Vice mayor questions whether General Fund — which largely is made up of property tax revenue — ever will be paid back
Sarasota Vice Mayor Shelli Freeland Eddie voiced worries on several occasions — even before the St. Armands parking garage was constructed — that a parking meter program in the city’s tony shopping district would not generate enough money to cover the annual debt service on the bonds that financed the structure.
On July 6, as she and her colleagues addressed a city staff request regarding just such a funding shortfall, Freeland Eddie did not offer an “I told you so.” She did, however, express skepticism that the parking program ever would bring in enough money to repay the city’s General Fund for the $140,000 transfer to the St. Armands Parking Area Fund that the board was preparing to approve that day.
A June 17 memo from Kelly R. Strickland, the city’s director of financial management, to the commission explained that the infusion of money from the General Fund was necessary because of “the decline of revenues in the St. Armands Paid Parking Area during the COVID-19 pandemic.”
The memo added, “[F]uture excess net parking revenues shall be used to repay the General Fund …”
Freeland Eddie asked what constitutes “excess net parking revenues.”
“It is our intent that the General Fund will be paid back from the St. Armands Parking Fund,” Deputy City Manager Marlon Brown told her.
Freeland Eddie suggested adding “simple language” to the proposed resolution about the transfer to ensure that the commission considered the General Fund money a loan to the parking fund.
The General Fund is made up primarily of property tax revenue.
City Attorney Robert Fournier suggested that that could be accomplished by creating a new section in the proposed resolution dealing with the transfer.
Although he read recommended language into the record during the meeting, he also sent a memo to a city staff member just after 9:30 p.m. that day with the amendment: “As required by Resolution 16R-2568, any future excess net parking revenues shall be used to repay the amount transferred hereby with interest at the [issuers’] blended investment portfolio rate.” That should be a new Section 4 in the resolution, Fournier added.
Then, a new Section 5 would include what staff previously had drafted for Section 4, he noted.
Section 5 said the resolution would take effect “immediately upon adoption.”
Before the board’s afternoon vote, Mayor Jen Ahearn-Koch also asked city Parking Division Manager Mark Lyons to address Freeland Eddie’s question about what constitutes “excess net parking revenue.”
“The city is required to cover any loss,” Lyons replied, in making the annual debt payment on the garage bonds. In the future, he continued, any revenue left over from the debt service and expenses for Parking Division operations on St. Armands would be returned to the General Fund.
“Under that formula,” Freeland Eddie responded, “there will never be excess revenue, and those funds will never be repaid.”
“I’m not so sure we know there never will be any [revenue excess] over the life of the bonds,” Fournier told Freeland Eddie. “There may well be.”
Then City Manager Tom Barwin explained that, without the COVID-19 public health emergency’s effects on tourism, the city might have received enough money this year from visitors to St. Armands Circle to cover the bond debt for the garage.
“We will charge for [parking on St. Armands] until the bonded indebtedness is paid off, at least,” Barwin said. “We will have a ‘Due To’ from the Parking Fund back to the General Fund,” Barwin added, “so whenever we get back to … positive cash flow … we’ll pay back the [$140,000].”
When Mayor Ahearn-Koch asked whether Barwin had sufficiently responded to the question Freeland Eddie had raised about the transfer, Freeland Eddie replied, “I’ll defer on the ‘sufficiently’ part.”
Strickland’s June 17 memo also pointed out that the General Fund loaned $382,190 to the city’s Parking Fund in the 2018 fiscal year to pay for the construction of the garage. Then, in the 2019 fiscal year, the General Fund covered the $130,000 expense of the purchase of parking meters for St. Armands.
Thus, with the $140,000 transfer this year, the memo noted, the Parking Fund will need to return a total of $652,190 to the General Fund.
Commissioner Willie Shaw finally made the motion to approve the funds transfer resolution, with the amendment Fournier had offered. Freeland Eddie seconded the motion, and it passed unanimously.
In October 2017, Freeland Eddie cast the lone vote against issuing $17.5 million in bonds for the St. Armands garage. The bonds also were to cover the expense of burying electric lines on the John Ringling Causeway and related work.