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Cape Council to discuss budget, charter schools

By CHUCK BALLARO - | Feb 23, 2021

Final_MSTU_vs_MSBU_COW_Presentation

The Cape Coral City Council will hold a second workshop meeting this month at 3 p.m. Wednesday at the Nicholas Annex.

City Manager Rob Hernandez will kick off the FY2022 budget cycle in a presentation that will include the Budget Review Committee to determine what the priorities will be next year.

Also present will be guest speaker, Amir Neto, the interim director of the Regional Economic Research Institute, and assistant professor of Economics in the Lutgert College of Business at Florida Gulf Coast University.

The purpose of the meeting is to guide staff in developing the budget, identify funding priorities, establish a revenue philosophy and affirm of modify the use of committed reserves.

As revenue sources stand right now, the property tax rate is expected to be 6.375 mills, the fire assessment at 62 percent cost recovery, and the public service tax on electric bills to remain at 7 percent. One mill is equal to $1 for every $1,000 of taxable property valuation. The fire assessment is a tax that allows the city to recover a portion of the cost of operations for its fire department services with the money collected going into the city’s general fund. In addition to its public services tax, the city also imposes a franchise fee of 3 percent, which is added to in-city electric bills.

One of the unknowns will be state-shared revenue reductions as a result of COVID as recovery per state will be uneven and many ups and downs in the next two years.

What city officials do know is that Fire Station 13 is set for design in 2022, and the fire and police training facilities are scheduled for 2022 construction.

Councilmember Jennifer Nelson said the city should prioritize public safety, as well as economic growth.

“Public safety is always our biggest need. But we also need to put money toward the city manager’s strategic plan for economic development,” Nelson said. “When he talked about a communications office and merging positions and making 47th Terrace a destination, that’s where we need to invest.”

Nelson said that would bring more tax dollars to the city, not only from local residents, but visitors.

Other key neighborhood investments include road resurfacing, median beautification, sidewalks, the Parks GO Bond and utilities expansion.

The question is how these expenditures are going to be prioritized. One of things the city wants to do is rely less on fund balances

Council budget workshops are scheduled for August, with the two public hearings scheduled for Sept. 2 and Sept. 16.

Council also is expected to discuss a sustainability plan for its municipal charter schools, with the system on the verge of potential insolvency in the coming years.

Nelson said she is an advocate for the schools, having served as liaison with the school board for two years, and that the city should do whatever is necessary to see them thrive.

“They are quality schools with quality staff, and anything I can do to help them reach sustainability, I will,” Nelson said. “We need to make decision to keep these schools and how to support them.”

In the past, it was suggested that the city take over the business and finance offices to save money. They also have to consider the debt service on the school buildings, for which the rent is high, Nelson said.

Council also is expected to discuss the use of committed reserves, in the hopes of enhancing financial sustainability during all economic times and get an update on the 2021 state legislature.

Also, it will discuss changing the collection method for the Lee County annual Solid Waste Disposal Facilities Assessment tax from a Municipal Service Taxing Unit (MSTU) to a Municipal Service Benefit Unit (MSBU)

The difference between them is that an MSTU fee is based on property value, while the MSBU is based on the benefit received by the property. Some property owners will pay less, others will pay more if the change is approved.

If adopted, the MSBU would go into effect for the FY2022. It would require a new ordinance to be adopted by city council, which would be needed by the Lee County Property Appraiser by June 1.

The meeting will take place in Conference Room A200. The Nicholas Annex is at 815 Nicholas Parkway.

The next workshop, or Committee of the Whole, meeting is scheduled for Wednesday, March 10, at 9 a.m. at the Westin Cape Coral Resort at Marina Village in the Tarpon Ballroom.