Stantec model shows adding public‑safety positions would accelerate reserve depletion; council looks at PST, FSA and one‑time reserve options

Cape Coral — During an extended modeling session at the Jan. 30 budget workshop, Stantec presented a five‑year general‑fund forecast and ran live scenarios that showed how staffing, tax and assessment choices affect the city’s fund balance.

Peter Napoli of Stantec started from the adopted 2026 baseline ($262 million revenues, $262 million expenses) and a starting fund balance of roughly $90 million (a $60 million budget stabilization reserve plus about $29 million unassigned). The model used conservative revenue growth (4.5% taxable‑value increases in early years in the baseline) and faster expense growth (personnel and benefits). Stantec also applied an execution factor (95%) reflecting that actual year‑end spending historically comes in below budgeted amounts.

Under the baseline (current millage and PST, no additional public‑safety hires), the model showed reserves would cover near‑term needs and approach policy targets. Adding the public‑safety requests that the chiefs proposed — a phased package of police and fire personnel and operating costs — widened the gap: Stantec reported an approximate $11 million shortfall in 2027 under the modeled staffing ramp.

Council members and staff tested options live. Examples and staff estimates discussed during the session included:

- Reallocating the portion of the public‑service tax (PST) currently dedicated to charter schools (about $2.6 million/year) to general debt service or operations; staff said redirecting that portion would reduce the modeled deficit by roughly $2.6 million in a year. - Raising the PST by 3 percentage points (from 7% to 10%) was estimated in the presentation to yield about $6–7 million annually and could generate significant bond‑funding capacity if dedicated to debt service. - Expanding the fire‑service assessment (FSA) toward full cost recovery (presentation scenarios showed a 100% FSA increased revenue by roughly $14 million annually in staff estimates), which council members discussed as a more targeted mechanism to fund stations and fire‑related debt service. - Using one‑time unassigned fund balance (the $29 million noted in public comments as last year’s surplus) for one‑time capital like paving, fiber completion or a finish‑out of an existing project; staff cautioned that applying one‑time monies reduces cushions and does not solve recurring structural deficits.

Council guidance and next steps: members directed staff to treat the current baseline as the initial scenario (no immediate millage increase), produce a packet of scenario snapshots showing: (a) applying unassigned funds for targeted one‑time FY27 expenses, (b) taxable‑value sensitivity (e.g., 5.5–6% scenarios), (c) PST reallocation and PST increase impacts, and (d) incremental FSA trajectories tied to fire station debt service. Staff committed to weekly spreadsheet updates and to return with project‑level debt profiles and the requested scenario snapshots before the June budget cycle.

Quotes from the workshop included Stantec’s summary of the starting position: “We have the stabilization reserve at around 60,000,000, the unassigned at 29,000,000 for a total combined fund balance of about 90,000,000,” and a council member’s admonition to evaluate applying one‑time surplus money to paving and other one‑time projects for FY27.