by SC Reporter Emilie Alfino
Deputy City Manager and Chief Financial Officer Steve Chaipel presented the 2025 budget at the August 27, 2024, City Council Budget Workshop. Next steps include budget hearings on September 9 and 23. On September 9, a tentative budget will be passed, after which it will be advertised before September 23, when the final budget will be passed. The new fiscal year begins October 1, 2024.
Budget workshops give the City Council an initial opportunity to discuss budget strategies, goals, and objectives and provide city staff with direction on the proposed budget. The initial budget workshop took place on July 16, with continued discussion in the August budget workshop and the first budget hearing on September 9, 2024 at 5:30 p.m. The new online program, OpenGov, is still a work in progress and will be launched in full going into the September 9 budget hearing. The budget in its entirety will be discussed that night.
Information on current budget initiatives includes property valuations, tax forecasts, available resources to fund recovery and operating expenses, reserves, operating expenditures, and capital project expenditures.
Taxable Property Values. The estimate received from the Lee County Property Appraiser on July 1 was $4,660,021,567 representing a 26.7% loss from the pre-storm valuation of $6,357,621,055. At the 2.5 operating village rate, it results in $11,300,552 in revenue.
The residential annual taxes at fiscal year 2024 adopted millage rates results in 36.5% going to the Lee County School Board, 19.2% to independent taxing districts, 26% to Lee County, and 18.2% to the City of Sanibel.
The operating millage rate provides most of the funding for general government operations. The 2.5 millage rate adopted for fiscal year 2024 budget generated $10,226.908 in ad valorem tax revenue. The 2.5 preliminary millage rate approved at the Council’s July meeting was the maximum rate that can be levied for FY2025 budget and will generate $11.3 million. The roll-back millage rate of 2.4848 mills would generate $11.2 million.
The Hurricane Ian Fund consists of a $15,260,511 State of Florida bridge loan received in FY 2024; $5.9 million was appropriated in FY 2024, and $9.4 million is remaining. There was also a $28,000,000 State of Florida FEMA Project Loan received in FY2024, and a $9,920,000 State of Florida Revenue Replacement Grant budgeted to receive in FY 2025, with $3.8 million appropriated to other funds (Transportation) in FY2025. $6.1 million remains.
In Reserves, the General Fund for FY2024’s adopted budget had $5.9 million in disaster reserves – the same amount in FY2025’s proposed budget. $600,000 was also allotted in operational reservices for FY2024 Adopted Budget, and that number is $2.6 million for operational reserves in FY2025 Proposed Budget. The Sewer Fund has $1.0 million in disaster reserves.
Pertinent budget issues in Operating Expenditures include wages, health insurance increases, general liability/property/wind insurance increases, worker’s compensation insurance increases, pension contributions, storm-related expenses all in the Hurricane Ian Fund and considering a CPI index of approximately 2.9% as of July 2024.
In Operating Expenditures there are personnel vacancies funding in FY 2025 not funded in FY2024 although the FTE (full-time equivalent) remained authorized. These include a support services assistant, a deputy recreation director, a recreation services assistant, beach rangers, and a resilience and sustainability coordinator. There was also a position for an ombudsman-Community Relations which sparked discussion among City Council and City Manager Dana Souza.
Vice Mayor Mike Miller asked City Manager Dana Souza if the two positions could be combined, but Souza felt the skill requirements and duties of the positions were too different. “If Council wants to cut one of the positions, I would want to keep the resiliency coordinator” and cut the ombudsman position from the 2025 budget.
There were additional questions about a new Human Resources position, “human resources generalist.” The HR department currently consists of two people, Crystal Mansell and a support staff person. As it is, Souza said, Mansell is “caught in the weeds 24/7” and unable to address the broader-scope issue and challenges. The consensus that the HR generalist position should be funded, and the executive assistant to the city manager should be withdrawn. The City Manager and City Attorney will continue to share an executive assistant instead, which is an existing position.
This discussion brought up the topic of employees working from home. Councilmembers Laura DeBruce, Holly Smith, and John Henshaw all had concerns about this and expressed the opinion that it would be more efficient and effective to have employees in the office.
“Most people are not as effective working from home,” DeBruce said. “Maybe there will be more efficiency if we have people coming back to work.”
Souza replied, “I don’t feel there is any efficiency loss by people working from home. Most of the studies that we have read state that having a hybrid schedule is very efficient. Also, when it gets into season especially, it gives employees a day when they can turn on their computers and get right to work without facing traffic. It’s actually an attraction and retention issue. I appreciate Council’s comments, but it’s one of the most effective and efficient programs that I’ve seen.”
DeBruce made a last comment, “It’s just a shame that people who work on Sanibel can’t live on Sanibel.”
The total city draft budget is $233,227,847, with the storm recovery impact of $84,078,314 without grants/loans – meaning almost half the budget is related to Hurricane Ian. FY2024’s budget was $81,246,927 without storm impacts. FY2023’s budget was $84,029,407.
How to Calculate Property Tax: [taxable value] divided by [millage rate] = [property tax. Based on the tax year 2024, average residential value of $540,701, divided by millage rate of 2.5 = $1,351.75 tax owed.
Councilmember John Henshaw noted that the city would lose just $70,000 if the rollback millage rate of 2.4848 was used instead of 2.5. “We should send a signal that [raising taxes] is not acceptable. We should send a signal to residents that our goal is to reduce taxes, and this would be a beginning step. A lot of people are struggling.”
The difference in the average tax bill would be about $8 less if the 2.4848 millage rate was used.
Mayor Richard Johnson responded, “We as a city operate on a very slim budget. The cost of everything is going up, and we’re going to continue to be challenged by that. We need to continue to build our reserves. At some point, we’re going to need to rely on those reserves.”
While Vice Mayor Mike Miller said he had no problem with going to 2.4848 financially, as it is a minimal change, he said he’s not sure it’s the signal he wants to send.” He said as politicians they want to reduce taxes but that, long-term, the city must deal with the legislatures, government, and staff. The message would be better that we’re not out of the woods yet. “It troubles me to send a signal that’s at variance with that,” Miller concluded.
Councilmember Holly Smith indicated agreement with Miller on this point, as did Johnson. In the end, the consensus given to City Staff was three in favor of 2.5 mills (Miller, Johnson, Smith), and two in favor of 2.4848 (DeBruce and Henshaw).
Again, the first budget hearing is September 9, 2024, at 5:30 p.m. at BIG ARTS. The final budget hearing is September 23, 2024, at 5:30 p.m. at BIG ARTS
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