INDIAN RIVER COUNTY — After two difficult years of slashing budgets to meet decreased revenue, County Administrator Joe Baird is beginning to see signs of a rebound on the horizon.
County leaders say that the real estate market, business and tourism sectors should be getting better in the coming years – despite being depressed for the last few.
“We feel we have hit rock bottom,” County Administrator Joe Baird said Tuesday to a roomful of business and community leaders during the annual State of the County luncheon hosted by the Indian River County Chamber of Commerce. Though he expects property tax revenues and other incomes to decline again next year, Baird said other revenue streams are projected to go up. Those include the sales tax, meaning he is expecting people to be spending more in 2011.
“Historically, the state has been more optimistic in recoveries,” Baird said, explaining that the state expects sales tax revenues to increase 5 percent next fiscal year. The county, however, will be building into its budget only a 2.5 percent increase.
Despite the anticipated increase in certain county revenues, Baird told the audience that he plans to shed an additional 45 positions from the county’s staff — more if the firefighters union insists on a raise it is due contractually.
Baird said he plans to first eliminate any open positions from the payroll, and then assess the staff “across the board” in all county departments to determine which positions should be cut.
“We only have so much money to go around,” he said.
Real estate analyst Wayne Kleinsteiver, of CCIM, gave an overview of the county’s commercial and residential real estate markets, noting that there are signs that the real estate markets are bottoming out as well and could start seeing improvement.
“Supply far, far, far exceeds demand,” Kleinsteiver said of the housing units in the county. To date, there are more than 3,100 homes on the MLS market – and 1,000-plus more for sale by owner.
Median home sale prices have plummeted from a high of $230,000 in 2005 to $130,000 in 2009, Kleinsteiver said, adding that today’s median prices are hovering around $123,000.
“Sebastian is flattening out,” said Kleinsteiver. “It’s getting better.”
Commercial real estate, too, has also suffered, as businesses have closed or seen income drop to the point where owners have a difficult time paying their rent. The situation has put some landlords in a position of decreasing the rent and covering their tenants’ utilities just to keep their storefront occupied, according to Kleinsteiver.
Though the markets are down now, Kleinsteiver said he expects them to start to rebound, but it will take time.
“In America, we like instant soup,” he said, explaining that the markets won’t return overnight. “It takes a lot of time.”
Kleinsteiver predicts that it will take at least three years for the markets to recover.
County Commission Chairman Peter O’Bryan told the audience that it’s not all “doom and gloom” – that there are “little green shoots” of positive signs sprouting up.
Such signs, he said, include reports of longer hotel stays in the county and increases in sporting events the county has been hosting — most recently the Police/Fire Games and the State Shuffleboard Tournament.
“These bring families to the community,” where they can see what the county has to offer, O’Bryan said. “They’re building our future.”
On the business front, O’Bryan said that the county has worked diligently to help foster a business-friendly atmosphere.
“The Board (of County Commissioners) and community are working together like never before,” O’Bryan said, noting that past years were not so cooperative. “I think there’s been a big shift.”
O’Bryan described several economic tools the county has developed or hopes to implement, including suspending certain impact fees and granting 90-day waivers for commercial Certificates of Occupancy that allow businesses extra time to make sure certain code requirements are met.
Commissioners also plan to ask residents to support a tax abatement referendum on the November ballot. That referendum would grant the county the ability to offer a property tax freeze to certain businesses that hire a certain number of employees at a certain rate of pay.
“We still have a ways to go,” O’Bryan said in turning the county around. “But there are bright spots.”