Cape Coral council hears wide-ranging FY2026 budget requests as staff warns revenues have pulled back

CAPE CORAL — City staff told the Cape Coral City Council at a June 5 budget workshop that the city’s FY2026 base budget has been balanced but that recent taxable‑value figures show a pullback in growth and leave little room for new recurring costs.

The city manager and finance staff presented a proposed general‑fund operating budget of $264,000,339 and described $66.47 million in additional program requests affecting the general fund (about $102.3 million across all funds). Stantec, the city’s consultant, showed five‑year “status‑quo” scenarios that forecast the city slipping below policy reserve levels without additional revenues or expenditure changes.

Why it matters: Cape Coral relies heavily on ad valorem (property) revenue and experienced reduced taxable values in the most recent June 1 update. With roughly 60% of general‑fund revenue coming from property taxes, staff said the city faces a short window to decide whether to accept reduced services, reallocate spending, or pursue new revenue measures that would affect residents’ bills.

Key facts and immediate choices - City staff presented a FY2026 proposed budget that preserves the current general‑fund millage at 5.2188 mills, but also laid out the revenue effects of alternate levers: raising the millage (each 1 mill ≈ $3.02 million to the general fund at current values), increasing the fire service assessment (FSA) recovery percentage (each 5% ≈ $3.89 million), or increasing the public‑service tax (PST) from 7% toward the 10% cap (each 1% ≈ $2 million). - The administration said it has already made approximately $11 million in adjustments to achieve a structurally balanced FY2026 base budget; staff described those cuts as pauses to capital, sidewalk and median beautification, certain parks upgrades and one‑time projects rather than reductions to core public‑safety operations. - Departments collectively requested 147 new positions across funds; 66.47 million of program requests are in the general fund and 102.3 million across all funds (including utilities and capital programs funded through rates or dedicated revenue sources).

What council heard from staff and consultants City Manager (City Manager): “the city manager has not asked for any positions in the budget this year. So to say that I've asked for a 100 plus positions is just inaccurate.” The manager reiterated the presentation would be refined and that any program additions require council direction on funding priorities. Jeff Radley of Stantec summarized the fiscal model as “just a snapshot” and urged councilors to view the five‑year scenarios as moving targets that show how different revenue and expenditure changes affect reserves and policy targets. Police Chief Anthony Sizemore said growth and hiring in recent years left the department still playing catch‑up to staffing targets; “we were not able to catch up, and still have not,” he told council, framing a multi‑year recruiting and training plan. Fire Chief Mike Russell said the department’s share of the proposed Emergency Operations Center (EOC) expansion is $3.2 million and outlined a package of training, logistics and apparatus needs tied to growth and accreditation goals.

Selected department highlights (requested additions) - Police: a multi‑year augmentation plan (project 35) that envisions significant new sworn and supervisory positions plus training‑facility support. Chief Sizemore asked council to consider phased funding to allow hiring and training capacity. - Fire: requests include firefighters and operational/logistics staff, training facility support and capital for bay‑door and rescue equipment; chief said added personnel will reduce overtime and support accreditation and frontline readiness. - Public Works and Parks: large capital and operating asks tied to pavement preservation, sidewalks, median planting and park amenities; public‑works staff emphasized preventative maintenance, facility asset planning and a desire to raise pavement condition ratings. - Utilities: multiple major water and wastewater capital projects are in design or under way (North Water Reclamation membrane design, WTP expansions, wellfield work); utility managers requested eleven UCD (collection/distribution) positions and other technical staff to deliver CIP and operations. - Development services: staff warned the permit/inspection software (EnerGov) remains a pain point for contractors and staff and noted a potential $3.6 million cost to replace or substantially upgrade the permitting system if needed. - Charter schools: OASIS Charter Schools presented a structurally balanced FY2026 operating budget that reflects increased enrollment and local capital‑improvement funding. - Emergency management: staff requested positions and a vehicle to support incident response and resilience work tied to the EOC expansion and federal grant work.

Council direction and next steps Councilors generally converged on a short list of funding priorities: public safety (police and fire) and infrastructure (particularly roads and stormwater) ranked highest. Several council members said they were reluctant to raise the property‑tax millage immediately; others said the millage rate remains an available lever if council chooses to fund a substantial portion of public‑safety and infrastructure asks rather than cutting service levels. Following the workshop the manager agreed to return a proposed budget that reflects council priorities and a set of clear scenarios showing how alternate combinations of millage, FSA and PST changes would fund different packages of personnel and capital. A tentative millage rate will need to be set on July 23; staff said July 1 property values will be used to finalize revenue estimates before that date.

What council decided at the workshop Council did not take final votes at the workshop. Instead, council gave staff direction to prioritize public safety and infrastructure in the proposed budget and to return a mayor/council‑reviewable proposed budget with options that show the revenue impact of: (a) millage adjustments, (b) raising the fire‑service assessment recovery, and (c) raising the public‑service tax. Staff will present refined scenarios and the city manager’s proposed budget at future scheduled workshops and the July timeline for tentative millage decisions.

Where to look next - Staff will produce the city manager’s proposed FY2026 budget for council review and will run the Stantec model against specific funding packages (combinations of millage/PST/FSA and targeted expenditure reductions) before council must set a tentative millage on July 23. - Council members asked staff to return costed scenarios showing smaller packages (e.g., funding a portion of police/fire requests) and to identify which previously cut items could be restored first if new revenue is approved.

Councilors, consultants and department heads agreed the coming weeks will be critical to choose between reduced services and additional revenue. The next public milestone is the July 16 regular meeting and the July 23 date to set a tentative millage rate. The city manager said staff will return with an updated proposed budget and the modeled scenarios that match council priorities.