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Vero City Council won’t include overhead or salaries in stormwater utility budget

STORY BY LISA ZAHNER (Week of February 4, 2021)

The Vero Beach City Council has told staff that any tax earmarked for a potential stormwater utility should only cover capital costs – not overhead or salaries.

The city currently spends between $600,000 and $700,000 per year on stormwater projects, paying for those out of the general fund with sales tax revenues. On top of that, typically $300,000 to $400,000 worth of projects go unfunded each year.

Should a stormwater utility be established and billed on property tax assessments this fall, the council has directed the staff to use $1 million – representing the funded and unfunded stormwater projects added together – for a target budget as consultants determine how much to assess each property owner.

The $600,000 to $700,000 in sales tax revenue currently spent on stormwater projects could then be allocated to road paving projects or other priorities.

The discussion over what expenses should and should not be charged to the stormwater utility came up after staff asked the council whether or not costs for salaries, overhead, vehicles and maintenance should be added to the costs for capital projects so that all expenses related to Vero’s stormwater management be captured within the utility.

Vice Mayor Rey Neville favors that strategy. He has said repeatedly that a stormwater utility tax assessed by the impervious area of each property is “more equitable” than using property taxes based upon value. Impervious areas such as roofs and parking lots don’t absorb rainfall and add to stormwater runoff that carries pollutants into the Indian River Lagoon.

“Do we create more employee costs? Do we shift some of that? Does it create a new position?” Neville asked.

But the idea failed to gain steam, so Neville voted to move forward with a stormwater budget free of overhead and personnel costs. The council considered holding a workshop and fully weighing its options, but staff said the consultants needed an answer “last week” and if they did not decide immediately, they would need to wait until 2022 to begin collecting the tax.

Vero Finance Director Cynthia Lawson told the council that the staff had never planned to charge portions of salaries and overhead costs to the stormwater utility. She said a spreadsheet showing $1.6 million in expenses – including portions of the salaries of 21 employees, plus vehicles and overhead – was simply an exercise in showing the council the true, full annual cost of managing Vero’s stormwater.

The capital-only approach won Councilman Joe Graves over to the majority side of the 4-1 vote. “We looked and we studied based upon this being for capital projects,” Graves said.

Mayor Robbie Brackett remained consistent, voting no even with the capital-only plan because he thinks it’s the wrong time to institute a new tax on local businesses and residents. Brackett wants to wait until economic conditions are more stable. In the meantime, he wants city staff to find innovative ways to get more done with less tax money.

The consultant will now move forward with calculating how much each residential, commercial, nonprofit organization and government property will pay into the new stormwater fund in the first assessment this fall, should council give its final approval in the spring.