Rising costs add up in budget

The town is considering collectively buying employee health insurance with Sarasota County and other municipalities in the county as a way of saving on health-insurance costs. These costs are projected to rise by 10% or $100,000 in the next fiscal year according to what Town Manager David Bullock told the Longboat Key Town Commission at its Thursday, April 19, regular workshop.

The town will also see its required pension contribution increase by 12.7% in the 2012-13 fiscal year to more than $3.2 million from the current year’s total of $2,855,980.

Those rising costs will likely come in the face of declining revenue.

Bullock said that the estimated 3% drop in ad valorem revenues on which town staff is basing its preliminary budget is “fairly real.”

“Those are very real and those will drive some adjustments in the way we do business,” he said.

However, he said the drop in other sources of revenues for the current fiscal year, such as franchise fees and sales-tax revenues, can vary and could still experience an upswing before the end of the year.

Town Finance Director Tom Kelley laid out options for increasing revenue in a memorandum earlier this month:

The town could levy a public-service tax on the purchase of electricity, metered natural gas, liquefied petroleum gas and water service at a rate of up to 10% of payments received by the seller of the taxable item, which could generate approximately $400,000 annually if levied on electricity. The town could also bring in approximately $500,000 a year by requiring the water-and-sewer utility system to pay a franchise fee and for use of the town’s rights of way.

Bullock said the revenue possibilities were presented to inform commissioners about options available to them but, at this point, are not recommendations.

Commissioner Lynn Larson said she was grateful for the options presented but expressed reservations about alternatives to generating revenue, which could increase the prices that utility users pay.

“That is still a tax, even if we’re going to shove it a different way,” she said. “It looks like maybe we’re trying to slip it through the door.”

Former Mayor George Spoll pointed out that utility taxes aren’t tax deductible.

“Sometimes biting the nasty bullet and increasing tax revenues is best for your citizens,” he said.

Vice Mayor David Brenner suggested a setting for the workshop in which the commission would be seated in a circle and able to look at one another. He said the discussion could involve looking at line items along with questions about why they changed.

“The nature of the budget this year is going to be a down-and-dirty type of discussion,” he said.

Bullock plans to hold the fiscal year’s first budget workshop during the first half of May.