Budget compromise discussed

Aug 24, 2022 By CHUCK BALLARO 4 min read

In what was expected to be the final joint budget workshop between Cape Coral City Council and the Budget Review Committee, some members of the Council said they are willing to accept the so-called “halfback rate,” provided some wanted spending is included in the budget.

For weeks, there has been a Council impasse on the property tax rate: Four have supported the city manager’s budget proposal with a rate of 5.5568 mills and four have said they want a budget based on the 5.3694 rollback rate.

On Tuesday, council members Gloria Tate and Robert Welsh said they would consider splitting the difference — the so-called halfback rate of 5.4691 mills — provided city staff can propose a budget that includes items they deem important.

“They expressed the idea of going to the halfback rate. I’m not walking away from this meeting with a clear direction on where council is. They have until the second public hearing on Sept. 22 where they have to adopt the budget,” City Manager Rob Hernandez said, adding he did not expect any more workshops until the first public hearing on Thursday, Sept. 8, at 5:05 p.m., when the not-to-exceed millage and budget are set.

A mill equals $1 for every $1,000 in taxable valuation.

Both rates under discussion are lower than the current rate of 6.25 mills but, due to a large increase in taxable valuation year over year and new construction, each would bring in more property tax revenue.

At 5.5568 mills, the rate Hernandez has recommended, the city would receive about $11.1 million more in property taxes.

At the rollback rate — the rate at which property taxes would essentially remain flat for most property owners — the city would still see an increase of more than $7 million.

The halfback rate would split the difference.

Thus far, Mayor John Gunter, and council members Jennifer Nelson, Keith Long and Dan Sheppard have said they favor the rollback. Council members Jessica Cosden, Tom Hayden, Tate and Welsh have favored the proposed budget with its 5.5568 millage rate.

Welsh expressed his frustration over the impasse, saying he wants to warn the council members sticking to the rollback rate that there are things in the city that need funding that won’t be there with the rollback.

“I’m not trying to play Whack-A-Mole, I’m just trying to compromise or see some movement,” said Welsh, who wants a code compliance position, and a manager at Pop’s Café. “We’re also funding a net negative at the rollback.”

“I want to see where the money is going to be. We had a windfall this year and we’re lucky that we did. But trends and data show nothing but downward,” Tate said. “We need to plan for next year.”

Meanwhile, Council gave Hernandez a list of one-time expenditures with $17 million of one-time revenues the city has at its disposal.

Among the 10 most sought items Council wanted to see was sidewalk funding, the PD&E on Pine Island Road, median improvements, crime center equipment, an aquatic center study, design and engineering on the Oasis football field, fire station funding, budget software and parks renewal and replacement.

When asked why the city couldn’t use the one-time revenues to plug the $4 million hole in the budget as a result of the rollback rate, Hernandez responded that it would be counter to best practices budgeting.

“Sound budget practices prohibit us from using one-time money (leftover money, grants, etc…) for recurring expenses. Our policy, and about every single public entity has this policy, you can only use one-time revenues for one-time expenditures,” Hernandez said. “The projects we presented are one and done and we don’t have to fund it in future years. That’s different than me hiring a police officer

To reach CHUCK BALLARO, please email news@breezenewspapers.com