Although latest projections show a $6.5-million shortfall in FY18, staff feels it can eliminate that, County Commission hears
Add in extra revenue, thanks to property values going up a projected 7.7 percent. Subtract higher expenses for the county’s constitutional officers — such as the sheriff. Then figure in a health insurance hike of $3.7 million (though only $1 million of that will come out of the General Fund), plus $2.2 million in merit pay increases and $402,000 more in Florida Retirement System payments. Those factors and others leave the General Fund budget projection for Sarasota County’s 2017 fiscal year at $251,460,627, county staff showed the County Commission during a June 22 budget workshop.
The overall budget will exceed $1 billion, with the county’s Capital Improvement Plan expenses and other considerations plugged into it.
The board is planning to keep its millage rate at 3.912.
The General Fund figure for FY17 is expected to increase 4.3 percent, County Administrator Tom Harmer said, noting that county departments were asked to limit any budget hikes to 3 percent.
However, Sheriff Tom Knight’s proposed budget, as shown in a county graphic on June 22, is up from $104,143,456 in the current fiscal year to $110,656,218 in FY17. (See the related story in this issue, with revised numbers Knight’s staff provided on June 23.) And the other constitutional officers’ submitted budgets are up slightly overall: from a total of $41,309,008 in FY16 to $42,901,871 in FY17, according to figures provided to the commission.
County property figures still have not recovered from the Great Recession, Harmer pointed out. At its peak over the past 10 years, the county’s ad valorem tax revenue was $175.7 million in the 2008 fiscal year. For FY17, the total is projected to be $137.5 million. “Things are looking better,” he said, “but we’re still not where we were.”
The property tax base is still down 20 percent compared to its highest point prior to the Great Recession, Harmer pointed out.
At the lowest level over the past decade, property taxes brought in $108.8 million in FY13, a chart shows.
Nonetheless, Harmer noted, the county is in a strong financial situation. It has a 75-day reserve fund that could be used in the event of an emergency such as a hurricane strike, compared to the 60-day level seen as the best practice to which most local governments adhere.
And while the county will continue to draw money from its economic uncertainty/budget stabilization reserve to balance the FY17 budget, Commissioner Christine Robinson pointed out, “This fund is being spent as intended.”
“It’s important that we say that with great frequency,” Chair Al Maio added. The next fiscal year will be the 17th in a row with no millage rate hike, he noted.
The General Fund projection for FY17 has built in $37,936,746 from the economic uncertainty reserve to balance the budget, but “we know that we’re not going to spend all that,” Assistant County Administrator and Chief Financial Management Officer Steve Botelho told the board.
Without that “rainy day” reserve, Harmer added, the board might have been forced to raise its millage rate.
One slide in the June 22 presentation did spark County Commission objections: Harmer pointed out that the total number of full-time county workers will increase by 35 from the current fiscal year to FY17, a 1-percent uptick. However, he said, the number representing employees in county departments other than those of the constitutional officers will be 100 fewer than the peak level of 2,366 recorded during the 2007 fiscal year. Counting staff positions for the constitutional officers, the figure is 159 lower than that of the 2007 fiscal year, a 4.3-percent decrease.
“When are we going to stop [showing] that, because I feel like … we grew because we were trying to handle things back then,” Robinson said. “It bothers me that we keep comparing ourselves to 2007. … It’s not an aspirational goal for us to be back there. … I want to have learned something from this and not to grow government again, unless we absolutely have to.”
“I echo those same comments,” Vice Chair Paul Caragiulo told Harmer. “It almost implies that we are operating below par,” Caragiulo continued, “like a 747 that has three engines instead of four engines going.”
Harmer replied that he would be happy to find a different way to convey the information.
After looking at his colleagues, Maio told Harmer the consensus was, “No slide [on that point in the future].”
“I like [fewer] slides,” Harmer responded.
Other budget factors
Among other factors taken into consideration in planning the FY17 budget, Harmer noted that the new Suncoast Technical College will open in North Port in the latter part of the 2017 fiscal year. That facility will include a community library the county is helping fund, and the county also will have to staff it. (Sarasota County School District staff has said the college should be ready for students in August 2017.)
On the positive side of the balance sheet, Harmer pointed out that the county will realize savings of $27.1 million from bond refunding and defeasances in the current fiscal year.
The county also is expected to save about $600,000 during the first full year of transition from the county’s operation of paratransit bus service for physically challenged residents to a contractual arrangement with a private firm.
Looking ahead, Botelho explained that the software the Office of Financial Management uses to project General Fund revenue and expenses for the next five years shows a projected shortfall of $6,540,377 in FY18 and a gap of $11,566,978 in FY19.
Maio pointed out — as he has during previous budget workshops — that the figures over the next five years do not factor in about $2.5 million that the county hopes to realize through the sales of surplus property. (Lin Kurant, the county’s manager of real estate services, told the board later in the day that she believes the income will be closer to the $3-million mark.)
“We do have some comfort that we will be meeting that shortfall in [FY]18,” Botelho told the commissioners.
Botelho also stressed that the projections do not take into account the 75-day emergency reserve fund or the extra $8.1 million the board set aside in 2013 for potential use on capital projects that could generate an increase in tourism and produce a greater positive economic impact on the county. That money was freed up from reducing the amount of money in the emergency reserve fund to reflect 75 days of operations instead of 90.
When Robinson asked about the shortfall indicated for FY19, Botelho explained that whenever staff expects a gap of $10 million or less, “we’ve always … figured out ways to mitigate it.”
In response to another question from Robinson, Botelho noted that the state provides reports several times a year on its estimates for property value changes, which also has an effect on budget modeling.
When Robinson also asked for clarification that most counties do not project budgets more than two years out, Harmer confirmed that. Sarasota County’s staff has been using its modeling software for a number of years, he added, “and using it appropriately” instead of over-reacting to potential shortfalls.
“That’s good messaging,” Robinson told him: “‘not over-reacting.’”