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Vero to collect an extra $493,000 without changing property tax rate

STORY BY LISA ZAHNER (Week of August 5, 2021)

Thanks to a boost in property values, the City of Vero Beach will have nearly a half million more dollars in property tax revenue to work with despite leaving the tax rate of $2.50 per thousand unchanged for the coming year. 

That $493,000 increase in tax revenues from a 6.1 percent increase in taxable property values almost offsets the $500,000 decrease this year in the temporary draw down from electric utility sale proceeds that the city calls the “glide path” to weaning Vero off the $5.6 million it used to count on from the electric utility.

About 60 percent of that $5.6 million was paid by electric customers outside the city through exorbitant rates, which kept property taxes artificially low for city residents for decades.  All area customers now pay the much lower FPL rates.

A proposal on the table to increase the property tax rate slightly, by about $12 per year for a property owner whose home had a taxable value of $200,000, failed by a 3 to 1 vote, with Vice Mayor Rey Neville the sole vote for increasing taxes.

Both Neville and Councilman Dick Winger wanted to increase the tax rate, but Winger left the meeting he was attending remotely before the vote to go to a medical appointment.

Even if Winger had been present, the increase would have failed, 3 to 2. Mayor Robbie Brackett insisted that 2021 was “not the year” to increase taxes, with many locals still struggling through the pandemic economy.

Councilman Bob McCabe said it was a priority for him to hold the line on the tax rate and Councilwoman Honey Minuse called it a “very tough decision” because it could leave some critical items unfunded. “Hopefully in August, we’ll have some idea of what we’re getting from the state because that priority list is huge.”

City staff put together a list of “unfunded items” and divided them into recurring expenses and non-recurring expenses. The $583,000 in non-recurring expenses will be funded by reserves at the direction of the council. Employee raises of 2 percent made the cut into the budget, but four items on the unfunded list are still in limbo.

To further the city’s efforts to clean up the Indian River Lagoon, the council wanted to purchase an additional street sweeper. The city already has one street sweeper and operator, but a second truck and driver would double the results, keeping additional debris from being washed into storm drains and the lagoon.

The truck is a capital expense that would come out of another area of the budget, but the driver would be a recurring expense of $80,000 per year. That’s $41,000 in salary, nearly $18,000 in benefits, plus $21,200 in uniforms, fuel, vehicle maintenance and landfill fees.

Next on the priority list is $72,000 to hire a cybersecurity expert to help protect the city’s systems from being hacked. Following that is $57,691 for body cameras for the Vero Beach Police Department and $2,600 for the city to use the DemandStar bidding program that would make it free for businesses to access city bid packets and bid on Vero contracts.

A portion of the cybersecurity employee and DemandStar system would be charged to the city’s enterprise funds like the water-sewer utility.

The proposed $24.8 million general fund budget without the two unfunded positions would leave the number of general fund employees at its current count of 212.

An addition of two water-sewer employees for the coming year, would bring that number to 75 and increase the citywide employee total to 328, equating to one city employee for every 55 city residents. That number has risen from 318 employees in the 2019-2020 fiscal year after the electric utility sale.

For perspective, 10 years ago, the City of Vero Beach employed 508 people, including 113 electric utility employees.

With regard to the resources available for the items on the unfunded list, Finance Director Cindy Lawson explained that the city is still waiting to find out how much it will receive in state revenue sharing. As of Monday, Lawson said, “no update yet for the only one that we still don’t have, which is Communication Services Tax.”

Lawson said she would bring back the final state revenue sharing numbers in August for the council to give her clear direction on which of the pending items to include in the budget to be presented for public hearing on Sept. 7 and Sept. 21. The new budget year begins Oct. 1.