Splitting on votes, board members decline to pull revenue from economic incentives and Community Reinvestment Program accounts
They came close this week — on paper, at least — to rounding up $5.4 million they want to preserve in their Economic Uncertainty — or “rainy day reserve” fund. The much more difficult discussion, one of them indicated, lies ahead on Jan. 31, 2018. That is when the Sarasota County Commission plans to pore over what Chair Paul Caragiulo characterized on Nov. 28 as an “a la carte” approach to cutting county department budgets.
And Commissioner Charles Hines warned again this week — as he has in the past — that reducing levels of service is going to create community uproar that only he among the board members has experienced. Hines, who was elected for the first time in 2012, has heard angry parents berate past commissions for overgrown athletic fields and barely visible playing lines, he pointed out as examples, when the county was dealing with the repercussions of the economic downturn.
“The fat’s been squeezed out,” he said of department budgets, as the board wrapped up a financial discussion late in the afternoon of Nov. 28. “Right now, we just maybe don’t believe it.”
He welcomed members of the public to point out any waste in county spending. But then Hines asked his colleagues, “What are you going to do? Cut lifeguards? … In a community that’s trying to bring tourists here, the last thing I … want … is to have two lifeguards at Siesta Key [Beach] instead of three or four.”
Commissioner Alan Maio referenced several residents who showed up at the Open to the Public comment period at the start of the board’s afternoon session on Nov. 28. Some pleaded not just for the board to keep its library system’s budget intact but also to expand hours and services and the numbers of popular books in the county’s collections.
During the board’s two public hearings in September, prior to its adoption of its 2018 fiscal year budget, several people pleaded for the University of Florida’s Institute of Food and Agricultural Sciences (IFAS) Extension budget to be kept intact. Hines said they will be back, as will representatives of environmental groups, as discussions about more cuts ensue at the dais.
“We all need to do our homework, our significant amount of homework,” Hines said, before Jan. 31, 2018 arrives. “We created this [situation] because we set policies, we set goals, and we’ve been underfunding [them] for the last six or seven years.” The board has been balancing its budgets, he continued, with money prior commissions set aside in the Economic Uncertainty Reserve Fund during the boom years before the Great Recession began. He added, “It hit the fan, and we didn’t vote to deal with it.”
Hines and Commissioner Nancy Detert supported one measure earlier this year that staff had proposed in an effort to shore up the county’s revenue outlook: a 5% Public Service Tax on use of certain utilities, such as consumption of water and electricity.
In response to speakers’ comments on Nov. 28, Detert said, “That window is closed. … You can take that argument out of your portfolio.”
Tax bills have been sent to property owners in the county, she pointed out, so the board would not be able to make any change in the county millage rate until next budget season.
Commissioners have voiced concern that — with a multitude of their projects relying on the issuance of bonds — the county could lose its high rating from the firms that make those decisions. That issue also arose on Nov. 28.
In response to a question from Chair Caragiulo, incoming Interim County Administrator Jonathan Lewis explained that while the rating agencies put their greatest focus on a local government’s General Fund, “they look at all the different accounts,” including the total amount held in reserve.
Maio underscored a point he has made in the past — with affirmation from Deputy County Administrator and Chief Financial Management Officer Steve Botelho: The county has approximately $150 million in its reserve funds. Even as
Botelho also reiterated the fact that one of those reserves has enough funds for 75 days of county operations, in the event of a catastrophe such as a Category 4 or 5 hurricane strike.
Nonetheless, he explained again on Nov. 28 that the Economic Uncertainty Fund will have nothing left without new revenue the board can count on.
Adding up the potential
The Nov. 28 discussion was the second the board has held since September, when it charged staff with producing suggestions to replace the $5.4 million the Public Service Tax was estimated to bring in this fiscal year, which began Oct. 1, and a total of about $11 million per year going forward.
The commissioners ended up with the potential of all but $137,598 of the $5.4 million before they adjourned on Nov. 28. Yet, as they and incoming Interim County Administrator Lewis acknowledged, the $5,262,402 they identified is contingent upon the sale of surplus county land at prices the Sarasota County Property Appraiser’s Office has put on the parcels. (See the related story in this issue.)
“You still need a buyer,” Commissioner Hines summed it up.
Motions Commissioner Detert made to take $600,000 from the county’s $5.6-million pool for economic development incentives and $400,000 from its $1.4-million Community Reinvestment Program (CRP) account failed.
Hines referenced letters the board members had received from business leaders in the community, urging them to preserve the incentives fund. “These are … folks I hold in high esteem,” he added. The board has made changes in the past three years to tighten up the awards of incentives to companies, he pointed out. “I don’t want to take this tool away from a group that we’ve asked to diversify our economy.”
Conversely, Commissioner Michael Moran pointed to figures he had compiled from the last quarterly report the board had received on the program. They showed that over the past eight years, the county had paid about $20 million altogether for its economic development efforts — including salaries for staff handling that work on their behalf. Yet, only 2,908 jobs have been created, he said.
“It ‘s my understanding that the policy [for awarding incentives to firms] has changed considerably from the outset,” Chair Caragiulo responded, “so let’s be fair about that.”
As for the CRP: The commission revived that in the 2016 fiscal year to assist with the construction of infrastructure in the municipalities and the unincorporated parts of the county in an effort to spur economic development.
In response to a question from Maio, Botelho reported that, to his knowledge, only one application has been received since then, and it was deemed inappropriate for the program.
Maio talked of discussions he has had with City of Venice leaders, who, he indicated, have gained a better understanding of how they can apply to the program for project assistance.
No other board member offered a comment on the program.
The parks maintenance issue
The commissioners did agree, however, to allow staff to send letters to the Cities of Sarasota, Venice and North Port, cautioning them that the county would be preserving its right to cease the funding it provides for maintenance of their parks come the 2019 fiscal year.
Under the terms of interlocal agreements with those cities, incoming Interim County Administrator Lewis explained, the commission has to notify them by Dec. 1 if any chance exists that the county will halt that funding support in the next fiscal year.
“It just preserves our ability to move?” Maio asked. “We’re not making any decision on changing.”
“That would be my perspective on this, yes,” Lewis replied.
Detert and Caragiulo voted “No” on a motion to send the letters.
“We send ’em that letter,” Detert told her colleagues, “that doesn’t look like what you’re saying at this meeting.” She added that she was “getting really tired” of the votes the board was taking that afternoon. “It’s like everything we vote on, we’re voting to go to Purgatory instead of heaven or hell. I’m for picking one.”
“I would suggest that our staff move immediately to call [senior staff and the elected officials of the municipalities],” Maio told Lewis. “They’ll light up only if they misunderstand [the board action].”
“I think it is impossible to over-communicate on this,” Commissioner Moran added.
Hines supported the motion, he said. Yet, regardless of how much communication staff undertakes to explain the intent of the letters, he added, “This is going to explode.”
Following the decisions on Nov. 28, the next step, as Caragiulo pointed out, is diving into the “operational consequences”: the funding allocated to county departments.
“I think that this is a critical exercise that we have to go through,” Caragiulo said, “in order to move forward.”