Commissioner Michael Moran votes ‘No,’ citing city’s failure to withdraw threat of litigation
Agreeing with the recommendation of Sarasota County Administrator Tom Harmer, four of the county commissioners voted on Aug. 29 to approve the resetting of the base year for the Newtown Community Redevelopment Area (CRA).
Commissioner Michael Moran concurred that Newtown needs the revenue that action should generate. Nonetheless, he said he could not support the motion made by Commissioner Charles Hines because the City of Sarasota has failed to provide written notice that it no longer has any intention of pursuing legal action against the county in regard to an approximately 19-month-long dispute over what the city says is a final payment the county owes to the Downtown Sarasota CRA Trust Fund.
“I’m not going to negotiate under the duress of litigation,” Moran told his colleagues.
“They have missed two to three years of money for Newtown,” Hines countered, because the city commissioners could have asked the county at least three years ago to reset the base year for the Newtown CRA.
As City of Sarasota Finance Director Kelly Strickland told the City Commission earlier this summer, the Newtown CRA still will not achieve any tax-increment revenue in the 2018 fiscal year, because property values within the district boundaries have yet to recover the level they reached for the 2008 base year. Income for a tax-increment financing district is derived from the difference in values between the base year and subsequent years.
“This is the right thing to do,” Hines added. “We’re elected countywide. … All five of us owe the residents in the Newtown [CRA] area representation. … I don’t want us to be an impediment to doing the right thing for those residents there. … [There] should have been cash in that CRA that they could have done some good things with. So, step up, leaders, and lead!”
“I agree 100% with those comments, soup to nuts,” Chair Paul Caragiulo said.
Apprising the board of the latest exchanges
Harmer raised the Newtown CRA issue as part of his report to his board during its regular meeting on Aug. 29; he noted that he had promised in correspondence earlier in the month with City Manager Tom Barwin that he would recommend the County Commission agree to reset the base year.
That will have “no financial impact on the county,” Harmer added on Aug. 29.
Harmer further noted that Barwin had requested “the county settle the [Downtown Sarasota CRA] dispute by paying half of the amount [the city says the county owes it].” With interest and penalties, Barwin wrote in his July 28 letter to Harmer, the total had grown to $5.3 million. “The Commission advised me to advise you that they would prefer to settle this matter and move on,” Barwin continued in his letter. “Although neither side may be elated with the $2.6 [million] settlement compromise articulated by the Sarasota City Commission, that is usually the sign of a fair compromise.”
(The Aug. 29 session was the first regular one the County Commission has had since July 12. It typically takes a summer recess of about five weeks.)
Harmer pointed out on Aug. 29 that he had advised Barwin that the proposed cash settlement “is contrary to the county’s position … I’m not recommending a different decision,” he told the county commissioners. “I think our response has been clear on that.”
Commissioner Alan Maio referred to the Newtown CRA base year reset as a matter of “breaking [the Downtown Sarasota CRA dispute] into pieces.” He added that he believed the county board should agree to the request, as Harmer recommended. “They haven’t collected a dollar,” he said of Newtown residents, because the 2008 base year saw county property values reach their height, right before the Great Recession struck.
“The Newtown CRA was a pawn, in my opinion, that was being used by the city” in the Downtown CRA dispute, Hines added. “It’s time for the city commissioners to step up and take control of their commission.”
Additionally, Hine continued, the County Commission has had the same response since the dispute began over the Downtown CRA payment: “Don’t send us demands for cash …” Yet, the city commissioners, he said, “let the city manger send us a letter that does just that.” He was doubtful the City Commission had even approved Barwin’s request for the $2.6 million, he said.
The City Commission did approve the terms in Barwin’s July 28 letter to Harmer; members discussed them during their regular meeting on July 17 and then voted unanimously to support a motion by Commissioner Jen Ahearn-Koch to call for the $2.6-million settlement.
‘Sticking points’
After seconding Hines’ motion on Aug. 29, Commissioner Maio said, “It was my understanding that perhaps the city bristled at the thought that the city had to ask us to change [the Newtown CRA base year] and so did nothing. … This is not our fault,” Maio added of the lack of any tax-increment financing revenue thus far for that CRA.
Although City Attorney Robert Fournier has expressed his legal opinion that the city could reset the base year on its own, County Attorney Stephen DeMarsh has disagreed with that interpretation of the documents that established that CRA.
“Normally, I would support this in the blink of an eye,” Moran told his colleagues. Then he pointed to the fact the city has supplied the county no notification that it has “fully withdrawn [its] threat of litigation against us.”
“The situation has been very unfriendly, and you hate to … extend a bad relationship,” Commissioner Nancy Detert responded. “I’m hoping the city commissioners can take control of their end of the world.”
She supported the resetting of the Newtown CRA base year, she added, but she pointed to the City Commission’s refusal to comply with the agreement it and the County Commission reached after the end of a joint meeting on the issue in late April: “So far, they haven’t kept their word on the [timeline].”
Under that agreement, the boards were to have discussed their settlement proposals separately within 30 days and then had Barwin and Harmer meet to review them, with the hope that the two boards would approve a resolution of the issue no more than 75 days later. However, the City Commission fell behind on the timeline because one of its regular meetings ran long, after two new members took their seats on the board.
Detert added, “They’ve made offers that were unrealistic, [including one asking that the county board] chip in on a capital [operating] option … which is never going to happen.”
Detert was referring to an earlier city settlement request that the county contribute $320,000 per year to the expense of operating the Robert L. Taylor Community Complex, starting in the 2019 fiscal year. The city asked that the payments rise 3% annually. The request was based on data showing that about 60% of the facility’s members are not city of Sarasota residents.
Hines reasserted his belief that the county does not owe any more money to the Downtown Sarasota CRA Trust Fund. Moreover, he continued, “We never had a say on how this money [for the Downtown CRA] was spent. We just would send [the city] a check every year, and [the funds were] controlled by the city.” That was one of the primary reasons, he added, that he opposed any extension of the Downtown Sarasota CRA when such discussions were underway several years ago.
“I will tell you right now I believe we do not owe them a single penny, period,” Maio added.