First budget hearing Thursday
Cape Coral City Council will convene the first of two formal budget hearings at 5:05 p.m. Thursday at City Hall.
This year’s first hearing could be the most contentious in years as Council has been deadlocked 4-4 on whether to go to the rollback millage rate of 5.3694 mills or with City Manager Rob Hernandez’s proposed property tax rate of 5.5568, the rate that was included in the TRIM notice sent to property owners in August.
One mill is equal to $1 for every $1,000 of taxable valuation and the rollback rate is the rate at which the city would receive the same amount of revenue as the previous year, keeping the impact essentially flat for Homesteaded property owners despite increases in 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 millions 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.
With a statutory deadline approaching, a decision must be made. The city council must set the not-to-exceed millage rate and the budget at Thursday’s hearing, however, with half the council stuck on the rollback rate (three of whom are running for office) and the other half thus far supporting the city manager’s recommended rate, someone is going to have to switch sides or propose a compromise palatable to five members of the eight-member elected board.
At the last budget meeting on Aug, 22, two council members, Robert Welsh and Gloria Tate, expressed an interest in possibly meeting in the middle at the so-called halfback rate of 5.4631 mills, which is 1.75 percent more than the rollback rate and would add an additional $2 million in the city’s operations budget.
The proposed millage of 5.5568, which the city manager is asking Council to approve Thursday, is 3.49 percent more than the rolled back rate (and seven-tenths of a mill less than the 2022 budget) and would bring the city $4.1 million more than the rollback.
Council members Tom Hayden and Jessica Cosden have indicated they would vote against the rollback.
Mayor John Gunter and council members Jennifer Nelson and Keith Long, all running for office in November, and Councilmember Dan Sheppard, are in favor of the rollback.
The city manager’s budget has $249,278,980 in the General Fund, which funds all city operations, and $944,681,592 in all funds.
In addition, the proposed millage for the parks GO Bond is 0.0471 mills.
Other taxes and fees on property owner’s tax bills include two additional taxes the city passed following the real estate bust to reduce the city’s reliance on property taxes.. The city added a public service tax, an additional 7 percent tax on largely, electric bills, is expected to see $4 million in estimated additional revenue in FY 2023 as a result of increase in Power Cost Adjustment to .0555 from .00630 over six months. These resources are not yet included in the proposed budget.
The city also added a Fire Service Assessment, which now is set at 62 percent recovery of the cost of providing fire services. The cost of operations for the city’s Fire Department, like the cost of operation for the city’s Police Department, previously was funded through property taxes.
The city also will have $18.3 million in one-time revenues to spend on one-time expenses, up from the nearly $17 million, including $2 million in median improvements, $2.5 million in parks renewal and replacement, and $2.25 million on the Pine Island Road Project Development and Environment study.
The second and final public hearing will be Thursday, Sept. 22, at 5:05 p.m. at city hall, when the millage and budget will be approved.
City Hall is at 1015 Cultural Park Blvd.
To reach CHUCK BALLARO, please email news@breezenewspapers.com