Interlocal agreement would have to be negotiated with Sarasota County Government for continuing services if Siesta Key were to become incorporated

Chair of nonprofit Save Siesta Key offers Siesta Key Association members new details about latest effort to create new town

If the portion of Siesta Key within Sarasota County’s jurisdiction becomes incorporated, an interlocal agreement would have to be forged between the new Town Council and Sarasota County Government regarding how much the town would have to pay for county services.

That was one facet of an update that the chair of the nonprofit advocating for the island’s incorporation provided members of the Siesta Key Association (SKA) during their regular meeting on Sept. 8.

Tim Hensey of Save Siesta Key pointed out that representatives of the Town of Siesta Key and the county would have to negotiate the expenses for those services, including mosquito control, solid waste collections, and maintenance of water and sewer services and stormwater infrastructure. “So there’ll be a lot of negotiating going on.”

Leaders of the nonprofit have met with county staff to talk about the issues, he added. “We had a civil conversation on that.”

As for a continuing county interest in the Key even if it were to become incorporated, Hensey noted, “The county owns the beaches” and all of the parks. County representatives “are steadfast,” he said: “They will not give those up.”

The 2021 incorporation feasibility study that Save Siesta Key had to provide to the Florida Legislature last year, in the nonprofit’s initial effort to achieve municipal status for Siesta Key, listed the following services to be handled by the county: public works, library, parks and recreation, building inspections and the Sheriff’s Office. For water and sewer services, that document noted, “Private provider or Sarasota County Utilities.”

Having met several times with Sheriff Kurt A. Hoffman and Hoffman’s chief deputy, Col. Brian Woodring, Hensey said, he has learned, “They’re more than willing” to maintain their level of service on the Key if the barrier island does become incorporated.

Hensey added that he is not in favor of the Town of Siesta Key establishing its own police force. “I just don’t see having two law enforcement agencies on an island this size.”

When SKA Vice President Joyce Kouba asked about road maintenance, Hensey explained that the Key has three classifications of roads. The arterials are Midnight Pass Road, Higel Avenue and Beach Road, he said. The local roads — including, as he put it, those with “Calle” in their names — will have to be maintained by the county, as well. A Florida law, he added, “says there can be no transfer of [road] ownership from one municipality to another” unless both parties agree to such a transaction.

“The county can’t force us to take the local roads,” Hensey pointed out, “but we can’t force the county to maintain them.” Thus, he expects the town would have to negotiate with the county over the expense of that road maintenance.

The town’s updated financial outlook

Last year, the Save Siesta Key leaders proposed a 0.25-mill property tax to cover all of the new town’s operations, including the salaries for full-time employees, such as a town manager and clerical staff. This year, Hensey reminded the SKA members on Sept. 8, Save Siesta Key has proposed a property tax rate of 0.50 mills.

One mill represents $1,000 of value.

The county’s operating millage rate for the 2023 fiscal year, which will begin on Oct. 1, is 3.2497 mills. (See the related article in this issue.)

Even if Siesta were incorporated, Hensey noted, residents would have to continue to pay county taxes.

He did emphasize the fact that property values on the Key had a “pretty significant” increase this year, as determined by the Sarasota County Property Appraiser’s Office. The total value for the island property, Hensey added, is “in the high $7-billion range, and that increased over the last 24 months by $2 billion. … It’s a very robust real estate market,” he pointed out of Siesta Key.

The Sarasota County Property Appraiser’s Office put the climb in county property tax value at approximately 17.76% this year.

Many people from out of state have been purchasing parcels on the island, including a number of second homes, Hensey said.

With the 0.50 mills tax, he continued, the Town of Siesta Key would have approximately $4.7 million in revenue in its first year. (He has explained that the feasibility study has to consider the first five years of town operations.)

The economist who drafted the revised study, he added, “has done this for like five other towns in Florida, so it’s not his first rodeo.”

Save Siesta Key’s 2021 feasibility study worked on the basis of the island’s property being valued at $5.7 billion.

In response to a question, Hensey said that he did not have an updated figure to show the average municipal tax bill for a homeowner, based on the new property valuations, if the Town of Siesta Key were created. Last year, Save Siesta Key directors noted that the average value of a residential unit on the island was $440,602. With the proposal then for a town tax rate of 0.25 mills, they pointed out that the owner of such a property would pay $97.65 in taxes to the town.

The doubling of the millage rate this year, Hensey has explained, was based on comments of members of the 2021 Sarasota County Legislative Delegation. They voiced concerns that the town would not have sufficient funds with which to operate if the rate were just 0.25 mills.

Other incorporated beach communities in the area have much higher millage rates, then-Delegation chair Rep. Will Robinson, R-Bradenton, pointed out.

Other details of the town’s proposed budget

Save Siesta Key did submit its updated feasibility study to legislative staff on Aug. 31, Hensey reported to the SKA members. Along with it, the nonprofit provided a copy of its proposed Town Charter and a draft of the local bill for the Delegation to consider.

Among the planned town expenses, Hensey continued, would be “very robust salaries, well above the state average,” for a town manager, a finance director, a town clerk, a chief building official, a building plans examiner, two Code Enforcement officers, two building inspectors and three full-time clerical staff members.

The proposed budget also includes $300,000 for legal expenses, Hensey said. Save Siesta Key’s board members are not certain that the town would hire a full-time attorney in its first two years, he pointed out.

In its first year, he added, the budget calls for a surplus of $2.4 million in revenue, which would grow to $3.2 million in the fifth year. That money, Hensey said, could be used for discretionary purposes — to pay to improve bicycle and pedestrian safety, beautification initiatives, and stormwater projects that county leaders might not be willing to undertake, as examples.

In response to comments made by SKA member Michael Holderness, Hensey explained that the Town of Siesta Key would not be able to count on any of the county’s Tourist Development Tax (TDT) — or, “bed tax” — revenue. Save Siesta Key’s leaders have learned that a municipality must have a millage rate of at least 3 mills, Hensey added, before it is entitled to such revenue.

The 5% bed tax is applied to rentals of accommodations for six months or less time. The tax will rise to 6% on Oct. 1, with the start of the 2023 fiscal year, thanks to a County Commission vote earlier this year.

Most years, Siesta Key entities account for the largest percentage of the TDT revenue that the county receives, as Sarasota County Tax Collector Barbara Ford-Coates and her staff have noted in annual reports.

Hensey added that he expected to begin getting legislative staff comments on Save Siesta Key’s new materials within the next couple of weeks.

The incorporation process timeline

In January, the six County Delegation members voted 3-3 on filing a local bill for Siesta Key incorporation in the Florida House and Senate. Thus, Save Siesta Key’s 2021 initiative failed.

This year, Hensey also has pointed out, the Delegation will have only four members. Sen. Joe Gruters, R-Sarasota; state Rep. James Buchanan, R-Osprey; and state Rep. Mike Grant, R-Port Charlotte will be three of them, he told the SKA members. The fourth member will be determined by a vote during the Nov. 8 General Election. State Rep. Fiona McFarland, R-Sarasota, is facing Democrat Derek Reich of Venice, Sarasota County Supervisor of Elections Office records show.

Hensey has characterized Gruters and McFarland as the champions of the incorporation effort because of their advocacy for it last year.

Because 2023 will not be an election year, the Florida Legislature is scheduled to convene on March 7 and end on May 5, Hensey noted.

This year, with elections, the session began in January.

Nonetheless, Hensey said that the Save Siesta Key leaders believe that the Sarasota County Legislative Delegation likely will vote again in January on whether to allow the Siesta incorporation effort to go forward.

If that vote is successful — it must be at least 3-1, Hensey said — then the local bill would be filed in the 2023 legislative session. Assuming the Legislature approved the bill, he continued, Gov. Ron DeSantis would have three options: sign the bill; veto the bill; or decline to act on it within 30 days, which would put the measure into effect.

As he has in the past, Hensey pointed out that Florida has more than 400 towns, cities and villages. “We’re the largest barrier island in the state of Florida that’s unincorporated.”

If the bill won final approval, Hensey explained, “We would have to pay for a special election [on incorporation].”

As of Sept 7, he noted, the island had exactly 7,100 registered voters. Fifty percent of the votes, plus 1, in favor of the ballot question would be needed for incorporation to take effect.

In response to a Sarasota News Leader question, Barbara Bain, public information coordinator for the Sarasota County Supervisor of Elections Office, explained the following in a Sept. 21 email: “I have checked with our finance folks who say we do not have and cannot estimate cost information for a possible special referendum for Siesta residents. What we can tell you is that routinely, when a municipality or jurisdiction calls a special referendum, they contract directly with vendors for ballots, postage/mailing, advertising, etc. and pay them directly. They also pay poll workers directly. These bills do not come from or through our office.”

Hensey told the SKA members that the referendum on incorporation likely would be held in July or August 2023. Then, if the majority of voters supported the initiative, he pointed out, island residents next would have to hold an election for the five proposed Town Council members. That would be prior to Dec. 31, 2023, he said, “so we can operate as a town beginning Jan. 1, 2024.”

In response to another SKA member’s question, Hensey noted that the Save Siesta Key leaders last year agreed that the Town Council members would not be paid. The idea, he explained, was that people seeking election to that board should be passionate about the island and “want to do the right thing for [it].”

Yet, he acknowledged, “It’s hard to find a village or a city commission that doesn’t have paid [members].”

The argument has been made, Hensey continued, that it would not be fair for members of the Siesta Key Town Council to forgo salaries. On the other hand, he said, “We kind of wanted to weed out those people” on the Key who are retired and just might be interested in vying for a seat to gain a little extra income.