Cape Coral council votes to raise tax after lengthy debate

When it came to the public service tax, residents’ responses bounced back and forth like a game of table tennis. A happy medium was found to the tune of 7 percent rather than the full 10.

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Poll: What do you think of the council's decision to raise the public service tax?

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In the end, council members voted as some expected. It was 6-2 in favor of the tax with Mayor John Sullivan and Councilman Chris Chulakes-Leetz dissenting. This adjustment increases the fire services assessment to 70 percent from 60 to try and recoup the 3 percent from the service tax. Council will receive more data on the second part of this revenue diversification effort in June. The final budget for the next fiscal year will be adopted in September.

A diverse group spoke before Cape Coral City Council on Monday night: parents, business owners, retirees, full-time and part-time homeowners, and renters.

Councilman Lenny Nesta motioned to shorten public comment time. It passed with a 5-3 vote, Mayor John Sullivan, Councilman Chris Chulakes-Leetz and Councilman Kevin McGrail dissented.

“If it takes longer than three to five minutes for residents to communicate, their position should not be shut out,” Chulakes-Leetz said. “I’m willing to be here until wee hours of the morning to hear everyone we work for.”

The night still went long with people lining up to speak at the podium.

“It’s a lot of emotion, and I understand the issue about taxes,” said Councilman Derrick Donnell, who felt the tax should remain at 10 percent. “When we finish talking and yelling about it ... this really is not a hard decision for me at all. You understand my vote to support this has come over years (of research).”

By 4:30 p.m. when the meeting began, it was standing room only inside council chambers. The masses were raring to begin but had to abide by the city’s agenda. They waited through two presentations by City Manager John Szerlag and Consultant Michael Burton on the issues and a 20-minute break.

The public service tax is part one of what many are calling a “three-legged stool” needed to balance the budget. The service tax is 7 percent of a household’s average monthly electric bill. The ordinance excludes the first 500 kilowatt hours. The exemption does not apply to commercial properties. The goal is to reach $20 million in additional revenue.

There are unknown variables such as the monthly use of electricity of home and business.

City officials have promised to drop the millage rate by $1 per 1,000 of taxable value. In 2008, Szerlag said the city had a $149 million budget. In 2013, it has $116 million. He said it’s time to catch-up and diversify revenue so the city can once again put money toward capital projects and economic sustainability. Council is committed to an overall average cost of $150 per household, a number many in the crowd were skeptical of. Cape Coral and Palm Coast are the only two of 41 cities in the state of Florida with a population over 50,000 who lack a public service tax.

More than one laugh was heard from the crowd when Burton noted that a “typical residential electric user has a total monthly bill of $145.15 based on usage of 1,200 kWh.” He attributed that average to LCEC reports. Financial Services Director Victoria Bateman encouraged residents to go online to capecoral.net to estimate their taxes and check the formula city staff used.

During public comments, some accused council of not cutting enough, of overspending or exaggerating the consequences with a “sky is falling” approach. They called potential layoffs and loss of services, such as parks and recreation, scare tactics. Councilman Kevin McGrail made the suggestion to lower the service tax slightly to help small business owners and put more responsibility on vacant lot owners.