City council, staff review budget in advance of draft work
The Sanibel City Council recently held a workshop on the current budget in advance of staff’s preparation of the draft budget for the upcoming 2023-24 fiscal year.
On June 20, Deputy City Manager and Finance Director Steve Chaipel presented information on current 2022-23 budget issues and initiatives, including property valuations, tax forecasts and more. Staff also sought consensus from the council on reserve funding for inclusion in the draft budget.
He outlined the following timeline for the new budget’s adoption:
– July 18: Draft budget presented at meeting and proposed millage rate set
– Aug. 22: Budget workshop
– Sept. 11: First public budget hearing
– Sept. 27: Second and final public budget hearing
In terms of the current budget, Chaipel reported that the estimate received from the Lee County Property Appraiser’s Office on June 1 for taxable property values was $4,382,628,000 as compared to $6,357,621,055 in July of 2022, which is a 31.06% decrease in estimated values year-over-year.
It represents a tax revenue loss of about $3.8 million using the current millage rate of 1.9750.
Chaipel added that staff expects the decrease to increase as condominiums, which represent approximately 30 percent of the city’s tax revenue base, have not yet been accounted for.
He reported that the operating millage rate provides most of the funding for general government operations. This year’s 1.9750 mills generated $12,179,613. The estimated rolled back rate — revenue neutral year-over-year — based on the estimated values would be 2.8877, which is a 46.2% hike.
The following pre- and post-Hurricane Charley millage rates were noted:
– 2004: 1.7291 (property value $4,000,193,070)
– 2005: 2.5000 (property value $4,224,462,080) — a 44.6 percent increase from the prior year
– 2006: 2.4000 (property value $4,229,529,530)
– 2007: 2.5000 (property value $4,957,185,155)
– 2008: 2.1966 (property value $5,196,712,970)
Based on an average residential value of $760,605, the residential taxes and services paid for the current year was about $2,833, of which about $1,502 was property taxes. Chaipel reported that based on an average reduction of residential property value to $532,424 and using the estimated rolled back rate, taxpayers would see an increase in their property taxes of about $35 — up to about $1,537.
He gave an overview of revenue projections, state appropriations and available resources.
Chaipel also explained that the $4.5 million Disaster Reserves, $1 million Environmental Reserves and $400,000 Contingency Reserves have been fully expended as a result of the hurricane. He sought direction on the general fund reserves including if they should be replenished and if so at what amount.
After some discussion among the dais and with staff, council voiced agreement with $5.9 million in reserve funding to be replenished and for the funds to be held in one bucket versus multiple ones.
Chaipel also outlined pertinent budget issues and draft budget initiatives within the operating expenditures, as well as staff’s draft budget initiatives involving the capital expenditures.
To reach TIFFANY REPECKI / trepecki@breezenewspapers.com, please email