Cape Coral is set to borrow $210 million to pay for water and sewer infrastructure in a northeast section of the city.
During public hearings at a City Council meeting May 6, councilors unanimously approved separate motions authorizing staff to issue $110 million in bonds for the latest phase of the city’s Utility Extension Project, or UEP, and $100 million for related water and sewer infrastructure.
The UEP extends potable water, wastewater and irrigation water utilities throughout more than a dozen areas of the city and removes residents from outdated septic systems.
Plans call for the cost to be shouldered by homeowners in each area through special assessments on yearly tax bills.
City staff estimated that $110 million in Utility Improvement Assessment Bonds will cover construction and financing costs for the latest North 1 East UEP assessment area. It includes about 7,300 parcels where work is expected to be completed near the end of 2027. Meanwhile, the adjoining North 1 West UEP area is under construction.
Homeowners in the North 1 East area have the option to pay their assessments up front, but most are expected to pay the debt service through 2056 on yearly tax bills. City Council approved the assessments at a meeting Nov. 19, 2025. City staff estimated that an average single-family home assessment totals $32,288, or $3,385 annually with interest.
Cape Coral Finance Director Crystal Feast explains projected borrowing costs and bond financing details during a May 6 City Council meeting on the Utility Extension Project expansion.
Cape Coral government
Cape Finance Director Crystal Feast said the initial North 1 East bonds will likely be issued in June, but staff is prepared to adjust the schedule to secure a more favorable interest rate if necessary. Until the bonds are issued, the exact cost with interest is unknown, but staff estimates show that at a 4.71% interest rate, the total cost through March 2056 would reach $193 million.
In a separate motion, councilors authorized $100 million in Water and Sewer Revenue Bonds to finance various capital improvements for the city’s system in the North 1 East area related to the UEP. That includes two 5 million-gallon booster tanks, water and sewer extension lines, and a pump station.
City staff estimated that at a 4.68% interest rate, the cost through October 2056 would total $180 million.
Councilors said the bonds are the lowest-cost option available to build the infrastructure the city needs. Municipal bonds typically achieve lower interest rates and allow costs to be spread among current and future residents.
A city map shows current and future Utility Extension Project areas across Cape Coral, including the North 1 East and North 1 West sections tied to the city’s latest infrastructure bond approvals.
Cape Coral government
“Spreading it out using debt allows everyone to pay their fair share,” Feast said.
During the public hearing, residents argued that it was unfair to ask homeowners to cover the costs instead of using general revenue funds. Others said the cost burden could price some homeowners out of the city.
Councilors acknowledged the costs would be painful for some residents, although the improvements are expected to boost property values.
“This is difficult,” Councilor Derrick Donnell said. “We understand what we’re doing. … There’s nothing easy about trying to build a city and put in infrastructure.”
Unlike many cities, Cape Coral is building its infrastructure as it grows toward full buildout.
“Many people have come from a city that has been developed for decades,” Councilor Bill Steinke said. “The truth of the matter is we’re going to have to continue to develop for decades.”