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Cape Council restores $4.5 million in reserve funding, approves budget compromise

By Staff | Sep 21, 2010

The city of Cape Coral will use some reserves to balance the budget next year but city employees still may see roughly 2 percent in wage reductions.
After nearly three hours of public comment during which city employees begged not to have their wages slashed, city council decided to find a compromise on next year’s budgeting philosophy by saving two months of reserves.
The previous two budget proposals, the so-called “Schwing” and “King” budgets saved 1.8 months, and 2.2 months of reserves respectively.
But an unexpected third budget option offered by Councilmember Bill Deile and supported with a 5 – 3 vote will see the city now using $4.5 million of reserves to help balance FY 2011, while retaining two months of reserves, according to budget administrator Sheena Milken.
Cape Coral Professional Firefighters Union President Mark Muerth said the wage reductions, now lowered to 2 percent from an estimated 6.7 does not change how the unions feels.
He said firefighters already have made concessions so the city can build its reserves, and sees the adopted budget as nothing more than a tactic to “disturb” the unions.
“All they’re doing is taking money from their employees so they can pad their reserves,” he said.
Councilmember Chris Chulakes-Leetz said there was no intent by anyone on council to pad reserves, but that the city’s financial policies – one of which requires two months of reserves – trumps the employee’s financial needs.
“You ask me to violate the policy of our city so you can retain a portion of salary?” he asked employees.
Councilmember Kevin McGrail said the majority of council’s philosophy – that no reserves should be used to bring balance to the budget – doesn’t fall into the compromise’s logic.
“We’ve been told that using reserves are bad, but now we can use a little. There’s a definite incongruity in that,” McGrail said.
Most of the city employees who spoke during public comment said that wage reductions would only harm their homes and families.
Some, like Mary Beth Pavoggi, a 14-year city employee, railed on City Manager Gary King’s performance bonus of $20,000, and his hiring of two political supporters at $39 an hour for temporary jobs.
“We feel like we’ve been lied to, we’ve been cheated, and we feel we’ve been stabbed in the back,” Pavoggi said.
Pearl Taylor, a five-year city employee, said wage reductions hurt not only the employees’ pockets, but the community’s pockets, too.
“The money they take away from our pockets will not be spent at Target, at Kohls, at restaurants, at the movie theater,” she said.
Deile said no budget is set in stone and can be adjusted throughout the year.
McGrail – who thinks council and the city manager should take a 10 percent pay cut – said he doubts the budget can be achieved without budget amendments.
“I anticipate some serious budget amendments,” McGrail said. “This only raises the bar even higher, and I hope we don’t move the finish line on employees again.”
City council approved ordinance 74 -10, which adopts the FY 2011 budget, with a 5 – 3 vote. Councilmembers Kevin McGrail, Marty McClain, and Derrick Donnell dissented.
City council also unanimously adopted the the millage rate, which stayed the same at 7.9702 mills, or about $7.97 for every $1,000 of taxable value. Due to decreased property valuations, it would have taken an increase in the tax rate to raise the same amount of revenue.