The Cape Coral City Council voted to use its budget stabilization reserve to fund the tentative 2026-27 budget shortfall, which stemmed from a decrease in state shared revenues, during its first budget hearing last week.<\/p>\n
\u201cWe have over $62 million in budget stabilization reserve,\u201d Council member Rachel Kaduk said at the hearing on Sept. 10. \u201cWe are at the high end. We can shave off $1.6 million of that.\u201d<\/p>\n
Mayor John Gunter said he would support filling the gap of $1.6 million instead of moving forward with the cuts presented. He said since they are down to the eleventh hour, he would support using the budget stabilization fund this year.<\/p>\n
\u201cHopefully next year we regroup and get that information a little sooner, so we can make a better decision,\u201d Gunter said. \u201cPersonally, I don\u2019t think we have enough time for the eight of us to go through a budget and say cut this and keep that. It\u2019s simple to use the budget stabilization and then we are done.\u201d<\/p>\n
A motion to use the $1,642,783 out of the budget stabilization reserve \u2014 and to remove the identified cuts \u2014 was approved 7-1, with Council member Dr. Derrick Donnell cast the sole dissenting vote.<\/p>\n
The council also approved a tentative operating millage rate of 5.1471 mills \u2014 the prior year\u2019s rate \u2014 which is 1.35% below the rollback rate, and a tentative 0.15544 millage rate for the parks general obligation bond, which Donnell and Council member Bill Steinke voted against.<\/p>\n
The council also approved a tentative budget of $1,442,386,480, with Kaduk, Donnell and Council member Jennifer Nelson-Lastra dissenting.<\/p>\n
\u201cFor me, I thought because we are just doing tentative here, and we are coming back to adopt the budget, that we could all do our homework and come back with exactly (what) we want to cut, so we are not here all night, and that is why I suggested using the BSR right now,\u201d Kaduk said, referring to the reserve fund. \u201cI don\u2019t really intend to do that, of course, because we can come up with our own cuts, or we do have that to fall back on. I was just throwing out options showing that we do have the $1.6 million here.\u201d<\/p>\n
\u201cFor me, I would like to support a tentative operating capital budget at $1,440,743,697 and come up with those additional cuts ourselves before we adopt a whole budget,\u201d she added. \u201cI will go home and do homework, I promise I will.\u201d<\/p>\n
Before any voting took place, the council was taken through a presentation by Deputy Financial Services Director Nicole Reitler.<\/p>\n
Among the changes that have occurred since August was a significant decrease from state shared revenue from the city\u2019s forecast of $2.2 million, which was not anticipated, she said.<\/p>\n
\u201cGenerally, we calculate a conservative 2% increase. Right now, it\u2019s a 6-8% decrease. There was no indication from the state that this was going to decrease this year. This is extremely unexpected,\u201d Reitler said.<\/p>\n
The city received the information on Aug. 31.<\/p>\n
\u201cIncluding $70,000 decrease in communication services tax, a $1.8 million decrease in our local government half-cent sales tax and $389,000 decrease in municipal revenue sharing program,\u201d she said.<\/p>\n
City Manager Michael Ilczyszyn said the state\u2019s shared revenue is population-based.<\/p>\n
\u201cThe population increase we do not believe to be accurate,\u201d he said.<\/p>\n
Assistant City Manager Mark Mason said the Bureau of Economic and Business Resources uses forecasters throughout the state that come up with a population estimate.<\/p>\n
\u201cThey do it earlier in the year, but because the governor didn\u2019t sign the budget until right before July 1, the economic group that does the calculations worked on it over the course of the next month and a half and issued out the information at the end of August,\u201d he said.<\/p>\n
Metro Forecasting, Ilczyszyn said, is assisting the city in challenging the population statistics.<\/p>\n
\u201cWe are hopeful we are successful. If we are, at a later date that would be adjusted,\u201d he said. \u201cThis is all happening very quickly, it was done this week. Nevertheless, we still have to go into the budget balanced \u2014 heading in, we have to act as if we are not successful and be balanced. If we are successful with the challenge, we will adjust it with a budget amendment.\u201d<\/p>\n
Steinke said he is sympathetic to where the staff currently sits.<\/p>\n
\u201cWe already used the interest earnings to alleviate having to make cuts like this before. Now we are in the position to create revenue additionally, however that happens. I think we have to recognize the $2 million income stream was not in our control and now we have to bob and weave somehow,\u201d he said.<\/p>\n
With direction from the City Council at the August workshop, staff added interest earning to cover the one-time expenditure for the Northwest Softball Lighting of $1.3 million. Reitler said a RedSpeed transfer in to the general fund of $150,000 to cover safety initiatives was also added and recognizing the Tourist Development Grant award of $257,051. She said it brought the total general fund revenues to $284,541,013.<\/p>\n
In order to balance the budget, Reitler identified areas of expenditures, such as removing five vacant positions.<\/p>\n
She went over options to achieve a millage rate of 5.1471 with the deficit of $1,642,783, which included such areas as playground replacement, special events, and the On the Move publication.<\/p>\n
\u201cWe understand the 5.1471, the variance from 5.1998 to 5.1471 is the $1.642 (million). In August you identified what you wanted to make up that $1.642 (million). On Aug. 31 we got a $2.2 million hit. We took your starting numbers, your starting list, and utilized that to take away that $2.2 million in expenditures. We had to cut there first before we could start focusing on that 5.1471,\u201d Reitler said, adding that required a list of additional expenditures to cut.<\/p>\n
The second and final budget hearing will be held Thursday, Sept. 24, at 5:05 p.m. in City Council chambers, at 1015 Cultural Park Blvd., Cape Coral.<\/p>\n
The hearing is open to the public.<\/p>\n