Commissioners balk at eroding beach funding

Town Manager Dave Bullock has been hoarding about $1.5 million. 

The funds Bullock is hoarding are surtax funds. He could start spending the money soon, but where it will go remains in flux.

Bullock was hoping to earmark that money for the $4.5 million in capital costs staff expects  the town’s public safety departments  will need in the coming years. But during a budget workshop Monday, commissioners balked at transferring the revenue — which comes from sales tax dollars currently slated for beach renourishment — for public safety.

Bullock asked commissioners to transfer the funds from beach management to public safety to take pressure off the general fund, from which the town plans to spend more than $750,000 in the next fiscal year on everything from new outboard motors for police boats at a total cost of $33,000 to $315,000 for a new ambulance. General fund dollars come from property taxes, rather than sales taxes.

“You pay it with the sales tax or with property taxes,” Finance Director Sue Smith said. “Those are the only two choices.”

But commissioners would rather see the $750,000 for public safety come from the general fund.

Commissioners balked at  a $2.6 million estimate for the future remodel or replacement of the south fire station and worried that having extra funding available could influence spending decisions.

“Money likes to be spent,” Commissioner Phill Younger said.

Commissioners requested more information from staff before making a decision.

Even without the fire station project, the town could spend more than $1.8 million on other public safety-centric items over the next five years.

“I believe you will feel the pain of the combined elements of improvements,” Bullock said.

When Sarasota County doles out its 1% sales tax funds to the Key, that funding falls into one of six categories, including comprehensive beach management and public safety. The town is slated to deplete public safety revenues next year, after which it would have to dip into property taxes.

“The biggest demand is public safety,” Bullock said. “It comes at you in hundreds of thousands of dollar hits.”

Although the town is now undertaking more than $10 million in beach projects and will likely take on more in the future, there are other funding sources for those types of improvements.

In Fiscal 2017, the town will collect $2.8 million in state grants, $685,000 from tourist development taxes and $10.7 million from bond proceeds for beach maintenance.

Bullock said as the town begins looking for sand and doing survey work for its next renourishment, there will certainly be ways to spend the surtax money earmarked for beach maintenance.

“We have plenty of appetite for this in beach (maintenance),” Bullock said. “We’ll spend this many times over.”

Good times, tough choices

The town is slated to draw about $41,000 from its reserves to balance its Fiscal 2017 budget. That’s the lowest amount needed to do so in recent memory, said Bullock after the workshop.

But as the fund balance improves, the town must strike a balance between drawing too much from the account or letting it get too healthy. That is, the Town Commission will soon have to decide on a limit for how much the fund can grow.

“It’s a bit of a balancing act,” Bullock said.

The town has a 90-day minimum for the fund balance, which means the account must always have 90 days’ worth of operating costs. The projected ending fund balance for Fiscal 2016 is $5.03 million, which equates to 117 days’ worth.

“I agree with the idea of setting a maximum,” said Vice Mayor Terry Gans.

Commissioner Armando Linde agreed, and Bullock said after the meeting that the Town Commission would next decide on a maximum day count.

“I think thinking (these decisions) through on a sunny day is a better way to set those priorities than when you’re up against a wall,” Bullock said.