“There is no priority No. 1. We have so many issues in the city to deal with, but I think above all is that the institution of the City Commission is effective, efficient and respected — and people believe again that it can achieve great things for this city.”
Hagen Brody, new Sarasota city commissioner
Newly elected City Commissioner Hagen Brody is right — the city has so many issues to deal with. And he’s right on this, too: It’s difficult to say which one is No. 1.
Perhaps he’s right that showing city residents the City Commission is “effective, efficient and respected” is a top priority. That would certainly be welcome. And he’s right again: If that were to occur, that would indeed help residents believe the commission can achieve great things.
No question about it. There is much to do — and show.
Newly elected Commissioner Jennifer Ahearn-Koch on election night articulated a list of big issues — transportation, development, affordable housing and homelessness, noting they are all intertwined and cannot be addressed independently. All of those issues never go away; there is no silver bullet. There never is.
Where to begin?
Events often have a way of dictating priorities. And one of those events that will provide a first test for the new commissioners begins this month. Commissioners and the city administration will start the months-long process of determining the budget and property-tax rate for the next fiscal year.
That should have a way of focusing Brody and Ahearn-Koch’s attention — as well as the other three commissioners’ attention — on what’s important. Indeed, if the new commissioners want a primer on what choices and tradeoffs they are likely to face, they should dig out City Manager Tom Barwin’s Sept. 6, 2016, budget letter. It’s sobering.
Barwin’s letter highlighted six issues that he obviously believed were the most crucial to highlight:
1) Employee pensions
2) Retiree health benefits
3) Sustaining public parks and public spaces
4) Planning and zoning for Sarasota’s growth
5) Sustaining infrastructure
6) Affordable housing deficit
Take the first two — pensions and health benefits. The city’s unfunded liabilities are $155.6 million, three times the amount of those for the city of Bradenton. This is money the city does not have, and yet is promised to be paid over the next two decades to retired and future retired city employees, police and former city firefighters. Here’s what Barwin said about the city’s pension liabilities in his budget letter:
“The City’s Public Safety Employee Pensions will continue at an unsustainable 71.89% of payroll through FY 2016-17. This means that for every dollar of a police officer’s pay, an additional 72 cents must be contributed to the police pension fund.
“In comparison, the current Florida Retirement System’s (FRS) contribution rate is 22.57% of payroll, and most local police pension plans contribute significantly less than the city of Sarasota’s current percentage of pay.
“The FY 2016-17 budgeted pension obligation for the Police Pension Plan alone is $7.79 million, or 12.6% of the total General Fund expenditure budget.
“All pension plans in the General Fund (Police, General, General Defined Contribution and Fire) are budgeted at $12.5 million, the equivalent of approximately two mills of our 3.1728 mills Ad Valorem Tax levy, and represents 20.2% of the total General Fund’s expenditure budget.
“Pension funding is challenging the city to maintain competitive tax rates and service levels. We must continue to remain lean as pension reform evolves.”
Every Florida municipality with unfunded pension liabilities is hoping its pension-fund investment returns will generate enough cash to meet all future obligations, or at least make the inevitable tolerable for taxpayers. But it’s not going to happen. City taxpayers, at some point, will be tapped to pay down this debt.
And now is the time to start facing it. Up to now, most of the past City Commissions have put off the reality, much the way Congress keeps piling on debt to future generations. Go back to Barwin’s comments. He said the current situation is “unsustainable.” The commission must decide: higher taxes or fewer services.
Add to the pension challenge, the city’s parks. Barwin has talked over the past year of perhaps instituting a new park tax. “I believe we must continue to look at innovative approaches, best practice options and creative ways to finance, manage, fund and undertake our landscaping, forestry and park maintenance responsibilities, to keep them to the standards Sarasotans expect, or to be clear, those standards may be lowered.”
It’s as simple as this: Take more tax money from somewhere else; charge park fees; or have scruffy parks. Don’t forget, either: There was no mention in Barwin’s letter about the idea of borrowing $14 million or taking $14 million from another use to fund a renovation of the Bobby Jones Golf Course.
Barwin closed his budget letter with this unvarnished warning:
“It is important that we point out to the City Commission and the public that maintaining current service levels citywide will be difficult unless we see a substantial increase in the economically sensitive revenues and a continued increase in assessed values throughout the city.
“Property tax values are expected to increase, however, property tax cap restrictions exist that will limit revenues to a meager amount regardless of large increases in market value.
“Unless the economy sustains very strong improvements, which would stimulate the economically sensitive revenues, annual shortfalls could occur.
“Additionally, if actual rates of return on pension fund investments fall short of the actuarial assumptions, future pension contributions will be unsustainable without more drastic measures, including severe service level reductions, substantial increases in the millage rate and substantial increases in fees and charges.”
We didn’t even address the city’s challenges with aging utility infrastructure (water supply and wastewater collection), roads, sidewalks, traffic signalization and bridge, seawall and pier infrastructure, nor the costs of addressing homelessness or the undermanned police force.
There are three ways to pay for all of this: Raise taxes and fees; increase the tax base with new development; or a combination of both.
Welcome to the City Commission, Mr. Brody and Ms. Ahearn-Koch.