$285,678,449 the total proposed city budget for 2023-24 fiscal year
Following roughly eight hours of discussions about the proposed City of Sarasota budget for the 2023-24 fiscal year, the city commissioners voted unanimously on July 25 to set 3 mills as the not-to-exceed operating millage rate for the new fiscal year, which will begin on Oct. 1
That figure is unchanged from the millage rate for this year. One mill represents $1,000 of the value of a parcel.
The commissioners formally will approve the millage rate following two public hearings in September, as Kelly Strickland, the city’s finance director, reminded them this week.
State law mandates that local governments approve not-to-exceed millage rates that then are advertised through Truth in Millage (TRIM) notices that go out to all property owners. The Sarasota County Property Appraiser’s Office mails those in August. Thus, people who own property will see the maximum amount of taxes they would have to pay, if none of the taxing bodies lowers the millage rates on final votes.
The city’s debt service millage is lower for the 2023-24 fiscal year, Strickland noted this week, because of staff’s having paid down some of the municipality’s general obligation debt. The proposed debt service portion of the millage rate is 0.1580, compared to 0.1782 mills this year.
As part of their July 25 vote, the city commissioners also approved the not-to-exceed rates for the city’s special districts. Those are as follows:
- Golden Gate Streetscape Special District — 1.3596 mills for the 2023-24 fiscal year, compared to 1.4474 mills in the current fiscal year.
- St. Armands Business Improvement District — 2 mills, which is unchanged from this fiscal year.
- Downtown Improvement District — 2 mills, which also is unchanged from this fiscal year.
During her July 24 opening workshop presentation, Strickland pointed out that the overall city budget proposed for the next fiscal year was $285,178,449. However, before the millage rates vote on July 25, she pointed to a late change in that figure. The Utilities Department staff inadvertently had failed to include in its calculations an extra $500,000, which is needed for the pilot program designed to improve the taste and odor of the city’s drinking water.
Therefore, Strickland said, the total budget figure was being changed to $285,678,449. The adopted figure for the current fiscal year is $251,933,075. Thus, the new budget would represent an increase of $33,745,374.
To further explain what happened, City Manager Marlon Brown asked Mark Nicholas, the finance manager for the Utilities Department, to address the commissioners.
Although staff in that department has been using debt service funds to cover the expense of the drinking water project, Nicholas said, more money will be needed before the end of this fiscal year, to keep the initiative moving forward.
Essentially, Brown continued, the Utilities Department staff members had shortchanged themselves.
None of the commissioners expressed reservations about adding in the $500,000.
More budget details, in general
As part of her July 24 presentation, Finance Director Strickland noted that the Sarasota County Property Appraiser’s Office’s revised property tax values for all of the local governments, released before July 1 to meet a state deadline, showed the city’s value up 13.16%, compared to the amount last year. The 2023-24 figure is $16,705,497,513. The 2022-23 figure was $14,762,961,792.
However, she continued, the value that took the biggest jump was that of the property in the Newtown Community Redevelopment Area (CRA): It rose 17.43%, to $274,355,845.
The amount for The Bay Park — the 53-acre recreational and cultural destination on the city’s waterfront — climbed 12.52%, year-over-year, she noted. The 2023 value is $1,631,025,175. Last year, Strickland pointed out, the value jumped 40%, compared to the 2021 figure.
The base year for The Bay Park Tax-Increment Financing (TIF) District is 2019, Strickland added. The property value then was $850,422,231.
The city commissioners and the Sarasota County commissioners agreed to the 2019 base year because of all of the development expected to get underway in the area close to the park, which was included in the district.
Each year that the value of the property in that TIF district increases, the two local governments calculate how much extra revenue they would have received, based on the difference. Then, the lower millage rate of the two bodies — compared to a base millage of 3.0892 — is used to calculate the resulting property tax revenue, as city and county leaders had agreed. The resulting money is placed in a trust fund for the park, so it can be used for construction of amenities.
Strickland also showed the board members a slide with a bar graph illustrating the changes in the city’s property value starting in the 2008 fiscal year. In that year, she noted, the figure was a little more than $10 billion. “We’re at our highest point [this year],” she added.
Because of the Great Recession, the property value fell to $6.9 billion in both the 2012 and 2013 fiscal years. It rose to $7.2 billion in the 2014 fiscal year and has continued to climb, the slide made clear.
Another slide used percentages to illustrate the changes over the years. For example, the city lost 10.3% of its taxable value in the 2010 fiscal year and then another 6.47% in the 2011 fiscal year. Additionally, the slide says that the taxable value was up only 4.67% in 2020, but last year, it climbed 17.85%.
Among other details regarding the proposed 2023-24 budget, Strickland said the city has planned for 808 full-time employees. A slide pointed out that the city had 777 full-time employees in the 2007 fiscal year. Because of cost-cutting associated with the Great Recession, that figure reached a low in the 2014 fiscal year, when it was 578. This year, the number is 803.
The Parks and Recreation Department has asked for one new staff member, she said, to handle additional maintenance for, among other facilities, the Bobby Jones Golf Club Nature Park, which is expected to open in November, along with the renovated golf course.
The expense of those extra employees totals $275,316 in the proposed budget, a slide showed.
Further, Strickland said, the Solid Waste Department had requested an extra employee so the street sweeping in residential areas could be handled in-house, which would save the city $20,623 in the next fiscal year, compared to continuing to pay for a contractor to do that work.
Other factors that affected the proposed budget, Strickland noted, were as follows:
- An uptick of $466,621 for the General Employee Pension Fund.
- An increase of $780,037 in the Police Officers Pension Fund.
- An extra $1,343,305 for the Firefighters Pension Fund.
- An uptick of $1,018,272 for the Other Post Employment Benefits Fund (OPEB), which applies only to persons who were city employees before 1993.
- An increase of $1,513,900 in the Florida Retirement System funding for city staff members.
General Fund factors
Strickland also presented the commissioners several slides as she addressed the city’s proposed General Fund budget for the 2023-24 fiscal year.
The General Fund, she explained, is the city’s operating account, as it pays for departments that do not generate self-sustaining revenue. For example, the Sarasota Police Department and the Planning Division receive their money from the General Fund, she said.
All of staff’s projections for the General Fund show that revenue will be up in the 2023-24 fiscal year, as noted in another slide. For example, electric, gas and water franchise fees are expected to bring in 15.85% more money than they have for the current fiscal year. State revenue sharing funds are anticipated to be higher by 27.27%.
The projected revenue for the General Fund for the 2023-24 fiscal year adds up to $94,311,977, which marks an increase of $11,734,298, compared to the amount for this fiscal year.
However, Strickland noted, General Fund expenditures are expected to total $97,028,278. Thus, staff was proposing that $2,716,301 be removed from the unassigned fund balance to make up the difference.
That would leave the unassigned fund balance at $28,937,007, which would represent 29.82% of the General Fund, she said.
The city’s policy calls for that unassigned fund balance amount to range from 17% to 25% of the General Fund, Strickland added.
The money would allow the city to continue operating in the event of a major disaster that prevented any revenue from being collected, she explained. Most local governments, she indicated, strive for a balance that would allow them to function for two to three months without new revenue. The City of Sarasota total potentially could pay for operations through four months, she said.
As a coastal city, both she and City Manager Brown pointed out, it is better to have more money than not enough in that unassigned fund balance.
The lowest amount the city has had since 2005 is 24.7%, in 2018, Strickland noted. The highest was 35.9%, in 2006.