Valuation increase met with cautious optimism
Even though the county appraiser’s office has announced Cape Coral’s taxable property valuation increased by 3.82 percent in 2011, city officials haven’t started their happy dance.
They say that while it is welcome news, it doesn’t erase years of steep declines and shouldn’t be construed as a green light to spend frivolously.
However, considering things such as roads, police cars and computers have aged, there is thought that now may be the time the city concentrates on capital improvements rather than possibly spent more later.
City manager John Szerlag said that while the numbers point to a bottoming out of declining property values, the city has a long way to go in gaining long-term sustainability.
“We must determine a sustainable revenue line. It doesn’t come close to what we had in 2007,” Szerlag said. “We’ve neglected capital improvements and that cannot continue. We need a realistic look at revenue sustainability.”
Councilmember Chris Chulakes-Leetz agreed with that stance, and said the city should remain in frugal mode for the foreseeable future.
“The city still has to take a defensive posture in the current economic times,” Chulakes-Leetz said. “The numbers are encouraging but far from enthralling.”
Councilmember Kevin McGrail said that while property values haven’t exploded by double figures as seen in the bubble years, the rate now is more sustainable.
“I’m encouraged by the increase, but we have a large capital improvement deficit to address,” McGrail said. “It isn’t 13 percent like it was in 2006, but 3.85 percent is sustainable.”
Despite the increase in overall taxable valuation, the city will only collect about $2.4 million in additional revenue from 2011 if the current millage rate of 7.9570 remains unchanged, according to a statement from the city.
A mill is $1 for every $1,000 of taxable valuation.
Chulakes-Leetz and Mayor John Sullivan laid the philosophical groundwork for another year of tough talks with the city’s police and fire unions.
“The increase falls short of the amount we gave back to the bargaining units. We’re still not breaking even from last year,” Chulakes-Leetz maintained.
“The $2.4 million isn’t a big help since it was all sucked up by police and fire,” Sullivan said. “We gave that much away.”
Sullivan added the city needs to find more efficiencies to do more with less and that raising the property tax rate is not an option.
“I made a commitment to not raise taxes when I took office, and I won’t vote to raise the mill rate,” Sullivan said.
Considering that the city’s capital needs have gone unfunded since 2008 and represent a gap of $14 million annually, the additional $2.4 million will have minimal impact in addressing those needs.
However, McGrail said the time to do so is now, especially when other items have been put off for years.
“We’ve had to catch up with four years of almost no capital improvements,” McGrail said. “We had to come up with 40 police cars, fire engines and white fleet vehicles and computers. Infrastructure has been ignored and understandable so.”
That said, restraint has been called for.
“The last thing I want to be is an alarmist,” Szerlag said. “But you know what you get when you play a country song backward. You get your truck back, your dog back and your girl back. This was cumulative and we need to dig ourselves out of this.”
Szerlag said he will submit a three-year budget, something the city has never done.
“We’re pretty accurate with revenue projections. A budget is about revenues, not expenditures,” Szerlag said. “We need to identify issues, look at best practices, revenue sources, be transparent and see what residents and business owners want.”
The Lee County Property Appraiser’s Office’s 3.82 percent increase is up nearly .3 percent from the 3.53 percent estimate the office made in June.