Higher property values in Vero Beach will allow the City Council to give all municipal employees a 5-percent, cost-of-living-adjustment pay increase – without raising the millage rate for the 2024-25 fiscal year.
“Technically, it’s a tax increase, because people will pay more in property taxes, but that’s because their property values went up,” City Manager Monte Falls said after the council’s two-day budget workshop last week. “The millage rate is staying the same.”
With taxable real-property assessments in the city up more than 8 percent this year, retaining the current millage rate will bring in nearly $860,000 in additional revenue to fund a proposed $34 million budget, which has increased by about $1 million.
That rate – property owners will continue to pay $2.77 for every $1,000 of taxable value – will generate about $12 million in ad valorem tax receipts, or about 35 percent of the total General Fund revenues, Falls said.
The rest comes from other sources, including utility taxes (about $3 million), electric franchise fees from Florida Power & Light (nearly $2 million) and contributions from enterprise funds: Water & Sewer ($1.5 million), Solid Waste ($220,000) and the Municipal Marina ($150,000). There are nearly 30 other revenue sources, Falls said.
Under the current millage rate, city tax for a house assessed at $800,000 would be slightly more than $2,200. And while homeowners will feel the effects of higher real-estate values, Florida’s Save Our Homes law prevents homesteaded properties from increases of more than 3 percent annually.
“I’m really pleased we were able to address the needs of residents and council members, as well as provide a pay increase for our employees,” Falls said, “and still bring in a balanced budget at last year’s millage rate.”
In addition to voting unanimously to set the new millage rate before concluding the budget workshops Friday, the council approved a 2-percent cost-of-living-adjustment increase for retired city workers.
The council is scheduled to vote on the city’s 2024-25 budget in September, after two public hearings are held. If the spending plan is approved – and Falls said there are no foreseeable obstacles – it becomes effective on Oct. 1.
Vero Beach continues to have one of the state’s lowest tax rates among similar-sized, full-service cities.
“The staff worked extremely hard on this and deserves a lot of credit,” Mayor John Cotugno said. “Everything we had discussed in advance is in the budget. There’s not one thing I can think of that was proposed and cut out.”
In fact, Cotugno said the city plans to install security cameras, which will be monitored by the Vero Beach Police Department – at Pocahontas Park downtown and at Humiston Beach Park on the island. He said Police Chief David Currey is exploring options.
Last year, the council increased the millage rate from 2.69 to cover the costs of adding four new police officers, expanding the staffs in the planning and finance departments, and an across-the-board, 5-percent pay raise for all city employees.
The budget the city staff proposed last week includes the addition of only two new maintenance positions in the Public Works Department.
Although the city is still in labor negotiations with the police and Teamsters unions, Falls said the next meetings are in August and he hopes to reach agreements before the council approves the budget.