City council reviews budget, millage rates
This week, the Sanibel City Council directed staff to prepare and present the 2024-25 draft budget using both the maximum millage rate and rolled-back millage rate for the first budget hearing.
At a July meeting, the council voted unanimously 5-0 to approve the not-to-exceed millage rate at 2.500 mills — the same rate as the current fiscal year. The rolled-back millage rate, which is the rate needed to raise the same amount of ad valorem revenue that was raised in 2023-24, is 2.4848 mills.
The millage rate can be lowered during the budget process but not raised.
During its second budget workshop on Aug. 27, the council voiced differing opinions on whether to proceed with the 2.500 or have staff present the draft budget at the first hearing using the 2.4848.
Councilmember John Henshaw reported that he would like to see the budget presented at the hearing using the rolled-back 2.4848 as a signal to citizens that the goal is to work toward reducing taxes.
“We’re going to live within our means,” he said, adding that it would be beneficial and the first step.
Vice Mayor Mike Miller reported that he is not sure it is a signal that the council wants to send.
“We’re not out of the woods yet,” he said, referring to the island’s ongoing post-Hurricane Ian recovery nearly two years later. “I’m comfortable with this budget. I’m comfortable with the 2.5 millage rate.”
Councilmember Holly Smith also voiced support for the 2.500. She pointed out that the city would again be seeking state funds this year for revenue replacement and more, plus loan forgiveness.
“Those will bring in big dollars,” she said. “I think our citizens would benefit more from that.”
Mayor Richard Johnson echoed the concern about returning to the state Legislature and asking for additional funding for the ongoing recovery if the city reduces taxes and is then asked about it.
“That’s going to be a tough one for me to answer,” he said. “So I’m comfortable at 2.5.”
Councilmember Laura DeBruce reported that she was initially supportive of sticking to 2.500.
“I’m leaning now toward the 2.4848,” she said.
Without a clear consensus from the council on which millage rate to prepare the draft budget with for the first hearing, City Manager Dana Souza confirmed that staff would prepare it using both rates.
The budget hearings will be held on Sept. 9 and Sept. 23 at 5:30 p.m.
Prior to the council’s discussion and direction to staff, Deputy City Manager and Finance Director Steve Chaipel gave a presentation on the draft budget updated from the first workshop in July.
He reiterated that the estimated taxable property values from the Lee County Property Appraiser’s Office on July 1 was $4,660,021,567, compared to $6,357,621,055 pre-storm — a 26.7% reduction. The 2.5000 rate would mean $11,300,552 in revenue — net 3.0% discount — and $1,073,644 additional ad valorem revenue into the General Fund over the estimated values from July of 2023.
Chaipel reported that based on this year’s maximum millage rates adopted by the local taxing authorities, residents’ annual taxes would be broken down as: 36.5% to the Lee County School Board, 26% to Lee County, 19.2% to the independent districts, and 18.2% to the city.
He reported that the current 2.500 rate generated $10.23 million in revenue for 2023-24. Using the same 2.500 would generate $11.3 million, while using the 2.4848 would generate $11.2 million.
Chaipel gave an overview of the Hurricane Ian Fund, including loans and revenue replacement.
He provided a break down of the current and proposed reserves for the general and sewer funds.
In terms of operating expenditures, Chaipel outlined the following as pertinent budget issues: wages; health insurance increases; general liability/property/wind insurance increases; worker’s compensation insurance increases; pension contributions; storm related expenses in the Hurricane Ian Fund; and a CPI index of about 2.9% (July).
He reported that the total draft budget would be $233,227,847, which would result in $66,576,689 in available ending fund balances and include $105,889,022 in external grant funding and $43,260,511 in external loans/grants/reimbursements. As far as the storm recovery’s impact on the budget, it would be $84,078,314 without the grants/loans. The current budget, without the storm’s impact, is $81,246,927 and the budget from fiscal year 2022-23 was $84,029,407.
Chaipel also provided the following formula to calculate property tax:
(Taxable Value) ÷ $1,000 x (Millage Rate) = Property Tax
So for example: $540,701 ÷ $1,000 x 2.5000 = $1,351.75 taxes owed
To view the presentation, click on BUDGET WORKSHOP.
To reach TIFFANY REPECKI / trepecki@breezenewspapers.com, please email