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City Council unveils 2016 budget

By Staff | Jul 21, 2015

The city unveiled its proposed Fiscal Year 2016 budget publicly for the first time at Monday’s City Council meeting, the first meeting after a four-week summer break.

City Manager John Szerlag summarized the budget for council members, pointing out a .75 mil reduction for taxpayers to 6.9570 mils or 9.8 percent lower than the 2015 rate of 7.7070. With increased property values, the lower rate would produce ad valorem tax revenues of $74.3 million.

In addition, the city expects to raise $7.2 million from the Public Service Tax and $19.6 million from the Fire Service Assessment. The Public Service Tax remains unchanged at 7 percent while the Fire Service Assessment increases from 38 percent recovery to a 64 percent recovery rate.

Szerlag said despite the FSA increase, property owners’ overall out-of-pocket cost for 2016 would be about $6 less than in 2015. Based on a $100,000 home value, the PST costs $65, the FSA raises $159.19 plus $695.70 ad valorem for a total tax bill of $919.89 for 2016 compared to $925.98 for 2015.

Mayor Marni Sawicki applauded staff’s budget work and presentation, but has concerns with the Fleet Department.

“I don’t see fleet as an efficient department,” Sawicki said. “I’m concerned about spending for a new building. If the issues are not resolved I would consider outsourcing the operations.”

Council next will set the do-not-exceed millage rate at its next meeting July 27, expected to be 6.9570 mils, and continue with discussions, public hearings and workshop sessions to adjust budget items. Two public hearings are scheduled in September at which time the final millage rate, which can be lower than 6.9570 but not higher, is set and certified to the Lee County Property Appraiser’s office. The 2016 budget goes into effect Oct. 1, 2015.

Discussions got a bit testy earlier in the meeting over a resolution for the city to continue its Municipal Electric Utility study through consultants. LCEC CEO Dennie Hamilton addressed the council in response to what he determined “misinformation” put out by city staff portraying LCEC as unwilling to cooperate in sharing information during negotiations for a new 30-year franchise agreement and claimed the city was dragging its feet.

Assistant City Manager Mike Ilczyszyn said he told LCEC the city was suspending negotiations on the contract while staff reviewed LCEC’s latest proposed agreement and drew up a response.

Councilmember Derrick Donnell weighed in on the fingerprinting.

“We are on a dual track,” he said. “While we are negotiating a new franchise agreement, we are studying the MEU. There’s something here that’s just not right with LCEC selling off power transmission lines (to FP&L), assets the city might want to purchase for the MEU.”

Sawicki said she wanted to review both sides’ proposed agreements before deciding to vote for the resolution seeking to spend $48,000 for phase two of the consultant’s MEU study. Council agreed and withdrew the item from the agenda at least until next week.

Developers of Village Square, a long proposed and delayed project in South Cape, appeared before council seeking another extension while they continue to wait on federal government approval of its EB-5 application that would help provide nearly half of the financing for the $140 million commercial, residential, retail and parking garage project.

The EB-5 program allows foreign investment in development projects limiting the investor to $500,000 per 10 jobs created. In return, foreign investors are able to get green cards for entry into the country.

Staff has reviewed and approved the developers’ financing that also includes TIF funds, traditional equity financing and other equity investments plus an estimated $66.5 million in EB-5 funds. The project will not move forward without the EB-5 funds. Developers are concerned that if the EB-5 is not approved as anticipated in December – one year after applying for the funds – that they will be unable to met the April 2016 deadline for substantial construction. They requested a one-year deadline from the date the EB-5 is approved.

While council to this point has fully supported the project and approved every extension, some members got off track over deadline dates. Two motions were made and withdrawn during discussions.

Councilmember Rana Erbrick sternly said she has become fed up with the delays but was willing to make one more extension for the project. Her motion set a May 18, 2016, deadline for the EB-5 to be approved and granted the developers one year after that to begin construction. Council approved it by a 6-2 vote with Sawicki and Councilmember Richard Leon voting no.

Council also unanimously approved the annual not-to-exceed rates for vacant lot mowing, solid waste removal and stormwater fees.

Lot mowing rates will decrease by a few cents in each of the four mowing districts for 2016 while the solid waste rate will remain roughly the same. Stormwater fees will increase to $80 per year, the first increase since 2006.

Council’s next regular meeting is July 27 in Council Chambers.