Council continues $65 million bond discussion
City looks to borrowing for Jaycee Park, Yacht Club, Coral Oaks & transportation projects
Cape Coral City Council on Wednesday continued two public hearings that deal with authorization of up to $65 million in bonds to fund various city infrastructure projects to June.
Financial Services Director Crystal Feast said staff is requesting up to a $65 million special obligation bond to finance capital improvements, refinance prior indebtedness and cover the cost of issuance.
The bond proceeds will support an estimated $18.7 million for Jaycee Park improvements, an estimated $2.5 million for Coral Oaks Golf Course irrigation improvements, an estimated $14 million for the North 1 West Transportation improvements, and an estimated $23 million for the Yacht Club seawall improvements.
The bonds proposed are not general obligation bonds, meaning property taxes will not be pledged for repayment, Feast said.
“The identified funding source is debt,” she said. “That is why we are here today. They (the projects) are completed, near completion, or in the process.”
The city uses commercial paper to fund three of the projects.
The Jaycee Park improvements repayment sources came from the city’s general fund, Coral Oaks irrigation improvements from the golf course revenues, the North 1 West Transportation improvements came from the 6-cent gas tax, and the Yacht Club seawall improvements came from the general fund.
Councilmember Rachel Kaduk said for her it was very simple – the city has cash on hand, a minimum of $29.9 million sitting in cash unassigned.
“We should not be borrowing $65 million,” she said.
Feast said the $29.9 million is unrestricted fund balance in the general fund, which was identified and shared with council during the January budget workshop. She said it was the balance left at the end of fiscal year 2026.
The sale of the Seven Islands property also generated about $11 million to the general fund.
“All general fund debt that we have is based on projects previously told to move forward,” City Manager Michael Ilczyszyn said. “We have to assume those are moving forward until five council members tell us to stop. Those projects are still going to move forward.”
He said they start to look at what assets are going to produce income, which are not, what is the total debt service to debt fund all of it and which assets pay for today and those in the future.
Ilczyszyn said if the city uses cash on hand today, only the people here today are going to pay for that, and all future users get it for free.
“If we are able to buy down the general fund debt at the Yacht Club it is going to have a revenue source. By carrying debt there with revenue coming in from the Boat House or P3, it could reduce the amount of what is due from the general fund because revenue is coming in,” he said.
Councilmember Bill Steinke provided three positive points of using bond financing.
“It is important to understand that some of the money is already borrowed. We have some of this on commercial paper already and are paying interest only on and not depleting the principal,” he said. “If we go to bond funding, we can retire the debt. Part of this is repaying the commercial paper and freeing up that working debt that we have available to us for short-term needs.”
Another point is having money in reserves is advantageous to the city for their credit rating.
“That is the piece of the city’s savings account to have that money there,” Steinke said. “Some of these decisions are predicting some things can happen in the future and how to be prepared for it.”
The third point is when the city uses debt to fund something, people who come in the future get to help pay for things that need to be put in place now.
Councilmember Keith Long said he was not ready to make a decision Wednesday as it was premature.
“I would love to have this discussion in context of other budget discussions,” he said.
His sentiment was met with the rest of council, as they, too, wanted to have a further discussion at the upcoming workshop next week before voting on the not to exceed amount of $65 million.
With Kaduk dissenting, council moved the discussion to continue at the June 3 regular council meeting at 4 p.m.
“We have a lot of projects out there that we have to identify what we are going to do, how to pay for it,” Mayor John Gunter said. “Let’s look at the big picture.”
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