A rare whiff of sourness roiled the Coalition of City Neighborhood Associations meeting on Saturday, Aug. 4. Two representatives of African-American neighborhoods were withdrawn and bitter, while a representative from a third less-prosperous neighborhood urged the coalition to censure City Commissioner Terry Turner.
Turner was the featured speaker that morning, bearing his own version of bad news. He reviewed city budgets for the past several years and offered an ugly vision of the future, one in which the rich desert the city.
Turner’s tale of doom
Accompanied by city Finance Director Chris Lyons, Turner used the city budget as the basis for looking to the past and future. He began with “the last of the good times” in 2007. “We had 666 employees and spent $48 million in employee compensation,” he said. “The per-employee cost was $65,000.”
Then real estate values crashed. Homes purchased for $250,000 became worth less than $100,000. People began walking away from mortgages, leaving behind empty – sometimes stripped – houses in foreclosure. Scavengers moved in to steal wiring, air conditioning equipment — anything portable and salvageable.
“We had a continuing decline in revenues and an increase in expenses,” said Turner. “Every year there was a $2-3 million shortfall, and the response strategy has been reducing staff.” One-third, or 222, people lost their city jobs.
“For the most part, service levels have been maintained,” he said. “We’re asking staff to do much more with much less, and they deserve our thanks and gratitude.”
After six years of plunging property values for tax purposes, the drop stopped for the upcoming Fiscal Year 2013 budget.
During the period of budget tightening, one cost ballooned – pensions. They now consume roughly double their amount in 2007, because earlier city commissions made poor assumptions and bad investment decisions.
“The Sarasota City Commission assumed an 8% return, and they made provisions for a 15-year period. In fact, for the last 12 years, we’ve earned 5%,” said Turner. “That 3% shortfall is a big part of this pension crisis. The benefits are generous, and we did not provide enough for them.”
The city tried to offset the pension problem in other areas. “We had an extreme overhaul of the health care plan,” said Turner. “We offloaded the [Ed Smith] stadium to the county, and that saved $600,000 per year. And the Van Wezel [Performing Arts Hall] now makes $400,000 instead of needing a $1.5 million subsidy.”
For the upcoming fiscal year, the per-employee cost is $88,000, which consumes about 80% of the entire general fund budget. “Per-employee wages are rising, as people move up the career ladder,” he said.
Then Turner made some assumptions about the future. Service levels are held constant, along with the number of city employees. Wages are forecast to grow 4% per year. Pension liabilities are based on a 6% rate of return, or about $25 million per year. And health care costs are expected to rise 8% per year over the next decade.
The impact on the city budget is large. Employee costs will eat up 85% of the general fund, and the cost per employee will be $140,000. Additionally, the current deficit of $2 million (anticipated costs minus anticipated revenue) will swell by $20 million in 2022.
“The economy is clearly sputtering. Tallahassee is trying to reduce local government taxes in a number of areas,” said Turner. “We’ll be lucky if the deficit isn’t $30 [million] or $40 million.”
“The community needs to start thinking about this,” he said. “To balance a $20 million deficit will require a doubling of the millage rate, maybe a tripling of the millage rate. That is not an option.”
He added, “Draconian cuts in staff and services is not an option either.”
Some savings could be achieved with more changes in the police pension plan ($2 million to $3 million saved), he said, or cuts in health care and general pensions ($3 million to $5 million). Taken together, however, those amounts wouldn’t fill the budget deficits.
Turner then suggested two strategies that might provide some relief. One is to “regionalize some services, maybe police services like criminalistics,” he said. “We could possibly regionalize neighborhood services or permitting to manage the city more effectively.”
His other strategy was growth. “Increase the city population by 20%,” said Turner. “The challenge is to do that without destroying the city. We need a vigorous debate on how to grow this city without destroying this city. Every household adds $500 to the tax base; every additional person adds $250 per year in sales taxes.”
The alternative could be a big tax hike, which Turner thinks would be a huge mistake. “In this city, class warfare is so rampant. People say, ‘They can pay for it,’” he said. “But a lot of people in million-dollar condos don’t require a lot of services, and they can move. If we drive them away and the businesses they support, Sarasota won’t be a place we want to live in.”
Turner is eligible for re-election next spring, but he has not made an announcement about whether he will run.
Turmoil among the ‘hoods’
One member of the CCNA wants Turner censured and tossed off the City Commission now. Park East representative Jon Susce interrupted the Aug. 4 meeting several times to make disparaging remarks about Turner.
He also said he wanted his neighborhood moved out of the city’s First District. “We’ll approach Gillespie Park and the Rosemary District to take us out of D-One,” he said.
Turner is among the authors of a proposed city charter change that would dismember the Office of the City Auditor and Clerk, turning over most of the duties to the city manager. Susce perceives the amendment as racist because the current clerk and auditor is Pam Nadalini, an African-American woman with deep ties to the city.
That amendment will be on the November ballot.
The unease over the amendment seemed to spill over to the longstanding CCNA members representing North Sarasota districts.
Every monthly meeting begins with a round-robin survey of the neighborhoods. Valerie Buchand, who represents the Janie Poe public housing complex, often takes several minutes to detail the activities, concerns and complaints of her constituents. This time she said, “There is nothing I want to share.”
A few moments later, the First District’s representative, Barbara Langston, said, “I am sick and tired of this … Maybe you don’t know what racism is.”
For the first time in several years, the neighborhoods reflected division instead of unity. “I do not feel comfortable in this room,” said Indian Beach-Sapphire Shores representative Gretchen Serrie.