Cape Coral council sets tentative 2025-26 millage, OKs tentative $1.437 billion budget after 4-3 votes

The Cape Coral City Council on Sept. 11 set a tentative operating millage rate of 5.2188 mills and a parks general‑obligation bond millage of 0.1608 mills, and approved a tentative operating and capital budget totaling $1,437,048,387 across city funds for fiscal year 2026. Both motions passed on 4–3 roll‑call votes. The council scheduled final adoption for Sept. 25, 2025.

The vote follows the first of two required public hearings on the city’s proposed fiscal 2026 budget. Crystal Feese, the city’s financial services director, opened the presentation by noting, "This evening marks the first of two public hearings that we are required to adopt the millage and operating budget for fiscal year 25‑26." Feese said the proposed general‑fund budget is $264,702,131 and that the combined across‑funds proposal is $1,437,048,387.

Why it matters: council members and the city’s consultant said the city faces growing gaps between revenues and expenses after fiscal 2026. Peter Napoli of Stantec Consulting told the council the city’s forecasting model shows 2026 ending fund balances are “sustained and healthy,” but warned that “the problem that occurs in ’27 onwards is the gap between revenues and expenses continues to exacerbate,” projecting an $11 million shortfall in 2027 that grows in later years unless revenues or expenditures change.

Key details and council debate - Millage decisions: Council considered four millage options described by staff: the proposed 5.2188 mills (the option the council adopted), the rollback rate of 5.1471 mills (which staff said would require identifying about $2.2 million of reductions), the not‑to‑exceed TRIM rate of 5.5188 mills, and any rate between the rollback and the not‑to‑exceed number. The city included the tentative parks bond millage of 0.1608 mills to cover debt service.

- Budget totals and adjustments: Feese told the council the proposed general‑fund total of $264,702,131 reflects upward adjustments for state shared revenues and other changes and removal of previously budgeted debt service tied to planned facility projects. Special‑revenue and capital funds were likewise adjusted, including an anticipated $15 million of mobility fee revenue and the removal or deferral of several facility projects and design work.

- Public comment and council concerns: Several residents urged restraint. One speaker said, “So it is a tax increase. Even though you keep the millage rate the same, you are increasing property tax dollar values by $12,000,000.” Other speakers said their assessments and bills have risen materially in recent years. Councilmember Donnell pressed the council to consider the impact on residents on fixed incomes and asked whether one‑time or recurring cuts could be found.

- Consultant forecast and long‑range implications: Napoli presented scenarios showing that under the currently proposed millage and current assumptions the city must consider additional revenue or cuts in future years. Napoli said balancing 2027 with a one‑time lever on millage would require roughly a 0.35‑mill increase in 2027 in the model; a larger, sustained program of new facilities and public‑safety positions would require higher levies in later years unless the city reduces planned projects or staffing.

Votes and formal actions - Ordinance 49‑25 (tentative millage): Motion to set the tentative operating millage at 5.2188 mills and the tentative parks GO bond millage at 0.1608 mills. Roll call: Lehman — yes; Long — no; Donnell — no; Gunter — yes; Kaduk — yes; Kilraing — yes; Lastra — no. Tally: 4 ayes, 3 nays. Outcome: approved. Final hearing scheduled Sept. 25, 2025.

- Ordinance 50‑25 (tentative budget): Motion to set the tentative operating and capital budget at $1,437,048,387 across funds (general fund $264,702,131). Roll call produced the same 4–3 result: Lehman, Gunter, Kaduk, Kilraing — yes; Long, Donnell, Lastra — no. Outcome: approved. Final adoption hearing scheduled Sept. 25, 2025.

What was discussion only vs. what was decided - Discussion only: Council and staff discussed alternative revenue strategies (raising the fire service assessment, trimming positions or staging hires, delaying capital projects such as fleet/facility projects and Southeast police precinct design) and long‑term revenue scenarios that rely on assessed‑value growth assumptions. Speakers and councilmembers debated fairness and impacts on residents on fixed incomes. Napoli presented modeling scenarios; council members asked for alternative assumptions (taxable‑value growth of 4.5% and higher scenarios) to see sensitivity.

- Directions and next steps: The council approved the two tentative ordinances to meet statutory deadlines and directed staff to return for the final public hearings on Sept. 25, 2025. Staff and consultants will continue to provide scenario analyses for council consideration during the final hearing and in future budget workshops.

Background and context By law the council must set a tentative millage rate before adopting a tentative budget as part of the state’s Truth in Millage (TRIM) process. Feese noted the city previously set a not‑to‑exceed TRIM rate of 5.5188 mills on July 23; the proposed millage of 5.2188 mills is roughly 7.22% above the rollback rate of 5.1471 mills. The budget includes personnel increases that add public‑safety positions (Feese noted 19 added fire department positions and 16 police positions in the proposal) and other planned capital and infrastructure work, some of which staff deferred or removed from the tentative budget to achieve balance.

Next steps The council will hold final public hearings on both ordinances on Sept. 25, 2025, when formal adoption of the millage and fiscal 2026 budget is scheduled. Staff will bring updated forecasts and any council‑directed adjustments at that hearing.