City Council - Regular Meeting

All right, here we go. So, good morning. Welcome uh to the city of Sebastian's first understanding of property taxes workshop here today. Um, so what we're going to do is I'm going to give a a presentation on on what you can expect and and looking at what property taxes are utilized for within the city. Our goal today is so that you are informed on what property taxes are used for. Um, at towards the end of the presentation, we'll discuss some potential alternatives. Uh, we'll also discuss one bill that is passing uh currently through the legislature. I'll get further into detail when we get to that slide. Um, but just trying to provide some facts and then at the end we'll give you all a chance to ask some questions. Uh, my name is Brian Bittton. I'm the city manager. I also have our chief financial officer, Brian Stewart, is here. Um, our human resources director, Cindy Watson. Our fleet superintendent, Dave Moore, our city attorney, Jim Stokes, our acting city clerk, uh, Kathy Ta. Uh, chief of police, Daniel Acasta, is in the back. And uh we have our um IT staff here as well helping with this. And I do want to recognize we have council member Ed Dodd in attendance as well here today. Um so at the end we'll give you a chance to ask some questions uh regarding property tax that we will um uh provide some answers and if there's anything we have to get back with you individually on we can do that as well. So with that we'll get started with the presentation. All right. So, as I mentioned, uh the goal here today is um to to discuss property taxes and what it means specifically to the city of Sebastian. Uh there's a lot of talk out out in in the media um on social media about property taxes as a whole across the state and our our plan, as I mentioned earlier, is to give you information specifically to Sebastian. Um, so we're going to discuss what are property taxes, how are they generated, what do

property taxes fund within the city of Sebastian, what is homestead versus non-homestead, what's that impact look like, um, and some potential alternatives to property taxes or potential cuts to general fund uh, as a result of property tax reduction. So, as I mentioned while we're hosting this, lots of discussion regarding property taxes and potential elimination. State legislation is discussing property tax elimination and the reduction um through multiple bills have been filed in the house. Um house joint resolution did pass the Florida House on February 19th. This proposes the elimination of all non-school advalorum taxes. If bills are passed, they will then be placed on the ballot for voters to decide. So, we'll get into that a little bit further once we get to the House joint resolution, but the voters will make the ultimate decision when it comes to property tax reform. The city's goal is to provide factual information to our residents regarding the usage of property taxes. So, to start off, what are property taxes? Property taxes are local advalorum which is valuebased taxes on real property and commercial personal property. Property taxes what is used in the um computation of property taxes is called the millage rate that is set annually by your city council. your city council um through presentations provided by staff comes to the res final result on a millage rate that goes through public workshops that we have with council regarding the budget and also goes through public hearings. We're required to have multiple public hearings um in preparation for adopting the final mill rate. Um your prop properties are assessed annually by the county property appraiser. Property taxes are then

collected annually by the county property tax collector. Property taxes are stable and predictable revenue source for the city when preparing the annual budget and primary local funding source for general fund operations. And we'll discuss what general fund operations include as we get further along. So, how are your property taxes calculated? property tax uh formula is utilized. As I mentioned, the property appraiser establishes a just market value on your property. It's then calculated less state increase caps which 3% on save our homes is the max that your just value if you are a homesteaded property owner within the city. Uh 3% caps your just value increase on an annual basis. If you are nonhomestead it is uh capped at 10%. So that means your just value that is utilized in calculating this number um can only increase by 3% annually if you are a homestead property owner and 10% non-h homestead. This comes up with your assessed value. Um then there's exemptions that that fall into place. So we start to deduct the exemptions. You have property tax exemptions. Currently Homestead is, you know, has a $50,000 uh exemption. And then also uh disabled veterans and a few other uh areas have increased exemptions that are uh provided that equals your taxable value. Your taxable value is then multiplied by your millage rate. As I mentioned before, your millage rate is set by city council. Um an example is 1 mill equals $1 per $1,000 of taxable value. That then equals your property tax owed here in the city of Sebastian. So that you're aware on your property tax bill, the city's millage rate this current fiscal year is 3.4455.

So for every dollar um per $1,000, it's multiplied by 3.4455. So millage rates, when you get your property tax bill, there's a lot of information on there and this breaks it down a little simpler when it comes to advalorum taxes. So, Avalorum taxes, also known as property taxes on your tax bill. Uh, this dollar bill breaks down to show the area in red is Indian River County taxes. Um, so this is the millage rate that's established by Indian River County plus the emergency services tax um that's established in there that pays for fire rescue because the city does not have fire rescue uh that's provided by the county. So you can see that any river county's portion and we use a dollar bill here just for the simple terms that it's easy to break a dollar bill down. So 36 cent of every dollar that you pay in property taxes goes to Indian River County. The next item in blue, Indian River County School Board. Um so 34.8 cent of every dollar you pay in property taxes goes to Indian River County schools. So those are the two largest elements on your property tax bill. The city of Sebastian then our property tax portion is 20.8 cent. So when you get your property tax bill, all of that funding does not go to the city. Uh as you can see 36 cent of a dollar goes to Indian River County, 34 cent roughly 35 cent goes to Indian River County schools. The city gets 20.8 or 21 cent roughly out of every dollar. Then you have the hospital district which receives 4.6 cent of a dollar. And in other taxing districts, um you've got improvement districts, you got water management districts, uh all of those

mosquito control, those those districts get 3.7 cent um established between those. So in in our initial discussion I mentioned there has been a h a bill that has passed the house of representatives at the state. Uh so that you you all are just to be fully transparent. When a bill is passed by one chamber you have two chambers uh in legislative legislative session at in Tallahassee. You have the house of representatives in the senate. Uh they both have to agree to pass a bill once it is then passed by both legislative branches. Um you it then goes to the governor for his signature for approval or he can veto the bill. The house has passed h what's known as HJR203. Uh this language initially started the original bill um started out with an increased homestead exemption of $100,000 a year for the next 10 years. Uh gradually eliminating property tax. So year one would have been an additional $100,000 exemption. Year two would have been 200,000. Year three 300,000 all the way until you get to year 10, which would ultimately result in no property taxes for homesteaded properties um except school taxes. So schools are exempt from this bill. So what you pay in school tax, if this bill were to pass, it would uh still stay on your tax bill to pay schools. However, once it got to the House floor last Thursday, there was an amendment to the bill. Uh the bill was amended to um establish the complete elimination of property taxes for homesteaded properties effective January 1st of 2027. Once again, that has passed the House of Representatives. It has been sent to the Senate. If that language is passed by the

Senate, it would then go to the governor and then whatever is passed by both chambers and signed off by the governor gets put as a referendum on the ballot. So then it would come to the voters and the voters would decide whether they are for or against the ballot measure. And that's part of the reason we're here today. We're just trying to inform you all of what is paid for by property taxes within the city. So a potential impact of HJR203 on the city of Sebastian city estimates collect estimates collection of Avalorum taxes to be 8,393,178 total number of properties in the city of Sebastian is 14,540 with that homestead and nonhomestead as we discussed earlier and we'll discuss on another slide um homesteaded properties equate for 64% of that at 900 279 properties. Non-homestead is 36% at 5,261. Total dollar amounts homesteaded properties account for 57% of the Avalorum taxes that are collected at 4,756,39. Non-homestead is 43% which equates to 3 a little bit over $3.6 million. So, the city's general fund would see a reduction in revenues of 4.7 or $4,756,39, which equates to 24% of the annual general fund revenue uh generated by the city. So, the city of Sebastian is a little different from uh other area parts of the state. When you hear a lot in the media that says the reduction homestead uh on property taxes, just the property taxes in general, um state averages about a 36% reduction in property taxes based on the proposed bill. Sebastian is different when it

comes to this measure because of how high our homestead rate is within the city and how low commercial property we have here. Uh it's part of our quality of life in Sebastian. It's what the residents have wanted. they've wanted to maintain it and keep it a small fishing village. Um, and with that, that means we are more heavily dependent on homesteaded properties when it comes to our property tax revenue. So, the city's homestead property percentage of 64% is almost double the state average and the 57% of property tax revenue is over 20 percentage points higher than the state average of 36%. So, just wanted to share that information that we are almost double the number of a typical municipality or city and there's 411 of those across the state. Um, when we come to that, we're more than double the average um with homestead property percentages. So, general fund revenues by type, uh, this breaks down how we generate our, um, roughly a little bit over $19 million in general fund. um for our our budgeting purposes. Uh with that property tax um the numbers here, the these are off of a a previous this is a a previous fiscal year, so it won't show the actual property tax percentages here for this fiscal year, but roughly 38% was property tax in this fiscal year. Um utility tax, which is levied on purchase of electricity, water, LP gas, and natural gas within city limits is 21%. Licenses, permits, fees, and charges for services are 7%. This includes plan review, inspection fees, business taxes, etc. Um, intergovernmental revenue, half cent sales tax, 8 cent fuel tax, municipal revenue sharing is 21%. And then the other category for general

fund, that's interest, fines, and service fees that are established in within the city. So when you start to look at the effects of House Joint Resolution 203 on revenues as it's currently passed the House, um it shows this graph here shows expenditures by department is the first one on the left. Um the one that's highlighted in in the orange on the very top is our police department. Um our police department does equate to a large percentage of our budget. Um it is almost it's I think it's like 48 49% is our police department and general fund. Um and then you you kind of go continue to go down from there in departments and we'll go over each individual department here shortly. Um revenues you'll see our revenues match our expenditures. Um we have a balanced budget. That's how we establish our budget on an annual basis and it's always balanced. And then you will see the roughly over $4 million um deficit in revenues if the bill passes. Um so that would greatly impact our expenditures by department as is shown to the left um if we only have you know the dollars that are assigned by house joint resolution 203 with the reduction in um homesteaded property taxes. So, homesteaded properties are primary Florida residents receive currently up to a $50,000 exemption. And as I mentioned earlier, your assessment is growth growth capped at 3% annually for your just market value. Non-h homestead properties. So ultimately, you know, that there will be some cuts to service, but there also would potentially be looked at from a council perspective. Um, how to if we can't make a complete reductions to make up for the $4 million, we have to generate revenue some other way, which could potentially

involve an increase in the millage rate against non-homesteaded properties. These would be your rentals, your second homes, and your commercial properties within the city of Sebastian. They currently have no homestead exemption and their just market value can only increase by 10% annually. So what do property taxes fund for Sebastian residents? Um police department that funds our road patrol, our police operations, our detective unit, um code enforcement, dispatch. All of those fall within the police department as it is funded currently um as we operate within our police department public works. This includes roads, bridges and maintenance throughout the city. Our garage and fleet operations which maintain all of our vehicles and machinery that we have throughout the city. Sidewalks and engineering within the city, information technology and cyber security. We're here in this room. We have our IT staff here. It is um broadcast. We always broadcast on our TV station um through Comcast, but then also through social media channels, Facebook, a lot of times we have Zoom that's active um and then also all of our computers and software throughout the city. CAD RMS system that's used by the police department when they respond to calls. All of those elements fall within the IT department. Um and cyber security is one of our main priorities. Um as we look into it, parks and recreation. Uh these are our we have 23 parks within the city of Sebastian. Um that is a lot of parks for for the population that we have within the city, but it's something that's been made a priority within the city to ensure that our residents have a a place that they can go and enjoy and uh just get out in in the sun and enjoy themselves um throughout the community. public facilities. We have um many facilities

throughout the city that are available for the public to utilize. Uh that department is funded by general fund as well. Our finance department which handles all of the city's finances, our investments and retirement accounts. Um all of the funds, revenues, expenditures that all come in throughout the city. Planning and zoning. Um this staff is in our community development department. They handle all of the applications that come in for development, for fence permits, um, for additions, you know, on onto your properties and and things like that that all have to go through planning and zoning, um, as we we continue to function. Code enforcement, they go out and address uh, code violations throughout the city to try to maintain our quality of life here in Sebastian. human resources handles um all of our benefits, hiring um of employees, recruitment of employees, and then lastly, uh city administration, the city attorney, city manager, and city clerks. All of our departments um are also funded by the general fund and um within all of those operations as well. So, now we get down to the specifics on general fund expenditures by departments. As you can see in this, our total general fund is $19,883,990. On this presentation, you will see that police department is 45% of our general fund, which is eight roughly $8.4 million. Um, and this is what this um information was provided from pre the previous fiscal year uh because that has been audited and looked at and and we want to make sure we provide those those um correct numbers. So basically going from that, that's our largest percentage in this. From that you will see, and I'll just go um kind of counterclockwise from that, you'll see facilities maintenance on the left equates for 5% of general fund. Parks and recreation accounts for 10% of our general fund.

Cemetery operations 1%. Community development 4%. Non-EP departmental is 9%. City Council is a percentage of of 1%. It is total budget of $82,35 and almost a $20 million general fund budget. Uh, city manager's office is 3%, city clerk's office is 2%, city attorney's office is 1%. Finance department 4%. Uh, management information services, IT, information technology is 4%, human resources 2%, roads and drainage um, public works um, is 8% and fleet management, our garage is 2% of the general fund. So, when you start to look at these and and you think of having to cut $4 million, which is roughly 24% of our budget, the bill, one thing I failed to mention, I do want to clarify on House Joint Resolution is it does require us to maintain current levels in public safety. So, our police department will continue to be funded at these levels um or at the level that that is presented in the current fiscal year budget and it would probably fall into the current uh fiscal year 27 budget is what I'm anticipating. However, um the rest of the $4 million would involve cuts to to all of these other departments um as we continue to go through. So, with that kind of showing what that um that amount that 19 o over $19.8 million accounts for um roughly $15.3 million of that uh goes to personnel cost. So when you look at the city of Sebastian and and kind of how we operate amongst our departments, the the place that we will cut, you know, when we start to look at these things is if we can't replace the revenue and find

out a way to to generate additional revenue sources, um then we would have to look at obviously personnel and our operating. So with that, um this kind of shows this information that uh 19.8 8 million is the the roughly the green uh diagram and 15.3 million is the orange element that's current in this fiscal year in regards to total expenditures is the green and personnel cost is the orange um I will stay state that our just so you all have the knowledge our number of employees per thousand residents is currently at 5.91 so we currently have 5.91 employees per thousand residents that number is derived it is not specific to general fund. So it does include um some other departments that are funded by uh enter enterprise funds. And so our enterprise funds are the building department, the golf course, the airport, and storm water. Uh so those enterprise funds have to fund themselves. That's why you didn't see them listed in general fund. They fund themselves based on uh non-avalorum fees um fees for services within the building department uh rents and and other funding sources for the airport and in user fees at the golf course. Um so that does that number does include those as well when we look at those. So property taxes versus other s other sources uh why you know property taxes are are important to the city um they're more stable. It's a guaranteed uh number. We can budget for it based on the millage rate that's established and know that our collection rate is somewhere typically between 95 and 97% on the tax bill annually. It's more flexible which equals less waste can divert resources to needed areas. The reason I say that is we have some other funding sources that go towards capital projects, discretionary sales tax and

local option gas tax that are used to fund many of the projects that you see in the city. Um those sources of revenue cannot be used for staffing. They are specific to being used only for infrastructure improvements, land acquisition, um and items of those such where property taxes is more flexible for us. It does allow us to be able to use it in different areas uh in general fund that includes being able to play uh as I mentioned um employee salaries and and benefits and such. Uh it's more predictable, budgets are more reliable. Um oftent times what we see in some of our other sources that come in intergovernmental funds and franchise fees um different differing factors can can vary those as we go through the fiscal year. Um, we see a lot of times that our our funding that comes from sales tax can vary depending on when we we had COVID, you know, there was a lot less sales tax that was coming into the city. So, those variable amounts do vary and it it's heavily dependent and this is property tax is more predictable for our budgetary needs. Bond markets prefer stable revenues which is property tax. Less risk equals lower borrowing rates. Um so that will have to be something. Currently the the city of Sebastian in general fund has zero debt. We have no debt. Um so you know as we start to look and you know in the future if we have to go out to to get some you know acrew some debt then you know property tax plays a major part in that because it is a stable revenue source that we can depend on when we go out into the market. exemptions with portability, limited growth by state caps and transparency, clear formula and publicly set rates. Millage rates. We start our process for budget development in February. Uh we have public workshops that are open transparent right here in

this council chambers. Um in June and July, we we start we have those those workshops that take place. Um, and then we also have a citizens advisory budget committee which meets all along throughout the entire process that is getting the same information that city council is receiving at their meetings. Um, and then as we get closer to the end of the budgeting process, um, there's many discussions that take place in our public meetings and then also we have to have two public hearings when we get to September on the militaryrate. It's as transparent as it can be. You can come in and ask questions during the workshops. you can come in during those uh public hearings that take place in September. Um those are are times that the public can ask questions. Um and then you honestly you can come and come to see me in my office or see our finance director, chief financial officer um to ask questions as well. Um our budget is posted. It's out there. It's on the website um and any questions we are available to uh answer any of those. So comparing those to fees uh limited to services provided um we can only obviously charge fees on services provided and then obviously if you raise those fees too high people will just stop using those services. Um and that's that's something that isn't isn't as stable as property tax assessments can only be limited to specified or specific service areas. Uh you'll see a little bit later when we talk about potential avenues that we can take. Um, I'll use one as example, uh, roadway lighting. We could establish a special district to pay for roadway lighting. Um, that would assess all the property owners within that district, but it can only obviously be in an area where we have street lighting. It can't we can't assess the entire city for street lighting in one specific area. So, it has to be specific to the service area. Grants project specific and limited. um we have applied for over the last three years we have applied for over $30 million in grants.

We have received quite a bit of that. However, if you start to look at even the state budget that's rolled out, some of those grant opportunities are being eliminated. Um so we are going out there and applying for every grant opportunity that we can find to help fund projects um that alleviate concerns of our residents. However, um those are starting to to be looked at closely from a state and a federal level as well because we do have to go after federal grants as well. Special assessments, um those are restricted use. Um it only it depends on certain elements and certain ways to do those. Um it it typically a lot of times with those has to be a direct impact on the property owner um on that specific property. So it can't just be a generalized assessment throughout the city. So, if property taxes were eliminated, the immediate impacts would be removal of local control and responsiveness to tax changes. Major general fund revenue loss. I showed you earlier, it's 24% of our budget would be eliminated if if this uh if this bill passes um through the legislature and ultimately through the voters. Longer response times to citizen requests due to staffing reductions. As I showed you before, we are very um our budget is very heavily on staffing and personnel. Um that would be one of the the key areas we have to take a look at. Um and with that would involve um some staffing reductions, reduce parks and recreation programs and maintenance. We'd have to take a look at the programs and the maintenance that we provide. Um and and that's just a reality right now. You know, we we try to maintain our parks up to a certain standard. We try to offer as many programs as we can that the community want. Um, and I can tell you that with our budget and with our staffing levels currently, we offer specifically what is wanted and what is needed within the city already. Um, but then we would just have to take a look at at those measures

and and kind of see how we could do some cuts in those areas. Infrastructure maintenance delays. You notice one of the things that I didn't mention was projects. um projects as I mentioned earlier quite a few of those are funded by a different source that cannot be used by general fund um but maintenance is a key item which then is going to drive up the cost of projects because if we're not able to maintain certain infrastructure our roads our storm water and different areas such as that um we and building maintenance and things like that then ultimately those costs will go up because we'll have to do replacements as opposed to just maintaining and we all know maintaining is cheaper than new construction. Increased reliance on fees or other taxes. Um that would be a potential option as we start to look down this pathway. So some specific uh Sebastian specific considerations as I mentioned earlier the assessment caps um have caused the value to be reduced to 71% of market value. So over the years as your value of the property has increased, the assessment caps that have been put on by Save Our Homes at the 3% and the 10% non-h homestead, those have caused that those increases to be reduced down to only 71% of uh market value. 15.25% of assessed value is homesteaded versus the statewide average of 5.05%. So with this the and in in 2025 um Sebastian was top 20 in the state in assessed value versus Homestead highest percentage which means that we are very we in the top 20 cities in the state that are dependent on homestead per this um market study um of the actual assessed value versus the homestead.

We have a very small commercial base. Um, this has been done on purpose. This has been a priority of of our residents. They've wanted to keep Sebastian what Sebastian is. Um, however, that does impact us when we come to property taxes. We do not have the commercial tax base um that many other local municipalities have. And as I mentioned earlier, 6.1 city employees per thousand residents. So, where would the funds come from? possible scenarios uh shifting the burden to non-homestead and commercial properties that would involve millage rate increases um to non-homesteaded properties shift to special assessments on the tax bill as I mentioned earlier that limits flexibility some of those uh they would have to be road maintenance assessments um and being able to on certain roadways it' be specific to those those districts and those areas um where we need to do that road maintenance street lighting assessment as I mentioned for um that's an option. That's something that many municipalities and and counties do across the state um in regards to street lighting in certain areas. Uh state funds and loss of local control, uh increase fees for services and initiate new fees. Uh we would look at parking fees, potential boat ramp fees, um and increase recreation program fees um with this as well. And I will state, you know, increased recreation program fees that would that would affect our um when we look at little league and football, those are third-party sources that operate those programs. Currently, the city does not uh have a a user fee for those programs. It is a a great program that provides for the youth of this community. Um however, as we go forward, that would have to be something that's looked at, which in return would raise those third-party fees if the city had to charge a fee to them. So today,

our key key takeaways for residents. Property taxes fund your core city services. They're the things you depend on every single day. Um property taxes, it has been mentioned that um it's just, you know, it's it's something that you're paying that that's keeping you from really owning your home. Property taxes are paying for law enforcement. They're paying for your road maintenance. They're paying for parks, recreation. um they're paying for the daily services that you depend on to enjoy the quality of life that we offer here in the city of Sebastian. Core services such as emergency services require consistent funding. Uh homestead exemptions reduce individual tax burden. Eliminated property taxes would require service cuts or new revenue sources. And decisions involve trade-offs between taxes and service levels. So with that, I will turn it over. We'll open it up now for a question and answer for anyone that has questions of us in regards to property tax. And if you would please, I need to make sure I get you a microphone because we are recording this and we want to make sure we get to questions um on the the broadcast as well.

Thank you. You're on. Uh Brian, what freedoms or constraints uh does the city have when it comes to enacting new taxes? Do we just wake up wake up one morning and say we're going to tax all cats and dogs in the city or I mean by what would be the process and the authority?

Yeah. So we do not have the authority to establish new taxes. Um the state um preempts us from that. The state establishes what fees we can char what taxes we can charge. Um we can increase and establish new fees. Um that is something that that will be looked at. um with this um obviously we'll look at what needs to happen in regards to service level cuts. Um but then ultimately I think it would come down to having to generate some additional revenue from fees for services or or fees in general. Um but we do not have the authority to establish new taxes within the city.

Yeah. Could you just state your name too? Sorry. So, Scott Baker was the first one. Can you just state your name for the record, please? David Garner.

Yeah. Uh, I'm I'm I'm originally from Palm Beach County. And in Palm Beach County, they pay property tax down there just like the rest of uh Florida does. And in Palm Beach County, you go down to Palm Beach County, even though they're paying taxes, you said that. Oh, we'd probably have to pay for parking. We'd probably have to pay for boat ramp and all that, they're already paying that down there. It It's going to come here anyway, whether we pay property tax or not, it's going to come to this city. Everything that goes to these other counties come to this city, too. So whether you vote for keeping property tax or not keeping property tax, you're still going to end up paying for that boat ramp. You're still going to end up paying for parking. That's just coming. It's coming regardless whether we vote no or yes. And Ronda Santis said that there's enough revenue in Florida that we don't that we shouldn't have to pay property tax anyway. So whether y'all vote yes or no on property tax, it don't matter. There's enough revenue in this state that we shouldn't have to pay. We paid taxes when we bought our property. You shouldn't have to keep paying taxes on something that you already own. Thank you.

Yes. I don't think there was a question there, but I'll just kind of point to a couple points that he he did mention there. Um, currently, you're correct. Other other places, and I mentioned it when I talked about street lighting, um, other municipalities do charge for parking. They do charge for the boat ramp usage or parking of your trailer. Uh, they do charge all those little fees that do add up. That is something we so far have decided not to do in Sebastian. Um, I quite honestly can't speak for city council. it has not been something that's been established as a priority um within our strategic plan or within our goals to establish that um in the near future. Um so I can't speak for far out but currently without you know with current our current situation that is not something that has been discussed um with us doing that in the immediate near future. Um in regards to state funding, um my understanding from this bill and is it does not provide any additional funding uh to municipalities. Um there has been some discussion about providing funding to make up make up some of the reduction for fiscally constrained counties. Indian River County does not fall underneath that. Um so currently and and this bill didn't even address that. And I think you know in in its current form it did not address that in the current form. Um but for the city of Sebastian uh there has been no discussion from the state to replace or provide us any additional funding than what we already get. kind of in in response to to the point that you just made, uh Toby Overdorf, who's a representative and was the co-chair of the of the uh uh the group that was put together by the House to evaluate property tax reductions, said in a Treasure Co regional planning council meeting a month or so ago that for the state to make up the revenue

lost from property tax reductions would involve a 16 to 18% sales tax. Now, I believe a yes vote on doing away with property taxes may well involve increasing sales tax to somewhere between 16 and 18%. Um, that's got nothing to do with boat ramp charges. That's got to do with your grocery store bill and everything else. And so, the state will have to make up that revenue. Infrastructure is a a major issue. If we don't maintain the streets, somebody's going to have to maintain them. And the state's going to have to come up with that money. and their only way to do that is through either a sales tax or an income tax. He was very adamant about the fact that nobody in Tallahassee wants to talk about income tax. So, wait, wait, wait. You have to you have to have the mic. You have wait. We pay taxes when you fill up your car with gasoline. There's a high tax on gas. We pay taxes for that. We every time you do something, you pay taxes. We pay enough taxes that we should never have to pay property tax. Never. No. Nobody. Not any county, not any state. And And let me

Huh? Sir, no. No. Go ahead. I want him to say what he's got to say.

No, but sir, so so I'm going to respond to that about the the gas tax because that is a specific item that was mentioned. Um the the the city we do have a 6 cent per gallon tax levied by Indian River County. Um those tax funds are distributed to participating cities within the county on a percentage base determined by the city's population and amount of annual transportation type expenditures. I will say that our local option gas tax projections decreased for fiscal year 2026. Um we will generate roughly our projected revenue is $79,020. However, that is a specific revenue source. Can't be used for staffing. It can only be used for roadway maintenance and preservation, which it funds, if you have been over in the area of Kildair and Schuman, we have done um some preservation work there this year. Um that was over over a million dollars in preservation work that took place over there. So, the money that was generated this year doesn't even pay for that for what took place there um in regards to gas tax.

Hello, my name is Bobby Brown. I'm a firsttime homeowner. I've been in Sebastian about two years now. My wife and I moved up here from Palm Beach County as well. Uh we made that decision because this is decidedly not Palm Beach County. We love it here. One of the reasons we love it here is the quality of life you have referenced in the presentation. Um my question is fairly large in scope and perhaps you can help me break it down. Um what will this proposed bill what will the impact be on our community's ability to make decisions for our own community? Is it going to shrink or influence that that ability? Um is it going to limit us? And I would love to hear from the city manager and council member Dodd if that's possible as well.

Yeah. So I'll I'll address that first. Um as I've shown on a couple slides, we're going to lose general fund revenue of about 24%. Um that's a quarter of what we have to offer um within each of those departments. And remember, look, I I'll tell you, uh, we just negotiated, and the chief is in the back, but we just negotiated a police contract last year that fully supported our police officers and was fully supported by our city council. Um, so that is not something we're going to look at touching in regards to that, and we're not allowed to by this bill. So, I want to state that initially. So, now you're left with roughly 50% of your budget to now cut 24%. Um, what does that look like? I think it really it really is going to come down to what our options are in regards to what fees we can establish and what fees we can't establish. Are there any potential assessment mechanisms that can be utilized? Um, if none of those are options, then I think you see, you know, you'll see major reductions in parks and recreation, um, public works, um, you know, staffing across other departments within the city. Um, I think that's where you see your biggest kind of impacts because those are the things that are forward- facing. Um, there'll obviously be other things that happen here in city hall. Um, but those are the things that you see on a daily basis. You ride by the parks every single day. um whether you have kids or if you go out and walk around our many trails that that are within our parks, those are the things you're going to see. You're going to see the grass not being mowed, you're going to see the US1 maintenance or the Riverview Park maintenance. You're going to see less special events that take place at Riverview Park. Um and less of those things will start to happen. So, those are those are probably the bigger impacts. Um, with that being said, it comes down to whether we can we can find alternative

revenue sources um that that could potentially come from this. And Council Dodd, I don't know if you need and I apologize, Vice Mayor McPartland has shown up and Mayor Jones has shown up as well to make sure to recognize they're here. Um, with that, so Yeah, Mark Dedric. Um, so first of all, I I think we all know that that taxes are not going to ever go down. So, uh, but second of all, I I want to know why why does municipalities, whether it be, uh, city of Sebastian or Indian River County, why aren't they screaming to high heavens to to the state legislature whom our representative is Bracket and our senator is Growl who have not communicated back to me period when I uh try to get to him. Why haven't you communicated to them that what they're going to do, they're not telling us where the revenue is going to be generated from? And they're going to put it out into a a public referendum and they're not going to tell you that you're going to pay 15% in sales tax as opposed to 7% in sales tax. So why aren't you screaming to the high heavens to to bring that out and get that shown for us? Thank you.

Yes, sir. So, um, what I will say is that, um, we the from the city standpoint, whether it's our council or or from a staffing level, we have expressed our concern, um, to the legislature. Uh, not just our representatives, but other representatives across the state, we have we have expressed our concern with this. Um, part of why we're doing this workshop is to inform the voters. Um that way when you go to the to the polling place uh ne in November, whatever ends up being on that ballot, you have you can make an informed decision. Um and if the decision is made that you're willing to to see some some reduction in some areas across the city, at least you were given the information from the city. Um, but yes, I can tell you we have had those conversations with them and we provided them with documents that show what the fiscal impact would be to the city and how it's different from other areas in the city. Um, I will say that, you know, we hear it a lot that one size doesn't fit all and this one definitely doesn't fit everybody across the state. I think that, you know, there has to be some some looking into that and and addressing how that could potentially be um addressed from the state level. Good morning. Thank you for this workshop. My name is Julie Judson. Um I'm a 40y year plus resident of Sebastian. Love it here. Love the small town feel. I like Ronda Santis, but what is his endg game by getting rid of the property taxes. We all want to save money. Let's just all agree to that. But to go to 15% sales tax, that's just crazy. I mean, I'm sure every small town in Florida is in the same predicament. So, what's the answer? It's very complicated.

Well, you know, I I I want to be clear and I want to state it. The 15% sales tax has not been something that has been discussed across the legislature. Um, that has not out out open and and and in those. So there has not there's not an implementing bill that is accompanying this house short resolution at the current time. Um I don't they at some point they will have to establish an implementing bill and what that you know outlines typically is how the bill if it p when it passes or if it passes the voters how it would be implemented. Um there as I mentioned earlier there's been some talk about making up revenues for fiscally constrained counties. We do not fall in a fiscally constrained county according to their metrics. Um, however, you know, I think that when you look at our metrics of how the the impact in totality to our general fund would be, we should kind of fall somewhere in one of those metrics, but we won't. Um, and we currently do not. So, I I don't want to go down the path of how sales tax increases or any of that potential because that has not been discussed from a legislative standpoint um in any bills at this time. I think that what we have to focus on from the city is how we can reduce make up $4 million whether that you know I think that involves a combination of efforts. I think it involves us having to look at additional revenue sources, being creative with additional fees, um or and andor reduction in staffing. Um so I think those are probably the realities.

Susan Laruso, I've been a 25-y year resident here in Sebastian. tell a little story of where I came from. Uh in Connecticut, there was a governor, Lel Wer, who wanted to uh start the uh state income tax, which Connecticut never had, and told us all the wonderful things that we would get if we did approve the state income tax. And it did get approved. They did knock down our sales tax. And by the time I left Connecticut, not only was it back up to before the state income tax, it was more than the state income tax. I recently read that um state of Florida, Tallahassee is looking at a bill to take away home rule from planning and zoning. It's not written yet, but if the state is going to regulate our zoning laws, we won't have a say of what gets built, how it gets built, where it gets built. So, by controlling our money and then controlling our vote, it's it's taking a lot away from our city. many cities, you know, as others have said, we're not Orlando. We're not Miami. We're we're a small fishing village and there is just no way that that 50% tax, you know, property tax can be made up just by you're going to raise the fees, you're going to cut the staff, then people are going to complain their roads aren't getting fixed. Well, you wanted the property tax removed. People are going to complain about drainage. That is a complaint that goes on

forever. Well, get out there and shovel your own swale because we don't have the people for it anymore. Um, you know, this is this is really bad and the word has to get out not to um eliminate the property tax.

Thank you, ma'am. And just uh I will state since we're on one topic here with property taxes, I'd be happy to discuss some of the bills, you know, offline outside of this in regards to uh development and things like that. There are quite a few bills that are currently in legislative discussion um as we over the next three weeks. They got three more weeks of session. Other questions or comments in regards to property tax? Yes, ma'am. name is Sandra Williamson. What's going to happen to all the bonds, the taxfree municipal bonds that are backed by advalorum taxes? They're going to go into default, including the state of Florida that has a ton of GO bonds out there.

Yeah, I I can tell you I know that there's many municipalities that have those. Um, and I I don't have an answer for that. And I know it was asked on the um the House floor last Thursday, which you have you haven't seen that discussion. It's a good discussion on the floor. Many good questions were asked. Um but that was something that was discussed there, but I don't they it's not included in the bill on how to address those or anything. And I will state, I know I've talked a lot about HR 203 because it is the one bill that's passed the House. Um there are other bills out there. there are other, you know, different cuts and and and different ways of looking at property taxes, but I know the House has made that their priority and then we have yet to kind of I don't think the Senate has kind of made their determination of of where they're going to look to go. So, that'll be something we're keeping a very close eye on. And unfortunately, the reason we're having this now with so little information is because we want to provide the facts of the services and everything that's provided to to our residents. once it becomes a referendum, we are not allowed to advocate for or against it. Um, so I think, you know, this was our chance to get out information in regards to what property taxes are used for within the city.

Thank you. Sorry to hog the mic. You mentioned that where our city has roughly six city employees for every 10,000 residents. Just as a frame of reference, surrounding communities or even comparable communities that are not near us, can you give us an example of where we fall in line with other communities in regards to our you city staffing?

Yeah, I mean I I know that one other city and I don't have those exact numbers in front of me, but I can tell you that there's one other city in this county um that is closer to I believe eight or nine per thousand. um it varies widely that there are differing factors that factor into that that and it's the reason why it's not on a slide here to compare it to the state average is because we don't have a utility um so we don't have water and wastewater and so a lot of times municipalities those numbers can get construed different ways because um of those differing factors that come into it. Um so it is a little little difficult to compare city by city but um I I can tell you that we our our number has actually um decreased. So back in 2006 cuz a lot of times it's referenced going back to 2020 or 2006 and and those numbers in 2006 the city of Sebastian had 7.63 employees per thousand. um back and then last year or 2025 we were at 6.24 and now this year 2026 we're at 5.97 um employees. Any other questions? Yes, sir.

Yeah, my name is Michael Hoe. Um, I've been here probably about under 5 years, but I'm thinking the uh the idea with the parking and the boat ramp fees and stuff like that, that might not be a bad idea. And I don't know if you guys have looked into that to see how much revenue we could we could get from that. I mean, probably don't make me the, you know, the nicest guy in town, but, you know, if everybody else has parking fees, I don't know if Vero does parking fees or boat ramp fees. Um, but I think that would be one way. I think probably increasing sales tax should be looked at um for the residents and and people visiting should be looked at as a last resort if we could do that. Um, I would request that um on behalf of all the rest of the residents, but um yeah, I think the boat ramp fees and parking fees because we do have a lot of events and we do have a lot of parking up and down the street and stuff like that and people coming from out of town and and with it getting a lot busier, I think we could probably pull in some money from that. Um, but I think that's about all I have. So, I'll just um I'm going to try to take that one by one um in your comments. So, sales tax, we're going to have no control over it. Um the state's going to be the one if they were to look into it. Like I said, right now I can tell you that that it's been mentioned here or there that it could be something thrown out there, but I haven't seen anything formal come on sales tax. Um so, I don't think that's up for this discussion currently. Um, in regards to boat ramp and parking fees, one of the things we would have to look into, I know for instance, our boat ramps, they

were they were uh constructed using certain grant dollars that we can't charge to launch your boat, but we can charge to park your trailer. So, there's different things that we would have to look at in regards to parking and and that complete in-depth look hasn't taken place yet. Um, but like I said, it it has not been so far made a a a priority. Not to say that it it can't, but um currently it has not.

Michael Anderson, um I would love to save money on my property taxes, but I realize that we have to fund this our our community. Um there is a isn't there a local component to the sales tax? I don't know if it's county or city based that you have control over.

So, in in one of our revenue sources and sorry, let me just pull up that. So, it within um a half cent sales tax does go into our general fund. That is part of our intergovernmental revenue. So that is the 21% of our uh general fund revenues by type. So we do receive that. It's it's a half cent sales tax. Um that goes into that general fund revenue market. Um that is there as well. Yes.

Something that the city council can or Sebastian can raise or lower or is that a county or where does that who controls that?

Yeah. So, it's a state mechanism um that it's just their percentage point that we get back from them um to be able um to to assist us in operating. And that just just for budgetary numbers, uh that local half cent sales tax generates about $2.5 million in a half cent sales tax for the city. Uh Brian, in anticipation of possible reductions of property tax revenue, are you going to ask uh city departments to submit or find 2% 3% reduction in their budget for this coming year?

So this coming year um yes, so we're we're currently in our capital capital portion of our budget. Um we have had discussions in multiple staff meetings in regards to being creative and and looking at your departments and how we could reduce funding. Um remember this measure will go on the ballot in November. So we would have already established our fiscal year 27 budget um by the time this goes to the voters. So I think we will probably we'll we'll do an exercise um and staff has already started looking at those measures and looking at how we could reduce. Um but this year I think we will it it won't go into effect until um our budgeting cycle that falls within the summer of fiscal year of 27. Um, so we still have this summer to get through with this upcoming budget. Um, and you know, we'll we'll have this obviously in the back of our minds and we'll go through some uh different exercises with this, but I can tell you and you can speak to any of them, they've already been informed um to start looking at these measures. Anyone else? I've been here about 25 years. I'm glad I came to this first meeting. Can you say your name again?

Jeff. I'm glad I came to this first meeting. First one I've ever attended, which I can't understand why. I'm definitely against property taxes. Like, you haven't proved to me what's good for it here. I mean, there's parks and rec and things out there that they're redoing and stuff. We can't we can't use them. There's fence. The bunch of guys I'm from Connecticut, too. We used to get a bunch of guys and go play football or baseball. There's a locked fence. We can't get in there and play on a on the weekend that I'm paying for. Can I Can I just correct you there? Yes. Barber Street Sports Complex is not locked. It never has been locked. So, I just I don't know. It could be somewhere else, but it's not in the city.

But they'll throw you off. They unlocked the uh they unlocked the a skateboard. But but when I first moved here, we had to pay getting that skateboard ring.

And then after about two years that I was here, maybe three, they decided to unlock the skateboard ring and let them go in there and and skateboard. But when I first came here, you had to pay to get in there. So, no, they wasn't all free. I just I can't understand it. I mean, there's no answers. Well, like just like we're getting buffaloed into the garbage bill. These people don't understand how we got buffaloed into that, paying two garbage bills. And they don't really understand it yet, but we are.

I mean, it went mandatory in Sebastian. It used to be just um subscription. That's a complete joke. Complete. Thank you. Thank you. Did someone else have a question? No. All right. Well, last chance for questions. Any other? Okay. Well, thank you all for coming. Um, I'll be here. I'll be available if you have any questions for afterwards that you'd like to ask. But, uh, thank you all for coming out. We appreciate it.