- November 24, 2024
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$12 million.
$81 million.
By this time next year, Longboat Key property owners may well have committed themselves to increasing the town’s long-term debt 580% — from roughly $12 million to $81 million.
A stunning jump.
The breakdown:
And we’re not including the $20 million or so in the town’s unfunded pension liabilities.
Excluding the latter, if you add it up, the town’s long-term debt per property will increase from about $1,200 to $8,100; per full-time resident, the total would be $11,870.
These are all bell-ringing numbers, especially in a town where fiscal prudence has guided Longboat Key’s town commissions for most of the town’s 60 years.
This is not to alarm you that suddenly Longboat’s town commissioners have gone the way of Congress, where money is never an obstacle to foolish waste. Or that the town is on the brink of Detroit. It certainly is not.
If you measured the town’s fiscal strength on the basis of total debt to the estimated value of Longboat Key property, the town will remain in a solid state.
For instance, municipalities that manage conservatively, typically put a limit of long-term debt at 10% of taxable value. In that case, Longboat Key’s debt limit would be about $468 million. At $81 million, the town would be at only 17% of its limit. The city of Sarasota is in similar shape. Its current long-term debt is only 18% of $720 million limit.
The point of all of this number crunching is to provide perspective. Indeed, we’re reminded of the admonition that often came from Jim Michaels, the late editor of Forbes magazine. Whenever his writers reported the financial results of a company, he would bark: “Compared to what?” In other words, what’s the total picture? How does everything fit together?
In the coming months, you can be sure Longboat Key’s financially astute voters will be asking questions about the effects on them of the town’s indebtedness. Particularly in light of Monday night, when the Town Commission voted in favor of asking voters whether to approve a $20.5 million bond issue to fund the installation of underground utility and fiber-optic lines in each neighborhood.
As you know, this referendum question will follow last month’s vote to approve a $25.25 million bond issue to fund underground tables the length of Gulf of Mexico Drive.
So of course, taxpayers will want to know: What does it all mean? How much will this cost me each year? Can I afford it? What’s more: Is the cost worth the benefit?
Only each individual property owner can answer the first two questions. But on the latter — whether the cost is worth the benefit — if you evaluate it as you would investing to improve the condition of your home and its future value, you likely can conclude the answer is yes.
This is one of those times, it appears, when everything hits at once. It’s like replacing your roof and worn-out plumbing at the same time. It’s a major financial burden. But the results are worth it: Paid for and completed for the next 20 to 30 years.
To be sure, the proposed annual cost for underground lines along Gulf of Mexico Drive and down every neighborhood street will be noticed in Longboaters’ annual tax assessments, assuming the second bond issue is approved (see page 3A). Combined, for some Longboat residents, the two underground assessments would add close to $700 a year to their town tax bill. But think of it the way liberal government spenders do: That’s roughly only seven great dinners for two at Harry’s Continental Kitchens or Euphemia Haye.
The value received for that $700 will be worth it — greater electric reliability and safety; a boost to property values for the aesthetics of no more electric poles; and access to 21st century fiber-optic communications. Maybe you won’t have to stand in your driveway to talk on your cellphone.
OK, now to address the elephant in the room: the funding formula. Town commissioners adopted Monday a formula that would require properties without underground utility lines to pay 81.5% of the $20.5 million neighborhood cost, while those that already have underground lines (primarily Bay Isles and properties on the Gulf side of Gulf of Mexico Drive) would pay 18.5% of the cost.
Up to now, we supported subsidies for no one. Those who do not have underground lines do not deserve an unearned benefit from those who have them and already paid for them. We still think that should be the case.
But we’ve also been around long enough to know that the economically justifiable stance of subsidies for no one likely would not be politically viable.
Apparently, so did the town staff; it was crafty. To justify charging 18.5% to those who already have underground lines, the town staff noted: If the neighborhood lines are rejected, electric poles still would be required at the mouth of every street that intersects with Gulf of Mexico Drive. Because of that, all Longboaters would benefit by not having those poles. Their verdict: That justifies everyone on the Key paying something for no more poles in the neighborhoods.
Why fight it? A pole-less Key will be worth the price.
STEP UP, MR. ADAMS
Perhaps next week can be the beginning of the end to the sad saga and start of a new beginning for the Colony Beach & Tennis Resort.
The Colony Association — the owners of the Colony’s 237 units — is expected to hold its annual meeting Dec. 15. That is, if the state courts deny Orlando developer Chuck Whittall’s petition to stop the meeting. Among the items on the association’s agenda: electing four new board members and hearing development proposals from Whittall and Longboat Key’s Manfred Welfonder and his partner, the Lutgert Cos.
At least three people running for the four open seats on the board have development experience — a sign, perhaps, they are determined to push this drama to a conclusion. But as we noted years ago, there is one man who holds the key to the fate of the Colony: Andy Adams, owner of 70 units, giving him approval or veto power over any vote of the unit owners.
Heretofore, Adams has opted to stay behind the scenes. Here’s his chance to be a white knight and hero.
