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Council, Budget Review Committee set budget workshop

By Staff | Aug 1, 2019

Cape Coral City Council and the city’s Budget Review Committee will get down to the nitty-gritty on next year’s budget when they will hold the first of three joint workshop sessions Tuesday.

The session will be begin at 1 p.m. at City Hall.

This is an annual rite of passage for the city in which Council and the committee bounce ideas on what to cut, what to add and where, potentially, more money can come from if needed.

Tuesday’s meeting will focus on public safety, infrastructure maintenance and Public Works, and the Department of Community Development.

Next Tuesday will be the balance of the city departments plus the Community Redevelopment Agency, the municipal charter school ststem and, time permitting, a presentation from the BRC.

City Manager John Szerlag said a third meeting may be necessary to tie up loose ends.

Mayor Joe Coviello has experienced these meetings on both sides, which have the task of making sure they look at the budget in its entirety.

“They’re going to come forward and make their recommendations,” Coviello said of the committee. “The workshops give us a place where each department can come forward and make a presentation where we can talk about making more reductions.”

Szerlag’s FY2020 proposed budget includes a recommendation to reduce the Cape’s property tax rate but not to go as low as a full rollback.

Szerlag proposes to lower the property tax rate to 6.55 mills, the fourth reduction to the property tax rate since FY2014, but the first since 2017 after Hurricane Irma.

The current property tax rate is 6.75 mills, which equates to $6.75 per every $1,000 of taxable valuation. One mill is equal to $1 for every $1,000 in taxable valuation.

The rollback rate, the rate that would generate the same amount of property tax revenues as approved for the prior year, is 6.4903 mills.

The difference between the rollback rate and the proposed rate is between $800,000 and $900,000.

City Council voted unanimously on Monday to set the not-to-exceed millage ceiling at 6.75 mills as a way to hedge its bets in the event of an emergency, as was Hurricane Irma in 2017.

Cape Coral’s total taxable valuation increased 7.96 percent this year or more than $1 billion, from $14.3 billion in 2018 to almost $15.4 billion in 2019. New construction represents about 41 percent of the total increased taxable valuation, and was a major contributor to the proposed millage reduction.

The proposed rate of 6.55 mills would generate about $96.2 million in property tax revenue.

The city manager’s proposed budget also would keep the public service tax rate at 7 percent, while the fire services assessment cost recovery rate would return to its original rate of 64 percent, up from 59 percent last year. The public services tax is a city-imposed tax on electric bills. The fire assessment is a tax designed to “capture” a part of operation costs for fire services, which previously were funded through property taxes.

“I think there’s a little more room where we can work to get there. We’ll sit down and come up with the best plan going forward,” Coviello said. “Can we get to the rollback rate? Do we need to go up on the fire assessment? That’s the starting point.”

The public services and fire assessment taxes will together produce an estimated $33.7 million.

Reimbursements from FEMA related to Hurricane Irma were not included in the proposed budget. While the city was awarded nearly $10.2 million in FEMA grant dollars, the timeframe for receipt of the two grants is not yet known.

Szerlag said that getting a notice of award from FEMA is different from cashing a check. He added that when he budgets, he doesn’t budget for what he doesn’t have yet.

Szerlag said once he has the money, he plans to go to City Council to discuss where that money is going to go and request a budget amendment

For the FY2020 proposed budget, the total for all city funds is $897,493,398. The General Fund represents $233,409,130 of the budget.

The proposed budget for the new fiscal year that begins Oct. 1 includes:

* $6.5 million for local road paving;

* $100,000 for new streetlight fixtures;

* $312,000 for median improvements;

* $520,000 for alley paving.

No fund balances will be used, and will remain 3.09 months of expenditures.

Coviello said he would like to work some of the FEMA money in, if it comes. Otherwise, it could get worked in to replenish reserves during the fiscal year. That will be discussed, he said.

Another item could be sidewalks.

Councilmember Jessica Cosden has said she would like to see the city use city funds instead of just grants to fund more sidewalks. The discussion became more serious following the deaths of two children waiting at, or walking home from, school bus stops in the early morning hours.

“We have two crews who install sidewalks continuously throughout the year. The question becomes do we up the ante with the city on top of those grants?” Coviello said. “If we started to do that, do we lose the opportunity to get those grants to pay for a lot of them?”

The Council will hold two more joint meetings, on Tuesday, Aug. 13 and Tuesday, Aug. 20, at 1 p.m. at City Hall.

The city will hold two public hearings on the budget, Thursday, Sept. 5 and Thursday, Sept 19, at 5:05 p.m. at City Hall, 1015 Cultural Park Blvd.