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Bond validation hearing adjourned until today

By Staff | Oct 8, 2013

The bond validation hearing for the city of Cape Coral’s new fire service assessment was adjourned until 9 a.m. on Tuesday after more than two hours of testimony late Monday afternoon at the Lee County Courthouse in Fort Myers.

The highlight of the hearing was the grilling of City Manager John Szerlag by many opponents of the assessment, including former city councilmember Bill Deile and current council member Chris Chulakes-Leetz, who were allowed to cross-examine Szerlag under the rules of the hearing.

The toughest examination came from attorney Richard Cudla who grilled Szerlag for nearly an hour on the legal validity of the controversial assessment in front of Judge Keith Kyle and a crowded courtroom.

Cudla questioned Szerlag on whether fire service was a special or general benefit and whether the assessment was necessary since the property values had risen substantially in the past 16 months, utilizing the latitude Judge Kyle was giving to the defense in their argument.

Szerlag said he was unable to answer specific questions because he did not have all the figures with him.

“It was about whether this was an arbitrary decision from the city council or a ruse in regard to the bond issue to establish the viability of the assessment itself,” Cudla said. “Did they need to do this instead of simply raising the millage?”

Cudla also said that since this is an assessment and not a tax, it won’t be able to be written off because the IRS code doesn’t provide it or provide relief to those who own property and don’t live in Cape Coral.

The hearing started innocently enough as Chris Roe of Bryant Miller Olive laid out the plaintiff’s case as to why the bond should be validated and presented their evidence.

Szerlag was then called to the stand, where he laid out the reasoning behind his financial diversification plan, leading up to questioning by the defense.

The city’s new tax plan, initially proposed to raise an additional $20 million in revenue called for two new taxes – the fire assessment to offset a portion of the department’s operation costs, and a tax on electric bills – couple with a reduction in the property tax rate.

The additional money is needed to help pay for capital improvements neglected when tax revenue plummeted with property values during the real estate bust.