Vero council opts for wiggle room on tax rate

VERO BEACH — Four members of the Vero Beach City Council voted Friday to give the city the leeway to increase the property tax rate — but not the amount of tax collected — in the coming year.

Faced with budgetary pressures and the possibility of having to dip into reserves, the council, with only Councilman Tom White dissenting, left the option open of avoiding police furloughs via property taxes.

“We can have a choice the next two months to raise the mill (tax rate) or go into reserves,” Sawnick said. “This gives you some latitude to do whatever you want,” City Manager Jim Gabbard said.

White said he wanted staff to go back and cut to keep the tax rate steady instead of leaving the door open to spend more money. The rest of the council voted to give themselves flexibility to accommodate unforeseen events or expenditures which may arise prior to final budget hearings in September.

“This gives us the wiggle room,” Councilman Ken Daige said. “I am not interested in going into reserves and I am not interested in raising peoples’ taxes.”

The current tax rate of 1.93 per $1,000 of taxable property value would bring in about $4.38 million, or roughly $500,000 less in tax revenues because property tax values are down nearly 11 percent. To net the same amount of taxes, about $4.87 million, the city could have to go to the “rollback rate,” of 2.15 per $1,000 of taxable property value.

“A rollback is not a tax increase, it’s trying to get the same amount of money as last year,” said City Attorney Charles Vitunac.

Should the city need to resort to the “rollback rate,” property owners would pay about $22.30 more for every $100,000 of taxable value. For the average taxpayer, however, their tax bill would remain the same as last year due to decreased assessed values.

“By going to the rollback rate we’re actually sticking it to everybody who is here full time and is homesteaded,” White said, explaining his vote. “They’re going to bear the brunt of the burden, and I’m one of them.”

The consensus of the council was that the staff should make every effort to adjust the budget so the tax rate would remain at $1.93 per $1,000 of value, but that they didn’t want to put themselves in a corner by approving and publishing a tax rate that would be too low and set in stone.

The council gave direction Thursday to find $108,000 somewhere to fund salaries for road patrol police officers instead of forcing them to take one unpaid furlough day per month off. Initially, members directed staff to take the money out of reserves, but setting taxes at rollback rate would allow options.

“If we just set it at rollback and see what happens and if we just raise the mill (tax rate) to cover the $108,000. It makes sense, but nobody wants to do it,” Mayor Sawnick said.

The rest of the city staff, including upper management at the police department, has been on a furlough program since October 2009.

Until the final millage rate is set in September, the staff has been tasked with combing the budget — including the Police Department budget — to save every dollar possible.

Toward that end, Gabbard said he had just received notice that the city could be saving about $600,000 in property insurance, but that he was unsure of the budget implications for the general fund, because the aggregate premium includes insurance paid by the city’s enterprise funds as well. He estimated about one-third of that amount could be realized as reduced General Fund premiums.

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