Approved budget: Tick downward in tax rate but not to the ‘rollback’
Cape Coral City Council on Thursday passed the city budget for the upcoming 2021 fiscal year at the second and final public hearing at City Hall.
Council was also warned that the city faces shrinking reserves in the coming years, as well as great uncertainty created by the pandemic.
The elected board approved the “compromise” millage of 6.375, or $6.375 for every $1,000 in taxable property valuation, which was lower than the current rate of 6.4903 mills, but not the rollback rate of 6.2428, the rate at which the city would have brought in the same amount of revenue as increased property valuations and new construction have added to the tax rolls.
The budget also includes an additional property tax of 0.30 mills to pay back the city’s $60 million General Obligation Bond for city parks.
Nobody changed their minds on their views on the millage. Councilmember Rick Williams believed they should have kept the millage alone.
“This cut takes $1.8 million out of the budget. We don’t know what will happen with COVID in November or if we will have a crash in property values,” Williams said. “If we’re going to cut the millage, let’s give the residents something worthwhile.”
Councilmember Lois Welsh said in her gut she felt the city could find a way to get to the rollback rate.
“I’m an eternal optimist and I believe this will be a big building year. I’m not fearful of what could happen,” Welsh said.
The lone council member on the fence was John Gunter, who said there was too much uncertainty to bring the millage down further.
“I would prefer the rollback rate, but I can’t in good conscience do that. We anticipate using $9 million and $7 million in the next two years in funds and I’m concerned about that,” Gunter said. “We don’t know where property values will be next year with COVID.”
Welsh and Williams voted against the millage in what was a 6-2 Council vote.
As for the budget, Council was unanimous in its approval. The budget, totaled at $978,433,885, includes $256,793,157 in the General Fund,which is the city’s operational fund.
Highlights of the budget include the $1.2 million cost of sworn firefighters joining the city’s health plan, $4.9 million for the construction of Fire Station No. 12, $3.5 million for a fire training facility, and $6.7 million for a police training facility.
City staff warned the council that the city fund balances could be in jeopardy in the coming years. With the 6.375 millage the city should have 2.79 months in reserves in FY2021. However, that amount will decrease as time goes on, to 2.10 months in FY22, 1.56 in FY23, 1.20 in FY24 and .88 in FY25.
The city would prefer to have three months of fund balances in reserve (but no less than two) as it helps obtain good interest rates for loans and is good for the city’s credit rating.
Mayor Joe Coviello said the city has a lot of public service projects coming up, so being able to trim the millage was a good thing. He also said there is a lot of money that’s been unassigned that the city can draw from.
“We have funding available we can plug in if we loose money on the gas tax. I think the budget is very solid. There is a concern about having to take from the General Fund in next year’s budget. There was a lot of money pushing into that reducing our balance in reserves,” Coviello said. “There is funding we haven’t utilized and that’s a safety net. There’s FEMA money we have in disaster relief that I would like to add to and we have more than $2 million from sale of surplus property.”