homepage logo

Residents protest tax plan

By Staff | Apr 23, 2013

Outside city hall, there were people passing out flyers. Inside, residents waited in line to get their chance to speak out.

With new taxes and fees likely on the horizon, people wanted to get their two cents in Monday on the city of Cape Coral’s plan to collect more money from utility rate payers and property owners.

Nearly everyone who spoke was against the proposed 10 percent public service tax to be assessed on electric bills, while nearly everyone on staff and on the dais said the city won’t be able to operate in the way it has without them.

Ordinance 28-13, as the measure is called, was moved up to the top of the agenda so people can ask questions of Mike Burton of Burton & Associates, the consultants who used their model to formulate the “financial diversification” City Manager John Szerlag is seeking.

The debate lasted nearly three hours. Szerlag said diversifying the city’s tax base, rather than simply raising the property tax rate, is important to protect the city’s credit rating and to diversify the city’s finances, while also once again spelling out the two futures Cape Coral has if they do or do not approve the new taxes.

“There is a new paradigm since the economic collapse. The city is on the tipping point with reserves and are avoiding capital improvement at the point where it can’t continue,” Burton said.

While there was some confusion as to how the numbers would be tabulated on the bill, there would be no charge on the first 500 kilowatt hours used per home, officials said.

Citizens didn’t agree. Nearly everyone who spoke during an oversized input session was against new taxes.

Those most opposed were business owners, who said the increase in their electric bills would prevent new business from entering and penalize them the most, since they use the most electricity.

“I looked selfish to ask for an exemption on business and they said nothing about it and that’s the answer I expected,” said Jim St. Amand. “I want to save something for the business people. The property taxes are supposed to pay for fire and police.”

Many of the speakers voiced their views and left after public input was over.

Still, council members explained their positions to those who remained.

“You suggest that you’re OK with a millage rate of 10. Would you put all your money into one basket?” Councilmember Derrick Donnell said. “This spreads things out. The target is $20 million, and we’re doing it in three ways.”

Councilmember Kevin McGrail commented on the empty seats.

“The people who left have made up their minds. There’s no way roads in the North Cape will be paved if we continue like this,” McGrail said. “We’ll have no infrastructure, and to wait for growth is an empty promise.”

Councilmember Chris Chulakes-Leetz said the formula would penalize year-round residents while the vacant landowners would benefit from a reduction in the millage rate.

“To drop the millage rate, the unimproved properties will wipe out any tax benefit and investors would get a free ride from those who live here,” Chulakes-Leetz said.

Szerlag said city council can do as it wants, including rescind the public service tax, if it’s put into place.

He also said that everything he has told the public has not been fear mongering, as some have suggested.

“People are entitled to their own opinion, not their own facts,” Szerlag said. “We cannot operate like we have in the past because we don’t have a fund balance.”

The final vote on the public service tax is expected to come Monday at City Hall. The second step on the “diversification” ladder is expected to come in June when council will consider a 60 percent “fire services recovery assessment.”

The final would be to adjust the ad valorem rate to reach the target of $20 million (or about $150 per household) Szerlag figures the city will need to pay for capital improvements.