Council eyes property tax, FSA rate increases

Jul 17, 2025 By MEGHAN BRADBURY 5 min read

Cape Coral property owners may pay more for the city portion of their tax bills next year.

Cape Coral City Council agreed on a tentative maximum millage rate and its fire service assessment levy Wednesday.

The tentative numbers are 5.5188 mills and an 81% cost-of-recovery fire services assessment, both higher than the current rates.

“Right now, we are talking about two specific revenue sources. We have resolutions we have to get ready for next week,” Assistant City Manager Mark Mason said.

After tentative rates are formalized, government entities cannot go above the number, but can bring it down. 

The proposals are a 5.2188 millage rate; an 81% recovery fire service assessment, up from 70%; and keeping the public service tax on electric bills at 7%. The Council all agreed that the third leg of its “three-legged” venue stool upon which its budget sits should be left alone.

Budget Administrator Nicole Reitler brought Council through a presentation that highlighted where the projected numbers were in June, compared to now.

“We presented an ad valorum estimate representing a deficit of $1.2 million compared to proposed expenditures,” she said. “July values came in at $31.9 billion with $1.7 of that with new growth — 7.4% increase from our fiscal year 2024 values, .09% increase over previously forecasted increase of 6.5% resulting in an additional $2.3 million increase in revenue for fiscal year 2026.”

Reitler said the fiscal year 2026 budget is currently balanced.

“However, the General Fund projections for ’27 and ’28 show a deficit. The funding strategies in ’26 are not sufficient to show projected growth under the current structure,” she said, adding that there are ongoing increases in operational and capital costs to maintain the current levels of service.

With the approved proposed budget items there is a deficit of $8.1 million, leaving additional funding sources needed to meet departmental requests.

Council was presented with four options through which additional revenue could be generated.

The first was to increase fire service assessment by 2%, the millage by .1 increase and the public service tax to 9%. The second option would increase the fire service assessment by 5% and raise the public service tax to 10%. The third option would increase the millage by .3 and the fourth option would increase the fire service assessment by 12%.

Councilmember Dr. Derrick Donnell asked property owners to print their tax bill and apply the different amounts to their numbers to see how much they would have to pay. For instance, he said if the council were to raise the millage rate by .3 for a person with a $100,000 home, that would equate to $30 per year to maintain the level of service in what is enjoyed today.

“Once it hit me, I was ashamed. If we just do the .3 it allows us the opportunity to maintain the other two legs, but still have versatility in the millage rate,” Donnell said.

One mill is equal to $1 for every $1,000 of taxable valuation.

Councilmember Jennifer Nelson-Lastra said the problem she has with the “three-legged stool” is it all the money comes from the same source – the homeowner, the taxpayer.

Councilmember Keith Long was not convinced any of the three revenue streams needed to be changed.

“The way we are approaching it can be changed. Look inward and direct each department to cut the operating expenses,” he said.

“All of my departments had to do exactly what he said in order to get me close to balancing the budget before I had to cut all the one-time expenditures,” City Manager Michael Ilczyszyn said. “We went through and scrubbed every department budget. Where did all the savings go in cutting the operating – 75th percentile – all the increases that you see in personnel lines went up. In order to achieve the 75th percentile, all the savings we came up with that was in the operating was consumed. I have a balanced budget with no new revenue. I had to cut out $11.5 million just to get to zero.”

He said the reason they are talking about the revenue side is because Council told him not to bring back a no-growth budget.

Ilczyszyn said he received more than $100 million in requests.

“With all the requests that came forward to me – how do I maintain the level of service that we have in public safety first?” he said of not an increase, but sustaining where they are today. “In other areas, in other departments, that was not the case.”

For example, Public Works is bringing on five new facilities, but there are no new facilities employee in the budget, Ilczyszyn said.

“There are other departments that are not public safety that are going to see a level of service decrease in fiscal year ’26,” he said. “We have tried to present a hold-the-line budget without losing the current level of service in public safety.”

Some of the approved positions include four code compliance officers and a code compliance supervisor, two contract positions for the clerk’s office, 22 positions for the police department, and two contract positions for parks and recreation.

“Code is the No. 1 complaint I get today,” Ilczyszyn said. “I had asked our code manager to look at the last five years and look at the amount of growth we have had in housing units and residents. There have not been any additions in staff. Each cover 4 square miles. The amount of violators has grown, but staff has not. The level of service has decreased because we are not keeping up with the growth of the community.”

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