City of Sarasota ‘in very strong financial position,’ 2021 audit shows

Total assets for end of 2021 fiscal year equal $397.6 million

(From left) Deputy City Finance Director Anthony Becich and Deb Muller, manager of accounting and payroll for the city, listen as Jeff Wolf of MSL addresses the City Commission on April 18. News Leader image

The 2021 Comprehensive Annual Financial Report (CAFR) for the City of Sarasota shows that the municipality is “in a very strong financial position,” Jeff Wolf, senior manager for audits for the Tampa firm MSL CPAs & Advisors, told the City Commission this week.

Although formal approval of the report and MSL’s audit of city finances was among three items on the board’s Consent Agenda No. 1 of routine business items for the April 18 meeting, Commissioner Hagen Brody asked Wolf for a presentation. This was the first audit undertaken by that firm for the city, Brody noted, with the commissioners having made the decision last year to hire a new company to handle that work.

“You met both federal and state single audit requirements,” Wolf told the commissioners.

The city’s total assets at the Sept. 30, 2021 end of the last fiscal year were $397.6 million, the MSL report said, while total liabilities added up to $151.4 million.

These are details about the City of Sarasota’s General Fund at the end of the 2021 fiscal year. Image courtesy City of Sarasota

In the General Fund, which largely is made up of property tax revenue, total assets were $44 million, the report noted, up from $38.1 million in the 2020 fiscal year.

The unassigned fund balance for the 2021 fiscal year represented 32.4% of total expenditures, the report said. That figure compared to 30.4% at the end of the 2020 fiscal year. The 2021 total gives the city flexibility to respond to “anything that potentially could come up,” Wolf pointed out.

Mayor Erik Arroyo did ask Wolf why the city’s investment earnings fell from $4,149,182 in the 2019 fiscal year to $$181,388 in the 2020-21 fiscal year.

“How does that happen?” Arroyo asked, noting that the decrease was approximately $3.5 million.

Wolf replied that he would have to look into that and report back to Arroyo.

In response to a Sarasota News Leader request, city Senior Communications Manager Jan Thornburg provided a copy of the response to Arroyo, which came from the city’s deputy finance director, Anthony Becich: “The reason for the large drop was because of the market rates dropping during the 2020-2021 year on the Fixed Income Portfolio.”

These are the city’s total investments and cash at the end of the 2021 fiscal year. Image courtesy City of Sarasota

Among other details in the CAFR, a pie chart shows that property taxes made up 35.1% of the city’s revenue for governmental activities in the 2021 fiscal year. Public service tax revenue accounted for 10%, and sales tax revenue made up 14%. Another 25.1% came from charges for city services.

This pie chart breaks down revenue by source. Image courtesy City of Sarasota

In the 2021 fiscal year, property taxes added up to $40,028,474, up $1,801,519, or 4.71%, from the 2020 fiscal year, the report shows. “The increase is a result of the City’s assessed values rising 4.67% over last year and the City’s millage rate for the current year [decreasing] from 3.4971 mills to 3.4866 mills,” the report notes.

The taxable value of commercial and residential property in the city rose 6.43% in 2021, the report adds. “The $757 million increase in taxable value for 2021 is the tenth consecutive year that property values have increased,” the report says.

Sales tax revenue was $16,005,912, which marked an 18.48% increase, compared to the Fiscal Year 2020 figure. That was a result of “recovery from the effects of the COVID-19 pandemic,” the report points out.

Conversely, investment earnings dropped 93.24% from FY 2020 to FY 2021, a chart shows. That marked a leveling out “from a highly favorable previous year of returns,” the report says.

Additionally, the city at the end of the 2021 fiscal year had capital assets, net of related debt, totaling $407,732,936, the report points out. The value of the city’s art collections at the end of the 2021 fiscal year was $1,670,683, the report notes; that was unchanged from the FY 2020 total.

This chart provides details about business activities in the 2021 fiscal year. Image courtesy City of Sarasota

Among other details, the CAFR notes that the Van Wezel Performing Arts Hall brought in $5,747,670 in revenue in the 2021 fiscal year and had expenses of $4,746,755. Thus, the Van Wezel earned $1,000,915.

However, the CAFR explains that the Van Wezel’s operating revenue dropped by $10,023,985 in the 2021 fiscal year — which began on Oct. 1, 2020 — because the COVID-19 pandemic necessitated the cancellation of performances. Yet, that also resulted in a decrease in performance fees and other expenses, leading to overall operating expenses falling by $7,635,165. The Van Wezel did obtain a $5,324,420 Federal Government Shuttered Venue Operator Grant to assist with its operating expenses during the pandemic, the report points out.

The Parking Management Division realized revenue of $3,739,766 in the 2021 fiscal year, the report says, but its expenses totaled $4,661,439, so it lost $921,673.

On the other hand, the CAFR shows, the city’s Water and Sewer fund had net revenue of $11,880,803 in the 2021 fiscal year, which was up from $8,339,712 in the 2020 fiscal year. That was primarily a result of the 3.5% increase in rates, the CAFR points out.

These are changes in city fund balances over the past few fiscal years. Image courtesy City of Sarasota

Yet another section of the report notes that, at the end of the 2021 fiscal year, the city had total outstanding bond debt of $94,245,005. Of that amount, the report says, $30,355,000 is “backed by the full faith and credit of the City. The remainder of the City’s debt represents bonds secured solely by specified revenue sources (i.e., special obligation bonds, and revenue bonds).”

Another detail in the report says that the city’s unemployment rate for September 2021 was 3.7%, which marked a 1.5% drop from the September 2020 rate of 5.2%.

Following the presentation, the commissioners voted unanimously to approve the CAFR and the MSL findings.

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