UEP Funding Proposal
UEP – The Mandated Utilities Expansion Project, Cape Coral
Submitted by: PEDRO J RIVERON
How Cape Coral Can Pay for the Water Project Without Punishing Homeowners
The City of Cape Coral can pay for this water and sewer project without forcing families to pay $30,000–$40,000 and eventually $60,000 per home — and without raising property taxes.
Here are realistic and responsible options:
1) Municipal Bonds (Long-Term Financing)
A $600 million project over 25–30 years would cost about $35–40 million per year and can be paid through normal city revenue.
2) Better Use of Existing Property Taxes (No Tax Increase)
Cape Coral already collects tens of millions in property taxes.
Setting aside about $15 million per year — without raising taxes — would cover a large portion of the project.
3) Federal and State Infrastructure Grants
With proper planning, the city could secure $100–$200 million in grants that do not need to be repaid.
4) Small Monthly Utility Fee (Instead of Huge Bills)
A $30 monthly fee per home would raise over $5 million per year without hurting families.
5) Reduce Waste and Unnecessary Spending
Saving just $5 million per year from consultants and unnecessary projects adds up to $150 million over time.
Realistic Funding Plan
Bonds: $200M
Existing Taxes: $150M
Federal/State Grants: $150M
Small Monthly Fees: $100M
Budget Savings: $100M
Total: Over $700 Million
Pedro’s Conclusion
Cape Coral has the resources to fund this project fairly without raising property taxes. Charging families $40,000 to $60,000 is not necessary — it is a policy choice. Water is a basic necessity. Cape Coral Homeowners deserve better!
UEP ANALYSIS AND NEW FUNDING OVERVIEW PART TWO
The Utilities Extension Project (UEP) in Cape Coral, Florida, mandates the extension of city water, sewer, and irrigation (reclaimed water) infrastructure to previously unserved areas relying on private wells and septic systems. This is driven by environmental concerns, including aquifer stress and septic impacts on canals. Special assessments fund most of the construction on a “beneficiary pays” basis, calculated by equivalent parcels (typically 10,000 sq. ft. per unit) for line extensions plus Equivalent Residential Units (ERUs) for capital facility charges. Recent phases (e.g., North 1 areas) have assessed standard residential lots at roughly $25,000–$35,000+ projected to cost $60,000+ in the next areas (varying by phase and lot size), with options to pay upfront (discounts) or amortize over ~30 years on property tax bills (with interest around 6.5%). Homeowners must also cover private hookup costs (plumbing, septic abandonment, permits).
These one-time assessments are often viewed as unaffordable or punitive, especially for fixed-income or lower-value properties, despite payment plans and a limited Utility Connection Grant Program for income-qualified primary residences (which helps with hookup costs but does not eliminate the main assessment).
Cape Coral already uses a mix of funding (assessments + debt + grants), but here are practical solutions and alternative funding approaches to reduce the per-home burden while meeting the mandated improvements. These draw from the city’s own practices, state/federal programs, and standard municipal finance options.
1. Expand External Grants to Directly Offset or Reduce Assessments
Grants lower the total project cost that must be covered by local sources (assessments or debt), directly cutting homeowner bills.
- State grants via Florida Department of Environmental Protection (FDEP): The city has already secured examples like a $6.5 million grant (Governor’s Office/DEP) for North 1 East reclaimed water extension, which explicitly reduced local revenue needs. Additional options include:
- Water Quality Improvement Grant Program (FDEP Division of Water Restoration Assistance): Targets wastewater/septic-to-sewer projects in impaired waters or basin management areas; prioritizes nutrient reduction.
- Small Community Wastewater Construction Grants (under Clean Water SRF): For communities ≤10,000 population with below-average per capita income (Cape Coral phases may not qualify directly, but sub-areas or partnerships could).
- Legislative appropriations: The city has requested $10 million in state fixed capital outlay for the Water, Sewer & Irrigation Expansion Program (FY 2026-27), which would reduce per-parcel assessments.
- Federal grants/loans (state-administered): EPA capitalization grants flow through FDEP’s State Revolving Funds (SRF). The Bipartisan Infrastructure Law (BIL/IIJA) added significant extra funding with required principal forgiveness/subsidization (e.g., ~49% in recent cycles for disadvantaged communities or specific projects).
- South Florida Water Management District (SFWMD) Alternative Water Supply Program: Has funded Cape Coral reclaimed water extensions in past cycles.
- Actionable step: City Council and staff should aggressively pursue more of these (as they state is a priority), potentially via annual legislative asks or grant applications. Even partial grants (e.g., $6.5M) meaningfully lower assessments across thousands of parcels.
2. Issue Municipal Bonds for Upfront Financing and Longer-Term Repayment
This is a core alternative already in use and can be expanded to shift or spread costs.
- How it works: The city issues bonds to pay contractors upfront for construction. Repayment comes from either (a) special assessment bonds (repaid via the same per-home assessments on tax bills, but potentially at lower effective rates or longer terms than current amortization) or (b) Water and Sewer Revenue Bonds (repaid via citywide utility rates/fees, spreading costs across all ratepayers rather than only UEP-area homeowners).
- Examples in Cape Coral: The city has issued bonds specifically for UEP, such as a $140.8–141 million bond for North 1 West (2023). Debt is also used alongside SRF loans. The Comprehensive Utilities Master Plan explicitly lists municipal bonds (30-year term) as an option alongside SRF loans and assessments.
- Benefits for affordability: Bonds allow the city to borrow at competitive rates, potentially refinance existing debt, or blend with grants. Revenue bonds could subsidize UEP costs citywide (treating it as a system-wide benefit for growth, reliability, and environmental compliance). This reduces or eliminates large per-home lump sums/assessments.
- Trade-offs: Bonds still require repayment (principal + interest), but over decades and often at lower rates than current assessment financing. Credit rating (e.g., Fitch rates the utility revenue bonds) affects costs; strong utility enterprise funds help.
- Actionable step: Increase reliance on revenue bonds (vs. 100% assessments) or issue larger tranches backed by a broader revenue pledge. The Debt Treasury Division already manages this with a municipal advisor (PFM Financial Advisors).
3. Leverage Low-Interest State Revolving Fund (SRF) Loans (with Possible Forgiveness)
- FDEP SRF programs: Clean Water SRF – STATE REVOLVING FUND (CWSRF) for wastewater/irrigation and Drinking Water SRF (DWSRF) for potable water. These provide low-interest loans (currently ~2–3%) with 20-year terms; Cape Coral has used them (e.g., ~$240 million estimated for one phase).
- Principal forgiveness/grants are available for small/disadvantaged communities (Cape Coral as a whole may not qualify, but targeted phases or income data could help).
- Advantage over pure assessments: Cheaper than market-rate financing; repayments can be structured into rates or assessments.
4. Other City/County/Local Mechanisms and Blended Approaches
- Utility rate increases or system-wide contributions: Fund a portion of UEP via all ratepayers’ monthly bills (already partially done for non-assessed components). This treats the project as essential infrastructure benefiting the entire city (growth, fire protection, environmental compliance).
- Expand hardship/grant programs: Broaden the existing Utility Connection Grant (income/asset-tested) or create assessment relief/deferrals for seniors, fixed-income, or long-term residents. Some discounts already exist for churches/schools/public properties.
- Lee County coordination: Limited direct role (county focuses on its own utilities, e.g., Fort Myers Beach projects), but possible joint applications for regional grants or shared infrastructure.
- Blended funding model (recommended best practice): Combine (1) grants (free money), (2) SRF loans/bonds (low-cost debt), and (3) reduced assessments. This is already happening; scaling grants and revenue bonds would minimize the punitive per-home hit while complying with the mandate.
- Phasing or prioritization: Slow non-emergency phases or prioritize highest-need areas to spread fiscal impact.
Summary of Feasibility and Next Steps
The most immediate, high-impact options are securing more state/federal grants (already proven to cut costs) and greater use of municipal revenue bonds + SRF loans to replace or supplement heavy reliance on per-home assessments. These align with the city’s existing tools, master plan, and recent actions (bonds issued, $6.5M grant received, SRF used). Pure assessments follow the benefit principle but create hardship; blending spreads the load fairly across taxpayers/ratepayers while meeting environmental mandates.
Homeowners can check their specific UEP status/assessment via the city’s UEP map and tax bill, apply for hardship aid, or contact Cape Coral Utilities (833-227-3837 or capecoral.gov/uep). For broader change, engage City Council on pursuing additional grants, shifting more to revenue bonds, or requesting state legislative support. These strategies have successfully lowered costs in past phases and can be scaled.
MANDATED WATER PROJECT COSTS COMPARED
Cape Coral’s Utilities Extension Project (UEP) is a large-scale, city-driven initiative to extend centralized water, sewer, and reclaimed water infrastructure to thousands of pre-platted parcels originally developed with private wells and septic systems. It addresses environmental concerns like aquifer stress, nutrient pollution in canals/groundwater, and compliance with state water quality goals. The project uses special assessments on a “beneficiary pays” basis (calculated by equivalent parcels/ERUs and linear frontage), with recent phases (e.g., North 1 areas) assessing standard residential lots at roughly $25,000–$35,000+ total (water + sewer + irrigation), plus private hookup costs of ~$2,000–$3,700 (plumbing, septic abandonment, permits). Homeowners can pay upfront (with discounts), or amortize over ~20–30 years on tax bills at around 6.5% interest. Grants (e.g., $6.5M for North 1 East reclaimed water) have reduced some assessments by several thousand dollars per parcel.
This approach stands out due to Cape Coral’s massive scale (one of Florida’s largest cities by land area, with ~half its pre-platted parcels historically unserved) and inclusion of all three utilities (including irrigation/reclaimed water). Many other Florida communities pursue smaller or targeted septic-to-sewer conversions, often with heavier reliance on grants, county funding, or blended mechanisms, leading to lower or more subsidized per-home burdens.
Key Comparisons to Other Southwest Florida and State Examples
- North Fort Myers and Lehigh Acres (Lee County / FGUA): These areas feature smaller, phased septic-to-sewer projects. State grants (e.g., part of $240M Wastewater Grant Program awards) funded ~300 conversions each in recent cycles, with estimated homeowner costs in the $15,000–$25,000 range (including connections). Assistance comes via county funding, state grants, and subsidies; projects are in early planning or limited phases rather than a citywide mandate like UEP. Lee County’s 2023 Countywide Wastewater Management Plan prioritizes conversions based on environmental risk, density, and proximity to impaired waters, using tools for cost-effectiveness. No full citywide special assessment model matching UEP’s scale.
- Charlotte County (e.g., Ackerman Wastewater Expansion, Port Charlotte): Homeowners in targeted neighborhoods pay a $11,500 special assessment (amortized as ~$575/year for 20 years) for sewer conversion. This is notably lower than Cape Coral’s recent figures, reflecting smaller project scope and different financing (special assessments on tax bills). Residents have voiced concerns over affordability, similar to UEP feedback, but the per-home hit is lighter.
- Bonita Springs: Uses special service charges for wastewater connections in specific expansion areas (e.g., $795–$7,210 lump sum or low monthly payments in certain neighborhoods). Focus is on targeted expansions rather than broad mandatory conversions; costs appear more contained and sometimes spread via monthly charges.
- Collier County (Naples area): Primarily uses impact fees for new development (~$6,470 water + $5,614 wastewater per ERC as of recent studies, totaling ~$12,000 combined). Existing septic areas see limited mandatory conversions; costs for new connections or expansions differ from Cape Coral’s retrofit assessments. Special assessments occur for targeted utility improvements but are less widespread.
- Other Florida examples:
- DeBary (Volusia County): Homeowner hookup costs estimated at $5,000–$7,000, with any remaining assessment amortized (~$28/month over 20 years). Monthly sewer bills average ~$45 post-conversion. Lower burden due to grants and county utility involvement.
- Central/North Florida (e.g., Seminole County near Wekiva River, Port St. John in Brevard, various springs protection areas): Costs can reach $50,000–$100,000+ per home in worst-case scenarios (long runs, private property work), prompting pushback over unfunded mandates. Some areas (e.g., Orange City, High Springs) secured $7M+ grants for targeted conversions, significantly offsetting homeowner costs. Atlantic Beach received legislative appropriations for small batches (~14 homes). Many leverage DEP grants (Clean Water SRF, Springs Restoration, Water Quality Improvement) or PACE financing for no-upfront-cost options.
- National typical septic-to-sewer hookup: $5,000–$15,000 (average ~$7,000–$10,000), varying widely by distance to mains and local policies.
Cape Coral’s assessments are on the higher end for Florida retrofits, driven by its ambitious scope (water + sewer + irrigation across large northern areas), construction inflation, and “beneficiary pays” philosophy. However, it includes grants that have demonstrably lowered costs in phases (e.g., $4,000 reductions noted), payment plans, and a limited hardship grant program—elements common elsewhere but scaled here.
Funding and Approach Differences
- Cape Coral UEP: Heavy on special assessments + municipal bonds/SRF loans + targeted grants. Treats the project as a system benefit but places primary burden on directly served parcels. Citywide utility rates cover some operational/expansion elements indirectly.
- Many other cities/counties: Greater emphasis on external grants (FDEP Wastewater Grants, Springs Restoration, Indian River Lagoon/Biscayne Bay programs, BIL/IIJA flows), countywide funding, or impact fees for growth. Some amortize smaller amounts over long terms or subsidize via general funds/rates. Smaller projects or voluntary/prioritized phases reduce per-home shock. Low-pressure or alternative collection systems sometimes lower capital costs vs. traditional gravity sewers.
- Common challenges across all: Affordability for fixed-income/senior homeowners, resistance to mandates, and rising construction costs. Environmental drivers (nutrient reduction, impaired waters, springs protection) are statewide.
Cape Coral is Unique
Cape Coral’s model is unique in its comprehensive, mandatory, multi-utility rollout for a very large pre-plated city. Other communities often achieve lower per-home costs through:
- Heavier grant pursuit (Cape Coral does this successfully but could expand).
- Blended funding (more ratepayer or county-wide contribution).
- Smaller/phased projects or alternative technologies (e.g., low-pressure systems shown cheaper in Lee County analyses).
- State legislative appropriations or regional partnerships.
Statewide, Florida encourages septic-to-sewer via DEP funding portals, but unfunded mandates draw criticism (e.g., in springs or coastal areas). Tools like Lee County’s optimization model help prioritize cost-effective projects.
For Cape Coral residents, this comparison highlights that while UEP costs feel punitive locally, similar conversions elsewhere range from $5k–$100k+, with many using grants and financing to mitigate. Engaging city officials on increasing grants, revenue bond reliance, or hardship expansions could align it closer to lower-burden models. Check specific UEP phases via capecoral.gov/uep or contact Utilities for personalized estimates.
Broader policy input (e.g., via City Council or state delegation) could influence future phases.

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