Sarasota County realizing much lower drops in major revenue sources than staff anticipated after pandemic began in the spring

Commissioners and staff point out that county beaches and other outdoor amenities have continued to draw visitors

These are the data for major revenue sources from the start of the 2020 fiscal year — Oct. 1, 2019 — through July. Image courtesy Sarasota County

As Deputy County Administrator and Chief Financial Management Officer Steve Botelho characterized it to the County Commission this week, the county is “in much better shape [financially] than where we thought we were going to be” when the novel coronavirus pandemic struck in the spring.

On Oct. 7, as part of the board’s regular meeting, Botelho presented the commissioners a slide detailing the impacts on the county’s major revenue sources from March through July.

For example, county staff had projected that its half-cent sales tax revenue during the 2020 fiscal year would add up to $14,313,842. Staff revised that in May to note the expectation of $9,013,154.

However, as the new slide showed, the actual amount of half-cent sales tax revenue the county received through July was $12,495,280. That was down 13%, compared to the original, budgeted figure.

The county’s 1-cent sales tax — or “surtax” — revenue, which is a voter-approved funding mechanism for county construction projects — was originally estimated at $17,701,269 for the 2020 fiscal year. In May, that was revised to $11,324,582. Yet, the actual figure, based on collections through July, proved to be $15,652,166. Thus, the total was down 12%, compared to the original estimate.

“These are all pretty big impacts,” Botelho said, “but we planned for that” during the board’s budget workshops after the pandemic started afflicting the economy.

The commissioners agreed to numerous steps to reduce expenses because of concerns about revenue gaps, Botelho added.

And even though the revised figures are better than anticipated, he continued, “It’s been, obviously, a tough few months.”

This is a graphic county Office of Financial Management staff showed the commission in late May, when the economic downturn was expected to have a more significant impact on revenue projections for the 2020 fiscal year. Image courtesy Sarasota County

When Commissioner Alan Maio asked for assurance that the slide did not reflect revenue for August and September, Botelho replied, “Correct.”

The slide also did not reflect revenue brought in from the beginning of the 2020 fiscal year — Oct. 1, 2019 — through February, Botelho acknowledged.

In response to another question from Maio, Botelho said staff probably would get the August and September revenue data “in the next couple of months.” However, Botelho pointed out, staff would not have official figures until December or January 2021, after auditors have pored over county records to prepare the Comprehensive Annual Financial Report, or CAFR.

Commissioner Christian Ziegler asked Botelho, “In your gut, what’s been your personal observation [about the impact of the COVID-19 pandemic on the county’s economy]?”

Botelho pointed out that Sarasota County’s beaches have remained a draw for visitors. The county is unlike the Orlando area, Botelho continued, which relies on attractions such as Disney World, or Tampa, which has suffered because of lost revenue from lack of use of that city’s national sports’ franchise facilities.

The latest data on the county’s surtax revenue, Botelho noted, is a good indicator of how much better off Sarasota County has been. “We were down 12% for [March through July],” he said, but, in March, staff expected the surtax drop to be “upwards of 40%” for the fiscal year, which ended on Sept. 30.

Ziegler noted the fact that the county’s arts and cultural organizations had to cease performances because of the virus. Still, he said, “Thankfully, we do have our beaches.”

This is a Siesta Public Beach scene that Visit Sarasota County featured on its Twitter account on Oct. 6. Image courtesy Visit Sarasota County

Ziegler added that he knew of visitors who had come to Sarasota County during the pandemic because of the outdoor amenities, which allowed for much easier social distancing.

Maio indicated his desire to see the year-to-date figures for the revenue sources shown on the slide that morning. “I think it’s much more positive than this snapshot,” he added, referring to the figures for 10 months of the 2020 fiscal year.

Botelho promised Maio that staff would work on that data and provide the board an updated slide.

In the meantime, Chair Michael Moran said he felt the need to point to “the looming concern for every municipality in this country,” in regard to budgeting amid the pandemic. The slide Botelho had put up for the commissioners to see “is very promising,” Moran added. “I need to compliment my fellow commissioners and your staff,” Moran told County Administrator Jonathan Lewis. Because of what Moran characterized as “a very fiscally conservative” budgeting process after the pandemic began, Moran said the county’s finances are in much better shape than expected.

Revisions result in a better ‘snapshot’

Just before the commissioners took their lunch break on Oct. 7, Botelho returned with the updated slide Maio had requested.

“This is very, very, very good news for our community,” Maio told Botelho. If the revenue coming in for August and September proves higher than expected, Maio said, the county could end up close to its original projections for the 2020 fiscal year.

This slide shows how much major revenue funds climbed from October 2019 through July, compared to the original 2020 budget estimates and revised figures presented to the commission in May. Image courtesy Sarasota County

Incorporating the revenue data from October 2019 through July, the revised slide showed that the county’s half-cent sales tax revenue was down only 3%, compared to the original estimate. Its surtax revenue was only 3% lower, as well.

Commissioner Maio suggested, “It would be a good exercise” to take a thorough look at the revenue figures for the full fiscal year, after staff has all of the data. “If we come up nearly even [with the original estimates from the fall of 2019], I think that’s a great indication. … I hope for an even better year next year.”

“Our community’s different” from other parts of Florida and from other areas of the United States, Commissioner Charles Hines said. “Our job … is to budget and plan for our community.”

“These numbers are great,” Hines added.

Then, referencing comments that Sean Snaith, director of the University of Central Florida’s Institute for Economic Forecasting, made to the board on May 21, Hines said of the COVID-19 economic downturn, “This is a self-imposed recession. Let’s see what happens in the next few months. … God forbid we have another shutdown.”

Based on the budget projections in the spring, Commissioner Ziegler said, “I thought we’d be in a little more of a hurt when we shut down the entire economy. … The beaches are so important to our identity and our draw.”

Botelho’s revised figures, Ziegler added, are “an example of why you should come to Sarasota County.”
However, Commissioner Nancy Detert had a different view: “The numbers are good but a little misleading.”

As she has noted during previous discussions on the topic, Detert pointed out on Oct. 7 that, in January, before the pandemic began in the United States, tourism was booming in Sarasota County. “The No. 1 complaint,” she continued, “was too much traffic,” followed by people frustrated about being unable to get into their favorite restaurants as a result of the crowds. “And then it went to zero,” she said of tourism, referring to the period after the first COVID-19 cases were announced in the county, in early March.

“This upcoming season will tell us,” Detert added. “Now we’re going to see a lot of businesses that don’t exist anymore,” along with a lot of people out of work.

These are county labor force and unemployment data provided to the county’s Tourist Development Council for its Sept. 17 meeting. Image courtesy Sarasota County

She also noted that the news media has featured “a lot of bad headlines” about the pandemic in Florida. “Hotels are down; restaurants are closing.”

“If these numbers stay the same,” Detert said of Botelho’s revised slide, “that would be terrific, but I’m not counting on it.”

Commissioner Ziegler said he had asked County Administrator Lewis to begin providing more reports to the board members about the county’s economic data, along with updates about the county’s positivity rate for the novel coronavirus and the number of patients in county hospitals with a primary diagnosis of COVID-19.

Ziegler specifically cited his desire to see unemployment figures and reports on how businesses are faring. “I think we need to evaluate that.”