The looming threat of oil washing ashore, albeit not likely for Longboat, was a key factor in the commission’s decision to set the tax bar higher this year.
In an about-face from last year’s hard-line stance, the commission voted 5-2 at its Monday, July 12 regular meeting to establish a maximum millage rate of 1.9036 mills, at the suggestion of Town Manager Bruce St. Denis and Finance Director Tom Kelley.
The proposed maximum millage rate is 19% higher than last year’s maximum millage rate of 1.6 mills. Last July, the majority of the commission did support St. Denis’ suggestion of 1.6750 mills.
Commissioner David Brenner, who urged the commission to use some of the town’s $5 million reserve fund to pay for a $965,000 pension bill in fiscal year 2010-11 as recently as last month, changed his mind and supported the higher maximum millage rate, which fully funds the six-figure pension bill.
“I hope we don’t have to spend a dime to clean up oil from our shores, but, until that’s under our belts, I want the $5 million in reserves left intact until then,” Brenner said.
St. Denis informed the commission earlier in the evening it could cost $2 million for each pass (Longboat Pass and New Pass) to stop oil from getting in Sarasota Bay if the town chooses to go above and beyond the state-and-federal emergency oil-response plan.
The majority of the commission agreed with Brenner. Only Mayor George Spoll and Commissioner Phillip Younger did not vote in favor of the maximum millage rate selected.
Because the tax rate will not be officially decided until September, Commissioner Robert Siekmann pointed out that the commission still has time to set a tax rate that’s lower than the maximum rate selected.
“By late September, we may know if we will have any oil expenditures whatsoever and can decide if we want to use reserves if oil comes ashore or not,” Siekmann said.
Siekmann made the motion to set the maximum millage rate of 1.9036 mills, and Commissioner Hal Lenobel seconded the motion.
Siekmann, Lenobel, Brenner, Vice Mayor Jim Brown and Commissioner Lynn Larson voted for the maximum rate.
The commission had the option of setting the maximum millage rate as high as 2.0153 mills. Although the maximum millage rate can be reduced in later budget hearings, it now can’t be set any higher than 1.9036 mills.
For taxpayers, if the maximum millage is adopted in September, property owners sitting west of Gulf of Mexico Drive will see a tax-rate decrease, while property owners east of Gulf of Mexico Drive will see a tax-rate increase (see box below).
The town already collected the taxes in fiscal year 2009-10 it needs to pay the final debt payment due in December 2010 for its latest beach renourishment project. And because beachside property owners pay 80% of the beach-project debt, they will get a one-year tax reprieve while bayside property owners who pay the other 20% of the debt will see a tax uptick this year.
But commissioners warned the reprieve would be short-lived because bond payments will come back in effect the following year for a new beach project to begin in November 2011.
“It (the tax rate) comes back with a vengeance the following year,” Spoll said, “there is no good news here.”
Spoll also expressed doubt that further budget reductions might happen.
“We accomplished that goal last year by forcing a lower (tax) rate than what was recommended by staff and putting pressure on staff to make other internal cuts,” Spoll said. “This year, that further pressure was not introduced.”
The recommended budget will be presented to the commission in early August, and the budget will be adopted on second reading at a special meeting at 5:01 p.m. Monday, Sept. 27.
Beachside vs. Bayside
The following table shows the effect of a maximum millage rate of 1.9036 mills on a range of Longboat Key home vales when compared to fiscal year 2009-10.
Home value Tax bill change
$1 million ($194.80)
Home value Tax bill change
$1 million $266.20
Contact Kurt Schultheis at email@example.com.