Cape Council looks to hold line on property tax rate

Jul 15, 2026 By MEGHAN BRADBURY 6 min read

The city of Cape Coral is looking to set its property tax rate for next fiscal year at the rollback rate.

Cape Coral City Council, by consensus, told city staff at a budget workshop Wednesday that it was looking at a not-to-exceed rate of 5.1988 mills, the rate that would bring in the same amount of revenue as this tax years, not including new construction.

The consensus goal is to keep the current millage rate of 5.1471 mills.

One mill is equal to $1 per $1,000 of taxable property valuation.

Consensus votes are direction to staff, not binding or final votes.

“As a result of maintaining the same revenue level, it reduces the ability to sustain current service levels,” Deputy Financial Services Director Nicole Reitler said.

City Manager Michael Ilczyszyn said the elected board provided direction with the understanding that they are not going to agree on all the cuts across the board, so different ideas of how to get there need to be produced.

“It gives me crystal clear direction with the proposed budget and (how to) continue to get there eventually setting the millage rate at 5.1478,” he said.
Council will set the not-to-exceed millage rate at its Wednesday, July 22  meeting.

Once set, the tax rate can be set lower, but not higher, for the Fiscal Year 2027 city budget.

Dr. Derrik Donnell was the sole council member opposed to setting the not-to-exceed rate at 5.7187 mills.

He said last year he was in favor of increasing the millage rate by one mil, and this year was in favor of increasing to 5.7187 mills, a .57176 increase.

“Everything around us is going up. In my home everything is going up,” Donnell said, adding that now he is watching how to take everything from the city down. “There is a cost to run the city. What does it cost to run this city in order to enjoy the services, amenities, and safety we have all come to enjoy. That is the number we need to be chasing.”

The almost .6 mil increase, on $100,000 in valuation, is a $50 increase.

“Before we try to do this – cut this and move this – we can handle it right now with a .6 economic impact to a person’s pocketbook is doable and we can move the city forward,” Donnell said.

Before council had a discussion surrounding the presentation, Reitler started where input from their June 4 meeting, at which council requested additional information on the general fund, led staff. She said the direction was around public safety budget initiatives and how to balance those with revenue options and expenditure reductions.

The general fund operating budget of $285,012,674 for fiscal year 2027 was developed by Ilczyczyn using the role back rate of 5.1988 mills. She said the current revenue projects for ad valorem is budgeted at 96% and shared revenue went from 95% to 98% of estimates for state shared revenues, franchise fees, public service tax and 5 cent and 6 cent gas tax.

Ilczyszyn said they have an 8% increase in their budget and that $5.9 million of the increase is the city budgeting in the adopted budget, what is normally done in a budget amendment.

“The budget, the arithmetic went up. By bringing that into the adopted budget, the adopted budget grew over last year. We changed the timing over where we would normally recognize it. (We have) more cost recovery from our (school resource officer program), $911,000 more against the service we provide. That is going to grow the budget by almost a million,” he said. “Our expenses – a totally different picture.”

Reitler discussed some of the budget adjustments for the fiscal year 2027 current service level budget, which includes SRO contract revenue increase of $911,637.

She also went over the expenditure cuts of $500,000 for Coconut Festival, $1,726,671 for fiber and wireless and operating, $500,000 for elections and $202,649 for the banner program.

The city auditor also proposed reductions in the amount of $204,672 for personnel and operating costs.

Reitler said the potential safety program modifications — unbudgeted requests — of additional expenditures is $11 million for police, which includes 34 additional positions, operating expenditures, and capital costs. She said the fire program modifications includes 14 positions, and capital requests for $1.9 million for the general fund share.

There were a few options provided to the council to consider – “revenue diversification,” which would adjust the millage rate to 5.6503 for the additional $12.9 million. Another option would be to increase the fire service assessment from 81% to 97% of the cost of operations, and a 3% increase in the city’s public service tax on electric bills.

Another option would be realignment reduction prioritization, which would make public safety the top priority, followed by infrastructure maintenance and quality of life – full cost recovery, partial cost recovery and zero cost recovery.

Reitler said council was provided with three slides that highlighted department specific positions and programs that were identified in either reduction in services or elimination of the program with expenditure amounts associated with reduction and services.

Among some that were highlighted included the city manager’s department and parks and recreation. Reitler said possibilities would be to eliminate the communications department services except for a PIO and webmaster, 311 services and environmental recreation programs and special events.

During the council comments, many shared different ideas on how to meet the deficit.

“I would like to first take a look at the public service tax as a way to increase revenue and maybe use that to the fullest advantage,” Councilmember Joe Kilarine said. “That is probably an area from a fairness standpoint that is a better way of creating that revenue stream.”

Other council members said a soft hiring freeze could also be implemented, as well as looking at open positions that have been vacant for some time.

Mayor John Gunter said the big elephant in the room is the referendum voters will decide in November regarding a much-larger homestead exemption for property taxes.

“I am a strong supporter of public safety, always have been, and continue to be. I would love to give the police and fire something. I don’t know if that is the right thing to do at this point in time not knowing the answer in November,” he said. “The last thing I want to do is increase cost now, which is going to further mandate us if we have the $150,000 exemption that we have to deal with in 2028.”

Councilmember Bill Steinke said he is more in favor of using the rollback rate and finding additional sources of revenue from other areas, and/or reduction in expenses. He said if that means some adjustments to department requests, then the budget needs to be evaluated more with the wants and needs, so they can trim from that.

“At all times when you all ask us for scenarios, we have an obligation to provide it, but it doesn’t mean we are going to recommend it because it may not be in the best interest of the organization,” Ilczyszyn said. “You have the role; it’s your role to make that policy determination and our job is to implement it. It is still administration’s responsibility to advocate and propose what is in the best interest of the organization.”

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