VERO BEACH — The City of Vero Beach will maintain its status as having one of the lowest property tax rates around.
The Vero Beach City Council Tuesday voted to keep the rate of $1.94 per $1,000 of taxable value. With most properties having experienced declines over the past couple of years, this means residents will be paying slightly less taxes in 2011 to support city operations than they did this year. The City of Sebastian is proposing a rate of up to $3.59 and the Board of County Commissioners a rate of $3.09. The Indian River County School District proposes to levy $2.50 per $1,000 to pay for public schools.
Vero Beach is able to keep its taxes so low because it transfers nearly $11 million from its utility Enterprise Funds, about $8 million from the electric fund alone, to offset costs of administration, recreation programs and some support staff needed to service the utilities and their employees.
In July, the Vero Beach City Council left itself some “wiggle room” by raising the tentative millage rate from $1.94 to about $2.05 per $1,000 of taxable value. That’s the figure that showed up on preliminary tax bills called “TRIM noticies” sent by Indian River County Property Appraiser David Nolte’s office in August.
This would have brought in another $22 from a taxpayer with property assessed at $200,000 taxable value.
According to comments made during a break by council members, when residents saw their tax rate going up, even slightly, they reportedly let City Hall know that this was not acceptable.
Instead of exercising the option of raising taxes to the “rollback rate” of $2.05, which would offset the decreased property values to bring in exactly the same amount of revenue as the previous year, council members got the message and opted to send the staff back to the drawing board to make the budget balance.
Among the measures being taken to reduce expenses are cuts to benefits for the city’s 400-plus employees.
Beginning Oct. 1, employees will be paying up to 35 percent more for their health insurance and they will be earning less toward retirement. The council passed ordinances to institute a three-tier plan for benefits giving employees a menu of coverage and charging them for benefits they receive as part of their package now.
This change is expected to save the city about $700,000 annually.
For new hires and those not yet eligible for retirement, the city has also reduced the pension it’s promising employees, for an expected savings of yet another $700,000.
Previously, the city contributed enough for employees to get 2.25 percent of their annual salary for the first 25 years. Now employees will receive 1.6 percent of their annual salary for the first 25 years. If employees stay on after the 25 years, they earn a half a percent extra for each additional year.
The city does not have a mandatory retirement age or cutoff and some employees stay 30 or more years before retiring.
Employees except for low-ranking patrol officers with the Vero Beach Police Department have been on a furlough plan since Oct. 1. This saves the city about $1 million per year.
The City of Vero Beach portion of homeowners’ tax bills is a small portion — only about 10 percent — of the total assessment. The largest percentage goes to the Indian River County School District and next largest to the Board of County Commissioners. Also on the tax bill are taxes from the St. Johns River Water Management District and the Sebastian Inlet Tax District.