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Final budget hearing set for Monday

By Staff | Sep 18, 2015

After much talk and debate, the Cape Coral City Council and city staff must have all their ducks in a row by Monday, when the second public hearing for 2016 budget is held, and the budget and millage must be ratified.

Much of the budget has been agreed upon, but there still are a few small things – and one pretty big thing – to be settled before the city clerk calls out the roll.

Still, barring a barrage of speakers who show up for the second hearing, it is believed that the budget should pass without a whole lot of debate.

“We’ve narrowed things down pretty good. There shouldn’t be much controversy. We’re still discussing the outcome of that $2.7 million we got from LCEC, but we’re all on the same page with that,” Councilmember Rick Williams said Thursday. “The rest of the budget is pretty well set.”

Last week, council set the tentative millage at 6.957 and passed the tentative general budget of $197 million. It also agreed to set $100,000 aside for capital improvements to the charter schools.

One mil equals $1 for every $1,000 of assessed taxable valuation.

The millage rate completes a promised reduction made when the city diversified its revenue stream by adding two new taxes, the public service tax and the fire service assessment.

Last year, Council reduced the millage rate .25 points, with the remainder of the promised 1 mil coming in this budget.

Perhaps the most contentious issue in the budget process has been what to do with the $2.7 million the city got in a settlement with LCEC. Originally, the money was to go toward increased road paving, but it soon became apparent it wouldn’t be that simple, especially after the fire service assessment money came in.

City Manger John Szerlag came up with a plan on how to spend it, which included $850,000 for an initial pool of money for the city’s self-insurance plan. It was eventually targeted for some “other projects” while other money totals are still being tossed around.

The Community Redevelopment Agency debt and economic development have also been among the sticking points in regards to the “extra” money. Many have not been so keen on giving the CRA money to help pay down the debt it incurred in its undergrounding project before the economy tanked and depleted that agency’s tax-generated revenue flow.

“As the CRA chairperson, I thought great. As a councilman, I thought the whole city should not pay for that,” said Rana Erbrick, who is both. “The city has subsidized the CRA for the last couple years. Incremental (tax) funding should come in at $1.2 million this year as opposed to $500,000 last year because there are newer sections that are making money.”

Williams said he agrees with anything that has to do with infrastructure, while he has a more wait and see approach to the Economic Development Office proposal.

“Road paving, median improvements and mowing I agree with. As far as the EDO, I’m on the fence. It’s important, but (Economic Development Director) Dana Brunett did not request funding and has money available,” Williams said.

Councilmember Jim Burch said wanted to see a plan from the EDO about what its proposals are for the coming year before giving it anything else.

The objective, as Erbrick said, is to get the best bang for the buck while getting a plan that everyone can live with.

Erbrick was a big supporter of more EDO money, and still is. But she can’t complain about the median money.

“If we want a return on our investment, we have to invest in the EDO. Nobody came up and sought money,” Erbrick said. “There were times I was on Cultural Park and wanted to bring a lawnmower and do the medians myself because it made me crazy.”

In the end, about $400,000 will be added to the paving budget and $250,000 toward the economic development office. Also included were $720,000 toward the fire fleet, $150,000 for a Bimini Basin project manager, $100,000 each to outsource median mowing and other improvements and streetlights, and $30,000 for Good Wheels.

The charter school debate seems to be settled, but the work on the relationship between the schools and the city as a landlord is still something that needs to be worked on.

“We need to support them and rework the lease with the charter schools and see who’s responsible for what,” Williams said. “They need the money for the buildings. They took a huge hit when the state took away their money.”

The one-time infusion will allow both sides to decide on what their roles need to be and improve the lessee-lessor relationship, the way they do with Ford’s Boathouse at the Yacht Club, Erbrick said.

Among the items off the table for this year is the proposed $4.7 million fleet building, which the city would like to pay for with cash to reduce its short-term debt. Many of the police cars have been replaced while much of the more expensive fire fleet has not.

Williams said it’s about priorities, which are to pave the roads and getting new vehicles on the road, which the city is doing the best it can.

“Every department has extra money in it to bring back the capital. We’re not spending more than we need to spend, not going bananas. We’re doing what we need to do,” Williams said.

Still, Erbrick said the city really can’t afford to enforce strict and fast zero-based budgeting in the long term as needs change in certain areas, such as capital improvements.

“Adding 2 percent to each department works for a little bit, but once certain departments have other needs, it doesn’t work across the board,” Erbrick said. “We need to look at it every few years, making sure everyone gets what they need.”

The city has estimated it will take five to seven years to go from catch-up mode to maintenance mode as the city is spending more to replace old vehicles, computers and other equipment.

Erbrick said it’s important for the city to keep that spending level, since in five to seven years, those items will have to be replaced as well.

By that point, there will be a need for a fleet building, which could be paid for with cash along with the proposed Fire Station No. 11 in the coming years.

“(Finance Director) Victoria Bateman has said we should pay for cars with cash so we don’t incur more short-term debt, then look for money to plan those facilities,” Erbrick said. “We should try to invest longer term debt on structures and not on things that have only so-much useful life.”