Fort Myers staff outlines $297 million in new 2026 capital projects, warns of $170 million in new debt service

City Manager and finance staff presented a draft Fiscal Year 2026 capital improvement program (CIP) and debt plan at a Fort Myers City Council retreat, outlining new projects, proposed bond sales and the near-term budget implications.

The presentation listed about $297,400,000 in projects being added for 2026, including a planned $50,000,000 allocation for new police department facilities, $2,100,000 for Fire Station 18, capital dollars for parks and recreation projects, and substantial utility plant work such as central wastewater upgrades and reclaimed-water work. Finance staff said a new five‑year CIP will be adopted at an upcoming council meeting.

Why it matters: staff told council the city is preparing to issue new debt for high‑cost projects and that the additional borrowing will materially increase the city’s annual debt service. The presentation said a combination of a general obligation bond program (up to $75 million of geo bonds identified for parks and related projects) and additional debt to finance the new police headquarters and other line‑of‑credit draws could create roughly $9.3 million to $12 million in added annual debt service on top of the city’s current roughly $15 million annual governmental debt service.

Details presented by staff included: a table that staff summarized as $297,400,000 of new capital projects in 2026 across categories (utilities, infrastructure, parks, public safety, technology and city structures). Utility projects are a large share of that total; staff identified multi‑year additions such as central wastewater plant upgrades and reclaimed water work that carry large multi‑year price tags. Staff said the city will likely issue GEO bonds in spring next year and also finance construction of the police headquarters with voter‑backed debt that would be repaid by a separate millage.

On how the bonds would affect taxpayers, staff gave a working example: issuing $75 million of GEO bonds with a 30‑year term at the then‑projected market rates would produce an annual debt service payment in the roughly $4.7 million range and would require a separate millage levy estimated in the presentation at about 0.345 mills based on current taxable values. For the larger combined borrowing scenario (an illustrative $170 million in future debt), staff projected roughly $7 million to $10 million in additional annual debt service depending on term and market interest rates; staff said an interest example used in the presentation was about 4.85 percent.

Council members asked staff about repayment options, refunding/refinancing opportunities, timing and whether the city should phase projects to avoid a large near‑term debt spike. Staff said there are options to structure repayment (level debt service, front‑loaded, or other structures) and that refinancing opportunities would be pursued if they generate meaningful savings.

Funding sources cited in the presentation included a mix of pay‑as‑you‑go operating funds, utility reserves, state revolving fund (SRF) loans for water/wastewater work, line‑of‑credit draws already in place, community redevelopment agency (CRA) proceeds, CDBG funds for some stormwater work, and proposed GEO bonds. Staff also described plans to issue general revenue bonds for the police headquarters and noted that some projects listed for 2026 will be multi‑year efforts requiring additional appropriations in later years.

Staff emphasized the council will consider adoption of the five‑year CIP and the FY2026 budget at a forthcoming council meeting; the debt issuance and separate millage proposals will be part of later formal actions. Council discussion focused on timing, whether some projects should be delayed, and how to use grant or CRA resources where feasible to reduce the need for borrowing.

Taper: staff recommended the council review the CIP and the proposed financing plan at the scheduled budget hearings and prepare for a discussion of bond timing and repayment options during adoption of the FY2026 budget.