Where Is Cape Coral’s Investment Income Going? City Holds Over $1 Billion in Short-Term Investments but the Interest is Missing From the Budget...

Tom Shadrach
Jun 30
3 min read

Updated: Aug 24

Cape Coral, FL – At the end of 2024, the City of Cape Coral reported holding more than $1 billion in short-term investments, earning between 3% and 5% in annual interest yields. That equates to an estimated $30 to $50 million in cash income per year, based solely on the city's investment portfolio. Yet, puzzlingly, this revenue does not appear in the city’s budget discussions, public documentation, or presentations. Where is this money going?

A Hidden Stream of Revenue?

The city publishes quarterly reports detailing its investments under its Financial Services > Debt Services > Investments section on the official website. These reports show a sprawling portfolio of short-term holdings ranging from Treasury securities to money market accounts, generating solid returns amid rising interest rates.

A closer look reveals that by the close of Q4 2024, the city’s investment yields ranged from 3% to 5%, depending on the instrument. Applying even conservative math:

At 3% on $1 billion = $30 million/year
At 5% on $1 billion = $50 million/year

This suggests a massive and consistent influx of revenue, independent of taxes, fees, or state/federal aid.

But when cross-referencing the city’s official annual budget documents, there is little to no direct reference to this revenue stream. Investment income is either lumped into vague line items or omitted altogether from public discussions during budget workshops and hearings.

Residents Left in the Dark

When questioned, several residents expressed confusion and frustration.

If there’s an estimated $40 million a year in investment income, why are we facing utility rate hikes, EXCESSIVE UEP ASSESSMENT increases, and discussions about raising millage?

Others questioned why the city would not tout this income as a success, especially in a climate where public trust in the city government's spending is under strain.

Expert Opinions

Municipal finance experts say it’s not unusual for cities to invest idle cash, such as unspent bond proceeds or reserves. However, they stress that transparency about the returns and how they’re used is essential.

A billion-dollar portfolio is enormous for a city the size of Cape Coral. If that’s not disclosed in the budget narrative, or if the use of that income is not publicly traceable, it raises accountability questions!

While some of this revenue might be earmarked for debt service or future capital projects, residents deserve clarity.

So Where Is the Money?

There are a few possibilities:

Debt Payments: The city could be using the returns to cover bond interest or loan obligations.
Capital Project Reserves: The interest may be reserved for large-scale projects not yet initiated.
Budget Offsets: The income might be internally allocated to reduce general fund pressures, without being itemized.
Administrative Sinks: Without clear disclosure, the funds could be spent within departments under broader umbrellas, effectively hiding their origin.

But without explicit acknowledgment in the public budget, the precise use remains unknown.

Calls for Transparency

Some city council members have begun to take notice. During a May 2025 workshop, Councilmember Rachel Kaduk briefly questioned an item labeled “investment earnings” that appeared as a minor line in a financial appendix, but no further discussion followed.

Local watchdog groups are now urging Cape Coral officials to provide a full accounting of how investment income is reported, allocated, and spent.

What’s Next?

The City Council is expected to begin its FY 2026 budget planning cycle in late summer. Advocates say this is the time to press for answers—and insist that every dollar, especially from such a lucrative revenue stream, is properly documented.

Cape Coral residents deserve transparency—not just about how their tax dollars are spent, but about how their city is profiting from prudent investing, and more importantly, where that profit is going.

All information has been thoroughly investigated and reported by the Take Out the Trash Committee of Cape Coral and/or its authorized volunteers!