GUEST COMMENTARY

“Over the next two months we will be pondering those choices, and listening to suggestions from the public, City Management, the Finance Commission, and other Council members, before reaching a decision. Please join in the process, it is important to get everyone’s views on this important matter.”

RANDY OLD

Editor’s Note: Randy Old is a member of the Vero Beach City Council.

Last week, after three full days of budget discussions among all City Council members, the City Manager, the City Financial Officer and all Department heads, the City Council voted provisionally to set the maximum millage rate at 2.6437. This together with an 8 percent increase in property values could result in a 38 percent increase in City taxes, or about a 4 percent overall increase in one’s property taxes, which means, if you have a house valued at $300,000 your annual property tax bill would go up by about $183 for the year in City of Vero Beach property taxes.

The reason for the tax increase is to generate $1,700,000 in new revenue for the City, which is needed to keep Vero effective and safe, while still maintaining sound fiscal policies. This provisional increase is to be reviewed by the City’s Finance Committee and will be the subject of two public hearings in September before a final Council decision is made. With the proposed tax increase, our city tax level still remains at the lowest 25 percent of all Florida cities.

The last eight years have seen a decline in property values, population, visitors, and all types of revenue, as was the case throughout Florida and the country. In response, the City cut staff by 156 (29 percent) from 547 to 391, froze salaries for the last 5 years and made significant reductions in employee benefits. During the past several years, general repairs and maintenance, work on our roads and other City assets were done only where absolutely required, and replacements, upgrades and preventive maintenance on equipment were cut nearly completely. Under the circumstances, these steps were wise, for they were in reaction to the economic downturn the City faced.

At the same time, the City hired a new finance director, put in a new accounting system, established a new budgeting discipline and a set of controls which has proved to be very accurate at projecting and meeting annual expenses. This last year the City moved to five year budget projections, for both annual expenses and capital expenditures, so the City has an accurate picture of its needs going into the future. Further, the City has significantly reduced employee benefits, has gone from a defined benefit to a contributory employment plan. Further, the City Council has decided to establish a trust fund for Other Post-Employment Benefits, which increases current costs but significantly reduces future employment obligations.

The economy is improving, housing values have started upward, tourist revenues are up and the City has a good credit rating. Cash reserves are just over $9 million and public debt about the same level. Now it is time to repair all the damage created by the economic downturn.

While not final, the proceeds from this year’s tax increase would provide a much needed 3 percent raise to our employees. Our overall staff level would be reduced by two people, but we propose to add two policemen to improve response time and code enforcement, two full time life guards due to the record number of visitors to our beaches, and two positions in Finance and Technology required by each department. In addition substantial increases are planned for road, building and other maintenance, buying the tools to allow our staff to do their jobs better, such as new computers, software, and new vehicles. At the moment, our software is no longer supported by Microsoft, our cars and vehicles breakdown and require high levels of maintenance, and our roads, if not regularly maintained, require rebuilding at a much higher cost.

Looking forward, Vero is a city that has to learn to plan well. Our City does not have much room for growth, we are essentially built out, and our population will not grow much. This means our revenue is going to be essentially flat from most sources, so we have to take a detailed look at ourselves, our property, our services, and decide what is essential, how we can improve the services we feel are essential and find other sources of revenue or means of increasing revenue. We need to use our Vision plan, together with a strategic plan for the next 20 years, and begin to move toward that long vision.

In undertaking the budgeting process this year, we entered the meetings with the understanding that our employees deserved a raise, that our maintenance had been neglected, that our technology was ancient, and that our pension and benefit programs were generous. At a meeting before the budget process, we had a five year projection of our needs and the deficit they produced. In order to meet what we all felt were necessary expenditures, we have very few choices. Over the next two months we will be pondering those choices, and listening to suggestions from the public, City Management, the Finance Commission, and other Council members, before reaching a decision. Please join in the process, it is important to get everyone’s views on this important matter.