Council, BRC hold first budget workshop
The Cape Coral City Council and the Budget Review Committee held their first budget workshop Tuesday at City Hall, and one of the questions that was answered was whether a third meeting will be needed.
It will. This happened after council had questions on if the city can use the wide range of reserves it has in numerous accounts to fund the budget and reduce the millage even more.
City Council and the BRC also had questions regarding sidewalks, police staffing, street lighting and other issues to give City Manager John Szerlag guidance on what he needs to do to massage the budget.
Police, fire, public works, community development and utilities were on the agenda for the first meeting. But what came up right off the bat was the vast amount of money the city was sitting on.
The city has more than $227 million in reserves and funds throughout an entire range of departments. By the end of 2022, that amount will balloon to $281 million.
Of course, not all of it can be pulled out and used by the city for the general fund. But council asked if there could be some money pulled out to help fund the budget and lower the millage even more.
Councilmember John Carioscia said he wants to see what the city can use and hopefully lower taxes beyond the rollback rate.
“What we want them to do is to look over it and come up with dollars that we can appropriate toward the budget this fiscal year,” Carioscia said. “For every $15 million we come up with, we can lower the millage by one point.”
Staff said it would go back and look at what they have and perhaps come up with some money to put up front.
“We thought they would already have done this. Now, they’re doing it at the direction of council,” Carioscia said.
One of the big sticking points was the typical $100,000 the city spends on street lights. Council-member Dave Stokes said he would like to see as much as $500,000 spent on lights, in reaction to the death of a local girl as she was waiting for the school bus.
Later in the meeting, Councilmember Rick Williams said the streetlight spending could be overkill, with some intersections inundated with lighting.
Councilmember John Gunter said he would like to see how much money it would cost in electricity to support those lights. He said he would also like to know what it would cost to bring in another shift for sidewalk installation and landscaping of medians.
Councilmember Jessica Cosden, via Skype, said she wanted at least to double the amount for sidewalks, which has been one of her biggest requests.
Utilities Director Jeff Pearson said the utility bills will not increase for the 7th straight year, and said he expects rate increases for the next decade based on continuing the UEP program. Six new employees will be hired.
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 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.