SEBASTIAN – The Sebastian City Council has tentatively set the city’s property tax rate so most owners will see a cut in the tax bill.
The property tax rate will remain the same as last year. And with property values on the decline, most residents should see a smaller amount of their money going to the City of Sebastian.
The approved millage rate of 3.3456 is 14 percent lower than what the city could have opted to set in order to collect the same tax revenues as last year.
“It’s not going to last forever,” Councilwoman Andrea Coy said of the current millage rate, noting that the city has worked hard the last few years to keep the rate where it is.
She said next year could be the year where the city council must increase the rate to keep services.
City Manager Al Minner told the council that the city has seen a 15 percent drop in the assessed value of properties within the city. Last year, the city collected taxes on more than $1 billion of assessed property values. This year, the assessed amount in the city is $974.5 million.
To help balance the $22.46 million budget, the city has reduced its staff by 19 percent – or 30 positions – and will continue with the unpaid days off (furloughs) one day each month.
As part of the budget’s approval, which will be finalized at the Sept. 22 council meeting, the Sebastian City Council signed off on one more year of running the city’s building department through deficit spending.
During the high-growth years, the building department collected money from permits and other services, which funded the department.
When the economy began to slow down, about five years ago, the department stopped bringing in enough money to cover itself.
Minner explained to the council that over the last five years, the department has covered its losses by tapping into its reserve. That reserve had been approximately $1.6 million.
The budget shortfall in the department has been approximately $100,000 annually.
“We do that with trepidation,” Minner told the council, adding that by 2013 or 2014, the reserve could be tapped out.
“I’m not certain how we fix this right now,” Councilman Don Wright said, adding that he would like for the city to address the issue sooner rather than later.
The department has already been cut in half, to six employees, according to Minner.
Councilman Jim Hill said that the only way to make the department run more efficiently would be to cut more employees.
“Those are the difficult decisions we’re going to have to make,” Hill said.
Minner cautioned the council that eliminating staff from the building department could have a negative impact on the city’s already tight general fund due to contractual agreements with the union.
Minner added that he’d rather hold off on making any changes to the building department until next year because the council did not want to increase the city’s property tax rate.
However, the city council directed Minner to research all the city’s options for the building department, including the possibility of transferring the department’s responsibilities to the county, as Vero Beach has done.
