County finance staff taking more conservative stance on projecting ‘bed tax’ revenue total for current fiscal year

County fiscal consultant indicates to Tourist Development Council that the decision has been based on latest red tide reports

This is the 2020 fiscal year budget for Tourist Development Tax for Sarasota County. Image courtesy Sarasota County

With a history of conservative budgeting, Sarasota County’s Office of Financial Management (OFM) staff projected total Tourist Development Tax (TDT) — or “bed tax” — revenue of $20,750,000 for the 2018 fiscal year.

The 5% tax is charged on rentals of accommodations for six months or less time. The tax is at the highest level the county can charge, under state law, until TDT revenue has reached the $30-million point, county staff has explained.

The FY 2018 total was set even though the revenue had been growing continuously over the past years. In fact, in November 2017, the Sarasota County Tax Collector’s Office had announced that the amount of TDT revenue the county received in the 2017 fiscal year was about $21.3 million. (Each fiscal year begins on Oct. 1 and concludes on Sept. 30.)

In January 2019, addressing the county’s Tourist Development Council, county Fiscal Consultant Doreen Buonpastore explained that staff was anticipating a total of $22,500,000 in TDT revenue by the conclusion of the 2019 fiscal year.

This is the TDT revenue chart presented to Tourist Development Council members in January, for the 2019 fiscal year. Image courtesy Sarasota County

Yet, county leaders were well aware of the severe downturn in TDT collections in the latter part of 2018 as a result of the red tide devastation of the county’s shoreline.

In the last two months of the 2018 fiscal year, the revenue totals had tumbled dramatically. In August, when the number of visitors to beaches plummeted as a result of the odors of fish kills and the respiratory irritation linked to the red tide algae’s aerosol, TDT revenue fell to $884,329.78, compared to $1.1 million in August 2017, the Tax Collector’s Office reported.

As red tide woes lingered into September 2018, the TDT collections added up to $750,748.52, compared to $1,082,309.87 in September 2017.

This chart shows the totals for each month for the past three fiscal years. Image courtesy Sarasota County Tax Collector Barbara Ford-Coates

Nonetheless, in spite of ongoing worries about conditions tourists would find on the county’s beaches as 2019 began, TDT revenues climbed. The county set yet another record in the 2019 fiscal year with a total of $23.3 million, the Tax Collector’s Office reported early this month.

That year-end figure marked a 2.4% increase from the FY18 total, Fiscal Consultant Buonpastore pointed out to the TDC members on Nov. 21.

Regardless of that fact, Buonpastore reported that the OFM staff had decided once again to be a bit more conservative in its outlook. As a result of recent concerns about red tide, she indicated, the total TDT revenue expected through Sept. 30, 2020 had been put at $21 million. Yet, she added, “We anticipate $22 [million] plus coming in.”

She did point out that, according to state law, the county cannot plan on collecting more than 95% of each of the major types of revenue it anticipates receiving each year.

Underlying Buonpastore’s comments about the OFM’s approach to TDT revenue in the new fiscal year, the Florida Fish and Wildlife Conservation Commission (FWC) reported In its Nov. 22 red tide status update that background to medium concentrations of the algae — Karenia brevis — had been found in Sarasota County in recent days. That report added, “Bloom concentrations (>100,000 K. brevis cells per liter) persist in Sarasota, Charlotte, Lee, and Collier counties. These include coastal sites in Sarasota County …”

Additionally, FWC noted that fish kills had been reported in Sarasota County.

On Oct. 11, when FWC was issuing red tide reports on a weekly basis, it pointed out that Karenia brevis had been observed only at background concentrations in Sarasota and Manatee counties.

This is a Karenia brevis cell. Image courtesy of Mote Marine Laboratory

With water sampling having shown the growth of the volume of red tide cells offshore of more southern counties, FWC had begun midweek reports by early October.

As of Oct. 30, FWC noted, Karenia brevis had been observed in background to medium concentrations in Sarasota County. Just a week later — on Nov. 6 — the algae concentrations had jumped to high levels along part of Sarasota County’s coastline.

That update also noted respiratory irritation having been reported over the previous week in Sarasota County.

Such reports have continued, as the Nov. 22 update made clear.

Additionally, FWC has begun directing people to a Facebook page — Florida Red Tide and other Harmful Algal Blooms (HABs) — for people seeking more information about the algae’s effects on the southwest coast of Florida.

Daily sampling maps may be found at this link.

Other TDT budget expectations for 2020

Although the total TDT revenue budgeted for the 2020 fiscal year was lower than the amount for the 2019 fiscal year, about $400,000 in interest — plus funds carried over from FY19 — have resulted in county staff’s projecting $29,872,606 will be available this fiscal year for expenses. TDT revenue pays for a wide variety of initiatives, Fiscal Consultant Buonpastore told the TDC members on Nov. 21.

These are the budgeted expenditures for TDT revenue this fiscal year. Image courtesy Sarasota County

The largest portion of those expenditures — 27.8% — has been allocated to capital improvement projects approved by the County Commission, she continued. Primarily, the $8,314,148 was set aside for beach renourishment on the Sarasota County side of Manasota Key Beach, in a joint project with Charlotte County.

The next largest portion of the TDT expenditure pie chart — 21.9% — adds up to $6,540,000 for promotion of the county to visitors.

Earlier, Buonpastore pointed out that the County Commission last year modified the ordinance governing TDT expenditures to reduce the amount of promotional funds provided to the county’s tourism office, Visit Sarasota County (VSC). Instead of 30% going to promotion, the amount was set at a range between 25% and 30%, so the commission could fund repairs and improvements identified as necessities for Ed Smith Stadium over the next 10 years, Buonpastore added. This will be the second year of those efforts, she said.

The Sports Stadium allocation increased to a range between 16% and 21%. That decision was based on a facilities assessments report the county’s Parks, Recreation and Natural Resources Department commissioned last year, in accord with the county agreement with the Baltimore Orioles for the team to conduct Spring Training and other activities in Sarasota County. Ed Smith has been the team’s Spring Training home since 2010.

The portion of TDT expenditures allocated to the Sports Stadium account is 15.3%, or approximately $4.6 million.

Buonpastore further noted that $1.1 million of that is debt service on the bonds the county issued to cover the initial makeover of Ed Smith Stadium for the Orioles; another $1.2 million will go to the bonds the county issued for the construction of the new Spring Training complex for the Atlanta Braves at the West Villages in North Port. (The Braves will have their first full Spring Training season in 2020 in North Port.)

Another 15.9% of the TDT expenditures are allocated to maintenance of the county’s beach facilities, the FY2020 pie chart shows. That total is $4,740,636.

This chart shows more details about the TDT budget for the current fiscal year. Image courtesy Sarasota County

Buonpastore also pointed out to the TDC members that 7.7% of the funds for this fiscal year — $2,300,030 — has been designated for Nathan Benderson Park. Of the total, she said, $1.1 million is debt service. The remainder is to go to the Suncoast Aquatic Nature Center Associates (SANCA), which manages the park for the county.

However, as of early November, County Administrator Jonathan Lewis reported that staff had yet to finalize a new agreement with SANCA’s board. He said discussions would continue in anticipation that the talks would end productively sometime within the coming months.

As Buonpastore concluded her presentation on Nov. 19, TDC Vice Chair Norman Schimmel of Sarasota — who was presiding in the absence of Chair Charles Hines — emphasized the fact that TDT revenue has been trending upward again, since the red tide bloom that began in October 2017 finally subsided earlier this year. However, Schimmel refrained from actually saying “red tide.”