If no resolution results from meetings of staffs or the two boards, the issue will end up in court
The Sarasota city commissioners were “having none of it,” as the saying goes.
The focus was an alternative conflict resolution process recommended by Sarasota County staff regarding the city’s assertion that the county owes a final payment into the Downtown Sarasota Community Redevelopment Area (CRA) Trust Fund. The city board members agreed unanimously on March 6 that they preferred a process detailed by the Florida Statutes. The latter offers a detailed set of steps designed to reach a resolution without litigation. However, if no agreement can be reached, the City Commission has the option of filing suit in the 12th Judicial Circuit Court.
Commissioner Suzanne Atwell reiterated a point she noted that she had made in an earlier discussion of the topic: “This commission needs to be in a position of power on this.”
As Deputy City Manager Marlon Brown noted, “we have been at a staff level trying to resolve this issue, … [but] we have not been getting any traction.”
Since late last summer, he pointed out, city staff and the commissioners have talked about how best to proceed in trying to collect that final CRA payment, which has grown to more than $5 million, City Manager Tom Barwin said; it has been accruing interest monthly.
The resolution proposed by county staff called for two meetings of city and county representatives “authorized to make a settlement recommendation” to their boards, in an effort to iron out the local government bodies’ differences over a 30th CRA Trust Fund payment for which the city billed the county last year. As City Attorney Robert Fournier explained it this week, if the City Commission did waive its right to pursue the process outlined in Florida Statute 164, as the county requested, that would mean if the staffs of the two local governments could not resolve the issue, the city no longer would have the option of pursuing the conflict resolution process spelled out in the state statutes, which could lead to a public meeting of the City and County commissions.
If the City Commission did opt for the state procedure, he pointed out, “[The county commissioners] have the right to say, ‘No,’” they will not participate. “I would expect that might be their response,” Fournier added, based on email exchanges between Barwin and County Administrator Tom Harmer,
Fournier said that county staff was concerned about the need for public discussions, as provided for by the state statute. In the view of county staff, that stipulation “simply didn’t promote a situation where you would have maximum flexibility and opportunity for dialogue,” he added. “I certainly can understand how this might be the case, but, of course, that’s a matter of opinion.”
Given the lack of success of the informal staff discussions to-date, Vice Mayor Shelli Freeland Eddie pointed out, “It appears to be a waste of time and resources” to agree to more staff meetings.
Commissioner Susan Chapman concurred: “I think we’ve already done an informal process.
“We tried one last time to try to work through this” with Harmer and the Office of the County Attorney, Barwin added.
“I have never seen a 30-year [tax-increment financing measure] end at 29 years,” though, he added, “I’m told that is the county practice.” Still, he continued, “I’ve seen no evidence in writing” to prove the county’s contention that a 30th payment into the Downtown CRA Trust Fund is not due. “I think we have a very strong case.”
“We’ve done due diligence,” Freeland Eddie said. “Let’s pass the ordinance [to pursue the Florida Governmental Conflict Resolution Act] and keep it moving.”
After Atwell’s motion to that effect passed, Fournier said that, as called for in the statutes, city staff would send a letter by certified mail to Harmer within five days.
The background
A tax-increment financing district raises money by setting a base year. Theoretically, the property values in the district will rise over time. Each year, the difference between the value of the property in that base year and the subsequent year is calculated, and the resulting increase in ad valorem tax revenue is to placed in a trust fund.
The resolution the City Commission approved on March 6 explains that the Downtown CRA Trust Fund was established in 1986 and was to remain in effect for 30 years. Additionally, 1986 was set as the base year. “Accordingly, the first tax year or calendar year that the tax increment revenues were collected and deposited into the Redevelopment Trust Fund was the year 1987,” the resolution says.
However, in 2015, the County Commission approved a resolution “providing that ‘the last year during which the County shall appropriate the increment revenues to the [trust fund] shall be Fiscal year 2016,’” the resolution adds. Therefore, county staff maintains that the final payment due to the Trust Fund was made in December 2015, the resolution notes.
All of the city staff members who have looked at the city’s documentation have concluded that the county owed 30 payments into the trust fund, Barwin told the board on March 6.
He continued, “We all see the development and the construction and the traffic that’s occurring around town. We need to do the things we can do to address that, and the [tax-increment financing] money is in place to help with that process.”
Barwin then provided a series of statistics to the city commissioners. First, he said the city’s residents make up 13% of the county’s population, though the city geographically comprises only 4% of the land in the county.
Additionally, he said, 25% of all sales tax collections in the county come from operations in the city. “That is well over $100 million per year.”
The city also accounts for 30% of Tourist Development Tax (TDT) collections that go into the county’s coffers every year, he continued. Of the more than $20 million in TDT revenue collected for the 2016 fiscal year — a county record — the city pulled in more than $6 million.
In the 2018 fiscal year, Barwin noted, another $2 million in ad valorem tax revenue will go into the county’s General Fund, thanks to development in the city. Furthermore, he said, city residents’ payments make up 17.4% of all property tax revenue that goes into the county’s coffers.
Barwin added that he felt sure the Downtown CRA Trust Fund was conceived as a means to partly compensate the city “for this wide discrepancy. … So I think it’s an issue of equity; it’s an issue of economics.” As the county seat, the City of Sarasota needs to be able to grow and flourish, he told the commissioners.
Next steps
Within 10 days after County Administrator Harmer receives the city’s certified letter initiating the conflict resolution procedure, county leaders “may elect to participate in [the process], but are not entitled … to control the timing or progress of [the process],” Chapter 164 of the Florida Statutes says.
After the initiation of the procedure, the chapter continues, “a conflict assessment meeting shall occur.” It is to be scheduled within 30 days of receipt of the letter, and it calls for attendance “by the appropriate personnel” from the city and the county, including the “chief administrator, or his or her designee.” A “facilitator may enlisted for the conflict assessment meeting,” as well, the statute notes. Further meetings may be scheduled, the statute adds.
However, if “no tentative resolution can be agreed upon,” the City Commission then would schedule a joint meeting with the County Commission, and that would occur within 50 days of the county’s receipt of the letter.
If resolution still continues to prove elusive, the statute says, the City Commission would arrange for mediation with the County Commission. Ultimately, if no agreement can be reached, the statute adds, “the entities participating in the dispute resolution process may avail themselves of any otherwise available legal rights.”