Vero Beach sets stage for near-40 percent tax hike
The City of Vero Beach has piled a wish list of items into its proposed 2015-16 budget and now it wants to hear from taxpayers how much they’re willing to fork out for city services and personnel to “keep Vero Vero.”
In a move that would bring in 38 percent more property tax dollars from Vero residents than the current rate of taxation, the City Council voted 3-2 last Wednesday to set a maximum tax rate that would support $1.7 million more in spending on salaries, benefits, road paving and capital improvements.
The new property tax rate, if set at the maximum approved, would be $2.64 per $1,000 in taxable property value. That's up 61 cents from the current rate of $2.03, and up 73 cents from the "roll-back rate" of $1.91 per $1,000 value that Vero would charge to bring in the same $4 million in property taxes as this past year.
The owner of a home in the Vero Beach city limits with a $500,000 taxable value, after homestead exemption, under the maximum tax rate could expect to pay $305 more to the city in the coming year than the tax bill received last fall. That's on top of county, school board and other taxes.
Vice Mayor Jay Kramer, who is running for the District 5 Indian River County Commission seat against the fiscal conservative incumbent, Commissioner Bob Solari, voted against the tax hike. Councilwoman Pilar Turner also dissented, calling the proposed increase in spending "untenable."
"You need to start with what do you really need, not what's nice to have," Turner said.
Mayor Dick Winger and Councilwoman Amelia Graves, who are both up for re-election in November, and Councilman Randy Old, voted in favor of the major tax increase.
"It's very painful for me," said Winger, who reminded his colleagues that he had tried to raise taxes incrementally last year and was outvoted. "I think we've got to look at a one-time fix. The revenues of this city are not sufficient to fund the services."
Old countered Winger's suggestion that more tax hikes would not be needed in coming years. "I actually think we've got more ahead of us. This is a first step in getting the city where it needs to be," Old said.
One key factor driving the need for more cash, throughout the three days of budget workshops, was Vero's aging and in some cases crumbling infrastructure. The budget includes $450,000 for capital improvements and purchases.
From roads to leaky buildings to recreation facilities in disrepair, the decades-old structures, plus the lack of maintenance during the lean years of the recession, resulted in a heap of costly, seemingly unavoidable fix-up projects piling up on the council's plate this year.
The amount Winger and the staff say is needed just to resurface the roads is $400,000. The bill for overhauling the Royal Palm Pointe fountain is expected to run about $85,000. The Community Center needs a new roof and other improvements, and Leisure Square needs major work to bring it back up to Vero standards.
Employees are set to receive 3 percent salary increases across the board. The total number of employees is scheduled to decrease, however, from 396 to 394, resulting in a net increase in payroll costs of $225,000.
Pile on increases in health premiums, plus a major change in the city's pension programs – freezing the defined-benefit plan and launching a defined contribution plan, but having to pay for both plans for the next dozen years. Pension costs are set to rise $450,000 from $5.29 million this year to $5.74 million next year.
“The city’s contribution towards the unfunded liability of the frozen Defined Benefit plan is $4.2 million, which is the same as the prior year. The city’s employer contribution to the Defined Contributions plan is 9 percent of salaries for existing employees and 7 percent for new hires,” the budget memo says.
Kramer cited the change in the pension plan, which he voted against in June and called "disastrous" on Wednesday, as one main reason why he couldn't vote for the tax rate increase as presented.
The budget also includes a 3 percent across-the-board salary increase for the city's nearly 400 employees, plus the addition of several new positions.
In response to calls for beefed-up police coverage in the beach zone and in Vero's mainland neighborhoods, the police department proposed adding two uniformed officers and a part-time parking enforcement officer come October.
The new officers, Police Chief David Currey said, would help keep a steady six officers at a time on duty, plus allow for patrols in the beach area that lifeguards have been asking for, some bicycle patrols and someone to patrol the river by boat – all activities that are limited by current staffing.
Only a few members of the public attended and spoke out at the workshops last week as the discussion was dominated by council members and city staff. But the city is hoping to have more citizen input at the two legally required public hearings at 5:15 p.m. Sept. 3 and Sept. 15.