Cape Coral staff propose $3 million economic development reserve to fund incentives

Crystal Feas, the city—s Financial Services Director, told the Committee of the Whole on Sept. 10 that the administration is proposing an amendment to the city—s financial management policies to create a dedicated economic development reserve.

Feas said the reserve "will be replenished each year so that it has a balance of $3,000,000 at the start of each fiscal year." She told council members that $3 million was already appropriated through "budget amendment number 3" and that a formal resolution to update the policy and memorialize the reserve is scheduled for the Sept. 17 City Council meeting if the council concurs.

The city manager clarified how a committed reserve functions in the budget book: it "sets a priority for staff and for council in the budget book," meaning if the balance falls below the $3 million target the budget process will prioritize returning the account to the $3 million level. Feas and the manager said the reserve is intended to fund infrastructure improvements, business attraction and retention, workforce development and other projects that "advance the city's economic goals." Feas also said a portion of the reserve balance is already committed through an economic incentive agreement between the city and Bones Brands.

Councilmembers asked how creating a committed reserve differs from using unassigned general-fund reserves on an ad hoc basis. Feas answered that codifying the $3 million commitment in policy earmarks those funds for economic development each year and makes replenishment a budget priority rather than an ad hoc decision.

Next steps: staff will present a resolution on Sept. 17 to amend the financial management policies and formally establish the economic development reserve.

Ending: The presentation closed with staff asking if there were any additional questions; none were raised and staff moved on to the next agenda item.