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Rollback rate unlikely in wake of Irma

By Staff | Sep 26, 2017

Faced with up to $15 million in costs associated with Hurricane Irma, Cape Coral City Council passed a tentative millage rate of 6.75 mills, – the same as the current year – while keeping the Fire Service Assessment at 64 percent of cost recovery.

Council also agreed to set the tentative budget with a General Fund of just over $208 million, which was City Manager John Szerlag’s original proposed budget, and to appropriate $4 million in reserve funds toward obligations resulting from storm damage.

Councilmember Richard Leon had been a supporter of the millage rollback rate of 6.344 but, faced with fixing the damage Irma caused the city, he shook his head Monday and said he would support the higher millage and fire assessment rate, provided any excess eventually goes back to the residents.

“Any money should go into the emergency fund and we need to keep track of that money and know what we’ve spent on the storm,” Leon said. “At the end of the day, any money left goes back to the citizens. It’s the right move, but it’s the unfortunate move.”

Victoria Bateman, city finance director, said the $4 million will be used to front the costs of rebuilding. Once the city gets reimbursed from FEMA, which could take as much as two to three years, that money will be put into the emergency fund to pay the bills.

Councilmember Marilyn Stout was also in agreement, not only because of the storm but also due to a future statewide referendum that could affect ad valorem taxes.

“An additional homestead could affect us in 2018 and, if it’s passed, it could impact revenue,” Stout said.

Mayor Marni Sawicki said there is still hope for lowering the millage to 6.50, the rate Szerlag originally proposed. It’s just a matter of finding the money, which she is confident the city can do.

“We can find $3 million. We have $3 million in unfilled positions. There are some areas we can definitely cut and get to 6.50,” Sawicki said. “We had $2.8 million to carry over for road paving. If we don’t have the contractors to do the work and keep putting the same amount of money in, when do we say we don’t have the contractors to do the work?”

The rollback rate is the tax rate at which the city would receive the same amount as revenue as the existing budget year, meaning the rate of 6.344 mills, or approximately $6.34 per $1,000 of taxable property valuation, would keep property tax revenue to the city flat for the fiscal year that will begin Oct. 1. This is because overall property valuations went up last year.

The fire assessment is a separate tax the city levies to recoup a portion of the cost of providing fire services to property owners. Until the assessment was approved by Council in 2013, fire services, like police services, were funded by property taxes. With the implementation of the assessment, Council lower the millage rate, with the intent being to diversify the revenue stream to the General Fund.

Among the items added to the proposed budget for next year is $30,000 for Good Wheels, which provides transportation to the elderly, disabled and disadvantaged, and $30,000 to Parks and Recreation for special events.

The millage and budget will be officially voted on Monday, Oct. 2, at 5:05 p.m. in council chambers.

In other business, also Irma related, council voted unanimously on three resolutions to extend the initial prepayment period for property owners in the North 2 UEP to prepay assessments and capital facility expansion charges with no added interest costs from Sept. 30 to Oct. 31.

For water, wastewater and irrigation, the second prepayment period will begin Nov. 1 and continue through July 31, 2018. Property owners can prepay any assessments or capital facility charges during this period; however, interest costs will be added to the assessments.

During both prepayment periods, the will provide a 20 percent discount for prepayment of any of the capital facility expansion charges. The discount reduces the cost from $6,750 to $5,400.

After July 31, 2018, any unpaid assessments and capital facility expansion charges will be added to the property tax bill to be collected in annual installments.