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Council must take control of wage goal

August 14, 2015
Cape Coral Daily Breeze

Cape Coral City Council will begin its formal review of the municipal budget next week.

Council has set two workshops, one Wednesday, one Thursday, both beginning at 4:30 p.m. in the Council Chambers at City Hall.

It's a well-detailed proposal with some good points: The $623,077,029 total/$197,499,321 General Fund budget plan starts with a cut in the property tax rate. It proposes a number of key capital improvements and it continues City Manager John Szerlag's "rolling budget" planning philosophy built upon a three-year projection.

As proposed and approved by city council, the maximum property rate that can be set for the 2016 fiscal year beginning this Oct. 1 is 6.957 mills. That's a .75 mill reduction of the current 7.7070 mills, or about $7.71 per $1,000 of taxable, assessed valuation and it's the lowest property tax rate since 2009.

The .75 mill reduction, along with an earlier .25 mill drop, keeps a promise made to reduce the property tax rate by a mill in exchange for adding two new taxes - a 7 percent public services tax on electric bills and an escalating "fire assessment" to help "recover" fire department costs previously funded with property taxes. This year's proposed 64 percent of operational cost "recovery" -up from 34 percent last year - frees up property tax revenues in the General Fund, which the city says it needs for capital improvements.

Among those capital projects?

The city manager's budget proposes to allocate $6.5 million annually for road resurfacing; $4.7 million for the construction of a fleet maintenance facility; $325,000 to finish the replacement of the city's sign shop; $2.6 million for a new fire station, No. 11, over the next two years with a $2.2 million allocation for another station, No. 12, in Fiscal Years 2018 and 2019; $300,000 a year for median improvements; $500,000 for alley paving and $1.3 million "average annual" for "capital maintenance of parks and general government facilities."

In his budget message Mr. Szerlag says the city's goal is to keep "Cape Coral one of the most affordable cities in Florida in tandem with providing a good level of service." He says based on 2013 data, the Cape ranks the fifth lowest in terms of spending per capita within the 15-city regional planning area and ninth in per capita spending among 10 comparable cities with populations over 100,000.

Nonetheless, council still has its work cut out for it.

The proposed overall budget is a near $49 million increase over the adopted 2015 budget with the proposed operations component, the General Fund, proposed to jump $26.6 million.

This budget also builds in a significant cost increase for what Mr.Szerlag refers to as "Organization Infrastructure." That's personnel costs, wages and benefits, along with related "legacy" costs, that include pension obligations and retirement health benefits.

In this budget, it's also eight new positions.

Although council has yet to actually bite the bullet and vote on Mr. Szerlag's goal to pay city workers at and above the 75th percentile - that's within the top 25 percent of self-denoted "comparable cities" - the budget continues "what will be a multi-year process toward a more fair and equitable pay structure for Cape Coral employees." The city's out-sourced "market analysis, total compensation comparison and a thorough review of the City's job classification system"... "confirmed that City employees in Cape Coral had fallen far down the ladder in comparison to other similar cities on compensation."

Ahem.

"Confirmed."

Given the verb, is anyone surprised with the results here?

Apparently, despite the 10 percent-plus raise received by city employees this year - which included tidy retroactive bonuses -the wages bar did not tick upward enough although general bargaining unit employees, and police department personnel are now at the 66th percentile.

The initial price tag estimate for the raises/raise-the-wage-bar/reach-the-75th-percentile as a MINIMUM wage base/employee position reclassification initiative was put at $23 million.

Per year at full implementation.

Post study, it's now closer to $48 million per year, according to city hall sources.

Yes, more than double the amount of the revenue diversification tax increase of $20 million-plus we were told a couple of years ago was needed for actual infrastructure such as roads and paving projects.

While we would agree the city has good workers - most of them, in fact, we would venture to say - believing the city has to pay as much or more than that paid to 75 percent of workers in comparable positions, plus above market benefits, -to get and keep good hires is laughable.

But the idea that the taxpayers can - or should - pay for significantly above median salaries along with the legacy costs associated with higher pension payments isn't funny at all.

We urge council - this council, this year - to determine whether the 75th percentile wage goal is appropriate. Not for city employees. Not for the city administration. But appropriate for the taxpayers who foot the bill while working in a market where the 50th percentile is considered competitive.

We don't think it is appropriate at all and certainly not across the board for all positions regardless of an alleged inability to attract and keep a specific sector of qualified candidates.

We also urge council to cast a skeptical eye on the continuing "we have to catch up" capital improvement proposals. While most of us will agree sidewalks and road repaving makes good fiscal sense, not every car, truck, equipment or office refurbishment proposal fits into the same "needs" vs "wants" scenario.

As with wages and benefits, every capital and services expenditure should be vetted with a "how does the taxpayer benefit" mind set.

For if we learned anything from the real estate boom and bust it is not that property tax revenues are unstable, but that spending all the increases afforded by increased valuations in the good years is not sustainable.

We urge council to keep that in mind as they begin their workshops.

- Breeze editorial

 
 
 

 

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