Cape budget workshops to begin
Starting next week, discussions regarding Cape Coral’s city budget for the 2016 fiscal year will get under way.
The city council will hold a pair of workshops on Wednesday and Thursday at 4:30 p.m. at city hall to discuss how they want to see the city’s money spent.
With the city’s “three-legged stool” of revenue diversification now in place, city leaders feel confident they can work to produce a budget that meets the needs of all citizens.
There will still be some debate, however. Items such as a new fire station, capital improvements and the amount of city debt will be among items council will want explained by staff.
City Manager John Szerlag’s proposed FY 2016-18 budget calls for $197.5 million for the general fund and includes a .75 millage rate reduction as its centerpiece, completing the one mill reduction promised when the city began the “revenue diversification” process two years ago. The city reduced the millage .25 two years ago.
The ability of the city to produce on that promise when the property tax/public services tax/fire assessment approach was first proposed three years ago is a triumph, according to city spokesperson Connie Barron.
“When we established revenue diversification, the intent was to collect an additional $150 (more) each year from the average homeowner. These sources can be used to make sure you maintain that amount of revenue from the homeowner,” Barron said.
The not-to-increase millage rate of 6.9570 will mark the first time in seven years the rate has been below 7 mills and is expected to generate $74.3 million in property tax revenue, $3.6 million less than FY 2015.
The proposed tax rate is well below the “rollback” rate of 7.2985, which is the tax rate required to bring in the same amount of tax dollars as the previous year.
Councilmember Jim Burch, who was mayor when the city had to raise the millage at the beginning of the Great Recession, said he is happy to see that rate come down.
“I was the mayor who had to make a decision to save the city and raise the mill rate. Derrick Donnell and myself said the day we did it was the day we lost the election,” Burch said. “I said it didn’t matter because it was what we had to do. Seven years later, to bring that down is very satisfying.”
The proposed budget keeps the public service tax rate at 7 percent, and sets the fire services assessment cost recovery rate at 64 percent, which will produce an estimated $26.8 million in revenue.
The FSA methodology was finally approved by the Florida Supreme Court after nearly two years of legal wrangling.
While on the surface it may seem like the three-pronged approach makes things easier. But even though for the first time in years there’s some breathing room, Councilmember Rana Erbrick thinks the pressure is on council to get it right.
“It makes it difficult to budget correctly and makes sure we’re getting the best bang for our dollar,” Erbrick said. “It would be easy to dust off your hands and say ‘OK.’ Now, it’s more personal because we’re charged as council to do what we can with those dollars and make them stretch as best we can.”
Councilmember Rick Williams said the “stool” method does make it easier as it gives them confidence they can keep the city moving forward, though you could get crazy with it.
“Having a low millage makes us look good in the eyes of the credit agencies. I would like to see us put the PST on the shelf and have it there when we need it,” Williams said. “Much of the council is quite conservative, and we have to justify every expense.”
On the expenditure side, the budget will allocate $6.5 million to continue the city’s five-year road resurfacing project, and $1.3 million for capital maintenance of parks and general government facilities.
The city also will have $5.4 million to replace its aging vehicles and equipment.
Burch said he hopes money is put into things that people see on a daily basis and to increase the level of service across the board.
“I hope we see medians that are cut every four weeks instead of every six. We’ll see more paving, especially in my district where it’s been put off for a long time,” Burch said.
Indeed, the budget allocates $300,000 for median improvements, $100,000 for street light improvements, and $500,000 for alley paving.
Erbrick said if anything needs capital improvement, it’s the economic development office, which has done well with what it has, but has been badly neglected and underfunded.
“If we don’t put resources toward that, we could miss the boat on businesses that could come our way,” Erbrick said. “If we’re not out there promoting us and grab some of those businesses, we’re going to get passed by. We’re short on dollars for them to bring a Trader Joe’s here. We won’t get that by sending an e-mail.”
Burch said he expects department budgets to include lots of items that went undone over the last five years that they are now trying to catch up on. He also wants to speak with Szerlag about the city’s debt.
“I’m hoping to see funding where they add back into the department to make them whole again in a plan that’s more long range,” Burch said. “Our per capita debt is more than $1,000 per person, whereas seven years ago it was $780. It’s not the whole story, but you have to be careful about that.”
“Because we went so long without any capital budget we have a bit of catching up to do. This budget is unique in that we now have all the revenue tools in place,” Barron said. “The city manager can put forth a budget without any cloud hanging over it because of a Supreme Court decision.”
Cash funds also are designated to build Fire Station No. 11 in fiscal years 2016-17 as well as a new fleet maintenance facility to replace the current building at Everest Annex.
Erbrick said she believes the construction of the fire station and the fleet facility, especially with cash, could be a concern.
On the one hand, interest rates could be poised to go up as the economy improves. On the other, there is the thought, like Burch, that the city has too much debt.
“We have a fair amount of debt, and I think that’s the driving force. The economy is finally building by more than a slow crawl, so I think they’ll be careful about raising interest rates,” Erbrick said. “They say cash is king and sometimes with interest rates you should look at those options.”
Williams agrees with Erbrick, and also believes salary increases will be a much-discussed topic.
“It won’t be what it was last year. That was an adjustment, this time the raises will be more strict. What does the city have to offer? It’s people. We have to take care of them,” Williams said.
Two public hearings will be held regarding the budget on Thursday, Sept. 10 and Friday, Sept. 25, at 5:05 p.m. at city hall in council chambers, after which the city council must vote on a budget for it to be ready for the fiscal year starting Oct. 1.
The budget is available for viewing online on the city’s website, capecoral.net