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City Council sets FSA, millage and budget

September 5, 2014
By CHUCK BALLARO ( , Cape Coral Daily Breeze

The Cape Coral City Council hedged its bets on the fire service assessment, much to the chagrin of one council member who has led the rally cry for financial diversification.

Despite that, the council set its FSA and tentative millage and budget for the 2015 fiscal year at its special meeting Thursday at City Hall, all by 5-2 margins.

A resolution that supported an FSA with a 64 percent cost recovery (with a .75 millage decrease) was dropped down to 38 percent with no millage reduction as council was concerned what could happen in the event its methodology, which is currently hung up in the Florida Supreme Court, is struck down.

"We wanted an interdependency between the millage rate and the FSA, but we couldn't be confident we'd win the court case," City Manager John Szerlag said. "We wanted to be more conservative by reducing the assessment but keeping the millage the same. It's a continuation of where we are."

This upset Councilmember Rana Erbrick, who, although she has supported the "three-legged stool" approach Szerlag has championed, saw a tax increase on top of an FSA.

Erbrick said she supported the rollback rate of 7.2089, adding that council seemed to have lost its way in regards to the FSA.

"There are times when you can't do the rollback rate. I understand that. I don't have that same state of angst," Erbrick said. "I believe we will prevail in this case, and we are backing off the goal of financial diversification and asking 'What if.'"

There is potentially going to be as much as $24 million in escrow at stake with the court's ruling.

Erbrick favored to rollback rate of 7.2089 as opposed to the approved of 7.7070, which is the same as last year and which Erbrick said would raise an additional $5.5 million for the city.

"We've increased taxes on top of an FSA," Erbrick said.

This set of the chain of events that included keeping the tentative millage the same as last year, as well as approving a tentative $547.635 million (with a general fund of $146.9 million) budget, utilizing the 38 percent fire assessment, and adding roughly $800,000 to the budget, otherwise known as "Option B."

The first option had a general fund of $146.1 million.

The city wants to use the extra money for a position in the clerk's office, two positions in the attorney's office, money for the Economic Development Office and the charter schools.

Erbrick said she understood the concern by her fellow council members. In the end, only Richard Leon joined her in voting against the measures.

Jim Birch was unable to attend, but City Clerk Rebecca Van Duetekom read a statement from Birch stating his support for Option B.

"We have gone six years without doing anything. What has been neglected has caught up with us," Mayor Marni Sawicki said, adding she was not going to cut the budget at the expense of denying pay increases to city workers.

"I'm all for a rollback in any other year. But if we have a problem with the court, we need to keep the millage where it is," Councilmember Rick Williams said.

The assessment will be collected on the 2015 property tax bill along with the annual stormwater and solid waste fees.

Council also established a 20-day hardship deferral program which will allow residents whose total household income is at or below a certain level to defer all or a portion of the assessment.

Homeowners have until Sept. 24 to apply for the deferral.

The numbers decided upon cannot increase, but can be decreased when the council meets again on Sept. 18 for the second public hearing and final decision on the millage and budget.



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