FY 2013 income from property taxes is one-third less than it was in FY 2008, a drop of $9.3 million.
To give the City Commission perspective on this change – and in response to people who say “run government like a business” – Lyons offered the cost of everyday staples during the 2006-2012 time period.
Using figures from the Bureau of Labor Statistics’ Southern Urban Region, Lyons’ chart showed the price of a gallon of milk jumping 9%, a pound of flour rising 52%, a gallon of ice cream up 36% and a pound of coffee going up 72%. Meanwhile, the cost of city government dropped more than 33%.
The giant in the budget room for FY 2013 is the Sarasota Police Department, taking slightly over half the total general funding expenditures (51.2%). Lyons said, “It is almost impossible to balance [the budget] without taking something from the police. Everything else is comparatively small, relatively speaking.”
Pensions and retiree medical benefits take another 17% of the general fund, leaving less than one-third of that fund for all other governmental functions. Property tax revenue alone covers slightly more than half of the police expenditures.
City employment peaked in 2007, when Sarasota was served by 777 persons. Today the figure is 594, and it is expected to decline to 585 under the proposed budget. Four police positions will be eliminated, but three of those will be filled with part-timers. The Neighborhood and Development Services Department will lose four more people. One member of the Parking Department will go, as will the administrator for the Police Advisory Panel.
Meanwhile, pension costs continue to escalate, roughly doubling to $14.5 million from $7.6 million in 2008. The number covers general employees, police and former members of the Sarasota [City] Fire Department. In 2008, the city fire department was melded into the Sarasota County Fire Department, but the city opted to continue paying for the former city firefighters’ pensions.
Fighting out of the hole
At a budget workshop in February, Lyons told the City Commission his estimates then led to a $5.9 million shortfall between income and expenses. The Florida Department of Revenue was predicting a 4% decline in property values, for example.
Between Feb. 28 and July 6, Lyons tried to plug the hole with $1.2 million in expenditure cuts and a half-million-dollar shift in funds from the Solid Waste Department and self-insurance funds. He was able to whittle down the deficit to $3.3 million for the July 6 workshop.
Unlike Sarasota County, which put aside tens of million of dollars during the “fat years” for budget stabilization, by levying more taxes than necessary, the city’s taxes were kept lean. Lyons was able to put aside only $3 million before the bottom fell out. His ability to dip into reserves is limited.
“Last year, for the first time, we budgeted to dip into those reserves” for planning purposes, he told The Sarasota News Leader. “But we’ve never had to touch them.”
Instead, the city scrimped and saved enough to keep the reserves intact. But like last year, the city is committing reserves to plug the deficit, should that materialize in 2013, because there is still a $3.3 million shortfall between anticipated expenses and revenues in the budget presented July 6.
Lyons carefully itemized budget “holes” — for example, Lido Beach Pool. It costs $161,000 to run the pool operation, but the pool gets revenue of $75,000. Last year, the city had to subsidize the pool with $102,000.
For another example: Last year, the Robert L. Taylor Community Complex in north Sarasota was $357,000 in the red, and it is anticipated to be $475,000 in the red for 2013.
Lyons offered millage rate increases that could plug those holes if the commissioners were willing to raise the tax rate to keep those facilities in operation.
Lyons also proposed the City Commission consider an increase in a variety of fees during subsequent budget workshops later this month. Historic preservation, public art review, a fax and credit card convenience fee, permit searches, building permits, inspection fees, temporary certificates of occupancy, permit extensions and zoning reviews were among the actions Lyons presented for possible fee adjustments.
All hail the ‘Purple Cow’!
If there was one truly bright spot in Lyons’ sober review of Sarasota’s municipal finances, it was the Van Wezel Performing Arts Hall — long considered a loss-leader, a drain on the municipal finances to demonstrate Sarasota’s cultural éclat (literally “sparkle”). In 2006, a $1.2 million subsidy from the city was necessary to keep the purple-painted bayfront hall open.
But a new team with a fresh approach has taken the hall into profitability. Lyons estimated this year the hall will make more than a half-million dollars in profit. “The art of the Van Wezel is picking shows that will sell,” he said. “Obviously, Mary [Bensel, executive director] and her staff have the knack.”
However, another local hall may face the axe. The Payne Park Auditorium lost $44,000 last year; it needs $88,000 in immediate repairs, and it requires an estimated $155,000 in improvements, Lyons said. “The Payne Park Master Plan called for its demolition and replacement,” he said. Staff recommends demolition.
Only one new item showed up on Lyons’ proposed budget. The city administration would like to begin evaluating “low-impact design” for stormwater runoff management. Sarasota County is a statewide leader in LID, with several demonstration projects working around the area. The city would like to include LID in its engineering code, but it needs a consultant to prepare “language and diagrams” for the city’s engineering design criteria manual. This solitary new item would cost “$30,000 max,” Lyons said.
If you’ve read this far, you should give yourself two gold stars for citizenship. While pundits can talk forever about policy, without funding there is no policy. Budgets are the fundamental documents of modern democracy — how taxes get spent and shared. Let me repeat: Without a budget to implement it, there is no policy.