Council defers decision on city-county compacts

Officials await possible tax distribution change
Feb. 28, 2013 @ 05:02 AM

City Council members on Wednesday decided to delay taking action on several interlocal agreements until the ongoing sales tax distribution issue is settled.

During a morning-long retreat at the city municipal center, members of the Sanford City Council reviewed proposed interlocal agreements put together by an appointed subcommittee — composed of Lee County Commissioners Kirk Smith, Amy Dalrymple and Jim Womack and council members Samuel Gaskins, Poly Cohen and Rebecca Wyhof. The committee met last week and tasked the respective managers with drafting new agreements based on the subcommittee's recommendation. The drafted terms of the interlocal agreements were submitted to council by Lee County Manager John Crumpton.

For her part, Sanford Mayor Cornelia Olive said, "I do not want to sign any agreements until we know something on the sales tax distribution."

Lee County has until April to change the sales tax distribution method from the current per capita system to ad valorem — pushed by the Republican majority on the county's board — which would provide a net increase of $1.4 million to the county, but a $1.3 million decrease for the City of Sanford. The Town of Broadway would also be impacted, losing about $100,000 if the change takes effect.  

Gaskins said he believes the sales tax distribution will change and the city needs to be prepared.

"They have made promises of reducing the property tax rate," he said. "And the only way to do that is to change the sales tax."

Sanford City Manager Hal Hegwer said the city will be working with two budgets until the county commissioners make a decision.

"We need to keep in mind that this is not our revenue source," he said.

The city will have to make some cuts to relieve the shortfall in revenue, and the largest chunk of the general fund budget is personnel, Hegwer said.

Personnel-related expenses constitute nearly 70 percent of the city's general fund. The city's police department employs 106 positions, followed by the fire department (54 positions) and general government (46 positions). Community development, solid waste and street departments constitute the remaining 58 positions.

Hegwer said he hopes reductions in staff will come through early retirement; about 20 people currently qualify.

"We have people in all spectrums," he said. "Through the interlocal agreements, we can look at some reorganization. We are still waiting to see what the county is going to do."

A full list of the county's terms of the interlocal agreements are available at www.sanfordherald.com. The subcommittee is scheduled to meet again at 1 p.m. March 11 at the West End Conference Room.