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GO bond may top questions at town hall meeting

By Staff | Feb 26, 2011

Councilmember Kevin McGrail plans on addressing several issues during his town hall on Saturday — road paving in the northwest Cape, economic development — but when conversation turns to the proposed General Obligation Bond, McGrail said it was vital that residents understand city council is running out of options to lower water rates.
“If they (voters) say no we don’t want it, there’s only one other option and that’s to add more customers,” McGrail said. “The water rates are going to look like car payments and you’re going to cripple your city.”
Cape Coral is facing roughly $322 million in utility debt, and rate payers are facing eight percent increases each of the next three years.
The city really only has a handful of options to deal with that debt. Other than the general obligation bond, the city could increase rates or the number of users; the city can institute a facility expansion charge by having properties pre-pay for their spots in the plant, but that option has no precedent; or the city can put public service tax in place.
The General Obligation Bond could lower the utility rates, but it could also raise property taxes based on the average home price when the bond is issued.
McGrail said the current median home price in Cape Coral — $74,291 with the homestead exemption — would translate to roughly $98.55 in monthly water bills, a 12 percent decrease.
Waterfront homes or properties with higher values would potentially face a higher tax rate despite lower water bills, a fact McGrail said he is more than aware of.
As a rate payer who paid his assessments, McGrail said he still would vote to support the GO bond, especially with aspect of astronomical water bills on the horizon.
“We have the potential for $200 water bills in 10 years and that’s insane,” McGrail said.
As a pure concept, Councilmember Derrick Donnell said a GO bond is a good way for the public to decide the future of the city’s utilities expansion, but Donnell is still concerned people will vote based, not as a city-wide collective, but as individuals.
Donnell said he doesn’t think the GO bond option doesn’t solve the “north versus south” mentality of those on the system, and those still on wells and septic tanks.
“It does give us, for the first time, some option with how we’re going to deal with that debt, instead of letting ratepayers absorb that debt … but it’s not going to be as simple as some people think,” Donnell said.
The GO bond is going to be a “difficult sell” to voters, according to Councilmember Marty McClain.
McClain said he was in pursuit of more information on the impact of the variety of tax assessments and a “clearer path” of who it’s going to impact and why, before he supports a referendum for a GO bond.
City Council would have to vote to support a referendum before it could make it onto November ballots.
McClain said it is not clear how to equally distribute the financial burden, and residents would likely feel the same.
“People are going to sit back and do the evaluations on their own bills and they’re going to come to their own conclusions. That’s where we’ll get the pushback,” he said.
If nothing else, McGrail said the GO Bond issue will likely get more people to the polls in November than in the last municipal election, when only 18 percent of voters cast their ballots.
“An issue with this much ramification … it’s going to give people a major issue to drive interest to get them to the polls,” he added.
Council member Chris Chulakes-Leetz could not be reached for comment.