The preliminary city of Sarasota budget shows the signs of a strengthening economic environment, but staff says maintaining growth will continue to come with challenges.
The city is holding three budget workshops this week, the first of which is scheduled for today at 5 p.m. at City Hall. In advance of that meeting, staff has shared a proposed financial plan for fiscal year 2017.
In total, the proposed $206,286,920 budget is a 6% increase over FY2016. The general fund budget is $61.97 million, a 5.4% rise in spending over last year.
The projected general fund revenues are $60.98 million, a 3.7% increase over last year. That revenue increase comes without a change in the general fund millage rate of 3.1728. Citywide, property values increased 7.67% over last year.
The city is proposing the use of $990,188 in unassigned fund balance to cover the general fund budget gap.
The majority of the general fund spending is tied to personnel expenses. In a memo attached to the financial plan, City Manager Tom Barwin highlights continuing pension obligations as a particularly significant challenge going forward. The $7.79 million budgeted toward police pensions this year represents 12.6% of the total general fund expenditures.
In total, the $12.5 million for all general fund pensions constitutes 20.2% of the general fund expenditures.
“Pension funding is challenging the city to maintain competitive tax rates and service levels,” Barwin wrote. “We must continue to remain lean as pension reform involves.”
Although the city is pursuing opportunities to improve the overall level of service for residents compared to the beginning of the decade, Barwin warns that the increase in spending is dependent on continued economic vitality. If revenues begin to taper off, even maintaining the current level of service could pose a serious challenge, Barwin said.
“Unless the economy sustains very strong improvements, which would stimulate the economically sensitive revenues, annual shortfalls could occur,” Barwin wrote.
The full proposed financial plan can be found on the city website.