City council updated on draft budget
During a recent workshop, the Sanibel City Council received an updated overview of next year’s budget with the current rate of 1.8922 compared to the proposed operating millage rate of 1.9750 and decided to proceed with the higher rate, while also adjusting the city’s share for one pension plan.
On Aug. 30, City Manager Dana Souza and Finance Director Steve Chaipel provided an in-depth presentation on the fiscal year 2022-23 budget and figures, which calculated in additional information that was unavailable when the council signed off on a tentative maximum rate at its July meeting.
Souza explained that some of the updates to the draft budget included wage increases from union negotiations, increases for health insurance premiums and increases for department reorganizations.
Chaipel reported that the budget was prepared with the current year’s 1.8922 rate and staff sought consensus direction on preparing the final operating millage rate for the first hearing set for Sept. 12.
Some of the highlights of the presentation included:
– Total operating revenues are budgeted to increase 9.1 percent
– Total operating expenses are budgeted to increase 8.6 percent
– Total capital expenses are budgeted to increase 23.1 percent
– Property values increased 13.2 percent to a historical high of $6,357,621,055
– Additional $1.4 million to the general fund using the 1.8922 rate compared to an additional $1.9 million to the general fund using the 1.9750 rate (at 97 percent collection on ad valorem tax)
– Breakdown of average tax bill and proposed rates:
— Lee County School Board: $4,217 at 5.5570 (40.1 percent)
— Lee County: $2,931 at 3.8623 (27.9 percent)
— Independent Districts: $1,731 at 2.2808 (16.5 percent)
— City of Sanibel: $1,633 at 2.1523 (15.5 percent)
– Average household increase for property taxes, solid waste and sewer service:
— $174.30 at 1.8922
— $237.14 at 1.9750
– An interlocal agreement with Lee County that provides the city with a 3.5 percent distribution of two local gas tax options is set to expire on Dec. 31, and the new proposed agreement from the county would reduce the city’s distribution to 1.35 percent beginning on Jan. 1
– Fund balance comparisons with a projected beginning fund balance of $32,056,679:
— 1.8922: $51,472,637 in revenues and $25,852,629 in expenses, with a total projected ending fund balance and reserves of $22,305,059
— 1.9750: $51,972,728 in revenues and $25,852,629 in expenses, with a total projected ending fund balance and reserves of $22,805,150
During its discussion about the budget, the council was split in its support on which millage rate would be best for the coming year. However, it directed staff to proceed with using 1.9750 for the hearings.
The council can approve a lower final rate, but it cannot go higher.
Also as part of its discussion, the council reviewed potential “fat” to trim from the proposed budget. One area that it focused in on was the city’s contribution to the General Employee pension plan.
As of one year ago, the plan was 108.8 percent funded. Staff had budgeted in a $400,000 contribution for the coming fiscal year, about half of the $865,000 contribution provided this year. However, the actuarially calculated minimum contribution required on the part of the city for its portion is $77,000.
The council directed staff to reduce the budgeted contribution to $100,000.
The second and final budget hearing is set for Sept. 28 at 5:01 p.m.
To view the budget presentation, click FY 2023 BUDGET PRESENTATION.
To reach TIFFANY REPECKI / trepecki@breezenewspapers.com, please email