At a Town Council meeting in April of this year, Town Attorney Dawn Lehnert told the newly elected council members about a problem that may arise with one of the recently passed changes to the Town Charter.
At issue is the elimination of Article 17.01, which appeared on the March ballot as Charter Amendment 21. Article 17.01 contains language regarding eligibility for state revenue sharing based on calculations including local special districts. When the Charter Review Committee (CRC) was looking over the charter last year (something they are required by state statute to do every 10 years), former Town Attorney Derek Rooney said the issue of revenue sharing is covered by state statutes, after which member Dan Hughes pointed out that the Town Charter is designed to cover things not covered by general law, making Article 17 irrelevant. The rest of the committee agreed, the question went on the ballot and Amendment 21 passed with 80% of the vote on March 15th.
Lehnert, who said she discovered the error ‘right before the election’, went to Council on April 4th and shared her concerns.
“As I understand, the CRC reviewed different provisions of the charter and made recommendations, which were adopted in September. Section 17.01 allowed the Town to meet the criteria set forth in Florida Statute 218.23 by allowing the Town to include the millage levies of the special districts operating within the Town’s jurisdiction in order to meet the 3 mil requirement. With the approval of referendum question 21, the Town is no longer able to use the special district’s levy to meet the criteria. As a result the Town will lose the ability to share in the revenue derived from the State Municipal Revenue Sharing Fund.”
“I see two options to fix this – Council can increase millage to meet the state criteria of 3 mils, hold another referendum to replace 21 – which can be done via mail ballot, or forego the amount of money we would have gotten from revenue sharing -$150,000 to $200,000/year.”
At that meeting, then-Town Manager Don Stilwell said he was notified about the issue on March 11th, the Friday before the election, though an email stream regarding the issue shows that he responded to an email from former council member and local attorney Bill Shenko expressing concern about revenue sharing on February 23rd.
Council member Rexann Hosafros said she was present at all of the CRC meetings, and that Rooney did seek advice from the Attorney General’s office.
“I’d like a written opinion from them as Rooney believes his advice was sound,” she said.
On April 19, Lehnert wrote to the Attorney General (AG) requesting an opinion asking whether or not provisions set forth in the Town Charter – as established by a Special Act enacted by the State Legislature – with respect to meeting state revenue sharing criteria using ‘stacking’ to receive revenue sharing funds, may be amended through the local referendum process and, if so, can the Town legally call for a subsequent charter referendum election to reinstate the revenue sharing provision and be assured that the Department of Revenue will continue to honor it.
The AG responded on June 2, saying that – based on the power of home rule – they would offer no opinion on the validity of the repeal of the charter provision.
“In sum, this office must presume the validity of the repeal of a provision in the town’s charter by referendum and would advise that the re-enactment of the provision by referendum would be controlled by section 166.031 of the Florida Statutes (the means by which a municipality may amend its charter),” wrote Assistant Attorney General Lagran Sanders. “Whether the Department of Revenue will recognize the Town’s eligibility to receive revenue sharing through re-enactment of the charter provision is a determination to be made by that agency, not this office.”
Lehnert then reached out to the Department of Revenue (DOR) on June 14, asking if they would allow the Town to meet the revenue sharing criteria set forth in Florida Statute 218.23 if Article 17.01 were readopted by referendum.
That email was followed up by another query sent to the DOR from Town Administrative Services Director Maureen Rischitelli on June 20. That query reads as follows:
“The Town did a charter amendment in April that will impact its revenue sharing. Our attorney has asked your office for an opinion to correct this error. My question involves the current allocation and what time period does it cover, and should our revenue sharing have changed effective with the Charter amendment date?”
On July 13, Marsha Revell responded:
“After reviewing your files and calculating the 3 mil equivalency test on your local government, we do not see an issue with Fort Myers Beach receiving the Revenue Sharing Distribution for our FY 2017 (note: the state’s fiscal year for 2016 ended on June 30). Fort Myers Beach will still exceed the 3 mils, though the margin isn’t as large as was when the special districts were included. But as long as your government continues to receive the Utility Services Tax, Local Business License Fees, Communication Services Tax and the millage rate continues to increase, you shouldn’t have a concern. It sounds like from your email that you’re planning to correct the error – is that true?”
Rischitelli then asked how the error should be corrected, and Revel further explained that a correction is not necessary should the Town generate at least $3,040,496.04 each year – a number that includes ad valorem taxes, utility services, business license and CST.
“Currently, with your assessed values as high as they are along with your current millage rate, your city easily meets this requirement in combination with the other taxes listed above,” Revel wrote in her reply on July 15. “You really wouldn’t need to correct the error in your charter, but if you choose to do so a referendum would be the proper method.”
When we spoke to Lehnert on Wednesday, she told us that since the DOR has said the Town meets the criteria for the current Fiscal Year (June 30, 2016 – June 30, 2017), she has decided to take the issue back to Council after the budget is complete in September.
“However, to make sure we don’t lose revenue sharing in the future if our property values drop, I am going to ask for a resolution to get Article 17.01 reinstated,” she said. “This could go on either the March ballot or be done with a mail-in ballot.”
Keri Hendry Weeg