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Home My WebLink About02-24-2026 5pm Property Tax WorkshopCITY OF SE]3ASTIAN HOME OF PELICAN ISLAND SEBASTIAN PROPERTY TAX WORKSHOP MINUTES TUESDAY FEBRUARY 24, 2026 - 5:00 P.M. CITY COUNCIL CHAMBERS 1225 MAIN STREET, SEBASTIAN, FLORIDA 1. CALL TO ORDER 2. PRESENTATION The City Manager opened the property tax workshop by explaining the purpose of providing factual information to residents about property tax uses within Sebastian. He acknowledged this was the second workshop of the day, with better attendance at the morning session, and noted the presence of Council Member Dodd, Mayor Jones, and various city staff members. A. What Property Taxis Used For L Overview of services funded The City Manager explained that the workshop was prompted by ongoing legislative discussions about property tax elimination, specifically House Joint Resolution 203, which passed the Florida House on February 19, 2026. The resolution proposes eliminating all non - school ad valorem taxes, though it must still pass the Senate and go to a referendum if approved by the governor. He detailed how property taxes are calculated using a formula that includes just market value assessed by the property appraiser, with Save Our Homes limiting increases to 3% annually for homestead properties and 10% for non -homestead properties. After exemptions are applied to determine taxable value, Sebastian's current millage rate of 3.4455 is applied, meaning $3.45 per $1,000 of taxable value. The City Manager illustrated how property tax dollars are distributed, showing that Sebastian receives only 20.8 cents of every property tax dollar, while Indian River County receives 36.1 cents (including emergency services), schools receive 34.8 cents, hospital district receives 4.6 cents, and other taxing districts receive 3.7 cents. He highlighted Sebastian's unique challenges, noting that assessed values represent only 71.87% of market value due to caps, and that Sebastian ranks poorly statewide with 15.25% of assessed value being homesteaded versus a 5% state average. This reflects Sebastian's character as a residential community with limited commercial base. The city estimates collecting $8,393,178 in property taxes for fiscal year 2026. Of the city's 14,540 total properties, 64% (9,279) are homesteaded, generating $4,756,309 or 57% of property tax revenue. Non -homestead properties comprise 36% of properties but generate 43% of revenue at $3,636,869. B. Impact of Property Tax Reduction i. Review of budget impacts and service implications ii. Discussion of short-term and long-term effects If House Joint Resolution 203 passes as amended for complete elimination effective January 1, 2027, Sebastian's general fund would lose $4,756,309, representing 24% of annual general fund revenue of approximately $19.8 million. This significantly exceeds the commonly cited statewide impact of 33% because Sebastian's homestead percentage of 64% is nearly double the state average, and its 57% of property tax revenue from homestead properties is over 20 percentage points higher than the state average of 36%. The City Manager emphasized that while the legislation includes a carve -out requiring maintenance of law enforcement funding, Sebastian's police department consumes $9 million of the general fund budget. This means the $4.7 million reduction would need to come from the remaining $10-11 million allocated to all other city departments. The presentation detailed how property taxes fund core city services including the police department (45% of general fund at $8.47 million), public works (roads, bridges, maintenance), information technology and cybersecurity, parks and recreation (23 parks citywide), public facilities, finance, planning and zoning, code enforcement, human resources, and city administration. Personnel costs represent $15.3 million of the $19.8 million general fund, leaving only $4.5 million for operating expenses and minimal capital expenditures. This heavy personnel dependency makes significant cuts difficult without affecting staffing levels through reduced hours, furloughs, or layoffs. The City Manager explained that property taxes offer advantages over other revenue sources, being more stable, flexible, predictable, and preferred by bond markets. The city currently maintains zero debt in its general fund. Other revenue sources like fees, are limited to services provided, grants are project -specific with increasing delays and reduced funding, and special assessments have restricted uses. Several scenarios were presented for replacing lost revenue, including shifting the burden to non -homestead and commercial properties (which would likely be passed on to renters and consumers), implementing special assessments for road maintenance and street lighting in specific districts, seeking state funds (with loss of local control), and initiating new fees for services like parking, boat ramp trailer parking, and recreational programs. The workshop noted that community partners like little league, football, and cheerleading programs currently use city facilities at no cost, keeping participation fees low for residents. Fee implementation would increase costs for these youth programs and other free park amenities. Immediate impacts of property tax elimination would include removal of local control and responsiveness, major revenue loss, longer response times due to staffing reductions, reduced parks and recreation programs, infrastructure maintenance delays (increasing long-term costs), and increased reliance on alternative revenue sources. D. Questions Robin Diaz expressed concerns about residents choosing between basic needs due to high property taxes, noting her taxes increased from $1,200 to $4,200 since moving to Sebastian. She questioned whether city staff had increased substantially compared to population growth and complained about difficulties accessing the value adjustment board. She requested the city work with residents rather than increasing taxes, suggesting holding back planned projects due to economic hardship. The City Manager responded that city staffing actually decreased from 7.63 employees per thousand population in 2006 to 5.97 in fiscal year 2026, and offered to facilitate discussions with the property appraiser regarding her valuation concerns. Terry McGinn asked about raising the sales tax to compensate, which the City Manager explained was not within city's authority, as only the state controls sales tax. McGinn also inquired about septic -to -sewer conversion costs, with the City Manager clarifying that Indian River County operates utilities and is conducting a feasibility study, while the city received a $3.6 million state grant to assist property owners in the first phase near the lagoon. Chuck Meckling provided supportive comments about city staff quality and the need for more commercial development to balance the budget. He expressed concerns about state legislation limiting local control and referenced other bills that would allow state -level permitting without local public hearings. Vickie Drumheller asked about potential law enforcement consolidation with other municipalities, which the City Manager said had not been seriously discussed, though he wouldn't rule out future consideration of such options or centralized dispatch. Robin Diaz returned with additional questions about removing garbage service from property tax bills (the City Manager clarified it's already a separate non -ad valorem assessment), a $10 million park enhancement project (clarified as $3 million total with $1.5 million in federal grants and $1.5 million from discretionary sales tax), and requested a potential audit by "Blaze Mongolia," with the City Manager noted the city has cooperated with all Doge requests. Terry McGinn concluded by praising the Budget Advisory Committee's thorough review process and expressing that as a fixed -income resident, he considers Sebastian the best city on Florida's East Coast despite high living costs, criticizing the state legislature's property tax reduction efforts as misguided. The City Manager concluded by inviting residents to attend summer budget workshops and September public hearings, emphasizing the city's commitment to transparency and public engagement in the budget process. 3. ADJOURN