Your Taxpayers Association would like to recognize the community spirit expressed by our local Firefighters and EMTs for voluntarily foregoing the 5% cost-of-living portion of the 10% raise guaranteed for 2009 by their existing contracts. Their willingness to work with the County to reduce spending and help with the required budget cuts should set an example for all public employees. They have recognized that these are troubled times and that putting community ahead of personal gain is required. We say thank you for this action that has been offered by the local International Association of Firefighters Union.

This spirit of cooperation bodes well for something we believe is crucial to the sustainability of our excellent emergency services, the consolidation of the Martin County and City of Stuart Fire/EMS Departments. The County and City Administrations should listen to suggestions made by those in the field to save money and keep our award winning department functioning at its best. We hope that the Union leadership will also listen to the Administrations, and all parties will act in good faith for the betterment of our residents.

With this in mind, very careful consideration must be given to the upper management reorganization required by the coming departure of the County’s Director of Emergency Services. A strong leader will be required to bring these two organizations together without disruptions in service or significant employee discontent. Merging personnel from organizations covered by different union contracts and work rules is never easy. Doing it with the objective of improving efficiency and saving money will make it doubly so.

  If properly executed this integration of Fire/EMS services could be an excellent first step in a fundamental reorganization of how our local governments operate. With income decreasing, reducing spending while maintaining services becomes mandatory. To quantify that income decrease we met with the County’s Property Appraiser and her staff, who hosted our June Board Meeting. We appreciate her hospitality and excellent presentations on their scope of work, 2009 budget and the latest appraisal/sale price of real property.

The Appraiser’s staff developed an interesting chart that dramatically illustrates the problem. As shown below, the sale price per square foot of Martin County homes was plotted on a linear graph every three months for the past 10-years. The price of fair and average quality homes increased in a stable and predictable manner through the second half of 2003. Interestingly, fair quality homes increased 7% per year while average quality homes increased less, around 5 – 6%. The good (and new) quality homes increased about 9% per year, but the sale price per square foot cycled dramatically especially on new properties. Even though the average increase remained stable, there was as much as a 10% increase/decrease in some years.

In late 2003 home prices for all three home qualities began to increase dramatically, graphically beginning a classic “bubble”. Fair and average quality homes went up in value by well over 50 dollars per square foot from 2003 – 2005. Good quality homes went up by almost 100 dollars per square foot during the same period, gaining over $50 per square foot during 2005 alone. As would be expected, tax revenues soared. However, prices leveled off in 2006 and, as happens with most bubbles, it burst with dramatic decreases beginning in the second quarter of 2007.

The bottom line of this exercise is where-are-we-now, and what is ahead. For all three home qualities the answer is virtually identical. Per square foot home prices in Martin County have retreated to where they were at the end of 2004 and would have to go down another 15% to get back to the straight-line average.

Hopefully this dramatic visual presentation will provide guidance for our elected officials as they look at their budgets for 2009. Our interpretation: 2009 ad Valorem tax revenues should approximate that collected in 2005 – their spending should also.