Town prepares for $4.7 million Sarasota County surtax shortfall

The town is preparing for revenue from Sarasota County’s 1% sales tax to come in $4,764,000 below what was originally estimated that the town would receive over a 15-year period that began in 2009.

The Longboat Key Town Commission discussed town staff’s suggestions for allocating sales-tax funds, also known as infrastructure surtax, at its Thursday, May 24 workshop. Revenue is currently estimated at $7,765,000, compared to the $12,529,000 originally forecasted.

“This is really about making sure we don’t have expectations about projects or revenues that are highly unlikely to be funded as is shown in the surtax ordinance,” Town Manager David Bullock told the commission.

Each of the suggested areas of revenue reduction has alternative sources of funding, Bullock said.

For example, staff recommends reallocating approximately $1.7 million in funding for beach projects, which are so large that they require some form of debt issuance.

Staff also recommends eliminating the $1 million originally designated for street resurfacing and drainage improvements, which can be funded by gas taxes.

Staff recommended keeping $3 million for parks-and-recreation improvements and $1 million for improvements to public facilities in place until a decision is reached on a proposed community center.

The decline in revenue is largely the result of the economic downturn. The revised projections reflect historic trends in sales-tax revenues, excluding the boom years of 1998 and 1999 and 2004 through 2006.

Approximately two-thirds of Sarasota County voters approved the surtax in November 2007. The tax generates funds for infrastructure projects in the county, public school district and the cities of Sarasota, North Port, Venice and Longboat Key.

PROJECT SPECS

Project: 2014 beach nourishment and erosion control structures
Original surtax amount: $3,529,000
New proposed allocation: $1,830,569

Project: Street resurfacing and drainage improvements
Original surtax amount: $1 million
New proposed allocation: $0

Project: Parks and recreation improvements
Original surtax amount: $3 million
New proposed allocation: $3 million

Project: Canal dredging maintenance
Original surtax amount: $2 million
New proposed allocation: $1 million

Project: Fire and rescue capital vehicle acquisitions
Original surtax amount: $2 million
New proposed allocation: $935,000

Project: Improvements to public facilities
Original surtax amount: $1 million
New proposed allocation: $1 million