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Longboat Key Wednesday, May 18, 2016 6 years ago

Town may erode surtax beach funding

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The Longboat Key Town Commission will consider changing how it spends Sarasota County’s sales tax during budget discussions this summer.
by: Alex Mahadevan News Innovation Editor

It may seem counterintuitive — especially as hundreds of trucks full of sand rumble onto the island each day — but Town Manager Dave Bullock wants Longboat Key to stop using sales tax revenue for beaches.

“It's hard to talk about Longboat Key without talking about beach funding,” Bullock said during the first of three budget workshops Wednesday. 

But to take pressure off of the town's operating budget in the coming years, commissioners will soon decide whether to reallocate about $1.4 million in projected surtax funds that are currently earmarked for renourishment and groin projects. 

That funding, which is collected through Sarasota County’s penny sales tax, would instead go toward other infrastructure needs that may arise until the tax sunsets in 2024. The Town Commission would have to pass a resolution for the proposal to take effect, said Finance Director Sue Smith.

When the town receives its annual surtax allocation from the state, those dollars fall into six categories: comprehensive beach management, streets and drainage, parks and recreation improvements, canal dredging, public safety and improvements to public facilities. Each category has a pre-programmed funding cap — and the town will deplete public safety revenues in the 2016-2017 fiscal year.

That means if the Longboat Key Fire Department needed a new fire truck, which Bullock said could cost $800,000, the town would have to dip into the operating budget for the entire cost. In a worst-case scenario, the millage rate would have to increase to accommodate the additional spending.

“I can understand the arguments you're making. I also know there’s an insatiable appetite for money for beaches.” — Vice Mayor Terry Gans

In the preliminary budget for the next fiscal year, the town is slated to use more than $730,000 from the general fund — the municipality’s primary operating budget — for capital spending. That includes a new ambulance estimated at $315,000, a $45,000 refurbishment of a police boats and $75,000 for a new records management system.

“I'm more protective of the general fund because of the large demands on the general fund,” Bullock said. 

The town has at least four other revenue streams that pay for beaches, including tourist development taxes, taxing districts, Federal Emergency Management Agency reimbursements after disasters and bonds. Longboat will spend about $11.1 million on beach projects in the 2016-2017 fiscal year, according to the workshop presentation.

“I think you have a strong case here,” said Commissioner Irwin Pastor.

Vice Mayor Terry Gans said he would also like to see an analysis of arguments against changing the funding structure.

“I can understand the arguments you're making,” Gans said. “I also know there’s an insatiable appetite for money for beaches.”

The great unknowns

While commissioners can begin discussing the estimated $16.3 million operating budget 2016-2017 fiscal year, for which Bullock has kept the millage rate steady at 2.1300, several unknown factors could influence future spending.

The town is currently investigating whether its sole wastewater pipe needs to be replaced. If so, that could come with a $19.9 million price tag.

Also, staff have projected a 3% increase in property values, which would add $309,000 to the town’s coffers. But they don’t have the official numbers from the Manatee or Sarasota county property appraisers.

“I always keep my estimates pretty conservative,” Bullock said.

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