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New Year’s revelations

December 31, 2011
Cape Coral Daily Breeze

Cape Coral took another jab to the jaw in 2011 as the fight back to economic normalcy moved into round five.

While there were some economic gains - unemployment stats improved slightly, the steep value declines of previous years slowed to single digits, the Cape finally fell from the top tier in terms of foreclosures - the numbers were only positive in the context of, well, we've seen worse.

As, indeed, we have.

According to The Brookings Institute, housing prices in the Cape have fallen nearly 60 percent since the first quarter of 2006, the top of the real estate boom. Prices dipped again in 2011 - 8.1 percent year over year - as foreclosures continued to affect the market.

Despite the numbers, the news wasn't all bad, though, on the home front. According to RealtyTrac, the Cape tumbled from the No. 1 and 2 spots it held in years past to No. 15 for foreclosures in 2011, meaning maybe - maybe - we're getting closer to bottom.

As the Cape's primary economic driver has traditionally been construction, that would be good news for the city's un- and under-employed. Job creation - quality job creation in numbers that matter- won't happen here until new home prices become competitive with the re-sales which, unfortunately, still are selling well below the cost of construction.

Job creation thus remains the Cape's primary challenge as the city moves into 2012.

While unemployment numbers have improved - November stood at 10.5 percent as compared to last November's 13.2 - the Brooking Institute's MetroMonitor ranked Cape Coral the worst among the country's largest metros for job hunters in 2011, placing the area last among 100 areas analyzed. In 2010, we were one up from the bottom.

Again, the news isn't all negative. Manpower, a Milwaukee, Wis. based staffing agency, recently projected gains in local employment during the first quarter of the new year. According to a recent poll of employers, a better jobs picture is predicted for 2012 with 17 percent of Lee County companies saying they plan to boost staffing levels in the first quarter. While some of that likely is due to seasonal hiring, there will be some quality in-city job creation in 2012 as the 220,000-square-foot Veterans Administration clinic will open. This will create an estimated 400-plus jobs within the $131.8 million complex alone. Peripheral development, meanwhile, is already lining up within the surrounding investment zone.

Neither the stagnant economic stats nor the possible potential to get the economy moving was missed by voters in 2011.

In a near-replay of the 2009 election, voters opted, for the most part, for new faces. Lack of leadership and petty political wrangling again drove the change.

So what did we learn in 2011 and how can those lessons be applied to 2012?

Victory at the polls does not

constitute a blank-check mandate

In 2009, voters tossed out the incumbents across the board, regardless of record, regardless of ideology. The driving factor two years ago was council's failure to reach consensus on key issues, most notably how, when and whether to proceed with the Cape's billion dollar utility expansion project, which was to have been completed in 2017.

Read that as lack of leadership.

The election of 2011 swept in new faces for much the same reason.

Despite a signed "contract with Cape Coral" pledging new unity and less divisiveness; despite promises to review and revamp the utility expansion project assessment methodology; despite a lock-step, "like minded" council majority with the ability to effect change, the new council dedicated year one to establishing that majority bloc and year two to pushing what those outside their circle perceived as a political agenda intolerant of dissenting views and compromise.

The promise of more unity and less divisiveness among the city's long-standing - and always vocal - factions fell by the wayside.

Nor was a new utility assessment methodology proffered. Instead, an unpopular bid to subsidize rates by re-assessing the owners of undeveloped "infill" properties by accelerating their impact fees was tendered - and subsequently shot down by the newly elected board.

Voters apparently took note.

With the appointed member of the "Fab 5" opting not to seek re-election, the other two up-for-re-election incumbents of the Road Ahead faction lost their bids to two union-supported challengers.

Meanwhile, Dr. Derrick Donnell, a member of the council minority, won re-election with voters also opting for Rana Erbrick, a non-union supported candidate in the sole race without an incumbent.

As they did in 2009, voters selectively split the "ticket," demonstrating this go-around that collectively they were neither anti-incumbent nor persuaded via union money and effort, two theories tendered to explain election results that again dramatically shifted power on the eight-member elected board.

The lack of a winner-take-all mandate is something our new council may wish to remember lest we have threepeat in 2013.

Cape Coral City Council represents a community of distinct and diverse views. Election to office - at least here in the Cape - has yet to mean the "losing side" can be ignored.

The failure to recognize this contributed to both the failed election bids of two council members as well as the post-election ouster of the city manager, whose appointment was perceived to have been politics-driven.

Cape voters do not take kindly to being shut out nor do they have any tolerance for political agendas - especially when there simply are too many challenges at hand.

Government is NOT

a business

Politics is full of buzz phrases and among the more popular now is that government should be run like a business. That rings well but, like most campaign bulletpoints, it sounds better than it plays

Businesses are built for one reason only: To make a profit.

Government is not profit driven. It's service driven.

And like any other not-for-profit, its value to those who fund its operations is determined by how well those services are provided and yes, on a cost-to-services ratio.

The previous council and administration was absolutely correct in premise, if not philosophy: With property valuations on the decline, the Cape must reduce its costs, but in such a way as to minimally impact already reduced essential services demanded by those who pay for them.

On the cost side, examination of union contracts, wages and benefits should remain on the table although, hopefully, without the city-employees-enjoy-filet-mignon-while-citizens-eat-Puss-n-Boots acrimony that led the Cape to contract impasse despite more than $226,000 in legal bill for negotiations.

Recognition that the city's employees - union and not - have taken furlough days, forgone "step" increases and accepted wage reductions and increased pension contributions over the past few years is a good start for 2012.

Concentrating on reducing the wage structure and benefits costs for new hires is the next priority.

The days when government employees were paid less than comparable positions in the private sector are gone - wages have plummeted along with property values and personal savings account balances. The days when government made up for the wage gap with pension plans with more-than-generous employer provided - read taxpayer provided - contributions, multi-week paid vacations from year one, limitless accrual of cash-out sick and personal time, are also gone as is the tax revenue to support them.

We believe our union workers and their representatives realize this and will bargain in good faith provided the city does so as well. Let 2012 be the year to bring forward a concerted effort based on current economic realities.

It's still the

economy, stupid

Our new city council has wisely made economic development and redevelopment its top priority for 2012. Right behind that is the stalled, but related, utility expansion project, and the establishment of some financial stability for the Cape.

These are good and appropriate goals.

To that end, we suggest that council revamp the Cape's impact fee structure in 2012.

The effort correctly began in 2011 when the board agreed to waive hefty "change of use" fees assessed to businesses looking to locate into an existing commercial buildings vacated or originally planned for another type of enterprise.

Getting the Cape's numerous vacancies filled to create jobs while building a better tax base certainly made sense.

Waiving similar five-figure fees - more than $18,000 for an average home at last count, including the fees assessed by the School Board of Lee County - for residential construction makes sense as well.

Politicians and bureaucrats can talk all they want about "diversification" but the simple fact remains that the Cape lacks the infrastructure to compete strategically for the most desired job creators - major league sports and industry, light or otherwise. Large-scale parcels are scarce, we have no airport, harbor, or an I-75 interchange. We don't even have utilities where needed north of Pine Island Road.

Desirable job creation is likely going to be medical related (the VA clinic positions the city well for that); education related (the gone-nowhere academic village site remains viable); or driven by the old standby for better-than-average wages, the construction trades.

Although stymied by the still abundant number of foreclosure resales and short sales, Cape Coral has a number of desirable residential lots - and at prices unheard of since the late '80s.

Builders, though, can't compete with foreclosures selling at less than cost. Remove the near $20,000 "tax" that escalated when times were good and buyers were willing to pay almost anything popped with the real estate bubble. At the bottom of the market, it's a near 20 percent add-on.

We know, we know - and we agree -that "growth must pay for growth."

But we have no growth. What we do have are impact fees collected and sitting in clock-ticking accounts for parks, roads and schools that aren't going to be built any time soon.

What we do have are people sitting home - if they still have one - watching their unemployment run out and their kids go without.

What we have had are city officials calculating phantom money that would be "lost" if people get back to work in the trades they know and actually build something.


Prioritize job creation in 2012 and do it by courting not the elusive "clean, light industry" afar but the clean light industry right here at home - construction. Re-evaluate impact fees across the board. Call it a business incentive and help put residents back to work.

Neither booms nor

busts last forever

With our local economy moving into its sixth post-boom year, even the most optimistic among us are having some difficulty seeing better times ahead.

But they are coming.

As we learned, boom years don't last forever.

Neither do busts.

As the stats show, the slide has slowed considerably, thank goodness.

It's now time to plan for the future.

That means getting the Utility Expansion Project back on track.

One, property owners and would-be buyers have an absolute right to know where they sit in terms of timing and potential costs.

Two, Cape residents have never been opposed to the expansion of water and sewer services. The issue has always been project costs and how those costs were to be assessed to individual property owners.

To that end, make 2012 the year council revisits the various elements of the UEP that have caused so much strain and controversy: Assessment methodology, construction costs, and payment alternatives.

That means making sure the amount assessed is equal to the benefit received, rebidding in light of reduced labor and material costs, and assuring the preferred payment plans are reasonable and affordable.

For example, the city's handful of rural acreage property owners have yet to have their rightful concern addressed that a six-figure assessment for a single home is inequitable.

Council has had more than two years to review this issue but has failed to do so.

Put that easy one on the table for 2012 then get to work actually establishing a viable plan for the future.

To 2012. May it be a year for political healing, for economic recovery, and for better times for the Cape's residents and business owners. We've been through a lot in the last few years. May we all look forward to better times ahead.

- Breeze editorial



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