HomeMy WebLinkAbout7-20-26 Budget Workshop Adopted Minutes1.:L�ir,MINUTES
s Budget Workshop Meeting
Monday, July 20, 2026 - 6:00 PM
City Hall, Commission Chamber
�� >r 800 Seminole Road, FL 32233
ATTENDANCE:
Present: Curtis Ford, Mayor - Seat 1 (At Large)
Bruce Bole, Commissioner - Mayor Pro Tem Seat 2 (District 1308)
Thomas Grant, Commissioner - Seat 3 (District 1307)
Candace Kelly, Commissioner - Seat 4 (District 1306)
Jessica Ring, Commissioner - Seat 5 (District 1312)
Also Present: Kevin Hogencamp, City Manager (CM)
Donna Bartle, City Clerk (CC)
Troy Stephens, Utilities Director (UD)
Victor Gualillo, Police Chief (PC)
Brittany Percell, Finance Director (FD)
CALL TO ORDER
1. PUBLIC COMMENT
The following speaker provided their comments:
Sarah Boren
2. TOPICS
A. Public Utilities At -a -Glance
UD Stephens presented an overview of the Public Utilities Capital Improvement Plan
(CIP), highlighting ongoing and planned projects across water production, water
distribution, wastewater treatment, and the sewer collection system and answered
questions from the Commission.
B. Police Department At -a -Glance
PC Gualillo presented as detailed in a slideshow (which is attached hereto and made part
of this official record as Attachment A) and answered questions from the Commission.
7-20-26 Attachment A
C. Homestead Property Tax Constitutional Amendment Implications
CM Hogencamp presented as detailed in a handout (which is attached hereto and made
part of this official record as Attachment B). He and FD Percell answered questions
from the Commission.
Budget Workshop
July 20, 2026
The Commission reached CONSENSUS to submit the current millage rate of 2.7499
mills as the ceiling to the Property Appraiser by the August 4, 2026 deadline. This will
require 4 out of 5 votes.
7-20-26 Attachment B
D. 2026-27 Budget Overview
CM Hogencamp presented as detailed in a handout (which is attached hereto and made
part of this official record as Attachment Q and answered questions from the
Commission. Commissioner Ring requested that staff produce and publish an
organizational chart showing all positions by title and count within each department.
7-20-26 Attachment C
ADJOURNMENT
The meeting adjourned at 7:55 PM.
Attest:
Donna L. Bartle, City Clerk
Date Approved: 0I/C)/ZD Z&
Curtis Ford, M yor
Budget Workshop
July 20, 2026
Attachment A to
7-20-26 Minutes
2025 UNOFFICIAL TOTALS
A comparison of category counts for local law enforcement agencies for the year ending
2025. These numbers are not absolute. Different agencies counts some types of calls
and reports differently so the totals are relative and for benchmarking purposes only.
30,427
20,534
52,213
750,902
271
239
1,059
28,652
1,596
824
1,378
COJ- not JSO
1,774
2,091
11,884
63,147
7,422
2,202
18,943
88,209
87
21/91
1,971/983
1,574
1,198
1,269
7,200
117,404
507
329
1,467
36,050
835
511
722
68,986
*Unofficial totals are from open -source data; not certified by the agencies or entities listed
Attachment A to
7-20-26 Minutes
2026 ATLANTIC BEACH POLICE TOTALS*
Traffic
651
708
716
795
677
Citations
689
Parking
28
46
260
170
206
211
Citations
Traffic Stops
959
812
1015
896
907
842
Arrests
42
44
58
46
38
36
Warnings
129
111
143
98
69
79
Property
967
828
919
847
673
843
Checks
Reports
120
149
188
147
153
141
Calls for
2667
2316
2909
2571
2527
2614
Service
'Unofficial totals are queried and calculated from raw data and
are designed
to provide a snapshot only.
Attachment A to
7-20-26 Minutes
STATISTICAL TRENDS
Statistics
Calls for Service
21,043
23,399
25,228
30,427
91
1,963
2,095
2,422
2,262
Average Response Time
2 Min 56 Sec
3 Min 35 Sec
2 Min 40 Sec
2 Min 36 Sec
Reports Written
1,877
1,678
1,158
1,198
Arrests
391
298
377
507
DUI Arrests
22
33
66
119
Drug Arrests
79
50
51
73
Clearance Rate
47.87%
44.48%
51.97%
63.40%
Traffic Stops
5,176
6,588
7,825 40WIM&
9,842
Traffic Citations
3,294
4,216
5,946
7,422
Traffic Warnings
2,910
5,671
1,508
1,774
Parking Citations
815
883
1,863
1,596
Traffic Crashes
249
236
320
270
Property Checks
6,356
6,634
5,234
9,389
Attachment B to / ACVZ I p - ( t 'A'4, R c
7-20-26 Minutes 14411440U'f-
FY 2026-27 Budget Strategy Report:
Opportunities and Constraints
To: Honorable Mayor, Members of the City Commission, and the Atlantic Beach
Community
From: Kevin Hogencamp, City Manager
Date: June 29, 2026
Subject: Fiscal Year 2026-27 Budget Strategy Report
Executive Summary
As we approach the Fiscal Year 2026-27 budget cycle, the City of Atlantic Beach stands
at a critical financial crossroads. Managing structural revenue shifts requires a balanced,
dual strategy: aggressive internal cost containment and targeted, modest adjustments to
user fees.
Furthermore, comprehensive policy development is a key responsibility that we are
undertaking during this cycle to establish clear, repeatable frameworks --for matters
ranging from lift station development to selecting a new city manager --for future
governance. By taking proactive, measured steps now, we can stabilize our fiscal
foundation, absorb upcoming revenue losses, and ensure the uninterrupted delivery of
high-quality municipal services to our residents.
Atlantic Beach at a Glance (FY 2025-26 Baseline)
To frame our upcoming strategic decisions, our current fiscal baseline and community
profile are outlined below:
Metric
Total Municipal Budget
Core General Fund i
i
Current Millage Rate i
Population 1 Households
Median Household Income ,I
Baseline Value
$57,616,034
$21,636,755
2.7499 mills
13,353 residents / 5,750 households
$103,288
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Metric Baseline Value
Median Home Value (2023) $565,500
Where Your Dollars Also Go (Enterprise and Special Funds)
• Water and Sewer Funds
• Stormwater Fund
• Sanitation Fund
• Building Code Enforcement Fund
Fiscal Benchmarks: Healthy Fund Balances (Projected — Sept. 30, 2026)
A significant positive highlight for the City is our strong financial positioning across several
targeted accounts. These healthy fund balances insulate the city and ensure capital
reserves remain viable:
• Water Fund: $1,865,705
• Sewer Fund: $2,499,924
• Capital Projects Fund: $1,002,760
• Tree Protection Fund: $617,495
• Better Jacksonville Fund: $484,994
• Paid Parking Fund: $330,573
Guiding Structural Documents
Our approach to the upcoming fiscal year is strategically anchored by the following core
planning frameworks:
• Capital Improvement Plan
• Stormwater Master Plan
• Connectivity Plan
• Adaptation and Resiliency Plan
General Fund Revenue Summary
In the City of Atlantic Beach, property taxes traditionally make up the single largest slice
of General Fund revenues (roughly 40%). To balance the rest of the operational budget
for daily services like public safety, street maintenance, and parks, the city relies on
several other primary funding mechanisms:
1. Intergovernmental & State -Shared Revenues
These are taxes collected by the State of Florida or Duval County and distributed back to
the municipal level based on local populations.
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Local Option Sales Taxes: A portion of the discretionary sales surtax collected
within the county.
State Revenue Sharing & Municipal Home Rule Taxes: Formulas that
reallocate state -collected sales and motor fuel taxes back to local governments.
Half -Cent Sales Tax: A state -shared revenue program designed to provide local
tax relief and support municipal operations.
2. Franchise Fees and Utility Service Taxes
The city levies fees on utility providers for the right to operate within the public right-of-
way, alongside discretionary taxes on consumption.
Franchise Fees: Charged to electricity (FPL), gas, and solid waste providers.
Public Service / Utility Taxes: Levied on purchases of electricity, water, metered
or bottled gas, and fuel oil.
Communications Services Tax (CST): Applied to telecommunications, satellite,
and cable TV services.
3. Licenses, Permits, and Fees
Revenue generated directly from regulatory activities, local commerce, and specific land -
use functions.
Building, Electrical, and Plumbing Permits: Fees collected during the
inspection and approval process for local development and renovations.
Local Business Tax Receipts (LBTR): The fee paid by businesses operating
within city limits to maintain their business tax license.
Zoning and Plan Review Fees: Collected by the community development
department for specialized land -use approvals.
4. Charges for Services & Shared Programs
Direct payments for city -provided activities or local operational agreements.
Arts, Recreation and Cultural Activity and Rental Fees: Revenues from
community center usage, park facilities, and specialized recreation programming.
Interlocal Agreements: Formally structured, cost-sharing programs with
neighboring beach communities or the county (such as the managed Paid Parking
Program revenue split at Beaches Town Center, which supports right-of-way
infrastructure and beach area amenities).
5. Fines, Forfeitures, and Miscellaneous Revenues
Smaller, auxiliary streams that naturally fluctuate year to year.
Traffic Fines and Local Code Violations: Revenue from municipal code
enforcement and local civil infractions.
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• Investment Eamings: Interest generated from the city's managed cash balances
and operational reserves.
• Grants and Administrative Transfers: Minor project reimbursements or
overhead charge -backs from the city's proprietary (utility) funds to the General
Fund for shared administrative costs.
City Commission FY 2026-27 Strategic Priorities
Our financial planning remains anchored by our commitment to preserve community
character, create a strong sense of belonging and safety, and promote active lifestyles
through green spaces and parks. To deliver on these promises, we continue to invest
prudently in our workforce. While fiscal restraint is paramount this cycle, the budget
maintains essential support structures --such as competitive compensation -and -benefits
packages, targeted tuition reimbursement, training, certification support, and assistance
with rising healthcare and fuel liabilities --to retain the talent necessary to run our city
efficiently.
I. Resiliency and Infrastructure
Focus: Addressing drainage needs, functional integrity, and long-term sustainability.
• Stormwater Master Plan Update: Formalize a strategic management framework
that includes:
o Basin and Geological Surveys: Conducting technical drainage basin
evaluations and geological -level surveys (distinct from property boundary
surveys).
o Infrastructure Prioritization: Emphasizing publicly funded infrastructure
improvements over property rights restrictions.
o Right -of -Way Optimization: Utilizing city rights-of-way to expand drainage
capacity and ditch networks.
• Systematic Maintenance and Equipment: Develop and publish a recurring
maintenance cycle for cleaning drainage ditches, restoring the functional capacity
of retention basins, and utilizing specialized machinery like the city Streetsweeper
to prevent debris accumulation.
• Comprehensive Rate Studies: Procure professional rate studies for water,
sewer, stormwater, solid waste, and recreational facilities to ensure fee structures
align with actual maintenance and public service costs.
• Permeable Technology Incentives: Create a program to incentivize the use of
permeable materials by residents to reduce neighborhood runoff, specifically
highlighting the integration of the Turf Block Program.
II. Environmental Stewardship
Focus: Protecting the tree canopy and preserving vital maritime ecosystems.
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Old -Growth Tree Protection and Management: Develop and adopt a robust
ordinance specifically designed to protect "champion" trees, supported by a
comprehensive, updated Tree Inventory.
Marsh and Shoreline Restoration: Prioritize marsh preservation and the
protection of vulnerable shorelines by initiating two high -impact environmental
restoration projects.
Dune Stabilization and Access: Sustain critical erosion -mitigation efforts through
investment in Dune Walkovers and strategic sea oat planting.
III. Community Spaces and Programming
Focus: Enhancing recreational assets and connectivity.
• Parks Master Plan Update: Modernize the citywide Parks Master Plan to reflect
current usage trends and community demographics.
• Donner Park Upgrades: Leverage grant and private funding sources for baseball
field and other improvements.
• Marsh Oaks Community Center: Dedicate specific programming and operational
resources to maximize the utility of this new facility.
• Neighborhood Amenities and Maintenance: Fund dedicated Community
Garden upkeep, park facility improvements, and park maintenance.
IV. Public Safety and Mobility
Focus: Improving visibility, traffic flow, and modernizing local legislation.
Town Center Illumination: Install upgraded street lighting within the Town Center
to enhance pedestrian safety and visibility.
Traffic Calming and Infrastructure: Implement the Sherry Drive traffic calming
project, utilizing targeted tool deployments like Speed Bumps and Right -of -Way
Parking Demarcation to manage residential traffic flows.
E -Bike Legislation (Version 2.0): Craft updated regulations to address evolving
safety trends and usage patterns for electric bicycles.
V. Organizational Excellence and Partnerships
Focus: Maintaining high service standards, community engagement, and regional
advocacy.
Employee Recruitment and Retention: Implement strategies to hire, train, and
retain a high-quality professional workforce.
Volunteer Optimization: Focus on better utilizing our community's talented
volunteers to enable us to do more great work across all municipal initiatives.
Civic Engagement and Infrastructure: Modernize city infrastructure beginning
with a Citizen Polling initiative to gather community feedback, paired with modest
facility updates like replacing the aging Commission Chamber Chairs.
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Educational Advocacy: Continue proactive engagement with Duval County
Public Schools regarding boundary and budget issues to ensure the long-term
viability of Atlantic Beach Elementary.
1. Strategic Opportunities:
Capital Project Wins
Operational Efficiency and
To maintain a balanced budget without compromising essential infrastructure, the City
must leverage internal efficiencies, capitalize on recent state funding successes, and
ensure that fee -supported services recover their actual operational costs.
Major Infrastructure Grants and Capital Projects
Governor DeSantis has officially signed the state budget, securing $1,062,500 across
three critical Atlantic Beach infrastructure priorities, alongside an exceptional ranking for
our resilience initiatives. We continue to maximize these opportunities through strategic
advocacy and professional grant consulting partnerships.
• Sherman Creek Dredging and Bank Stabilization: $650,000 in state funding
approved. We also have a separate $1 million Federal FY 2026-27 community
funding request active in the legislative queue to advance further phases.
• Dora Drive Stormwater Mitigation Pond: $212,500 in state funding approved.
This project is engineered to protect 92 structures from 25 -year flood events. The
city intends to leverage this $212,500 state appropriation as our 25% local match
for a FEMA Hazard Mitigation Grant Program (HMGP) design and survey grant.
The total projected funding for FY 2026-27 is expected to reach $850,000, fully
covering design costs.
• Marsh Oaks Septic Tank Elimination: $200,000 in state funding approved to
further our phased septic -to -sewer conversion efforts.
• Resilient Lift Station Project (Phase 1): The Governor signed the Resilient
Florida implementation program at full funding ($160 million). Because Atlantic
Beach's Phase I project ranked second on the statewide list, our grant writers
report we are safely in line for a $1.34 million state matching share. This will fund
vital floodproofing for five of our most vulnerable lift stations: Mimosa Cove,
Lakeside, Palm Avenue, 11th Street, and Camelia Street. An official award
announcement is expected any day.
• Sea Gardens Lift Station: Advanced in the infrastructure pipeline to further
safeguard the local sewer network against environmental vulnerabilities.
• Stanley Road Stormwater Pipe Enlargement: This project (stretching from
Stanley to Donner) is HMGP-funded. We are currently awaiting final approval of
our design documents and construction estimates from the state to unlock
construction funding. The contract execution is anticipated within FY 2026-27.
Veto Update: The Governor vetoed our requested $195,000 appropriation for the Sailfish
Drive multiuse path. Accordingly, administration will revisit this connectivity project with
the Commission during an upcoming budget workshop to determine if alternative funding
paths are viable.
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Operational and Communications Improvements
Digital Communication Efficiencies: In partnership with BS&A, we successfully
launched our new e -Plan Site Plan Review Software. Modernizing public
information distribution and internal workflows significantly reduces print and
administrative overhead while increasing development review transparency.
General Communications Improvements continue across departments to digitize
workflows.
Fee -Supported Service Alignment: Transitioning specialized municipal services
into self-sustaining models, reducing their reliance on general tax revenue.
Strategic Communications Expansion: To further build upon these digital
milestones, the city will develop and implement a formal, Strategic
Communications Plan. This initiative will anchor our operations around proven best
practices within the municipal communications arena. To achieve the transparency
and reach our community expects, the city will invest in both dedicated human
resources and updated communications technology. This framework will ensure
proactive public messaging, streamline resident feedback loops, and foster greater
civic engagement.
2. Internal Cost Containment ("Belt -Tightening")
Faced with tightening margins, surging fuel prices, and climbing health insurance
premiums, the administration is leading by example with aggressive internal cost -control
measures. These decisions are difficult but necessary to avoid immediate property tax
spikes.
Workforce Restructuring: For the first time in more than a decade, the City will
reduce its FTE count. This careful restructuring optimizes departmental workflows
and lowers long-term salary and benefit liabilities.
Conservative Compensation Adjustments: The upcoming budget proposes the
smallest employee salary increase in more than 10 years. While retaining top talent
remains a priority, this step reflects the immediate need for organization -wide fiscal
restraint.
PTO Bank Optimization: We are implementing a strategic restructuring of our
PTO bank policy. By adjusting accrual limits and cash -out structures, the City is
actively mitigating long-term compensated absence liabilities.
3. Modest and Targeted Fee Adjustments
To relieve pressure on the General Fund, the City will implement modest, localized fee
increases, ensuring specific services are supported directly by users rather than broad
tax subsidies.
• Annual Utility Indexing (Water, Sewer, and Stormwater): Implementing
predictable, annual adjustments to utility and stormwater rates. These incremental
increases directly fund crucial Capital Improvement Projects (CIP), ditch
Attachment B to
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maintenance, road paving, aging infrastructure replacement, and environmental
compliance.
Recreation Permits: Adjusting fee structures for recreational programs and
facility usage (such as the newly completed Aquatic Dog Park pavilion) to better
align with the rising operational and maintenance costs of parks and public spaces.
Building Permits: Updating the building department fee schedule to reflect the
actual administrative and logistical costs of plan reviews, code enforcement, and
field inspections.
4. Looming Challenges: Structural Revenue Shifts and
Regional Pressures
The primary drivers of our current fiscal constraints are external, structural, and
contractual. We must proactively plan for shifting tax exemptions and sunsetting regional
revenue sources.
Long -Term Revenue and Environmental Vulnerabilities
• Coastal and Climate Resilience: As a coastal city spanning three square miles
with two miles of ocean beach, we face escalating infrastructure protection and
mitigation costs. We must safeguard our stormwater systems and maintain robust
emergency reserves against severe weather events.
• Homestead Exemption Pressures: Ongoing legislative expansions and
structural shifts in homestead exemptions continue to limit property tax revenue
growth, decoupling municipal revenue from real-world inflationary pressures on
service delivery.
• The Sunset of the "Better Jacksonville Plan" Revenue: The impending loss of
the Better Jax sales tax revenue represents a major structural shift. This sunsetting
regional revenue source has historically offset significant capital and infrastructure
burdens; its expiration leaves a financial void that must be actively managed.
• City of Jacksonville (COJ) Interlocal Agreement: Renegotiating or adapting to
the shifting terms of our interlocal agreement with Duval County may impact
shared revenue distributions, county -provided services, and cost-sharing metrics.
Operational and Contractual Hardships
Potential Hiring Freeze: If revenue lines do not stabilize following the Better Jax
elimination and prospective property tax realignment, the city may be forced to
implement a comprehensive hiring freeze. This presents a challenge for
maintaining optimal service levels in high -demand departments.
Partnership Obligations (Boys and Girls Clubs): Maintaining this critical
partnership with the Boys and Girls Clubs of Northeast Florida remains a high
priority. Managing our funding obligations and operational expectations within our
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joint agreement requires careful recalibration to ensure community benefit
matches fiscal capacity.
Compounded Utility Pressures: While utility fee increases represent an
opportunity to stabilize the enterprise funds, they simultaneously present a political
and community challenge. Communicating the necessity of concurrent annual
increases for water, sewer, and stormwater utilities to residents will require
absolute transparency regarding infrastructure needs.
5. Key Decisions to Make
The City Commission will need to provide definitive policy and funding direction on the
following localized items during upcoming workshops:
1. 16th Street Walkover: Determining structural parameters, budget allocations, and
execution timelines for access maintenance.
2. ARCC Grant Funding: Finalizing the application, deployment, and matching
allocation strategy for upcoming grant project cycles.
3. Donations to Nonprofits: Establishing the baseline funding levels and evaluation
criteria for municipal resource contributions to local community organizations.
6. Forward -Looking Strategic Outlook
To put our property tax rate in perspective locally: under Atlantic Beach's current rate, the
homesteaded owner of a $500,000 home pays about $1,070 a year in property taxes
directly to the City. For an entire year of police protection, storm drainage, paved roads,
ditch maintenance, and clean, equipped parks, the cost is equivalent to a premium
boutique fitness subscription --about $89 a month.
To maintain this exceptional return on investment for our residents, our upcoming budget
presentations to the Commission emphasizes a three -pronged approach:
Protect Core Infrastructure: Ensure enterprise funds (Water, Sewer,
Stormwater) remain self-sustaining through predictable annual adjustments,
avoiding massive, back-loaded rate shocks to residents. We must also begin work
immediately on the next FDEP Resilient Florida cycle before the September 1
deadline.
Optimize Intergovernmental Partnerships: Aggressively defend the city's
interests during upcoming interlocal agreement discussions and regional revenue
transitions (COJ).
Exhaust Internal Efficiencies: Demonstrate to taxpayers that the city is
exhausting all internal "belt -tightening" options -- including workforce restructuring
and minimized salary growth -- before seeking broad-based millage rate
adjustments.
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CITY OF ATLANTIC BEACH
FY 2026-27 BUDGET WORKSHOP NO.2
7/20121 - �► zC
To: Honorable Mayor, Members of the City Commission, and the Atlantic Beach Community
From: Kevin Hogencamp, City Manager
Date: July 20, 2026
Subject: Fiscal Year 2026-27 Budget Planning Update
1. Executive Summary and Strategy
• Core Approach: With a potential annual property tax revenue shortfall beginning in
FY 2027-28, staff proposes balancing the budget by reducing planned FY 2025-26
expenditures, spending smartly in FY 2026-27, adopting the smallest net pay
increase in over 10 years, using special revenue funds for targeted projects,
maintaining the City's low property tax rate, adjusting fees minimally, and managing
reserves per policy target (2511/o minimum / 50% maximum of General Fund
expenditures).
• Property Tax (Ad Valorem): Holds steady at 2.7499 mills (among Florida's lowest
municipal rates for full-service cities). A homesteaded home assessed at $500,000
pays $1,070 annually (-$89/month).
• Revenue Impact: Property valuation growth yields $600,000 in new revenue; a
General Fund reserve transfer adds $TBA.
• Homestead Referendum Scenario: Staff modeled an estimated -$1.08M revenue
cut in FY 2027-28 due to potential state tax shifts.
• Efficiency Drivers: BS&A and e -Plan software rollouts streamline long-term
operations despite initial implementation costs.
2. Workforce and Compensation Strategy
Economic Context (BLS CPI -- June 2026)
• Headline CPI: Overall 12 -month CPI increased 3.5% over the year ended June 2026.
• Core CPI: Core CPI (all items less food and energy) stands at 2.6%.
Citywide Compensation ("Greater Of" Formula)
• Raises the minimum wage floor from $16.83/hr ($35,006.40/yr) to $18.00/hr
($37,440/yr) via a fixed $2,433.60 annual boost.
• Mechanism: Employees receive the greater of $2,433.60 OR a percentage rate
adjustment.
• Pivot Point Baseline ($121,680 Base Salary):
o Under$121,680: Receives $2,433.60 (effective raise of 2.43% to 6.95%).
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o Over $121,680: Currently capped at 2.0%.
Inflation Adjustment and Strategic Realignment Options
• Purchasing Power impact: Capping staff over $121,680 at 2.0% falls 0.6% short of
Core CPI (2.6%) and 1.5% short of headline CPI (3.5%).
• Compounding Risk: Unaddressed loss in real purchasing power will compound in
future fiscal years if the 0.6% gap is not accounted for on top of subsequent Core CPI
figures. While energy prices are expected to normalize downwards, food prices
remain historically sticky.
• Net -Cost Neutral Solution: Revise the cap percentage for salaries over the pivot
point to at least 2.6% to keep pace with Core CPI. To ensure zero net cost increase to
the City, staff can simultaneously lower the salary pivot point threshold (rebalancing
the $2,433.60 flat rate allocation). This publicly demonstrates commitment to
protecting employee purchasing power without compromising budgetary
constraints.
• Another Net -Cost Neutral Option: Simply increase all employee salaries the same
amount ($2,433.60)
General Fund Personnel Adjustments (FY 2026-27)
• Net Reduction: Net decrease of 1 position.
• Positions Eliminated: HR Deputy Directorand Building Maintenance (—$170k salary -
and -benefit savings).
• Executive Restructuring: Deputy City Manager reimagined as Chief of Staff (—$20k
savings). Add Communications Lead (—$68k salary), offset by executive reductions.
• Long -Term Plan (Years 1-3): Target net reduction of at least 5 additional FTEs via
attrition through FY 2028-29 (—$500k savings).
• Fiscal Headwinds: Healthcare, pension, fuel volatility, PTO liabilities, expiring sales
tax, and potential tax reform cuts ($1.0M in FY 27-28; $1.8M in FY 28-29).
Police Department Compensation and Budget Context
• Pay Practices and Union Negotiations:
o The City as a matter of practice keeps up with neighboring cities' starting pay.
o Historically, the top five police positions (unionized) have received step
increases corresponding with salaries of unionized police employees. That
practice is being revisited with consideration of a one-year organization -wide
salary plan adjustment, which may mean staff proposes salaries significantly
lower than those staff members have come to expect.
• Budget Timing and Overview:
o There are too many moving parts -- most notably the uncertainty of FY 2027
revenue amounts and, in the case the Police Department, the continuation of
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collective bargaining agreement negotiations -- for Staff to propose a formal
budget at this time.
o Overview: The FY 2026 police budget was $8.7 million. It is staff's intention to
limit the increase of the General Fund portion of that budget by no more than
3%.
• Key Cost Drivers and Operational Navigations: In addition to contractually
obligated increased pay higher than the rest of the workforce as a result of collective
bargaining, Staff is navigating:
o Purchase of additional vehicles (as many as three)
o Substantial increase in pension contributions (much more so than general
employee pensioners)
o Health insurance and fuel cost volatility
o Radio communication hardware and taser replacements
3. Reserve Policy and Accounting Structure
• General Fund Reserves: $500K transfer used to balance the budget. Unassigned
balance must remain strictly between 25% (3 months) and 50% (6 months) of total
expenditures. Excess funds over 50% are allocated to one-time non-recurring uses.
• Enterprise Reserves (Projected Sept 30, 2026):
o Water: $1.87M
o Sewer: $2.50M
o Capital Projects: $1.00M
o Tree Protection: $617k
o Better Jacksonville: $485k
o Paid Parking: $331k
4. Statutory Compliance (HB 1329)
• Mandate: Effective Jan 1, 2027 (impacts FY 2027-28 forward); requires modeling a
10% budget reduction exercise.
• Exemptions and Impact: Public safety and debt service are exempt. Protected
public safety forces non -safety General Fund departments (Parks, Public Works, IT,
Admin) to face effective operational cuts of up to 20%.
• Schedule: Budget calendar published Jan 30; tentative budget posted late summer;
10% Reduction Workshop held mid-September prior to final adoption.
5. Homestead Reform Shortfall Mitigation Options
• Projected Revenue Loss: $1.OM (FY 2027-28) 1 $1.8M (FY 2028-29)
• New Fees and Assessments: Fire/EMS property -based assessment fee,
neighborhood streetlight assessment districts, expanded paid parking, and special
roadway maintenance assessments.
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• Transfers and Internal Offsets: Enterprise utility transfers to General Fund and
reviewing CRA districts to return property tax revenues directly to the General Fund.
• Expense Cuts: Delaying/scaling back CIP, resurfacing and multi -use path projects,
auditing shared interlocal service agreements, and cutting at least FTEs through
attrition by FY 2028-29 ($500k savings).
• Tax Adjustments: Raising millage rates as a last resort and maximizing
state/regional grants.
6. Interlocal Agreement Renegotiation (City of Jacksonville)
• Context: The 1982/1996 agreement framework deducts a 3.2907 millage differential
from beach taxes for county services. Outdated service definitions have created
cost-sharing friction.
• Third -Party Study: Atlantic Beach hired an independent firm, Civic Consulting
Group, to evaluate service equity and update agreement terms.
• Interim Fire Savings: Executed a temporary 2 -year extension reducing the Fire and
Rescue contribution from $1.5M to $750,000 ($750,000 annual savings).
• Strategic Recommendations:
o Treat the $750k savings as non-recurring; direct it to capital reserves rather
than permanent operational costs.
o Model three multi-year scenarios: Base Case (Status Quo), Conservative
Case (higher cost-sharing), and Optimization Case (recapturing revenue for
double -taxation).
o Align a special City Commission meeting with the release of the Civic
Consulting Group study.
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