Proposed budget holds line on tax rate
Cape Coral council members have begun to review the new city manager’s proposed budget for the upcoming fiscal year and a few things jump out.
City Manager John Szerlag, who officially started in May, released his proposed operating budget for fiscal year 2012-13 on Thursday. It totals $459,821,080, or 4.13 percent more than last year’s adopted budget.
The general fund proposal is about $142 million, up from $138 million in 2011-12.
According to his budget, taxable value rose from about $8.7 billion to $8.9 billion in the last year – 3.82 percent. It is the first increase since 2007.
Szerlag proposed maintaining the current millage rate at 7.9570. One mill translates into $1 of tax revenue on every $1,000 of taxable property.
The rolled back rate, or rate needed to bring in the same amount of tax revenue collected during the previous fiscal year, is 7.7391. By maintaining the millage rate, the tax revenue will jump $2.4 million, or 2.81 percent.
Councilmember Derrick Donnell, who only had a chance to take a preliminary look at the budget by Friday, said he went straight for the property tax rate.
“The fact that they are recommending that the millage rate stays the same,” he said. “It gives a sense of calm for the residents.”
The rate can be adjusted, but Donnell called it “a good starting point.”
“We’ll start here and just see what we need to do,” he said.
Szerlag noted in his budget the long-term issues facing the general fund, including a gap between core revenues and expenditures and a neglect of the city’s capital needs, which represent approximately $14.2 million annually.
He suggested focusing on the desired levels of service and alternative methods of funding, and implementing multi-year budgeting and planning.
Councilmember Rana Erbrick was pleased to see a refocus on capital.
“The capital needs portion of it has been in the back of my brain all along,” she said Friday afternoon as she worked her way through the budget.
Erbrick pointed out that, per Szerlag’s budget, the taxes being levied are about $30 million less than in 2007, despite an increase in the millage rate. She continued that although the revenue is smaller, the city still needs it.
“The city is still the same city,” Erbrick said.
She called it a supporting issue for a closer look at capital needs.
“We have a city manager who is finally going to address that,” Erbrick said.
Undesignated reserves will remain at levels equal to two months of operating expenditures, or 17 percent of the general fund operating expenditures.
According to the budget, 441 positions have been eliminated – about 25 percent of the city’s workforce – since 2008. Szerlag proposed changes to department positions, but overall added five full-time benefitted positions.
The budget calls for eliminations within the Public Works department and reinstatements in the utilities department, along with the reinstatement of contract hours or reduction of contract hours among other departments.
The reinstatement of an assistant city manager and the reinstatement of a legal/administrative assistant to the city attorney have been proposed.
Erbrick hoped to see justifications for the staffing changes as she got deeper into Szerlag’s budget, though she called the reinstatement of the assistant city manager a “no brainer” and noted that the person can pull “double duty.”
“For a city of this size, we kind of need one,” she said.
Erbrick was concerned about the hours reduction to the clerk’s office.
“I know that office is busy,” she said. “They are the go-to entity for just about everything.”
Personnel costs are 29.5 percent of the budget, about $136 million.
Szerlag’s priorities in the allocation of general capital funds are: public safety, infrastructure maintenance, building maintenance, quality of life and operational support. The budget allocates $1,389,517 to buy equipment.
Though Councilmember John Carioscia had not had time to look over the budget as of Friday, there were some things he planned to watch for.
“I want to make sure essential services are not cut. I want to make sure we don’t get into the realm of brownouts, like the prior administration did,” he said. “I want to make sure the money is going where it’s supposed to go.”