City Council will explore the option of charging assessments for those properties that have water and sewer available but have not yet hooked up to the system.
The board members will get a taste of the proposal Wednesday during their Committee of the Whole meeting.
According to city documentation, the proposal would lower water rates by 4.5 percent in the third quarter of 2012, by using the proceeds from the assessments to pay construction debt.
City documentation states the assessment would affect 16,437 properties; 12,119 properties in District 1 and 4,318 properties in District 2.
About $91 million in assessment bonds will refund the $91 million in commercial paper, according to city documents.
Council recently shot down a proposed General Obligation Bond that would have affected everyone in the city, not just properties that are not hooked up, or property owners who have no services available.
Councilmember Pete Brandt thinks this new option would be better received by both council and residents, as it would add only a “few hundred dollars” to the non-ad valorem portion of residential tax bills.
He said the idea has been pursued, in part, by former mayor Arnold Kempe and Gary King before he was city manager, but were told it would not work by Mark Mason, former city finance director.
“Long before the last election and long before he was talked of for the city manager, we sat in the city attorney’s office with the former finance director and was told this wasn’t possible,” Brandt said. “We’ve been working in this direction for a while.”
The idea is a variation of Kempe’s notion of charging capital reservation fees for properties in north. Brandt thinks moving forward with in-fill assessment, and some form of Kempe’s idea in the north, will keep both parts of the city from feuding as the north and south would be paying into the debt.
With his re-election campaign in full swing, Brandt said he would support the in-fill assessment and not worry how it would affect his chances at retaining his District 2 seat.
“I can’t worry about doing the right thing at the right time because it might affect the election,” he said.
Councilmember Kevin McGrail said he would not support the infill assessment or the capital reservation fee, and that at least water should be brought to those areas in the north that have nothing.
He also thinks the city is not looking where it should, which is at the $17 million of sludge drying equipment, which is sitting idle.
McGrail said the debt could be paid off in five years and could give the city an opportunity to make money rather easily, especially if Cape Coral was drying sludge for governing bodies outside of Lee County.
“We could literally be the sludge kings of Florida,” McGrail said. “With the benefit of the technology we could pay off the debt in five years or less, and that’s without picking up any other accounts.”
McGrail also doubts the idea will make it past the discussion phase, and if it does come for a vote, he doubts the council would approve the idea of a new tax with an election looming.
“This council does not have the wherewithal to approve this, especially in an election year,” he said.
The Committee of the Whole meets 5 p.m., Wednesday, in council chambers.