City budget challenge: Cut planned projects or tax increase?

Jun 6, 2025 By MEGHAN BRADBURY 10 min read

Faced with $66 million in unfunded requests from city departments, Cape Coral City Council was presented with three options that would to bring in more revenue: increase the property tax rate, increase the fire service assessment, or increase the public service tax.

“We happen to be raising a city child and it ain’t grown up and gone on its own yet,” Councilmember Bill Steinke said and the city’s first budget workshop Thursday. “The cost of the city is going to go up year after year because it is a growing city. Sometimes growth pays for growth, but sometimes it doesn’t. It’s a matter of money. We have these expenses. If you don’t want the expenses, you don’t get the benefits, then you don’t need the money for it.”

According to Budget Administrator Nicle Reitler the city’s current revenues are not structurally balanced, and therefore will not meet the needs of the departments.

Mayor John Gunter asked his fellow council members to have discussion about where they can increase General Fund revenues, as that will dictate what they can add over and above what has been budgeted for in the operational fund.

Some on Council said they could not immediately make a decision regarding any one of the options.

City Manager Mike Ilczyszyn said it is important for Council to hear what the needs are in the departments, so they have an understanding that the market and growth is slowing down. He said governments, in most situations, are in catch up and usually behind the market.

“We are still trying to catch up to where we would like to be in maintaining a level of service,” Ilczyszyn said. “What you will see today is a lot of departmental requests because departments are acknowledging lag of what is happening. Unless the council authorizes, or steps on the throttle a little bit, we will be in a no growth budget for next year.”

The city manager’s budget will come out after July 1.

Council has agreed that public safety, and road maintenance, which is infrastructure, are priorities, Ilczyszyn said.

That means cutting quality-of-life items.

“I am reluctant to even tell you where I start because it will send a shockwave through my employees. If you want me to look at that, that is going to happen. There is no safe way out of this,” he said.

Ilczyszyn said the city either goes with a status quo budget, or increases revenue to fund some of the departmental requests.

“I am hearing five of you saying you are OK with funding more stuff. Three of you all are a nonstarter on the millage,” he said. “My job is to read the tea leaves of what is acceptable – understand what you are saying and how it fits our philosophy and approach.”

Ilczyszyn assured Council the city will have a balanced budget.

The Thursday workshop began with a breakdown of the proposed Fiscal Year 2026 budget, before each department shared its mission, goals and needs for the upcoming budgeted year.

The proposed 2026 budget is $1,495,767,829 and includes a millage rate of 5.2188, which is the same as for this fiscal year. The General, or operating, fund budget is $264,339,124.

The proposed fire service assessment is at 70% cost recovery. Proposed or pending are an 11% increase in water and sewer rates, a 4.7% increase in stormwater rates and a 5% increase in solid waste rates.

The proposed budget also includes four new positions for the Cape Coral Fire Department rescue unit and 12 positions for the utilities department.

The total General Fund program requests sit at $66,473,882 and the total all funds requested is $102,347,390.

With $11 million more in expenditures than revenue, quite a few things were cut from the proposed fiscal year 2026 budget.

Some of those projects pulled include sidewalk funding, median beautification, parks and recreation funding for Operation Sparkle or existing park upgrades, IT funding for fiber, development services fund for additional debris collection, deferred a generator in government services, deferred a police command service vehicle, removed the transfer out for the golf course irrigation replacement, and reduced contracted staff for parks and recreation for before and after care programs, which was moved over to the charter schools.

Ilczyszyn said his rationale for cutting the items is they do not have the funding today and some things can be deferred a year if there will be no increase in revenue.

“We are going to put a pause on adding new sidewalks, improving any medians. Instead of refurbishing parks they will look like they are today. Instead of putting fiber in the grounds, we will live with the fiber we have,” Ilczyszyn said. “Is it a retreat from the plan we have announced in previous years, yes.”

Ilczyszyn said based on revenue projects he had to cut sidewalks, median beautification, sparkle, fiber, the mobile command center.

“I had to remove all that – it is a hold-the-line, get us through the year budget,” he said. “Normally I have more revenue than I have asks, and I have new growth money and recurring taxes. In what we are looking at now our (property) values have dropped and the amount of money for new growth was consumed in day-to-day operations. At this point we are going to have to raise something. I need to know what you all want to raise. The budget as I have discussed, status quo budget – keeping doors open on the backs of new growth that has come in.”

He told Council that the 2026 year is not the rough year — next year will be a little rougher with the following year even worse.

“We are always a year behind and a year of slow down to follow that,” Ilczyszyn said.

Reitler said the industry is showing a decline in taxable values and nothing indicates the city will see an increase.

“The overall valuation, not including new construction, will be flat,” she said. “Overall we will see a decline in existing values and leveling out in new growth. They are always changing with each update that we receive from the property appraisal.”

For 2026, Reitler said there is a projected 6.5% increase for new growth and zero percent increase in growth in existing value.

“Based on estimates, new growth will be the driving factor for the next three years. Existing values to remain flat,” she said.

Among the two department conversations that had a great deal of conversation were the Cape Coral Police Department and the Cape Coral Fire Department.

Public safety

Police Chief Anthony Sizemore said the program modifications for FY26 is very personnel driven. He said when he assumed the role as chief in November 2020 it became quickly apparent that they were behind on personnel.

“The problem that we ran into – the goal line continues to move,” Sizemore said. “What we found – I am four years into it, and we are not on the gas enough.”

Last year the department began a project – Project 35 – which looks at Fiscal Year 2035 and what the department looks like. Sizemore said they have a shared vision of 10 years ahead and then they reverse engineer that budget backwards to ensure they hit that mark in 2035.

This is year one of that vision and the police department is asking for 31 positions at a price tag of $6,975,889.

He provided one example of how the growth translates to new positions. The police department recently opened the police training facility.

“When our cadets graduate in the academy, they are immediately put into the facility for eight weeks,” Sizemore said, adding that the high liability piece of real estate needs to have supervisory personnel. “The growth of that unit has necessitated the training unit to grow its own bureau.”

The positions include two public service aides, 22 police officers, one police logistics coordinator, one administrative specialist, one administrative assistant, one digital forensics technician, one police lieutenant, one police sergeant training and one police sergeant SRO.

“I fully support your 35 Program,” Councilmember Joe Kilraine said, adding that he articulated the key issue with police – well trained and understanding the right ways to do things. “That is the top shelf priority, to make sure we keep our city safe and out of trouble. I support your ramping up to that level you see fit. I would like to see that accelerated pace you have laid out there.” 

The fire department’s request includes 22 positions for $3,621,535 and capital outlay request of $7,278,900.

Fire Chief Mike Russell said there is an increase in the budget primarily due to two capital projects – the Emergency Operations Center and the rebuild of Fire Station #5. Other capital projects include Station 9 bay door replacement, fire engine for training facility, high winds rescue boat and trailer and high-water rescue vehicle.

As far as the 22 positions, it includes a data analyst, logistics manager, three fire officers and one firefighter for special operations, fire training lieutenant, assistant fire marshal, 12 firefighters and a fire inspector.

Russell explained the need for all the positions, which included the reasoning behind the 12 firefighters. He said that will provide optimal staffing to reduce overtime.

Mayor John Gutner said they have to make sure that they not only plan for the future, but keep up with the needs of today and tomorrow for public safety.

“When it comes to public safety we have to try to allocate for what they have asked for,” he said.

The other departments shared their requests during the workshop.

Other departments

Parks and Recreation requests includes 13 positions, as well as asks for operation, capital outlay and facilities maintenance.

Director Joe Petrella shared that they are growing as a department with services expanding. He said the uptick of personnel is due to the expansion of parks in the north.

“I have a lot of asks in this year’s budget, heavy asks,” he said, as they are expanding as a department and city. I need to “keep up with the pace of demand and need.”

Petrella said his goal is to replace amenities that were lost during Hurricane Ian and to ensure they can get back to a level of service that they were previously.

The city attorney asked for three positions – administrative clerk, assistant city attorney II and a senior paralegal for $455,513.

The city manager’s request for this office included a $361,804 increase for power DMS software, communications vehicle, cubicles, as well as a public relations marketing firm and economic development vehicle.

The City Clerk’s Office requests include a code compliance officer and contract administrative technician.

Developmental Services requests include seven positions, as well as operating expenses, such as ENERGOV Software replacement.

The Emergency Management and Resilience Department is asking for three positions, as well as an incident support unit.

Human Resources asked for two fleet vehicles for the labor relations division and the Information Technology Department asked for the replacement of three roof top AC units.

Public Works also had a number of requests: An increase of $77,244,995 from the FY25 amended budget. The requests include additional personnel, equipment and funds for road resurfacing and facilities maintenance.

Utilities program modifications requests include an automatic backwash filter rehab and WRE – master pump stations – generator replacements. 

To reach MEGHAN BRADBURY, please email news@breezenewspapers.com