VERO BEACH — Avoiding deep cuts again this year by using $11 million collected from utility bills, top Vero staffers are proposing to trim a mere 4.8 percent from the city’s current $21 million General Fund budget.
Budget workshops open at 9 a.m. today and continue through lunchtime Friday, at which time the City Council will set the tentative property tax rate. The city’s current rate is $1.94 per 1,000 of taxable property value. Property taxes are expected to bring in about $4.1 million in the coming year.
The budget includes a 5 percent reduction in General Fund staff. Positions being eliminated include one part-time person in the Information Technology division of the Finance Department, six part-timers in the Police Department and six full-time Public Works employees. Proposed staffing for the General Fund is 263 employees, including 88 full-time Police Department personnel.
The proposed General Fund budget of the city is $20.2 million. The total budget including the utility funds and airport and marina revenue is roughly $135 million.
The city’s plan comes in a year when, by comparison, the Indian River Board of County Commissioners is cutting 28 percent from its budget and eliminating 50 positions, amounting to $100 million in reductions to the expense side of the ledger. The City of Vero Beach has been viewed as behind the curve in comparison to the county with regard to cutting government spending and staffing levels due to the economic recession.
Since countywide property values have declined nearly 10 percent and property tax receipts are expected to come in close to 11 percent less than the current year, the city intends to again balance its budget by relying heavily upon revenues from its Enterprise Funds. Transfers from these funds siphon dollars off water, sewer and electric utility bills in order to keep property taxes low for city residents.
In the upcoming budget year, the city is scheduled to derive $5.6 million in direct transfers from the Electric Fund, $859,000 from the Water-Sewer Fund, $153,000 from the Solid Waste Fund and $86,000 from the Marina. On top of that, all the enterprise funds contribute to the management and administration costs at City Hall to the tune of $2.7 million.
The city also expects to collect $2.25 million in utility taxes during the 2010-2011 fiscal year. The total revenues taken directly from ratepayers utility bills toward general fund operations will be about $11 million in the coming year. In comparison, Vero expects to receive $4.1 million in property taxes, down from $4.6 million in the current year.
The Electric Utility fund budget is down by $3.2 million due to a rate cut which occurred in the winter of 2010 when the city switched power providers from the Florida Municipal Power Agency to the Orlando Utilities Commission.
Of the approximately 200 employees who work for the city’s electric, water and sewer utilities, only two full-time positions are slated to be eliminated from water and sewer. There is no staffing reduction budgeted for the Electric Utility in the coming year. The proposed budget will leave the Electric Utility with only $166,000 in cash, which amounts to about 1.5 days of operating capital. Industry recommendations for an electric utility are between 80 and 90 days of operating cash.
The Water and Sewer fund shows a proposed $872,000 cash balance at the end of next fiscal year, as the city plans to save up money to pay for capital improvements in cash instead of borrowing. The budget of the Water and Sewer fund is $17 million.
Last week, the city approved a plan to offer early-retirement bonuses to 88 eligible employees in an effort to eliminate 10 positions and to save more than $300,000. The program was touted as an attempt to avoid layoffs. Employees over the age of 55 who are vested in the city’s retirement system will have until Sept. 30 to accept the officer, which would give them a lump-sum payment of one month’s pay for retiring earlier than scheduled.
The plan was described as a “more humane” approach to cutting the budget.