N YOUR CORNER

We seldom write about the City of Stuart. We care about City taxpayers, but the City has generally provided them high quality services at reasonable cost, at least since recovering from the fiscal crisis of 1993, when they laid off 15% of the workforce and raised both taxes and fees more than $1M to balance their budget. Unfortunately, our review of the City’s proposed 2005 budget suggests this is about to happen again.

In 1990, the City levied 2.6 mills, or $2.60 per $1000 property value. Between 1990 and 2000, millage increased to 4.16 mills. Since 2000, the City has enjoyed a 7.9% average annual property assessment increase. This year, property valuation increased 22.2%. We would like to report the City is rolling millage back, similar to what the County and School District are doing.

Unfortunately, this does not appear to be the case. Last year’s budget is running more than $1M in the red. The draft City budget released July 16 is projected to run $540,000 in the red, so its not adequately funded even with the proposed $1.1 million in additional revenues produced by 22.2% property value inflation..

If the City makes it through this coming year, barring a miracle, major cost-cutting will be required unless taxes are increased again next year, probably by a similar amount or more. It is difficult to imagine that property values will continue to increase more than 20% per year, so millage will have to go up.

Ten years ago, the City was reducing millage. It had a $3M reserve fund, and strict fiscal policies that required the City Manager to prepare a lean budget. Since then, Commissioners have allowed the fiscal policies to be watered down, and budgets have bloated. The reserves are down to 49 days of operating costs.

This year, the draft budget does not even conform to the watered down fiscal policies. The required five-year projections of future revenues and expenses were not included in the budget. The most amazing thing is that not one Commissioner objected to the budget not following the fiscal policies, nor to projections of future revenues and expenses being omitted, at the first budget workshop on July 19.

The General Revenue budget (exclusive of capital improvements) has grown from $11.85M in 2000 to a proposed $17.36M in 2005, during one of the lowest inflationary periods since WWII. The share of the budget funded by Ad Valorem taxes has grown from 24% to 33%. Personal services now consume 79% of the General Revenue Budget versus 66% in 2000.

Tax revenues captured by the Community Redevelopment District (CRA) have reached the $1M per year mark. These funds must be spent to revitalize blighted areas. Rumor has it they will be spent to construct a parking garage downtown. Meanwhile, the City has desperately needed a new police/fire headquarters for 10 years, and is no closer to financing it now than it was 10 years ago

The City appears to be a fiscal train out of control. There are probably multiple reasons. The only question is what the City Commission will do about it. Continuing on the present path will lead to a fiscal crisis. City taxpayers and City employees deserve better than a replay of 1993.