PORT ST. LUCIE - In a turnabout decision, the City Council Monday night gave an initial 4-1 vote to increase the property tax rate by 11 percent.

The council also unanimously approved a 2009-2010 revised total budget of $430 million.

A final vote on the property tax rate and budget is scheduled for a 7 p.m. Sept. 28 public hearing at City Hall.

Last week, the council made a last-ditch effort to avoid an earlier proposed 26 percent property tax increase and held a special meeting to discuss using half of the city’s general fund reserves to help offset a more than $18 million deficit in the general fund.

At that meeting. all five council members, with little discussion, voted in favor of keeping the property tax rate at its current rate of $4.22 per $1,000 of taxable value.

All five council members also agreed to keep 4 percent of the city’s general fund budget in reserves instead of 8 percent. It has been council’s policy to keep 8 percent in reserves since the 2004 hurricanes devastated the city. Reserves are generally used for emergency disasters and unexpected expenses.

But in a 3-2 vote Monday, the council rejected keeping the tax rate the same. Mayor Patricia Christensen and council members Christopher Cooper and Linda Bartz shot it down.

“I understand people want an extra $20 to $40 savings in their tax bill, but I’m not going to set this city up for a disaster and a train wreck,” Cooper said. “This is a Band-Aid approach.”

Cooper said he changed his mind after the special meeting last week when he started asking Budget Director Dave Pollard for specific details on what impact keeping the rate the same would have on the city’s 2010-2011 budget. City Manager Don Cooper projected the city would likely have a $10.5 million shortfall in the 2010-2011 budget year.

Pollard said the city would have to raise the property tax rate to almost $6 per $1,000 of taxable value next year to offset the shortfall, which would require a voter referendum because it would amount to 10 percent above the city’s rollback rate, $4.37 per $1,000 of taxable value. The rollback rate is the rate at which the city could generate the same amount of revenue as it did last year, minus new construction.

Pollard also said 173 employees would have to be laid off next year for the city to provide the same level of service as this year.

Raising the property tax rate by 11 percent, or to $4.68 per $1,000 of taxable value, would generate $2.6 million in revenues, Pollard said. Using Port St. Lucie’s median home price of $112,000 with a $50,000 homestead exemption, an average city property tax bill would be $290, excluding taxes from other taxing districts.

Vice Mayor Jack Kelly, who cast the lone vote against the 11 percent increase, sticking to his guns and favoring a zero percent increase, said he wasn’t going to fall for the “sky is falling routine.”

“I don’t see the sky falling,” Kelly said. “I’m not going to panic. Everything will work out next year. If we need money next year and a tax increase next year year, do it next year. Now is not the time.”

Councilwoman Michelle Berger made the motion for the 11 percent increase after a zero percent increase vote died. But the council shot that down, too, in a 3-2 vote with Kelly, Christensen and Cooper voting against it. Berger then pleaded with council members for a compromise and said she refused to raise taxes by 26 percent. The council was stuck with no other proposal on the table, so Berger then made another motion for the 11 percent increase and this time it passed 4-1.

City Manager Cooper recommended the council not tap into its reserves all along.

“I have not recommended this,” Cooper said. “I’ve been talking about this concern for multiple years.”

The council still will keep 4 percent of the budget in reserves, but the additional revenue the city will generate by increasing the tax rate will provide extra cushion in the city’s reserves for future years, Pollard said.

City Hall critic Victoria Huggins criticized what the city spends on car allowances.

She said information obtained from the city shows the city spends $23,405 monthly on car allowances and $280,860 per year. Some of the city’s employees get $500 per month car allowances, she said.

“I think it’s time to stop the car allowances,” she said.

Alexi Howk

Tags: budget, car, critical, dies, emergency, fall, gun, guns, hurricanes, informant, mayor, money, prices, property, raise, raises, shot, special, taxes, train, value, vote, voting, wreck

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