City staff warn property-tax reform could force rethinking $182M in projects

City staff on April 13 told the Fort Myers City Council workshop that uncertainty around state property-tax reforms and a requirement to demonstrate 10% budget cuts could force the city to pause or rethink large capital projects.

"Currently, as of this moment, there are no tax reform measures moving forward," Chris Tenney, the city's director of financial services, said, but he warned that "it still could potentially be added in a special session" and that a constitutional amendment would need to meet an August certification deadline to appear on a November 2026 ballot. Tenney said one widely discussed proposal — full elimination of the non-school homestead exemption — would cost the city about $8,750,000 in revenue, and that roughly 43% of city properties claim that homestead exemption.

Tenney gave detailed budget figures for several capital projects to illustrate exposure if revenues fall: he said the police headquarters has a current budget of $87.8 million with $23.9 million spent and approximately $61 million available; he estimated a middle construction cost scenario that would bring the total to $157.8 million and a debt need of about $146.3 million. He listed other projects, including Fire Station 18 (current budget $6.3 million; estimated total $7.3 million) and a STARS expansion (total budget $31.9 million; estimated debt roughly $18.4 million) and said combined near-term borrowing could approach $182 million, with estimated annual debt service just under $11 million.

Councilmembers pressed staff on what keeping the millage rate flat would mean for revenue and whether staff had modeled scenarios. "If that space goes up, you know, we would get more revenue out of that one mill," Tenney said, explaining how a full mill generates about $11.9 million at current values. City Manager Lawing and Tenney said staff will present more detailed scenarios at the council retreat, noting some numbers depend on certified taxable values expected in June.

The workshop also addressed a pending state local-government spending bill, which Tenney said would require municipalities to demonstrate — though not necessarily implement — a 10% budget reduction scenario during budget adoption. "We just have to show what a 10% budget cut would look like," Tenney said, adding that staff have not yet received definitive statutory guidance on how to demonstrate the cuts and that doing so without touching public safety or violating debt covenants will be challenging.

What comes next: staff told council they will return with more precise modeling on millage scenarios, updated GMPs and pricing for major projects, and options for pacing or staging work in light of possible revenue changes.