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Council sets target at $116.4M for operating budget

By Staff | Mar 10, 2009

Cape Coral City Council members took an early step in what promises to be a long and arduous budget process Monday, voting 5-3 to set a $116.4 million target for the 2010 fiscal year operating budget.
The city’s finance department asked council members to set a target during last week’s workshop meeting, and council members responded, but not before haggling over the target figure and debating budget-cutting strategies for about an hour.
Some council members expressed their desire for city staffers to develop multiple budget scenarios with the target $116.4 million, while others thought the onus was on them to find areas to cut.
“I think asking Mr. (City Manager Terry) Stewart to produce different scenarios would be very beneficial to me,” Councilmember Bill Deile said.
He added that he would prefer to see a reduction in city expenses rather than an increase in fees or taxes on residents.
“The less government in my life, the better I like it,” Deile said.
But Councilmember Gloria Tate challenged Deile to come up with constructive ways to cut spending instead of leaving it in the hands of the finance department.
“I heard you say you didn’t want government in your face, but I didn’t hear you say what programs you wanted to eliminate. I would rather start at $120 million and work our way down,” she said, noting her preferred target figure for the operating budget.
Tate, along with Councilmembers Dolores Bertolini and Tim Day, voted against the $116.4 million figure.
During last week’s meeting, Financial Director Mark Mason explained that there would be a $33.4 million reduction from this year’s operating budget of $127 million if the current millage rate of 4.77 was kept, due to an anticipated 35 percent reduction in property values.
“We’re looking at a $30 million decrease in revenue if the millage is kept the same,” he told the dais Monday.
The $116.4 million target figure means $22.8 million will have to be made up, through an increase in the millage rate or the institution of public service fees, or a combination of the two.
A public service fee of 10 percent — the maximum allowed under Florida law — would show up on electric bills to the tune of $14 per month, according to Mason, and would mean about $10 million in revenue for the city.
That would allow council members to cut the amount they would raise the millage rate by one mill.
Some council members, however, are wary of what they perceive as a new tax.
“It’s easy to understand why people have viewed these revenue sources as new taxes,” Councilmember Pete Brandt said.
“I have difficulty in substituting ad valorem (property) taxes for other methods,” Deile said.
Even if a public service fee is instituted and the millage rate is raised, there will be cuts to the operating budget. Where those will come from is still unclear.
Many council members have spoken out against cutting the police and fire departments, whose combined $60 million budget will account for 66 percent of the operating budget. That means cuts are eminent for other city departments.
“I can guarantee you at this level, there’s going to be plenty of a reduction in force,” Stewart said.
He thanked council members for providing a target figure, and indicated time is of the essence in the complicated budget process.
“I know it’s a little bit painful right now, but this is the earliest that we’ve ever started. We still have time to get there, but we don’t have time to waste,” Stewart said.
Mason will present his budget presentation with the $116.4 million target operating budget in the coming weeks.

In other news
— The council amended a resolution that requires banks to maintain abandoned homes in the process of foreclosure. The resolution explicitly states that banks are not required to inspect the inside of a property, and are only required to inspect the home once every month, instead of twice monthly as the previous resolution held.