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Council caps property tax rate at current level

By Staff | Jul 23, 2013

Cape Coral City Council voted Monday to set the city’s property tax rate cap for next year at the existing rate.

Although there was much debate, council voted 6-2 to keep the millage rate at 7.957, the same rate it’s been the previous two years, with a rollback rate – the rate needed to bring in the same amount of revenue – of 7.5139.

The rate voted on is a “not-to-exceed” rate, meaning the city can’t make it higher once approved, but can lower it as the budget process for the next fiscal year continues.

Public hearings have been set for Sept. 5 and Sept. 19, with a vote expected at that time.

One mill is equal to $1 per $1,000 of taxable assessed valuation.

The rate may still come down by 1 mill if City Manager John Szerlag gets bond certification for the proposed fire assessment, but that likely won’t come until the beginning of the next calendar year. The new fiscal year begins Oct. 1 and the budget must be finalized through the summer and early fall.

Despite the likelihood that it won’t be possible to approve the new fire fee this budget cycle, some members of council are asking for a millage rate decrease anyway, saying it was promised by the council and that the other assessments could more than compensate for the reduction.

The three-component “revenue diversification” plan was to impose a new tax on electric bills, add a fire assessment to offset most of the department’s operation costs and, in turn, reduce the property tax rate by a mill. Overall, the city estimated the plan would bring in an additional $20 million.

Councilmember Derrick Donnell said he’s all for financial diversification, albeit not a huge fan of the already approved 7 percent public service tax, and added that maybe a smaller millage rate decrease would achieve that promise.

“We have an opportunity to do more and not spend it all on paved roads,” Donnell said. “There are a lot of moving parts here, and even though I will vote for a millage rate tonight, I will ramble in and not use the PST.”

Mayor John Sullivan said that any millage reduction would live up to the promise the council made and urged council to do so.

“Tonight we’re voting to ask the public to trust us. We made an obligation and a 0.3 reduction would keep us in line,” Sullivan said.

Councilmember Chris Chulakes-Leetz said he believes the assessment and the PST will generate more money than anticipated, since the business sector faces higher utility rates it can do little to decrease.

“We can’t accurately account for what we’ll bring in until next year. We went under the auspice of reducing the millage rate, now we don’t have the confidence the assessment fee will be available this year or next,” Leetz said. “One leg in the three-legged stool (of the originally proposed revenue plan) is broken.”

Councilmember Kevin McGrail said there was nothing wrong with the plan, that everything has been laid out for all to see.

“The stool isn’t broken. The millage rate leg hasn’t been set. We’ve been transparent and have done everything we said we would do,” McGrail said.

McGrail added that it’s because they city has taken a balanced approach to revenues that Moody’s has given Cape Coral an Aa3 rating.

“We need to improve capital infrastructure and maintain our strength, or Moody’s will think we’ve lost the will to move forward,” McGrail said.

Councilmember Marty McClain added the city had decimated municipal operations and projects for seven years because it felt it had to, but that approach didn’t work.

“Now, we’re trying to figure out how to put this back together. People took their reduction in property values,” McClain said. “We never said we’d do a reduction unless it was in a package.”

The other assessments voted on generated far less steam. Council voted unanimously to approve the 2014 solid waste assessment of $149.79, down from last year’s $157.25, though McClain expressed concern over reducing a commodity, especially in a city where the assessment is already the lowest in Lee County.

Also, the annual stormwater fee was set at $75, the same it’s been for six years. The vote was unanimous.

The city council also voted 7-1 to hold budget workshops instead of committee of the whole meetings on Aug. 7 and 14 at 4:30 in the conference room. Sullivan had the only dissenting vote.