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New Year’s revelations

December 31, 2015
Cape Coral Daily Breeze

If national recognition is any indication of economic health, Cape Coral has climbed its way back to normalcy.

2015 may well be remembered as the year recession-slammed Cape Coral - noted as one of the hardest-hit communities in the country for property devaluation and foreclosures following the crash of the housing market in 2007 - bounced back to the "top 10" spots the national "best" lists including:

No. 1, Most Vibrant Market in the U.S. for Job Growth, Manpower Group, a Milwaukee-based staffing giant.

No 1, Highest Net Local Job Growth, MoneyHub

No. 3, Future Job Growth, Forbes Business

No. 4, Expecting Best Economic Growth

No. 4, Best Bounce Back Market

No. 6, Fastest-Growing Metro Area, MoneyWatch

No. 8, Best Places for Retirement, Bankerate

No. 9, "Boomtown" for economic growth, SmartAsset, a web site devoted to finance.

Why?

The housing market continues to stabilize with an overall increase in property valuations of nearly 8 percent in 2015, single-home permitting up 63 percent over last year and a veritable wealth of major projects are in the queue for 2016, including a $10 million, 35,000-square-foot conference center at the Westin Resort at Tarpon Point that will add a total regional benefit of $33.44 million in its first three years of operation.

Wahoo!

Good news is good news indeed for a community that not only weathered, but rebounded, from the implosion here that the national press called the catastrophic housing collapse epicenter.

If anything, the national analysts were slightly behind the curve already acknowledged by city residents.

Cape Coral voters gave the status quo a vote of confidence in 2015 when four city council seats - and one previously hotly contested charter amendment -came to the ballot.

First, one of the elected board's members, Rana Erbrick, went unchallenged in her bid for re-election.

Voters then re-elected a second incumbent, John Carioscia, who survived a multi-candidate primary to beat a change-is-needed challenger in the general election -all while running strictly on his four-year record and promising more of the same.

Finally, voters approved an amendment eschewed in the past and, in the process, gave city council members a significant boost in compensation by changing the by-registered voter methodology to a flat rate of $32,600 for council members and $36,600 for the mayor.

So what does all of this mean for 2016?

Residents are pleased with the city's course - for the most part

Voters largely endorsed the Cape Coral City Council's collective philosophy of diversifying its revenue streams and reprioritizing capital and infrastructure needs. That is clear.

However, the 2015 municipal election also shows the year was not without controversy centered around spending policies, and these will issues remain on the table to be addressed by the newly composed city council in the new year.

Among them:

Employee compensation

As the new budget year approached in 2015, the elected board continued to wrangle with a wage "benchmark" proposed by the city's administration.

Saying the city needs to be able to retain good employees while attracting top-tier talent, City Manager John Szerlag both proposed and embarked upon a plan to compensate city workers at the "75th percentile" for like positions.

This "pay parity" plan, estimated to add $25 million to payroll annually at full implementation, was proposed to be phased in over time.

Council, though, has yet to vote on the plan, described during the election debates on the issue as an "administrative goal" rather than a council plan.

We urge the new council to address this "administrative goal" in 2016 by voting to either accept or reject the benchmark. Otherwise, the "goal" will do two things: One, set the tone for any union contract negotiations in the future and two, continue its creep into the administration-proposed working budget without council ever endorsing the full wage plan.

We are on record as opposing the benchmark and that position will continue into 2016 for a variety of reasons: We take issue with union and employee involvement in collecting the data on which the city is predicating its "employees are underpaid" position; we believe the city should have done its comparisons closer to home - i.e, Lee and, perhaps, neighboring counties, rather than self-determined "like" cities across the state; we think setting the bar at the 75th percentile across the board is way too high; and finally, we question the wisdom of bar setting at all in a collective bargaining environment.

Let us be clear, here.

We have no issues with the city's multiple unions. Their job is to get the best they can obtain in terms of wages and benefits for the members they represent. We acknowledge the concessions made during the economic bust years when tax revenues plummeted.

We do, however, have major issues with the city's administration and possibly council doing the unions' job for them by proffering the underpaid, non-competitive benefits argument.

That's the heart of the problem with collective bargaining in the public sector, or at least here in Cape Coral - it often seems everyone is sitting on the same side of the table.

That's why the unions, and the candidates they supported, were demonized - unsuccessfully, we might add - in the political rhetoric that dominated the 2015 election.

The sad thing is the city fully understands cards-on-the-table bargaining doesn't work. That, in fact, is why council members and administrative officials alike are touting a negotiate-from-strength philosophy in the Cape's dealing with the LCEC franchise agreement renewal.

Personnel costs are one of the issues where there continues to be debate. City Council needs to take a leadership role here in 2016.

Spending

A second issue that proved divisive in 2015, and was a candidate dividing line as well, is council spending -needs vs wants.

Cape voters showed they have little issue with spending on quantified needs. Despite a revenue diversification plan that added two new taxes while shaving the property tax rate by a mil for an overall tax bump, one incumbent went unopposed while John Carioscia was easily re-elected despite a concerted upset effort that targeted his alleged "tax-and-spend" voting record.

This does not mean voters wrote a blank check, however.

Unopposed Rana Erbrick is one of the council's most conservative members, newly elected Marilyn Stout centered her platform on fiscal responsibility, and newly elected Jessica Cosden promised to scrutinize all expenditures.

With Councilmember Jim Burch saying he is heading into 2016 with an eye on the numbers, and Councilmember Richard Leon on record as opposed to certain spending initiatives, the board appears to be headed in the right direction.

We urge Council to stay the course, summed up well by some of its members, including Councilmember Erbrick and Councilmember Burch: Just because revenues are up doesn't mean it's time to spend. As the recent past has taught us, in the long-term, that's the road to fiscal perdition.

LCEC and the franchise agreement likely

to dominate 2016

The year 2015 opened with an issue that likely will be the top priority in 2016. In terms of impact, any decision on the LCEC franchise agreement renewal could resonate for decades to come.

Last January, the city received an analysis and feasibility report concerning the possible "municipalization" of electric services in the city from,Spencer Consulting/WHH Enterprise. That report set the foundation to a parallel track en route to a decision on whether the Cape should become its own utility provider or whether LCEC should continue to service the community as it has since Cape Coral was little more than a developer's dream.

With the current 30-year franchise agreement set to expire at the end of 2016, much of 2015 was devoted to fact-finding on the part of the city.

The city administration's working conclusion? The city of Cape Coral can provide comparable service at comparable rates and still have an estimated $12 million to spend on "value added" amenities such as underground lines and street lighting each year.

With the cost of purchase estimated at $450 million in that January report, critics of municipalization have disputed those numbers, pointing out that LCEC is a not-for-profit co-op, overseen by a ratepayer-elected board and owned, in fact, by its members - including those very same Cape Coral taxpayers who would then have to foot the bill for purchase.

In 2016, the Cape Coral City Council will decide whether to sign a new franchise agreement or whether to pursue municipalization, a process that could take three to five years -longer if the matter goes to court.

Thus far, the issue of municipalization has pretty much run along one rail of that parallel track. While the city has devoted much time and money to its fact-finding process, little has been spent on the negotiating process to put a new franchise agreement on the table.

While City Manager John Szerlag and LCEC CEO Dennie Hamilton had a pair of meetings in the wake of a controversy over a stop work order issued by the city for a transmission line rebuild, and while the two and a staffer each met in December, the "core negotiation team" established by the city and LCEC has not met although both entities agreed in May to meet monthly. Mr. Szerlag and Mr. Hamilton agreed at the December meeting to begin team meetings sometime in the future.

Meanwhile, as of Wednesday, the "boilerplate" franchise renewal put on the table by LCEC in March has received no counter.

Given the amount of time and effort devoted to the "fact finding" and its purely positive conclusions thus far, we fear city staff may have its collective mind made up that municipalization is the way to go.

We continue to disagree.

But either way, the LCEC franchise matter is a top tier issue - if not the top issue - for the city of Cape Coral in 2016.

Again, Cape Coral City Council must provide definitive direction that if the Cape is to continue to explore municipalization, the "tracks" must be given at least equal emphasis. Otherwise, the process will lack options, save the one given the gas.

We have two other recommendations as well.

One, when the negotiation meetings actually commence, notice the sessions and open them to the public as they should be if the city's negotiation team has any bargaining ability granted to it at all. Transparency is always a good thing, especially when public money is at stake.

Two, if, following public workshop meetings and public hearings in 2016, Council's best decision is municipalization or some similar track, then commit now to bring it to the residents via referendum. That is what would have to happen if the city were to attempt to finance the purchase through General Obligation bonds. The fact that the city might be able to wriggle off the hook of a taxpayer OK by seeking alternate funding is not an acceptable alternative.

At least not for those of us who would foot the bill.

Happy New Year.

May 2016 be the best one yet for Cape Coral and all of us who live and work here.

- Breeze editorial.

 
 
 

 

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