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Cape Council remains split on tax rate

By CHUCK BALLARO - | Aug 11, 2022

Cape Coral City Council remains deadlocked on where the city’s property tax rate should be set.

Its advisory board, the Budget Review Committee, also is narrowly split as to where the working rate should land — at the city manager’s proposed rate or the rate at which property taxes would remain largely flat for existing property owners.

The four-hour joint workshop with the City Council and the BRC Tuesday resulted in a 4-4 concensus with City Manager Rob Hernandez told to create a budget at the rollback rate, even as he warned that doing so would hinder the city’s flexibility going forward.

Prior to the vote, Finance Director Mark Mason gave a numbers-heavy presentation to council and the BRC, explaining the highlights of the proposed city manager’s $965.3 million budget, which is based on a millage rate of 5.5568 mills and a 62 percent recovery rate for the city’s fire service assessment. The proposed General Fund, or operations budget, is $247,545,993.

One mill represents $1 for every $1,000 in taxable value of property.

That proposed budget would bring in $10,861,595 in additional revenue, increase police and fire staffing, while the FSA would bring in $32,616,730 to partially offset the cost of providing fire services.

Among the highlights were more sidewalks within one mile of schools, median improvements and the continuation of the bulk solid waste drop-off site. Also included was reserve funding for local bridge rehab, an aquatics center study, and new events such as one for New Year’s Eve.

However, not everyone was on board with Hernandez’s budget proposal.

Mayor John Gunter was still set on going to the rollback rate of 5.3692 mills, which would still give the city an additional $7 million in revenue over last year.

Gunter, who compared Hernandez’s preliminary and proposed budgets, also said he wanted to have 2.5 months in reserves, which would give the city an additional $8 million to work with.

“That’s an additional amount of money to work with. Can we use any of our five and six-cent gas tax money to pay for that study on Pine Island Road?” Gunter asked. “If we can, that’s $4.5 million we can free up in the General Fund.”

Councilmember Jennifer Nelson agreed with the mayor, saying it’s time the city gets creative and finds the $4 million the city needs to be able to get to the rollback.

Councilmember Tom Hayden warned, though, that by going to the rollback rate now, the city would have budgetary consequences down the road.

“We have to stop funding our city in one-year increments. Anyone can go through the budget and find $4 million to cut; you did the same thing last year,” Hayden said. “But that’s not positioning ourselves to become a vibrant and inclusive community.”

Councilmember Jessica Cosden was also a proponent of the proposed budget, saying she didn’t want to see the city try to move money around or raid other funds to come up with the money for projects contained in Hernadez’s proposal.

Joanne Gruber with the BRC gave its presentation, which said the advisory panel supported the city manager’s budget by a 4-3 margin.

The majority said the 5.5568 rate would provide savings for the homesteaded properties and support room for future millage reductions in the event of a recession and growth, which requires money to invest with.

The minority suggested bridging the $4 million gap between the proposed and rollback budget by budgeting staff and operating costs at 97 percent, finance some capital projects and utilize protected reserves from FEMA and COVID relief.

Hernandez said he could create a second budget using the rollback rate, but he needed rules of engagement for that.

“I don’t want to cut from Program X and you’re enamored with Program X and have you get upset and ask why I cut from Program X,” Hernandez said. “You need to tell me what’s in play and what’s not in play.”

Gunter said he wants to find a way to fully fund the police request for additional staffing, which Hernandez said could be in jeopardy if the city opts to go with the rollback rate.

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