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HomeMy WebLinkAbout07-21-2025 BAC MinutesSEBASTIAN BUDGET REVIEW ADVISORY COMMITTEE MINUTES 6:00 PM MONDAY — JULY 21, 2025 CITY HALL 1225 MAIN STREET A. Acting Chairperson Reed called the Citizens Budget Advisory Committee meeting to order at 6:00 p.m. B. The Pledge of Allegiance was recited by all. C. Roll Call Mr. McGinn -via Zoom Mr. Baker Mr. Garton Ms. Jacob Mr. Middleton Ms. Reed Absent Mr. Hall -Excused Mr. Napier -Excused Mr. Hoffman Also Present Brian Benton, City Manager Brian Stewart, Finance Director/CFO Bridget Eakins, Recording Secretary Cynthia Watson, Human Resources Director D. Approval of Minutes: Meetina of March 5.2025 A motion to approve the minutes as presented from March 51h 2025 was made by Mr. Garton, seconded by Mr. Baker, and approved unanimously via voice vote. E. Review of FY2025 2"1 Quarter Financial Reports The Finance Director presented the Second Quarter Financial Report, highlighting key aspects of both revenues and expenditures. i. Revenues The Finance Director presented a report structured comparisons of the original budget, budget amendments, amended budget, prior fiscal year-to-date actuals (FY24 up to 03/31/24), and current fiscal year-to-date actuals (FY25 up to 03/31/25). Percentages showed increases or decreases over the prior year and the percent of the budget (at 50% for the period October through March). The Finance Director stated Ad Valorem Tax and Stormwater Utility Fees demonstrated 93% and 94% collection rates compared to the budget. The Finance Director noted that most ad valorem taxes were BUDGET REVIEW ADVISORY COMMITTEE MINUTES OF REGULAR MEETING J U LY 21, 2025 PAGE 2 typically collected by January 1, with a usual 96% to 97% collection rate by March. Sales Tax, Gas Tax, and Franchise Taxes/Fees were approximately 30-36% of the budget, which was lower due to a one to two -month delay in receiving accrued taxes from collecting agencies. Golf Fees were up 67% compared to 50% on budget, and 6% year -over -year. Airport Revenues saw an 8% year -over -year increase and reached 49% of the budget. Ms. Jacob inquired about projections for ad valorem tax increases for FY25 and whether any overage would be added to reserves, noting that the current year was ahead of the previous year. The Finance Director clarified that the report's data was not as accurate for future projections as previous budget hearings would be, where the levy and collection data for ad valorem taxes were presented. He reiterated the typical 97% normal collection rate. The City Manager added that the FY25 budget preparation had estimated a 10% increase on the millage rate, which was already factored into the budget. The current collection was 9% above the previous fiscal year, with an estimated 1.2% still to be gained to reach the budgeted numbers. Mr. McGinn praised the Finance Director and staff for the budget workshops, describing them as the most outstanding way to present this workshop, providing comprehensive information. ii. Expenditures The Finance Director directed to the second page of the quarterly financial report which provided a breakdown of governmental and proprietary expenditures. Salaries and Benefits were 13% more than the prior year but precisely aligned with the budget at 50%. Professional Services (Contract Services) were 10% more than the prior year but only at 26% of the budget, potentially indicating projects scheduled later in the fiscal year. Most departments performed in line with or below budget, with specific examples including Riverfront Development at 26% of budget, Stormwater at 42%, and Solid Waste at 49%. Total expenses were 49% of budgeted expenditures, remaining on track. A graph illustrated the amended budget compared to fiscal year-to-date actuals. Mr. Garton inquired about discussions from the workshop regarding the police union negotiations and the potential use of reserves for salaries. The City Manager clarified that the Q2 financial report should not be confused with the future budget. He mentioned that the next negotiation meeting for the police union was scheduled for July 29, and no further information beyond what was already programmed into the budget was available at that time. He assured that further details would be shared during the FY26 budget discussion. iii. Cash and Investments The Finance Director presented a report that outlined cash in bank and investments, primarily in Florida Prime Pool and Florida Trust Pool. Since the report, investments had also been made in the Florida Class pool. The Finance Director stated the Morgan Stanley Account held PD pension money. iv. Capital Project Status Report The Finance Director detailed current ongoing projects, prior year expenditures, current year-to-date expenditures, percent expended, and the remaining amount. BUDGET REVIEW ADVISORY COMMITTEE MINUTES OF REGULAR MEETING J U LY 21, 2025 PAGE 3 Ms. Reed confirmed that there were no immediate questions from the committee or public regarding the Q2 report. V. Public Input Damien Gilliams, from 1623 US1, Sebastian, addressed the committee during public comment. He acknowledged the increase in numbers, reserve accounts, and real estate values. He expressed concern about current economic hardships faced by citizens and urged the committee to identify areas for budget reductions (3-10%) within each department. Mr. Gilliams highlighted significant reserves and recent expenditures on new equipment (e.g., trucks for Solid Waste, airport equipment). He emphasized the need for representatives to thoroughly scrutinize the budget, advocating for careful consideration during challenging times, particularly for veterans and retirees. F. Presentation on Draft FY 2026 Budget and Proposed Millage The Finance Director presented a PowerPoint on the upcoming budget for the period of October 1, 2025, through September 30, 2026. He noted that this presentation was prepared before the budget workshops and may not have incorporated all suggestions made during those sessions. The Finance Director read the information on each slide. (SEE ATTACHED) i. Key Budget Considerations: [Slide 21 The presentation covered current factors, a summary of the General Fund Budget, Enterprise, Special Revenue, and Other Funds Budgets, the Capital Improvement Program, Property Values and Millage, and Other Considerations. ii. Current Factors: [Slide 31 The Consumer Price Index (CPI) showed a 2A% increase nationally for the year ending May 2025. Interest rates remained high, with the Fed rate at 4.25%-4.500/o, which was causing housing values to decline but positively impacted interest revenue. Florida Unemployment was trending higher, up 0.04% year -over -year in May 2025. Florida Housing Prices were down 2% year -over -year in May 2025, and specifically down 3.4% in Sebastian. The Sebastian Taxable Assessed Value (from the Indian County Property Appraiser) increased by 8.4% for FY26. iii. Personnel Factors: [Slide 41 Health insurance premiums were projected to increase by 7%. The City Manager noted that this was significantly lower than the 20-30% increases observed in other municipalities, attributing it to the success of a new plan implemented the previous year where employees met specific targets. Police and Supervisors Union Negotiations were ongoing, and non -union employee pay increases were still being decided. No new positions were planned. The City Manager stated that there were currently eight total open positions city-wide (three in Police, three in Stormwater - frozen until the new FY, two in Public Works), which was the lowest in a long time. A new retirement plan was being explored due to the dissolution of the CWA union, with contributions scheduled to end on September 30, 2025. iv. General Fund Increases and Decreases: [Slide 51 Personnel Costs increased by $1,109,698 (a 7.7% increase due to pay). Operating Expenditures saw a slight increase of $13,669 (0.3% increase), attributed to efforts by staff to reduce costs. Capital Items BUDGET REVIEW ADVISORY COMMITTEE MINUTES OF REGULAR MEETING J U LY 21, 2025 PAGE 4 and Projects experienced a decrease of ($388,766), with capital projects shifted to other funds as needed. The overall impact on the General Fund resulted in a $734,691 (3.8%) budget increase. V. Golf Course Budget: [Slide 61 The draft budget indicated a revenue excess of $15,203, with revenues projected conservatively. A repayment of $100,000 was shown to the General Fund. The restaurant lease remained at $30,000. Airport rent increased from $106,864 to $107,483. A Building Fund Loan for $36,991 (Principal and Interest on a $700,000 loan) was also noted. The City Manager stated that new daily rates would be brought back for discussion, aiming to build up golf course reserves for self -funded capital projects, while membership rates would not be adjusted. vi. Airport Budget: [Slide 71 The draft budget indicated a revenue excess of $23,433. Property rental revenue was expected to increase with the rental of Hangar D. Loans from the Discretionary Sales Tax Fund included Hangar A ($213,495 - $235,111 by 9/30/26) and Hangar B ($213,408 - $210,111 by 9/30/26). Grant Matching from the DST Fund included $50,000 for the design of the Taxiway Golf, $197,520 for its construction, $27,750 for the Construction of the Terminal Apron Expansion, and $50,000 for the design of the NW Access for expansion. The City Manager noted a council discussion at the workshop to utilize airport reserves for some of these grant matching projects, particularly for Taxiway Golf design and construction, and the Terminal Apron Expansion, thereby reducing the impact on the DST fund. Over the following five years, $1,010,000 was allocated for matching funds for the construction of Taxiway Golf, Runway 10/28 Rehab, Security Fiber Network Upgrades, Construction of NW Access for expansion, Design taxiway Alpha Rehab, and Taxiway Bravo Rehab. Mr. Baker expressed his excitement about the apron and taxiway golf work, emphasizing that these projects significantly benefited the city beyond just the airport, as they facilitated future industrial and business growth. City Manager reinforced that airport projects were typically 95% funded by the FAA (federal) or up to 20% funded by DOT (state), minimizing the city's contribution. He reiterated that economic development was a key driver for airport expansion. vii. Building Fund: [Slide 81 Permit revenue began to level off. Loan payments were expected, including a $36,991 Principal and Interest Payment on Golf Course Loans. The $700,000 loan would be $428,522 by 9/30/25, with a $559,684 loan to be paid after the $700,000 one. viii. Special Revenue Funds: [Slide 91 American Rescue Plan Act Fund (ARPA) fund was originally allocated to Gardenia Ditch, Schumann Drive, Concha Dam, Employee Retention Payments, and Road Work. Funds had to be obligated by December 31, 2024, and fully spent by December 31, 2026. Improvement projects required plans and permitting, which took time. Road work was completed in FY25, and the Gardenia Ditch and Schumann Drive Projects were ongoing. BUDGET REVIEW ADVISORY COMMITTEE MINUTES OF REGULAR MEETING J U LY 21, 2025 PAGE 5 ix. Local Option Gas Tax: [Slide 101 Collections were projected to increase by 1.0% annually for future years. This fund was being used for all road preservation and associated swale work as scheduled in the current Paving Management Program. It was also funding a road condition assessment in FY26 and railroad crossing maintenance. X. Discretionary Sales Tax: [Slide 111 Collections were projected to increase by 1.0% annually for future years. This fund was being used for Road Reconstruction and associated swale work as scheduled in the current Paving Management Program. It also funded MIS Infrastructure, Police Vehicles/Equipment, A/C Replacements, PD Roof Repair/Replacement Work, Main Street Boat Ramp Dredging, a Vehicle and Equipment Shelter at the PW Compound, Major Construction Vehicles/Equipment, and Matching Funds for FAA and FDOT Grants. xi. Riverfront CRA Fund: [Slide 121 Operating Expenditures included Audit Fees, Administration, Working Waterfront Improvements, Other Facility Maintenance, Submerged Land Leases, Consulting Fees, Travel and Education Cost, Legal Ads, State Fee, Association Dues, and Landfill Fee on Fisherman's Landing. Landscaping was handled in-house. Fisherman's Landing and Working Waterfront Projects were ongoing through FY 26-27, with the Central Avenue Catalyst Site planned for FY 27-28. The City Manager reported a projected $50,000 annual savings by bringing CRA landscaping maintenance in-house (estimated cost reduction from $147,000 to $96,000, including staffing and capital costs), compared to previous contract services. xii. Recreation Impact Fee Fund: [Slide 131 This fund supported unspecified improvements ($5K per Zone) and $80,000 in playground improvements budgeted in FY26. The projected 2026 Fund Balance was $207,787, provided revenue estimates held true. xiii. Stormwater Utility Fund: [Slide 141 Personnel and Operating Accounts exceeded the revenue from fees by $160,773. Capital expenditures included a Mini Excavator, Zero Turn Mower, and Slip lining or Pipe Replacement. xiv. Law Enforcement Forfeiture Fund: [Slide 151 This fund was used only for unbudgeted items, and specific items required City Council Approval. The current balance was $53,582. xv. Parking In Lieu Of Fund: [Slide 15] Used for providing additional parking, the current balance was $127,246. xvi. Cemetery Trust Fund: [Slide 161 Half of sales on Operations and Maintenance reimbursed $150,000 to the General Fund. Half of sales were expendable on expansions or costs incidental to adding future sites, funding Columbarium Niches in FY 26-27. The Administration Building was being replaced in FY26 at a cost of $660,000. BUDGET REVIEW ADVISORY COMMITTEE MINUTES OF REGULAR MEETING JULY 21, 2025 PAGE 6 xvii. Capital Improvement Program (CIP): [Slide 17] The total projection for the CIP was $47 Million over 6 years, with $12.9 Million allocated for the next fiscal year (FY26). Grant funding was expected to cover $4.1 Million next year, representing 31.9% of the total. The largest items for the next fiscal year included $3,547,500 for Street Work, $1,110,000 for Terminal Apron Expansion, and $987,600 for Taxiway Golf Construction. These three items together constituted $5,645,100 of the largest projects. xviii. Property Values and Millage: [Slide 181 Total Certified Taxable Property Values increased by $193,311,991 or 8.4% above 2025. Additions accounted for $58,569,929 or 2.55% of the increase, while reassessments contributed $134,742,062 or 5.86% of the increase. The Rolled Back Rate was 3.0148. The Proposed Millage was 3.5455, representing an increase of 0.35 Mills from the prior year. Using the Rolled -Back Millage would have required using $1,359,017 of reserves. Mr. Baker inquired about the outlook for an increase in the Homestead allowance, based on the City Manager's visit to the state capital. The City Manager detailed that Amendment 5, which voters passed in November 2024 and became effective in January 2025, added a CPI increase to the homestead exemption (approximately $722, resulting in a $60-$80 total tax decrease for homeowners, not just city taxes). He noted that while nothing formally passed the legislature this year, there was significant interest in reducing property taxes, with no less than 10 bills related to the issue. He fully expected similar items to return in the January 2026 legislative session with a more concerted effort. xix. The Finance Director presented the Dollar Value of Tax Roll Additions [Slide 191: He noted a slight decrease from 2024 ($59 million down to $58.5 million). xx. The Finance Director reviewed Millage Rate Options [Slide 201: The lowest option was the rollback rate (3.0148). The chart showed net tax collection and the increase in revenue over the rollback rate for various millage options. The far -right column displayed the deficit or reserve increase based on the general fund expenditure budget. The actual balancing of the general fund budget would be between 3.5455 and 3.5955 mills. The proposed 3.5455 millage rate showed a negative $78,995.08 balance, which did not yet include all workshop suggestions. xxi. The Finance Director presented the Millage impact on various Home Values [Slide 211: For a home valued at $350,000 with a $50,000 homestead exemption, city taxes would be $958.65 at a rate of 3.1955. The proposed rate of 3.5455 would result in an increase over the Roll -Back Rate of approximately $136.91 for a $350,000 home (with homestead exemption), $159.73 for a $400,000 home (with homestead exemption), and $182.55 for a $450,000 home (with homestead exemption). For homes without a homestead exemption, the increase over the Roll -Back Rate would be approximately $226.74 for a $350,000 home, up to $291.52 for a $450,000 home. xxii. The Finance Director presented a 20-Year History of Millage Setting [Slide 221: Lighter colored bars represented the rollback rate, while darker green bars showed the actual final rate. The city had chosen the rolled -back rate 11 years out of 20 (55% of the time). Ms. Jacob inquired about Indian River County's proposed millage. BUDGET REVIEW ADVISORY COMMITTEE MINUTES OF REGULAR MEETING J U LY 21, 2025 PAGE 7 The City Manager confirmed that the County's current proposed budget aimed to maintain their existing millage rate, which was approximately 3.6 for city residents. He clarified that maintaining the millage rate would still result in a tax increase due to increasing property values. xxiii. Other Considerations for the Budget: [Slide 231 Property and Liability Insurance Costs were not yet settled, and Police and Supervisor Union Negotiations were still ongoing. Prices continued to increase, raising questions about the duration of current economic levels. Unknown future impacts of tariffs were also a concern. The TRIM Notices, setting the Proposed Millage at 3.5455, would be advertised as a 17.60% Tax Increase. Exceeding the Proposed Millage on the TRIM would be expensive and would delay budget adoption. Mr. McGinn asked the City Manager to provide an explanation of the process for setting the TRIM notice and the implications of not using a higher rate initially. The City Manager explained that the request was for a recommendation to City Council to set the TRIM notice, which was the preliminary tax bill. He mentioned that there were still unknowns in the budget over the next 4-6 weeks (e.g., better revenue estimates, worse insurance costs). He emphasized that once a TRIM number was set, the Council typically would not exceed it later in the budget cycle due to the expense and delays it would cause (e.g., mail -outs to residents, statutory timelines for public hearings). The prudent approach was to set the TRIM notice at a rate that would not be surpassed, allowing staff to work down from there before the budget hearings in September. Mr. McGinn affirmed that the explanation was exactly what he had hoped to hear. xxiv. Committee Deliberation and Recommendation for Tentative Millage The Finance Director requested the Budget Committee recommend a tentative millage for Fiscal Year 2026 at 3.5455 [Slide 241. He concluded the presentation, inviting further questions. Ms. Reed opened the floor for further questions. Mr. Baker asked about the outlook for state and federal grants. The City Manager provided an overview of grant experiences stating it had been slow (e.g., a $1.5 million Land and Water Conservation grant from the previous summer was still awaiting paperwork) but, FAA grants could be very fast. The City Manager stated the city had diversified its pursuit of federal grants beyond just FAA, utilizing a third -party grant writer. He cautioned against full dependency on federal grants due to current funding mechanisms. In reference to State Grants the City Manager informed funds were available but increasingly competitive. He cited a $3.6 million DEP grant for septic -to -sewer, which had involved two months of back -and -forth on agreements. He also noted that some historically funded state grants (e.g., Florida Recreation Department, Parks and Trails grants) were not funded that year. The City Manager stated, excluding airport funds (which received substantial grant dollars), the city would have applied for over $21 million in grants by the end of September. $5.6 million had been awarded, with approximately $12 million pending. He then said some grants initially denied the previous year were awarded that summer upon reapplication. The City Manager mentioned grants required a 50% match, meaning the city's $2 million match on awarded grants translated into $7.7 million in project funding. He further specified that the city could BUDGET REVIEW ADVISORY COMMITTEE PAGE 8 MINUTES OF REGULAR MEETING J U LY 21, 2025 not fully depend on grants, and would continue to pursue them and advocate for them with legislators. Mr. McGinn then raised a point to unforeseen expenses as the "bright line surprise." City Manager elaborated that the city had agreements with Florida East Coast Railway for railroad crossings, which were historically one-sided. He informed recent notices for maintenance on the Barber Street railroad crossing ($223,000) and the Schumann railroad maintenance crossing ($90,000) totaled $310,000, an unbudgeted expense. The City Manager stated the city was working to identify Local Option Gas Tax funds to cover these costs, which would necessitate reallocating funds from other planned projects. Mr. McGinn stated he brought this up to counter the idea that everything was going well and that the city should give away its reserves, emphasizing that surprises like this could always occur. The City Manager clarified the city's financial policies regarding reserves. He stated that the target for general fund reserves was $7 million. Currently, general fund reserves were approximately $8.59 million, which was lower than some larger numbers that might be cited, as some funds were restricted (e.g., discretionary sales tax, local option gas tax, building department, airport, golf course funds could not be used for all purposes, such as employee salaries, which were a heavy lift for the general fund). The City Manager detailed that an "unrestricted" figure of $10.7 million was further reduced by $1.5 million for typical annual items like renewal/replacement (e.g., unexpected AC or car breakdowns), $275,000 for employee payouts (for accrued leave upon departure), and assigned funds that were rolling over. These reserves were crucial for unforeseen circumstances, including hurricanes or natural disasters. Ms. Reed summarized her understanding that the current draft budget presented was viewed as the city's wish list for the year. She said when capital improvement projects and other items came up for expenditure, they were already reviewed by the City Council, who had approved them and justified their necessity. Ms. Reed stated this did not guarantee that every desired item, like a claw truck, would be acquired. She said the proposed millage rate of 3.5455 would require dipping into reserves by approximately $79,000, with potential for more depending on future unknowns. City Manager clarified that the draft budget was not a complete wish list; significant cuts totaling $1.5 million had already been made from an initial $2A million deficit. He emphasized that staff continued to work daily on refining the budget. The City Manager also reiterated that funds like Discretionary Sales Tax (DST) and Local Option Gas Tax (LOGT) were specifically allocated for infrastructure and could not be used for general fund expenses or staffing, meaning that cuts to capital projects funded by these sources (e.g., a claw truck, road repaving) would not alleviate the general fund's needs or the millage rate impact. Ms. Reed expressed support for the recommended millage rate, contingent on the City Manager and staffs commitment to finding further efficiencies if circumstances improved. Mr. McGinn reiterated his satisfaction with the budget workshop process. xxv. Public Input BUDGET REVIEW ADVISORY COMMITTEE MINUTES OF REGULAR MEETING JULY 21, 2025 PAGE Damien Gilliams, from 1623 US1, Sebastian, voiced opposition to the proposed millage rate, describing a 16-17% increase as a big jump, especially when the county was attempting to maintain its rate. He questioned why the city did not partner with the school board or county for health insurance to reduce expenses. He emphasized current economic hardships, impending tariffs, and the rising cost of living in Sebastian. He claimed that with $7 million plus an additional $1.5 million in reserves, the city had sufficient funds to avoid such a significant tax increase. He declared that rising property values should lead to a reduction in the millage rate, not an increase, and criticized staff for not proposing ideas to get closer to the rollback rate. He also referred to past project overruns, citing the airport facility completion at $9.2 million versus an initial $3.4 million budget. Ms. Reed interjected, asking Mr. Gilliams to focus on the proposed FY26 budget rather than past expenditures. Mr. Gilliams continued, reiterating his concerns about maintaining armored vehicles for a small town and urging a tour of the new airport facility as an example of project overruns. He suggested a pattern of low -ball offers leading to significant cost increases. He concluded by advocating for the city to hit rollback as close as possible and follow the county's lead. Ms. Reed closed the public comment section. Mr. McGinn noted that a $200 annual increase for a $400,000 home (with an actual sales value of $600,000-$700,000) was equivalent to about one month of a Comcast bill. He argued that maintaining the city required funding and that drastic tax cuts would leave only a police department. xxvi. Motion and Vote for Millage Rate Recommendation MOTION by Mr. Baker and SECOND by Mr. McGinn for the committee to recommend a millage rate of 3.5455 to the City Council for fiscal year 2026 passed with a unanimous voice vote. G. Next Meetina Date- Mondav Auaust 4.2025 The next meeting date was set for Monday, August 4, 2025. No conflicts were noted. Ms. Reed extended her appreciation to the City Manager and Finance Director, stating she had the opportunity to watch most of the meeting live on TV. She commended the staffs excellentjob in presenting their departments and detailing ongoing activities. She acknowledged that taxes were generally undesirable but necessary for city operations. She also expressed reliance on the city to save money if funds were not needed, noting that past issues were beyond their control. H. Next Meetina Date- Monday. Auaust 4.2025 Being no further business, Ms. Reed adjourned the Citizens Budget Review Advisory meeting at 7:16 p.m. By: (JialiC 'uQS.. T'iF tuc 2026 Budget and Capital Program Presentation on Proposed 2026 Budget and Tentative Millage Budget Review Advisory Committee Meeting: Monday July 21, 2025 City Council Meeting to Approve Millage: Wednesday July 23, 2025 City Council First Hearing: Monday September 15, 2025 City Council Second Hearing: Monday September 24, 2025 Prepared By: Brian Stewart Chief Financial Officer 1 2026 Budget and Capital Program Current Factors Summary of General Fund Budget Enterprise Special Revenue and Other Funds Capital Improvement Program Property Values and Millage Other Considerations 2 Current Factors Economy Consumer Price Index inflation up 2.4% for year ending May 2025. Interest remains high, Fed rate 4.25%-4.50% Causing housing value to decline Helps with Interest Revenue Florida unemployment trending higher, up .04% year-over-year in May 2025 Florida Housing Prices down 2% year-over-year in May 2025, (-3.4% in Sebatian) Sebastian Taxable Assessed Value up 8.4% for FY26 Current Factors Personnel Health Insurance Premiums Projected to Be Up by 7%. Police and Supervisors Union Negotiations ongoing. Non-Union employees Pay Increases. No new Positions. New Retirement Plan. General Fund Summary General Fund Increases (Decreases) $ 1,109,698 Personnel Costs 1 13,669 Operating Expenditures2 (388,766) Capital Items and Projects $ 734,691 3.8% Budget Increase 1 7.7% Increase due to pay. 2 0.3% Increase. 5 Draft FY2026 Enterprise Funds: Golf Course Draft is Showing a Revenue Excess of $15,203. Revenues Are Projected Conservatively. $100,000 is Shown as a Repayment to General Fund. Same $30,000 for Restaurant Lease. Airport Rent From $106,864 to $107,483. $36,991 Principal and Interest on $700,000 Building Fund Loan. 6 Draft FY2026 Enterprise Funds: Airport Draft is showing revenue excess of $23,433 Property Rental Revenue Expected to Increase With Rental of Hangar D. Loans From Discretionary Sales Tax Fund: Hangar A $213,495 - $235,111 By 9/30/26. Hangar B $213,408 - $210,111 By 9/30/26. Grant Matching From DST Fund: $50,000 for the design of the Taxiway Golf; $197,520 for the Construction of Taxiway Golf; $27,750 for Construction of the Terminal Apron Expansion; $50,000 for the design of the NW Access for expansion. Over the Following Five Years, $1,010,000 for the matching on the construction of Taxiway Golf; Runway 10/28 Rehab; Security Fiber Network Upgrades; Construction of NW Access for expansion; Design taxiway Alfa Rehab; Taxiway Bravo Rehab. 7 Draft FY2026 Enterprise Funds: Building Permit Revenue starting to level off. Expecting $36,991 Principal and Interest Payment on Golf Course Loans: $700,000 Loan Will Be $428,522 By 9/30/25. $559,684 Loan To Be Paid After the $700,000. 8 Draft FY2026 Special Revenue Funds American Rescue Plan Act Fund (ARPA): Originally Allocated to Gardenia Ditch, Schumann Drive, Concha Dam, Employee Retention Payments and Road Work. Must Be Obligated by December 31, 2024 and Totally Spent by December 31. 2026. Improvement Projects Need Plans and Permitting Which Require Some Time. Road work completed in FY25, Gardenia Ditch and Schumann Drive Projects ongoing. 9 Draft FY2026 Special Revenue Funds Local Option Gas Tax: Projecting Collections at 1.0% Annual Increases for Future Years. Being Used for All Road Preservation and Associated Swale Work as Scheduled in Current Paving Management Program. Funding Road condition assessment in FY26 Railroad Crossing Maintenance 10 Draft FY2026 Special Revenue Funds Discretionary Sales Tax: Projecting Collections at 1.0% Annual Increases for Future Years. Being Used for Road Reconstruction and Associated Swale Work as Scheduled in Current Paving Management Program. Also Funding: MIS Infrastructure, Police Vehicles/Equipment, A/C Replacements, PD Roof Repair/Replacement Work, Main Street Boat Ramp Dredging, Vehicle and Equipment Shelter at PW Compound, Major Construction Vehicles/Equipment and Matching Funds for FAA and FDOT Grants.11 Draft FY2026 Special Revenue Funds: Riverfront CRA Fund: Operating Expenditures: Audit Fees, Administration, Working Waterfront Improvements, Other Facility Maintenance, Submerged Land Leases, Consulting Fees, Travel and Education Cost, Legal Ads, State Fee, Association Dues and Landfill Fee on Fisherman’s Landing. Landscaping is Handled In-House Fisherman’s Landing and Working Waterfront Projects Thru FY 26-27. Central Avenue Catalyst Site in FY 27-28.12 Draft FY2026 Special Revenue Funds: Recreation Impact Fee Fund: Unspecified Improvements ($5K per Zone). $80,000 in playground Improvements budgeted in FY26 Projected 2026 Fund Balance is $207,787 Provided Revenue Estimates Hold True. 13 Draft FY2026 Special Revenue Funds: Stormwater Utility Fund: Personnel and Operating Accounts are exceeding the revenue from fees by $160,773. Capital Includes: Mini Excavator Zero Turn Mower Sliplining or Pipe Replacement. 14 Draft FY2026 Special Revenue Funds: Law Enforcement Forfeiture Fund: Used Only for Unbudgeted Items. Specific Items Need City Council Approval. Current Balance is $53,582. Parking In Lieu Of Fund: Used for Providing Additional Parking. Current Balance is $127,246. 15 Draft FY2026 Trust Fund Cemetery Trust Fund: ½ of Sales on Operations and Maintenance: Reimbursing $150,000 to General Fund. ½ of Sales Expendable on Expansions or Cost Incidental to Adding Future Sites: Funds Columbarium Niches in FY 26-27. Replacing Admin Building in FY26 $660,000. 16 Capital Improvement Program $47 Million Over 6 Years. $12.9 Million Next Fiscal Year. $4.1 Million Next Year Will Be Funded by Grants, Which is 31.9%. Largest Items for Next Fiscal Year: $ 3,547,500 Street Work 1,110,000 Terminal Apron Expansion 987,600 Taxiway Golf Construction$ 5,645,100 Total of Largest Items 17 Property Values and Millage: Certified Taxable Values Total Certified Taxable Property Values Increased $193,311,991 or 8.4% Above 2025. Additions Account for $58,569,929 or 2.55% of the Increase. Reassessments Were $134,742,062 or 5.86% of the Increase. Rolled-Back is 3.0148. Proposed Millage is 3.5455 (Increase of .35 Mills from Prior Year). To Use Rolled-Back Millage Would Require Using $1,359,017 of Reserves. 18 Property Values and Millage: Taxable Value Additions Dollar Value of Tax Roll Additions: 2025 58,569,929 2020 33,685,698 2024 59,143,508 2019 23,351,814 2023 84,817,696 2018 15,998,366 2022 47,981,095 2017 35,951,704 2021 32,716,715 2016 25,763,700 19 Millage Rate Options 20 Net Tax Collection Increase (Decrease) from Roll-Back % Change From Roll- Back Rate Increase (Decrease) in GF Reserves Roll-Back Rate 3.0148 $7,271,550.51 $0.00 0.00%(1,359,017.58) Draft Budget (PY) Rate 3.1955 $7,707,390.10 $435,839.58 5.99%(923,178.00) 3.3305 $8,033,003.51 $761,453.00 10.47%(597,564.59) 1/4 mill increase 3.4455 $8,310,377.90 $1,038,827.39 14.29%(320,190.20) 3.5455 $8,551,573.02 $1,280,022.51 17.60%(78,995.08) 3.5955 $8,672,170.58 $1,400,620.07 19.26%41,602.48 1/2 mill increase 3.6955 $8,913,365.70 $1,641,815.19 22.58%282,797.61 MILLAGE RATE OPTIONS Property Values and Millage: Millage impact on various Home Values 21 Millage With Homestead (3%) Without Homestead (8.4%) Various Home values 350,000.00 400,000.00 450,000.00 350,000.00 400,000.00 450,000.00 2025 Tax Amount @ 3.1955 958.65 1,118.43 1,278.20 1,118.43 1,278.20 1,437.98 2026 Tax Options 2026 Increase (Decrease) over Roll-Back Rate Rolled Back Rate 3.0148 (27.08) (31.59) (36.10) 25.39 29.02 32.64 Prior Year Rate 3.1955 28.76 33.55 38.35 93.95 107.37 120.79 Other Rate Options: 3.3305 70.47 82.22 93.97 145.17 165.90 186.64 3.4455 106.01 123.68 141.35 188.80 215.77 242.74 3.5455 136.91 159.73 182.55 226.74 259.13 291.52 3.5955 152.36 177.75 203.15 245.71 280.81 315.91 3.6955 183.26 213.80 244.35 283.65 324.17 364.69 Millage Setting 20 Year History At or Below Rolled-Back 11 Years - 55% of the Time 22 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Rolled-Back 3.051 3.212 3.364 3.803 3.901 3.731 3.564 3.739 3.544 3.629 3.670 3.493 3.151 2.939 2.809 3.004 2.683 2.627 2.985 3.014 Final 3.051 2.991 3.345 3.345 3.304 3.304 3.716 3.716 3.855 3.855 3.800 3.400 3.151 2.939 3.151 3.004 2.905 3.195 3.195 3.545 2.0000 2.2000 2.4000 2.6000 2.8000 3.0000 3.2000 3.4000 3.6000 3.8000 4.0000 Other Considerations Property and Liability Insurance Costs Not Yet Settled Police and Supervisor Union Negotiations Still Ongoing Prices Continue to Increase But How Long Will Current Economic Levels Continue? Unknown Future Impact of Tariffs Setting the Proposed Millage for the Trim Notices at 3.5455 Will Be Advertised as a 17.60% Tax Increase Exceeding the Proposed Millage on the TRIM is Expensive and Delays Budget Adoption 23 Conclusion Staff Request You Recommend to Council the Tentative Millage for Fiscal Year 2026 at 3.5455. 24