by SC Reporter Emilie Alfino
At the City of Sanibel’s Budget Workshop on June 16, 2026, City Manager Dana Souza first presented some figures that could apply to Sanibel if the state’s proposed constitutional amendment creating $150,000 and $250,000 homestead exemptions passes.
Sanibel has 8,698 parcels (final 2025 tax roll), 7,446 of which are residential. Thirty percent of those are homesteaded; 70 percent are non-homesteaded.
What would be the reduction in ad valorem revenue with increased exemptions of $150,000 or $250,000?
• At a $150,000 exemption, with FY26 ad valorem of 14,824.43, it would be reduced by $554,250 or -3.7 percent in the first year.
• At a $250,000 exemption, with FY26 ad valorem of 14,824.43, it would be reduced by $1,108,500 or -7.5 percent
“We would have to reduce expenses or raise money some other way,” Souza said.
Property tax reform would not take place until FY2028.
Fiscal Year 2027 Draft Budget
As presented by Deputy City Manager and Chief Financial Officer Steve Chaipel, the proposed FY2027 operating budget is $44,133,458. Note that insurance costs increased by 50 percent, and there is significant pressure on all costs. Still, the budget is $2 million less than the previous two years. The potential stormwater assessment fee is a potential revenue source.
There is a $500,000 reduction in expenses from previous years, primarily from Planning consultants, with the biggest reduction in the Building Department.
Council member Holly Smith said, “There are so many unknown factors now; this is really informational.”
Tuesday’s workshop presented the initial draft operating budget and included the proposed capital budget presented at the June 2, 2026, City Council regular meeting. There is also a workshop scheduled for August 18, 2026.
The City received an estimate of the taxable real and tangible property values on May 31, 2026, from the Lee County Property Appraiser. The City’s estimated taxable values of $5,536,341,000 decreased 1.75% from the taxable values used for the fiscal year 2026 budget received in July 2025. At the same operating millage rate assessed in fiscal year 2026 (2.5000), the reduction in values would result in approximately $238,800 in revenue decrease to the General Fund.
On or around July 1, 2026, the City will receive the preliminary taxable values from the property appraiser. This number will be used to develop the full draft budget to be presented to the City Council at its July 21, 2026, meeting.
The capital improvement plan has not changed since the last Council meeting. The City adopts an annual one-year budget (Fiscal Year 2027). The FY 2027 proposed capital improvement plan requests a total of $71.9 million, including a carried-forward amount of $27.6 million for projects that were in the approved fiscal year 2026 capital improvement plan but are not anticipated to be completed fully in fiscal year 2026.
The fiscal year 2027 capital improvement plan does not include any Hurricane Ian FEMA recovery projects.
Since the storm, the City has been working with FEMA representatives to obligate public assistance projects. However, due to the length of time it has taken to work on projects, and the fact that several large projects for the City have been denied by FEMA and we are working through the appeals process, resources for hurricane projects will not be included in the budget until the specific project has been obligated by FEMA. The resources will remain in the Hurricane Ian Fund as an unappropriated fund balance. Once a project is obligated, a budget amendment to appropriate that project will be presented to the City Council for approval.
The FY 2027 proposed operating budget is 0.7 percent higher than the FY 2025 budget in nominal dollars, but 5.1% lower after adjusting for inflation. The FY 2027 proposed operating budget is 1.3% lower than the FY 2026 budget in nominal dollars and 4.8 percent lower after adjusting for inflation.
The proposed operating budget ($44,133,458) puts the emphasis on cost containment – “holding the line.” Initiatives that are not currently included in the proposed FY2027 budget but are recommended for future
City Council discussion and prioritization:
• Periwinkle Way Landscaping
• City Hall Native Garden Rehabilitation
• Town Center Planning
• Expansion of Recreation Center operating hours
• Coyote population study
• Sea turtle nest protection (SCCF)
• Wage and healthcare adjustments
The Proposed Capital Budget is $71,893,077 ($27,608,989 in funding carried forward from prior year). The Capital Improvement Plan calls for:
• Recreation Center pool deck $350,000
• Recreation Center structural assessments $85,000
• City Hall general repairs $300,000
• City Hall generator $500,000
• City Hall HVAC $250,000
• Historical Village $50,000
• Shared use paths: $1.25 State Appropriation included
• Stormwater improvements $500,000
• Weir flap gate improvements $600,000 State Appropriation included
• Tahiti-Jamaica/Tradewinds stormwater project:
· Funding not secured in 2026 cycle
· $4.2 million estimated project cost – delayed to FY 2028 plan
• Sewer Utility System non-grant funded projects:
· $2.6 million force main improvements
· $3.4 million lift station control panel replacements
· $5.2 million included that is grant funded
• Beach Parking Enterprise Fund:
· Police Department $380,000 for patrol boat
· Public Works $2.3 million in TDC funding
→Includes $2.1 million for pier replacement
• Lighthouse Beach Park maintenance building $450,000
· $100,000 insurance funding
Budget Schedule
• July 1, 2026 – Property Appraiser Releases Taxable Values
July 14, 2026 – Planning Commission CIP Sub-Committee Meeting
• July 21, 2026 – Draft Full Budget Presentation to the City Council
• August 18, 2026 – City Council Budget Workshop
• September 14, 2026 – First Budget Hearing
• September 28, 2026 – Final Budget Hearing – FY2027 Budget Adopted
Leave a Comment