Sarasota County finance staff finally works out agreement for Manatee to repay sales tax revenue it mistakenly received

Four-year schedule put in place

Kim Radtke addresses the County Commission on Feb. 26. News Leader image

It will take four years, but Manatee County will repay Sarasota County, Sarasota County’s municipalities and the Sarasota County School Board almost $4 million in sales tax revenue that the state inadvertently distributed to Manatee County.

That was the news Kim Radtke, director of the county’s Office of Financial Management, delivered to the County Commission on Feb. 26.

She credited staff of the Office of the Sarasota County Clerk of the Circuit Court and County Comptroller, the finance director of the Sarasota County Schools and the municipal finance directors for their collaboration on the issue. Radtke also emphasized the assistance of Rob Lewis, the county’s director of governmental relations, who had worked intensively with state Department of Revenue staff.

The Sarasota Herald-Tribune first reported the potential problem in July 2018, as a Feb. 26 county staff memo explained. The revenue at the heart of the issue was collected in the area around University Parkway, where the Manatee County and Sarasota County borders meet, the memo noted.

After county staff contacted the Florida Department of Revenue (DOR), the memo said, “it was determined that there was an error in the distribution of sales tax between Manatee County and Sarasota County since 2014.”

Of the approximately $3.7 million, Radtke told the commissioners on Feb. 26, $2.1 million was infrastructure sales tax revenue, while the remaining $1.6 million was half-cent sales tax revenue. The latter, she said, would go back into Sarasota County’s General Fund as it is repaid.

The General Fund comprises largely property tax revenue. County financial staff points out that it is the most constrained of all the county’s sources of revenue for budgetary purposes, as it pays for the operations of many county departments, as well as those of most of the county’s constitutional officers, including the sheriff and the supervisor of elections.

The infrastructure surtax revenue will go back into the Infrastructure Surtax Fund, Radtke noted.

The extra penny of sales tax designated for a variety of improvements countywide — Surtax 3 — won voter approval in Sarasota County in November 2007. The levy of the tax began in September 2009 and will continue through Dec. 31, 2024, county documents explain.

Following talks with “high level staff at DOR,” Radtke said on Feb. 26, an agreement was reached on the schedule for payback of the funds. “As it stands now,” she continued, each of the local government bodies in Sarasota County will “be paid back in equal increments over four years.”

This aerial map shows a portion of the area around University Parkway. Image from Google Maps

The staff of the Clerk’s Office will receive an email each month from the DOR, Radtke explained, which will provide details about the repayment amounts. The School Board and the municipalities, likewise, will receive those notifications, she said. That way, each can determine “if they are getting the full amount of repayment.”

“Stay on top of ’em,” Chair Charles Hines told Radtke, referring to the DOR staff members.

The commissioners previously discussed the issue during their regular meeting on Oct. 9, 2018. Then-Vice Chair Hines brought it up, saying, “We’ve known about this for months,” but no details had been forthcoming from DOR staff. “It’s time for some details,” he added, especially in regard to the specific amount Sarasota County was owed and when county staff could expect to receive the money.

Commissioner Nancy Detert. File photo

Then-Chair Nancy Detert — who previously served in the Florida House and Senate — responded that she had discussed the matter earlier that week with County Administrator Jonathan Lewis. She has a contact with the DOR, she said, so she would give that person a call and tell her, “We feel we’re stuck somewhere in middle management. … If she can’t free it up, then we’ll go from there.”

Jonathan Lewis pointed out on Oct. 9, 2018 that Radtke and Nicole Jovanovski, finance director for the Clerk’s Office, had been working hard to try to learn the details of the mistaken distribution. “As the administrator,” he continued, “I have been very unimpressed with DOR’s ability to respond …”

County staff had planned to talk with DOR officials that week, Lewis said, but the call had been cancelled because of the prediction that Hurricane Michael would strike the state close to Tallahassee.

Rob Lewis, he said, and the county’s state lobbyist also would be working with DOR representatives, Jonathan Lewis pointed out, to try to iron out the problems.

DOR representatives, he continued, had been telling county staff “there’s not a process to true up the money.” They also had suggested that they would need to apply a formula that would necessitate a repayment over four years, Jonathan Lewis added. Yet, if any local government falls behind in remitting sales tax revenue to the state, he pointed out, the DOR gives that body “only 30 days to get that done.”

Further, Lewis noted, DOR representatives had suggested that Sarasota County staff iron out the situation with Manatee County staff. Yet, he said, he believed the responsibility lay with the state.

“If you do happen to have an appropriate contact [with DOR],” he told the commissioners, and could reach the person, he asked that they let Jovanovski know how their conversations went.

“What you’re telling us is typical of getting stuck in middle management, where they’re going to read you the rule book,” Detert responded. “We don’t want to be read the rule book. … I have no intention of jumping through all of those hoops.”