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Electric bill hike could come from city

By Staff | Jun 12, 2009

Cape Coral citizens could see a jump in their electric bill next year, but the increase won’t be instituted by the company serving the Cape, the Lee County Electric Cooperative.
The Cape Coral City Council is considering placing up to a 10 percent public service tax on electric bills in order to decrease the city’s dependence on property taxes. If passed, some council members have pledged to reduce the millage rate by in proportion to the revenue generated by the new tax.
“If you reduce the millage rate and you have a lower assessed value, you’re going to be paying less,” Councilmember Tim Day said.
City management has pushed the public service tax for the last few years as a way to reduce the city’s reliance on property taxes for revenue. The city gets 65 percent of its revenue from property taxes and city coffers are bracing for a hit after a housing bust that has seen home values plummet. City Council members, however, have consistently rejected the public service tax.
Day said he regrets his stand against the public service tax in the past and says it will shield the city from the rollercoaster ride of property values in recent years.
“I think we’ve all learned that (relying on property taxes) doesn’t work. If we had adopted the diversification model (city management) had proposed, we wouldn’t be in this mess,” Day said.
Meanwhile, LCEC is attempting to hold rates firm, despite a drop off in total customers from the boom years and an increase in the amount of delinquent customers.
LCEC, a nonprofit electric cooperative that serves Cape Coral, North Fort Myers, Marco Island, Sanibel and Captiva Islands, Pine Island, Everglades City, Immokalee and parts of Lehigh Acres, had 171,400 customers in 2004. That number shot up to 195,000 in 2007 before falling down to 191,000 in 2008. The total customer count has increased to 191,400 so far this year, but that number is still below 2006 levels.
LCEC public relations manager Karen Ryan said the company is making cuts to hold costs firm for customers in an area already hit hard by a housing bust and double-digit unemployment.
“Honestly, in this economy, we wanted to try to do what we could not to raise rates,” Ryan said.
Revenues for LCEC this year so far are 5 percent below projections, and budget cuts were needed to avoid rate increases.
To compensate for the drop in revenue, LCEC cut 10 percent of its management positions, froze wages and salaries for management and non-union employees, altered work schedules and left empty positions vacant. The cost-cutting measures will save LCEC $2 million this year, according to a news release.
Ryan said the reductions have thus far not led to decreases in service.
“Customer satisfaction numbers are the same and well within our goals. We’re not running behind on service calls,” Ryan said.