Finance director recommends City Commission use Unassigned Fund Balance to plug the hole
Because the Sarasota County Commission last week turned down a City of Sarasota request for almost $1 million to assist with the operation of the Robert L. Taylor Community Complex in north Sarasota, the projected gap for the city’s 2017 fiscal year budget is just under $1.5 million, Deputy City Manager Marlon Brown explained to the City Commission during its June 27 budget workshop.
A slide city Finance Director John Lege showed the City Commission indicated a gap of $990,188 between anticipated revenue and expenditures for FY17. However, City Manager Tom Barwin explained that the city staff received the rejection letter from County Commission Chair Al Maio subsequent to preparation of the slide. The county’s decision will make it necessary for the city to cover a $500,000 hole in the Taylor Complex’s budget.
“We had no reason to believe, really, that we would be totally rejected on that request,” Barwin added of the county action. “But it is what it is.”
The County Commission voted unanimously last week to deny the funding request, even though a letter from Mayor Willie Shaw and Barwin pointed out that 60 percent of the people who use the Robert Taylor Complex reside outside the city limits.
County Commissioner Carolyn Mason cited the “dangerous precedent” her board would be setting if it acceded to the city’s funding request, because the county could expect other municipalities to follow suit. Moreover, the money would have to come out of the county’s General Fund, which, as she noted, is the county funding source with the most demand upon it.
As a result of the county’s decision — conveyed in a letter signed by County Commission Chair Alan Maio on June 23 — Barwin told the city commissioners he has asked Jerry Fogle, the city’s director of parks and recreation, to “to take a look at the fee structure” at the Robert. L. Taylor Complex. “As we all know,” Barwin continued, “90 percent of the users are Sarasota County residents.”
Barwin added, “I’m impressed as heck every time I set foot in the facility … but we still have to pay the bills.”
Lege noted that, with the county having fulfilled its commitment to make five annual payments of $320,000 to the city for the Taylor Complex — an element of a June 2011 interlocal agreement between the two local governments — 80 percent of the facility’s operating expenses will have to come out of the city’s General Fund.
When Vice Mayor Shelli Freeland Eddie and Commissioner Suzanne Atwell asked Fogle about residents’ requests for extending hours for the fitness center and the pool — with the potential for more user fee revenue as a result — Fogle replied that he has looked into the possibilities, but longer hours of operation translate into higher bills for utilities and cleaning, as well as more pay for lifeguards at the pool.
“This is not a private club,” Atwell said of the complex. “We are struggling.”
Fogle also explained that the most expensive offerings at the facility are the summer camp, the afterschool program and the HARD:NOC Teen Program. Participants in the latter “participate in activities that encourage good values [and] stress the importance of communication, education and personal character,” according to the city’s 2016 Parks and Recreation Program Guide. Those are the programs that strengthen the community, Fogle continued.
What Barwin has asked him to do, Fogle said, “is very tough because the costly things for the center are those programs. … To touch [them] would break my heart, literally.”
When Atwell asked whether he has been communicating with Foundations in the area to try to gain financial support, he replied that the Gulf Coast Community Foundation covers the cost of the summer swimming program, which has more than 100 children enrolled, from age 5 to the teen years. “We are working with the foundations,” he added.
The funding gap
Lege told the board on June 27 that his recommendation is for the City Commission to appropriate money from its Unassigned Fund Balance to cover the budget gap for next year. If almost $1.5 million is needed, he noted, that still would leave an amount reflecting 24.19 percent of the city’s General Fund expenditures.
Without the $500,000 deficit in operating revenue for the Taylor Complex, he had said earlier that his projection called for $15.5 million to be left in the Unassigned Fund Balance at the end of the 2017 fiscal year, equating to 25 percent of General Fund expenditures.
Freeland Eddie sought clarification from Lege that if the board has to approve budget amendments for unanticipated expenses after the new fiscal year starts on Oct. 1, that money also must come out of the Unassigned Fund Balance. Lege replied that that most likely would be the case.
However, Barwin pointed out, “There would be a variety of options to look into,” not just the Unassigned Fund Balance.
Further budget details
During his presentation, Lege explained that the overall proposed budget for the 2017 fiscal year is $206,286,920, which represents an increase of $11.7 million — 6.03 percent — compared to the FY16 budget.
The General Fund itself has risen $3.1 million — 5.37 percent — to $61,969,977.
The preliminary property value from the Sarasota County Property Appraiser’s Office showed a total increase of 7.67 percent year-over-year, Lege noted. The total value of city property, according to that report, was $8,738,042,730. The final figure, provided to The Sarasota News Leader on June 29 in response to a request to the Property Appraiser’s Office, is $8,785,867,883, a 0.5-percent increase from the preliminary number.
Working from the earlier figure, Barwin had written in his introduction to the 2017 fiscal year budget that the city expected to realize an increase of $1,423,647 in property tax revenue compared to the previous fiscal year, with the millage rate recommended to remain at 3.1728.
“We’ve gained about 65 percent of the amount that we lost in the previous years,” Lege noted on June 27, referring to the Great Recession.
With staff having proposed no change in the millage rate, Lege continued, 1 mill was expected to bring in $6.9 million for the 2017 fiscal year. Altogether, the $21.9 million in estimated ad valorem tax revenue for the next fiscal year would represent 36 percent of total revenue for the General Fund, he pointed out.
As for total revenue expected during the current fiscal year: His estimate calls for $58,917,576 in the General Fund, with spending projected at $58,965,787, leaving a gap of $48,211.
As of June 27, for the 2017 fiscal year, total revenue in the General Fund was estimated to be $60,979,789, with expenditures of $61,969,977 — plus the extra $500,000 for the Robert L. Taylor Community Complex.
New employees requested
Lege also explained on June 27 that city departments have requested a total of 37 new employees for the 2017 fiscal year; 19 of those would be paid for through the General Fund.
Personnel expenses will comprise 75 percent of General Fund costs for the new fiscal year, he pointed out. Therefore, if the City Commission wished to cut the budget instead of using money from its Unassigned Fund Balance, it would need to pare positions or raise the millage rate, Lege indicated.
Among the new positions requested are the following:
- A communications specialist to assist Jan Thornburg, the city’s senior communications manager.
Thornburg explained that her workload has “increased quite tremendously,” especially because of the rise in the public’s use of social media, such as Facebook and Twitter.
Barwin told the commissioners that, given the number of tourists who visit the community and the international exposure the city enjoys, it is a necessity for staff to refute false information spread by social media.
“You really want to figure a way … to let people know what the facts are,” Thornburg said.
- An assistant city administrator at a total cost of $175,000, with the hope that the position could be filled before the end of the current fiscal year, Deputy City Manager Brown pointed out. “We are really, really busy,” Barwin said of himself and Brown.
- Three new employees in the Office of the City Auditor and Clerk, including another commission reporter. In the past, City Auditor and Clerk Pam Nadalini explained, four people served as commission reporters. Only one person handles that responsibility in the current department structure, she added, and, as of June 27, that person had earned $9,000 in overtime pay. “I don’t want her to burn out,” Nadalini told the board.
Moreover, “there’s a significant increase in public records requests that we see on a daily basis,” Nadalini noted, and her staff has to respond to those “in a timely and adequate manner.”