City of Naples CFO Says the New 2023-24 Budget Is “Something Council Should be Proud Of”

A special City Council meeting was held on September 20th where City Council approved a new  2023-24 Budget of $197 Million and to set the Millage Rate at 1.17.

Assistant City Manager and CFO Gary Young made a detailed presentation on the budget and the reasons for the Millage rate change from 1.15 to 1.17.  

Watch the 20-minute presentation by opening the hyperlink HERE: Naples CFO Gary Young explains the City Budget

An email had been distributed to City residents by Councilman Blankenship encouraging them to  “fight” what he referred to as a “massive tax hike”.   It was learned at the meeting; however, that the Mill rate change represents only twenty dollars annually per million dollars of property value.  

Former Councilman Gary Price publicly admonished City Council on increasing the Mill rate after a hurricane, but it was pointed out that Mr. Price had voted for an even larger increase to the Mill rate (1.18) after hurricane Irma which was passed at that time.    

Councilman Ray Christman regarded the rhetoric as politically motivated  (there will be a Council/Mayoral election next March) and he asked the public to take a broader view and consider the facts.

The presentation by CFO Young included a near 20-year trend analysis which illustrates that our Mill rate has gone up and down as a result of things that affect us.   The current sitting Council reduced the Mill Rate to 1.15 in 2020 from the 2019 rate of 1.18 and has maintained the 1.15 rate for the past three years.  The proposed 1.17 is less than the most common Mill rate over the last twenty years of 1.18.

Collier County’s property assessments and the recent increase in property values has resulted in higher taxes.  Many in attendance did not realize that the City has no input to the assessment process and the City only receives a fraction of every dollar collected by the County.  

Mr. Young said it is Important to know that the City receives only 12% of the taxes collected from our residents by the County with which to fund the local budget and noted that 46% of the collected taxes go to the schools,  39%  go to others items in the Collier County budget, with the remaining allocated to County miscellaneous expenses.

The City of Naples is reported to be among those with the lowest taxes in the State and that our Mill rate is significantly less than our neighbors,  Marco Island, Sanibel, Cape Coral, Fort Myers.

Mr. Young said Fund balances get spent, especially after events like a hurricane, and a rate hike is not unusual to replenish the emergency and general fund balances to protect residents and the City as well as to meet policy requirements.  

Our City fund balances have been adjusted accordingly over the years and a fund balance policy calls for parity between the budget and reserves; - If the budget increases the fund balance must be maintained accordingly.

An emergency reserve is required to be 10% of the prior year’s budget and additional money must be put aside now.

Public safety accounts for 59% of the City budget.   Other spending includes the $18 M cleanup after Ian as well as planned infrastructure upkeep and improvements, parks, critical water quality projects, hurricane related repairs such as The Naples Pier estimated at $25 Million alone, and street paving the cost for which has increased 50%, as well as funding competitive pay for first responders and general employees which is biggest swing in the budget.

Young ended his presentation saying  “Our job is to provide public service and to improve the quality of life of the residents and this budget that Council put forward reflects those priorities and Council should be proud of that.”

Councilwoman Petrunoff reminded the public that in 2020  leadership from Port Royal, Royal Harbor, Park Shore and others came to Council chambers to demand Council fill police vacancies and increase pay and benefits to attract more qualified applicants.  Council has provided historic raises to our first responders and improved their retirement to bring their pay up from cuts made by Council a decade earlier that were not previously corrected.      

Petrunoff remarked on current spending for stormwater projects left previously unfunded for over a decade, including the removal of the beach outfall pipes which in spite of demands of the State more than 12 years ago to remove them was left unfunded.  This Council has funded and begun the project.  Inadequate pay for personnel and several environmental and stormwater projects lagged over that decade, even at a time the Mill rate was 1.18.    The current expenditures are aligned with the priorities the people have demanded.

Councilman Christman added his remarks beginning with the mis-information circulated by Councilman Blankenship going on to explain that when it comes to supporting spending Councilman Blankenship is eager to do so, who earlier in the week joined in supporting a planning study for the section of Gulf Shore Boulevard  known as the Miracle Mile which would utilize a full half of the additional revenue generated by the millage increase.  

Christman said in spite of Blankenship’s recent emails encouraging people to come out and protest this “horrendous” tax hike, he doesn’t see the kind of self-restraint Mr. Blankenship talks about nor any ideas from him about where the City can cut back on expenses.

Councilman Christman went on to point out critical projects and policies that prior City Council’s had not addressed for years, saying  “Added to the hurricane repairs we have had to correct 20 years of stagnation of our personnel costs who have been previously underpaid;  our emergency reserves are 20% less than they were a couple of years ago . . . . we could be struck by an event that would cause those reserves to disappear completely.” 

See Councilman Christman’s comments by highlighting and opening the hyperlink  HERE:  Council Christman Budget Comments

A resident in attendance suggested that the annual rent of one dollar a year paid by the Naples Airport to the City be rectified in the City’s lease with the Airport.   He referred to the rent as an unjustified rent subsidy for an airport that has $68 Million in cash and investments citing the Airport pays one dollar a year on a piece of property with an estimated tax valuation of $170 Million.

(Note):    The City lease with the Airport was signed in 1969.  It is a 100-year lease (with 46 years remaining) at $1.00 per year.

A resident of the Crayton Road area commented that the problem lies with the County and their property assessments.   Commercial assessments done at the County level are taxed at a lower rate than residential which is the real problem.  He said commercial properties have been under assessed using the Edgewater Beach Hotel as an example. The property sold for $55 Million in 2013 but is only assessed at $35 Million;  he suggested the property may be worth $150 Million now.

The same resident said the value of the Naples Beach Hotel property could be a billion-dollars and their assessment is even more out of line. 

The resident said we must look in to the disparity; correcting it could be a huge source of property  tax relief to our residents.  He suggested that the City do something to help fix this with the County.

A video of the full Council Budget Meeting can be viewed by highlighting and opening the City’s hyper link HERE:  https://naples.granicus.com/MediaPlayer.php?view_id=14&clip_id=4585

A subsequent article from Gulf shore Business on the meeting can be read by highlighting and opening the hyperlink HERE:    Gulf Shore Business Budget Article