City Council begins to set ‘not-to-exceed’ tax rates
With City Manager John Szerlag having released his proposed operating budget for Fiscal Year 2018 late Friday, City Council began the process of setting the “not-to-exceed” rates on key components at Monday’s meeting at City Hall.
Szerlag has proposed a reduction in the property tax millage rate of .25 mils, which is a 3.8 percent decrease in the overall rate from 6.75 last year to 6.50 mils. The proposed reduction is the fourth in the last five years. The city has trimmed the millage rate by 18 percent since 2013.
Rates for vacant lot mowing, solid waste removal, stormwater user fees and the Fire Service Assessment were set Monday night at staff recommended “not-to-exceed” figures. Those rates can be adjusted down later during the budget hearing process. Council-members Richard Leon and Rana Erbrick voted no on some of those rate requests.
The Fire Service Assessment for 2018 is proposed to increase 8.26 percent over last year. The rate jumps almost $12 for Tier 1 properties along with a reduction in the Tier 2 portion of the rate methodology. Tier 1 is the rate paid by all properties in the city set at $134.57 for 2018. Tier 2 adds to that the amount paid according to the value of improved properties. The new tentative rate is $2.09 per increments of $5,000 in taxable value, or 31 cents lower than last year’s rate of $2.40.
Fire Chief Donald Cochran said the rates include continuing the city’s “capital catch-up” plan to purchase new equipment and construct new fire stations, both of which went unfunded during the economic downturn years.
“We are using small annual increases to deal with capital improvements, trying to do it a little at a time,” said Cochran.
Councilmember Jim Burch questioned the millage rate reduction and its relationship to the 8 percent FSA increase.
“I don’t want to see incremental increases year after year,” said Burch. “You have to remember why you are doing this. The FSA should be tied to the millage rate reduction. The two rates should offset each other.”
Councilmembers John Carioscia and Erbrick opposed Burch’s view. Both were on council when the FSA was established five years ago.
“At no time was it a dollar for dollar reduction,” said Carioscia. “It was put together for financial sustainability. We can only cut what we don’t need.”
“It’s kind of interesting that the FSA will bring in $2 million more which is about equal to the .25 mil reduction,” said Erbrick.
Szerlag’s proposed 6.50 millage rate will generate property tax revenue of $82.3 million, which is $1.9 million more than the rollback rate of 6.344 mils. The budget also maintains the public service tax rate at 7 percent.
The public service tax and FSA will generate a total of $33.4 million in revenue for the city.
Erbrick and Leon cast dissenting votes in the 6-2 tabulation approving the tentative rate.
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Vacant lot mowing rates in the city’s four districts will remain basically the same, some going down slightly. The rate for District 1, basically everything south of Pine Island Road, is proposed to remain the same as last year at $65.54 for mowing seven times a year. The rates in the northern three districts see a reduction of $1.46 to $1.48 to $49.64 or $49.62.
Staff explained the higher rate for District 1 on there being fewer vacant lots in the south that makes for increased travel times for contractors between lots.
Solid waste removal rate requests came with two options. One passes along an 8 percent increase to the Lee County disposal fee charged to the city’s hauler, Waste Pro. The second option tacks on a 1.4 percent increase requested by Waste Pro. Council approved the second option of $190.19 with Erbrick voting no. The rate is higher than last year’s rate of $181.13.
A much greater hike in the recommended rates accompanied the stormwater user fee, which was set at $111 for 2018. That’s an increase of $24 over the 2017 rate of $87.
Staff explained it continues to follow a consultant’s rate analysis to step up stormwater fees in order to provide sustainability through growth in the level of services and expansion.
The fees support the city’s catch basin and drainpipe replacement programs along with swale grading and drainage management, canal dredging, weirs and maintenance. Staff reported a savings of $1.1 million from its outside contract dredging budget for 2017, a portion of which will be spent to purchase new dredging equipment that city in-house crews will use instead of outsourcing the majority of the dredge work.
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The proposed budget components will be discussed in the coming weeks at council workshop public meetings on Aug. 8 and 10 and adopted at two public hearings on Sept. 7 and 21. The 2018 budget goes into effect on Oct. 1.