County’s 2018 fiscal year budget wins final approval on 4-1 vote; district millage rates also approved

Once again, Commissioner Moran declines to support the budget, citing the need to pare expenses

A graphic shows changes in the Sarasota County budgets since the 2014 fiscal year. Image courtesy Sarasota County

Commissioner Michael Moran continued to withhold his support, but the remainder of the Sarasota County commissioners this week approved the county’s budget for the 2018 fiscal year.

They agreed during their first public hearing on the budget — held Sept. 18 — that they would not implement a 5% Public Service Tax on residents’ use of electricity, water, natural gas and propane in the unincorporated part of the county, and the majority voted this summer not to support a millage rate increase. Therefore, beginning on Oct. 10, the board members will begin formal discussions about how to deal with what staff anticipates will be a $7.3-million shortfall in the 2019 fiscal year.

Prior to the Sept. 26 vote of 4-1 on the budget, Steve Botelho, deputy county administrator and chief financial management officer for the county, explained that one option the commission could utilize in an effort to cover the FY19 shortfall would be shifting $4.1 million out of the fund balance for the county’s Environmentally Sensitive Lands Protection Program (ESLPP) into the county’s General Fund, which pays for most county operations.

The voter-approved millage rate for the ESLPP is up to 0.25 mills, Botelho emphasized. Therefore, after debt service and maintenance of lands purchased through the program are paid for, Botelho said, approximately $4.1 million would be left for acquisition of more property; that could be moved into the General Fund.

A slide he showed the board indicated that the shift would jeopardize the long-discussed potential of purchasing the 5,744-acre Orange Hammock Ranch in South County, as well as two parcels on Siesta Key’s Beach Road. On Sept. 13, the board voted 4-1 to have staff renew a county offer of $2,850,000 for the latter property.

During the final budget hearing on Sept. 26, County Attorney Stephen DeMarsh explained that if the board chose to transfer money from the ESLPP fund to the General Fund, it would have to act on that prior to adopting the FY18 budget. However, Commissioner Alan Maio’s motion did not make that part of his budget approval motion, which was seconded by Commissioner Nancy Detert.

Prior to the vote, Moran said, “Overall, I am simply troubled that we want to live beyond our means,” adding that he “was very much hopeful” his colleagues would have been willing to entertain not only the ESLPP transfer but two more options, as well, that Botelho noted that evening.

A chart shows details about department budgets for the 2018 fiscal year. Image courtesy Sarasota County

The other potential fund shifts, Botelho said, entailed the Community Reinvestment Program the board revived with the start of the 2016 fiscal year and $5.5 million in the fund for county economic development incentives.

Earlier that day, Moran suggested the economic incentives money could be used in lieu of the $5.4 million in revenue the Public Service Tax would have been estimated to bring in during the second half of the 2018 fiscal year. By law, Botelho had explained in budget workshops, the tax has to be implemented at the beginning of a fiscal quarter. Staff had projected the earliest it could take effect — after the county satisfied the necessary state statutory requirements for advertising it — would be April 1. The fiscal year begins on Oct. 1.

The Community Reinvestment Program was revived to enable municipalities — and county programs — to win grants for infrastructure projects designed to have a significant economic impact. Public/private partnerships were foreseen as the focus of applications. However, to date, the county has not awarded any of the money in that program. County Administrator Tom Harmer has offered the program numerous times as an option to City of Sarasota staff and the City Commission in lieu of any further county contribution to the Downtown Sarasota Community Redevelopment Area (CRA) Trust Fund. (The city and the county boards still have not resolved an approximately 17-month-long dispute over the CRA issue.)

Without a millage rate increase or the excise tax revenue, Botelho explained again on Sept. 26, the county would be depleting its Economic Stabilization Fund in the 2018 fiscal year budget. However, he said, “if the board looked at these alternative revenue sources,” it would be able to maintain some of that fund, which previous commissions built up in the event of an economic downturn.

When Commissioner Charles Hines asked how much altogether was in that Economic Stabilization Fund before the Great Recession struck, Botelho replied that it was between $30 million and $40 million, and probably closer to the higher number.

Looking ahead

A graphic prepared by the Office of Financial Management shows the projected budget gaps in coming years that the County Commission will have to address. Image courtesy Sarasota County

During their first public hearing on the budget — held on Sept. 18 — the majority of the board members agreed with a motion by Commissioner Maio to use the last of the Economic Stabilization Fund to balance the FY18 budget and then start working after Oct. 1 to find ways to pare expenses. Moran was the only one to cast a “No” vote that night, as well.

On Sept. 26, Detert asked for clarification on whether any of the $7.9 million the board has dedicated to the purchase of the first segment for the North Extension of The Legacy Trail could go back into the General Fund if the board chose not to move forward with a December closing on that property.

None of it would, Botelho responded, reminding the commissioners that the board this spring cobbled together a mix of funds from the ESLPP and mobility and other fees to achieve a savings of $8.6 million that would go toward the North Extension.

However, County Attorney DeMarsh and County Administrator Harmer pointed out that the contract with the Trust for Public Land allows the county to opt out by Nov. 30 if the county has insufficient funds to close on the deal.

“I think we all have the desire to move forward and the desire to fund it,” Detert said of the additional property for The Legacy Trail. “We just want to make sure we have the money to fund [Phase I].”

A chart shows the millage rates approved this week for the county’s special districts. Image courtesy Sarasota County

“It does not go back into the General Fund,” Commissioner Maio pointed out — with affirmation from Botelho — if the money is not used for The Legacy Trail.

Both Maio and Hines noted that the board could proceed with the Phase I purchase in December and the board “could just let [the land] sit” — as Maio put it — until the county holds a referendum in 2018 on bonds to pay for the Phase II segment and the improvements necessary for the extension from Culverhouse Park on Palmer Ranch to Fruitville Road.

Calling for caution

As talk turned to the Public Service Tax on Sept. 26, Hines said he respected the majority of his colleagues who chose not to implement the tax. (He and Detert were the only ones to support it during the board’s Sept. 18 public hearing on the budget.)

Nonetheless, Hines continued, “without it, we’re really running this county very, very thin.” Using up all the Economic Stabilization Fund could pose problems not just for future boards trying to balance the budget but also potentially for the current commissioners, he added.

When those previous boards created that reserve, he continued, they did not foresee financial issues with which more recent boards have grappled, including homelessness. (The FY18 budget, Botelho pointed out, will pay for extra emergency beds at The Salvation Army in Sarasota in response to a consultant’s recommendations this spring.)

A chart that is part of the Capital Improvement Program approved by the County Commission this week lists funding for traffic-related projects. Image courtesy Sarasota County

The county’s 2016 Citizen Opinion Survey — whose results the board members learned about in August — made it clear that respondents “didn’t want [higher] taxes,” Hines said. “But I don’t know that we’re having an honest conversation with them openly … of where we are in reality” without some new means of revenue to plug budget gaps.

Hines also talked of his concern that another recession is on the horizon, as economists and the county’s own financial adviser have told the board.

Additionally, he pointed out, without any flexibility in spending in the coming years, the board might have to forgo “a wonderful opportunity that comes to us … We’re putting ourselves at risk.”

Even if the board had approved implementation of the Public Service Tax, Hines noted, that would not have brought in enough money to replenish the Economic Stabilization Fund.

Finally, referring to the majority of the board’s unwillingness to raise the countywide millage rate, Hines said that if a homeowner looked at his property tax bill from 2000 or 2005 and then looked at the most recent Truth in Millage (TRIM) notice mailed out by the Sarasota County Tax Collector’s Office, the homeowner would see that the bill remains lower than it was 17 or 12 years ago.

“I would agree with Commissioner Hines,” Detert said. Although she is “not a big fan” of the Public Service Tax, she added, “I try to be fiscally responsible.” She told her colleagues, “This is our last cheap year.”

Because of the Sept. 18 decision on the Public Service Tax, County Attorney DeMarsh explained that the board did not need to hold the scheduled public hearing on Sept. 26 on that issue. After conferring with his colleagues, Chair Paul Caragiulo noted that the board would follow that advice. “So 2B is not to be,” Caragiulo said, referring to the item’s number on the agenda.

Additionally, on Sept. 26, the commissioners unanimously approved the 2018 millage rates for a number of special districts and the countywide rate of 3.3912. They also approved the county’s Capital Improvement Program for the next fiscal year, including projects they had discussed at workshops in the spring. That list includes, for example, $555,000 in FY18 for athletic field improvements, $10 million for road resurfacing and $2,033,000 for the county’s sidewalk program.