Dunedin FY 2027 Budget Workshop #1: Balanced Budget, Contingency Plan, and Storm Costs - July 21, 2026

The Dunedin City Commission convened a Budget Workshop on July 21, 2026, at City Hall (737 Louden Avenue) from 9:00 a.m. to 4:30 p.m., to review the proposed FY 2027 Operating & Capital Budget. City Manager Jennifer Bramley presented a balanced draft budget with a 17.8% reserve, noting it will change through the workshop and public hearing process. The workshop covered new initiatives and CIP projects by department, property tax reform and a projected $5.65 million annual General Fund shortfall, storm-related expenses and reimbursements from Hurricanes Helene and Milton, long-range revenue and expenditure projections for all City funds, FY 2027 personnel requests, and the Health Benefits Fund. No formal votes were taken; the meeting was informational, with staff directed to prepare fact sheets and analyses for the August 4, 2026, Budget Workshop #2.

City Manager Opening Remarks

• City Manager Bramley advised the proposed budget is a draft, balanced with a 17.8% available fund balance reserve (target is 15%).
• Operating expenses were reduced and some capital projects moved out to achieve balance. No decisions were expected; staff sought direction and questions.
• Key dates: August 4, 2026 (Budget Workshop #2, final direction on tentative budget); September 3, 2026 (first public hearing); September 17, 2026 (second/final public hearing); contingency budget to be presented in October.
• Mayor Freaney stressed the importance of letting voters understand the tradeoffs of the property tax referendum before the November vote.

New Initiatives & CIP Projects in FY 2027

Department directors presented new initiatives; most are small or CRA/enterprise-funded.

• Economic & Housing Development (Director Bob Ironsmith): CRA Master Plan Supplement — $49,500 City share ($50,000 from Forward Pinellas plus staff time; total study ~$250,000). North Alt 19 Entrance Enhancements — $30,000 concept plan. Virginia & Milwaukee Bulb Out Improvements — $75,000 (placeholder, may come in lower; possibly designed in-house). All CRA-funded, not General Fund.
• Fire Rescue (Chief Michael Handoga): Bunker Gear Extractor replacement — $65,000 (28-year-old unit; state grant application pending; placeholder funding). Extrication Equipment replacement — $70,000 in FY2027 and $70,000 in FY2028 (new saltwater-submersible battery-powered technology; Firehouse Subs grant up to ~$40,000). Fire Boat 60 Replacement — $700,000 in FY2032. SCBA-related replacements in FY2032.
• IT Services (Director Michael Nagy): Citywide Door Access Control Systems — $36,000 FY2027 + $64,000 FY2028, phased starting with Fire Administration and Fire Station 60; addresses CJIS/HIPAA protection requirements.
• Parks & Recreation (Director Tony Mulkey): Dunedin Marina Ferry Dock Reconstruction — $207,000 (City's 20% match for $800,000 federal appropriation secured through Rep. Luna's office; PSTA will lead procurement; waiting on November referendum). Highlander Pool Resurfacing — $280,000 to keep pool operating until full renovation (plans ~90% complete). Memorial Dedications Study — no funding noted; inventories memorial benches/trees/rocks (11 causeway benches missing). CAPRA Accreditation — $8,000 in FY2028 + $400 out-years. Partition Wall Recover — $60,000 FY2028 at the Community Center.
• Public Works (Director Suzanne Bartlett): Gabion Repair & Replacement Program — $850,000 over the six-year planning period (FDEP state appropriation); ongoing ~$2 million grant program.
• Utilities & Engineering (Director Clayton Watkins): Fairway Reclaimed Main Replacement — $25,000 FY2027 survey, $1,000,000 FY2029 construction. Utility Work Planning & Management Software (Mainstar) — $150,000. Biosolids Dewatering Facility — $500,000 FY2029 + $500,000 FY2030. Utility Rate Study — $100,000 FY2028 (Commissioners questioned the cost; staff to explore in-house options and possibly defer).
• Projects removed from the Business Plan: Tyler Technologies Fire Prevention Software, Pinellas Solar Co-op, Ready for 100 (implemented/ongoing); Paid Time Off initiative (inactive/cancelled).

City Commission Discussion on Initiatives

• Commissioner Gow's sidewalk plan was folded into the Memorial Dedications Study; Scottish cultural funding was consolidated under one BPI (~$130,000 total, merged with Sister City project).
• Strategy & Sustainability Manager Nicole Delfino reported a live dashboard page is nearly ready for public launch.
• HR Director Dr. Theresa Smalling said the $5,300 Career Planning Path line was a placeholder; most work is in-house.
• Vice Mayor Walker confirmed $25,000 ARPA funding remains for the Boat Club & Sailing Center (FY2028); ARPA grant funds must be spent by December 31, 2026, but interest earnings are unrestricted.
• Nothing will proceed on Mid-town Parking until after the November referendum.

Property Tax Reform / Projected Budget Shortfall Contingency Plan

• Property tax reform impacts (estimates): Increasing the homestead exemption on non-school taxes to $150,000 in FY2028 would result in a ~$4 million annual loss of ad valorem revenue; increasing to $250,000 in FY2029 and future years would result in a ~$6 million annual loss. First-year impact is 3.9% per the Revenue Estimating Conference; subsequently 6.8%. Finance Director Tyler noted numbers are moving and the City is using Pinellas County estimates.
• Roll-down effects stated (partial list): EMS revenue would drop from ~$3 million to ~$2.1 million per year (~33% reduction); Library Cooperative funding would fall ~30% (~$200,000/year from ~$680,000); County payment for regular Fire services would decrease 35-38% (from just over $1 million to ~$650,000-$700,000, ~$350,000 reduction); CRA revenue would drop ~$150,000 in FY28 and ~$250,000-$270,000 in FY29. Mayor Freaney estimated the combined annual cut at roughly $8.3 million by FY2029.
• FY2027 budget shortfall context: The FY2027 Proposed Budget projects an annual General Fund shortfall of $5.65 million in out-years (FY28-FY32). Departments were asked to reduce controllable operating costs by 20% without reducing service levels (achieved ~$500,000 in savings); contracts were reviewed; risk, health insurance, and fleet savings were evaluated. Additional reductions will result in reduced service levels.
• 2027 Contingency Plan: Staff is developing a contingency plan to account for a $3 million budget reduction effective January 1, 2027 (via increased revenue, reduced expenditures/services, or both). If the referendum passes in early November, it would be fully implemented January 1, 2027; if it fails, implementation would be slower, through attrition for labor savings and immediate for non-labor costs. Departments developing plans include Community Development, Economic & Housing Development, Facility Maintenance, IT Services, Library, Parks & Recreation, Streets, and support departments. Plans due August 10, 2026; draft to Commission early September; approval targeted late September/early October as a budget amendment.
• Commission discussion emphasized the need to educate the public on actual service impacts (e.g., response times, facility closures), while respecting the line between education and advocacy. Commissioner Sandbergen requested a fact sheet. Vice Mayor Walker noted the silver lining of a healthy budget review. Commissioner Dugard criticized the referendum as a "service tax" cut with poor cost-benefit for residents; Commissioner Gow urged protecting the future and noted the City cannot go back.

Storm-Related Expenses & Reimbursement (Hurricanes Helene & Milton)

• Total estimated storm costs (General Fund incl. Disaster Recovery + Marina Fund): $17.4 million. Expected FEMA reimbursement is ~$4.5 million total; the City received $2.3 million last year in expedited debris removal payments, plus some small-project reimbursements (totaling roughly $3 million to date per Finance Director Tyler).
• Remaining $3.2 million debris removal reimbursement (Crowder Gulf, $5,250,777 paid by City) is hoped for by September 30, 2026; FEMA was dormant for 290 days and resumed review ~2-3 weeks prior to the meeting. Most other storm projects expected to be reimbursed over 2-3 years.
• Estimated City match: $528,000 (General Fund) + $894,000 (Marina Fund) = ~$1.4 million. Anticipated storm line-of-credit draws in FY2027: approximately $1.4 million General Fund (transcript states $4.1 million — discrepancy noted) and $7 million Marina Fund; line expected to be paid off in 2-3 years.
• A $3 million State Appropriation for Marina Storm Repairs was approved by the Governor after budget publication, reducing the Marina Fund line-of-credit need. (Minutes reference a "$2 million" state appropriation for the Marina — discrepancy with the $3 million figure in the presentation/transcript; total state funding including prior-year $1.5 million may reach $4.5 million.)
• FY2025 storm activity decreased the General Fund available balance by $2.7 million; FY2027 shows revenues exceeding expenses by $1.93 million. Net expense to the General Fund over the 5-year period: ~$1,021,000 (a ~$500,000 savings versus the pre-hurricane Fishing Pier budget of ~$1.6 million).
• FEMA reimbursement assumptions: 75% FEMA + 12.5% State. Staff warned future FEMA percentages will decrease (debris was 100%, going to 75% max) and FEMA is shifting to a metric-based methodology, which could roughly double the City's future match. A possible catastrophic reserve was discussed (seed money of ~$100,000 from ARPA interest proposed).
• Mayor Freaney requested a fact sheet covering the $17.4 million in storm costs, FEMA reimbursements, state appropriations, and insurance proceeds.

Revenue, Expenditures and Projections — All Funds

• Baseline: Ad valorem taxable value increased 4.52% (May 29, 2026 estimate; final July 1, 2026 certification: 4.53%, adding ~$1,200; CRA/TIF at 4.66%, adding ~$1,750). Millage rate remains 4.1345, held since FY2016. Proposed maximum millage to be presented July 23, 2026 (Item 3.d).
• FY2027 revenues: General Fund other taxes +3.7%/$215,000 (Duke Energy electricity service tax); Penny Fund -6.1% (HB 7031 eliminated 2% sales tax on commercial rents/leases, effective October 1, 2025; actual trending -7.5%); County Gas Tax -3.2% (flat/declining consumption). Enterprise utility rate increases: Solid Waste +15.61% effective 4/1/2027 (Ordinance 26-01); Water/Wastewater +15% (Ordinance 25-04, sets rates through FY2030); Stormwater +18.6% (Ordinance 24-15).
• FY2027 expenditures: 3.5% merit increases (except Fire Union per contract); Health benefits costs +15.9% (may be reduced; detailed presentation August 4). Controllable operating expenses decreased in most funds; exceptions: Building Fund +37.2%/$103,400, County Gas Tax +7.3%/$25,000, Water/Wastewater +4.4%/$298,430, Marina Fund +26.1%/$24,950, Health Benefits +15.9%/$1,114,414, CRA +2.5%/$10,100.
• General Fund: Available fund balance FY2027 = 17.8% (above 15% target); drops to 7.4% in FY2028 if shortfall unaddressed. Projected average annual FY28-FY32 shortfall: ~$5.65 million. Revenue highlights: property taxes +4.3%/$775,589; intergovernmental +$774,123 (FEMA reimbursement $1,046,000, offset by reduced state revenue sharing and half-cent sales tax); charges for services +8.1%/$819,785. Expenditure highlights: operating -7.1%/-$1.5 million (property insurance ISF -$782,000 one-time; ~$500,000 departmental savings); capital -$4.9 million; debt service +$873,441 (storm line of credit $935,000). Projects pushed from FY27 to FY28 to balance: Solar & Energy Improvements $550,000; Weybridge Woods Bridge $800,000; Dunedin Boat Club & Sailing Center $186,140; Citywide Door Access Controls split $64,000 (total $1,600,140). The FY2027 budget started with a >$1.5 million shortfall before reductions.
• Stadium Fund: Charges for services -2.8%; operating -24.2% (property/liability insurance ISF). Capital Reserve ~$3.4 million at end of FY27 (211% of operating; target ~15%). General Fund transfers in $550,000/year (mainly property insurance). State pays ~$1,000,000/year (bond payment); Blue Jays pay debt service twice yearly; ticket-sale revenue must be reserved. Finance Director Tyler will analyze whether the $550,000 transfer can be reduced or a one-time transfer made.
• Impact Fee Funds: Parkland fees projected to increase due to development (265 Causeway Blvd, Azul Avenue Vacation Homes, Sunrise Townhomes). Multimodal: Pedestrian Safety Crossing Improvements $30,000/year. Parkland balance ~$1 million FY27; Fire fee balance ~$135,000 (staff seeking a capital project); Law Enforcement balance ~$12,000 ($80,000 spent on safety barriers in FY26).
• Public Art Fund: $2,500/year estimated revenue; operating reduced due to low funding stream; development projects may elect 0.5% of project cost into the fund.
• Building Fund: Operating +12.7% ($50,000 inspection contract services; $50,000 floodplain software license). Fund balance $2.1 million FY27, declining; state SB 553.80 requires balance near 4-year operating average (~$1.4 million); fees reduced 33% in 2021 (Ordinance 21-12), may need future adjustment.
• County Gas Tax Fund: Revenue flat at $450,000 FY27; fund balance ~$66,000 end FY27 (barely above 15%). $25,000 sidewalk maintenance increase; pavement management shifted to Penny Fund; sidewalk program moving to Risk Fund in FY28+; $100,000 added to General Fund streets for striping/ADA curb work.
• Penny Fund: Sales tax revenue -6.1%/$342,300 (HB 7031). FY27 budget $5,237,700 (2% growth over FY26 actual). Debt proceeds -$4.6 million (Highlander Aquatic Complex financing moved to FY29). Fund balance at end of Penny IV (2030): ~$1.5 million uncommitted. Highlander Aquatic Complex total construction budget: $23.5 million (Penny + General Fund); Penny Fund paid ~$17 million of the $23 million City Hall project; last City Hall payment October 2029. Buena Vista Drive Drainage Improvements $500,000 (FY28/FY29). Fleet Services Building design placeholder in FY29/FY30. Penny IV rollover ~$16 million estimated.
• ARPA Fund: Total grant ~$18.3 million ($6,401,910 General Fund revenue recovery; $3,040,025 Golf Operations). Ending FY27 balance ~$389,000 interest-only (unrestricted). Grant must be spent by December 31, 2026; staff will recommend transferring balance to General Fund and potentially seeding a catastrophic reserve (~$100,000). Downtown pavers ($187,000 ARPA) discussed — Commissioner Gow asked to move back to CRA; staff to analyze impact and return August 4.
• CRA Fund: Property tax/TIF revenue +4.8%/$108,812. Other expenses +$300,000 (Affordable Housing incentive, continuing $50,000/year accumulation). FY27 includes $9.1 million debt proceeds for Mid-town Garage (RFP will wait until after referendum; debt service ~$840,000/year, CRA until 2033 sunset, then General Fund). Available fund balance $943,000 FY27, growing to $4.3 million FY32. Downtown pavers $350,000; North Alt 19 $30,000; underground utilities $150,000; Virginia & Milwaukee bulb outs $75,000.
• Solid Waste Fund: Charges for services +25.2%/$1,776,400 (rate increase 28.52% effective 4/1/2026; 15.61% effective 4/1/2027; then 3% or CPI from 10/1/2028). FDEP diesel mitigation grants $800,000 for two Class 8 vehicles (net cost ~$75,000). Negative FY26 fund balance shown is timing-related (vehicles received in FY27). Rates remain competitive.
• Water/Wastewater Fund: Charges for services +15% (Ordinance 25-04). Capital +48.7%/$6,456,219 (greensand filter $3M, Facility 8 filter media $2.9M, Bay Shore Water Main $500,000). Available net position FY27: 41.9% (target 25%). Projected $7.5 million bank loan in FY27 and $7.5 million financing in FY30; reimbursement resolution to Commission August/September. $468,700/year transfer to Penny Fund for City Hall debt service through October 2029.
• Stormwater Fund: Charges for services +18.3%/$1,225,000 (rate +18.6%). Intergovernmental +21.2%/$985,587 (USDA EWP $2.7M; FDEP gabions $850,000; pending HMGP $2.8M). Capital +73.4%. Available fund balance $2.3 million FY27 (42%); financing likely needed in FY28.
• Marina Fund: Intergovernmental +$1,882,000 (anticipated FEMA reimbursements). Miscellaneous +20.1%/$101,200 (slip rental, Dunedin Fish Co. lease; 7% slip rental increases proposed FY27-FY31). Debt service +8,429.2%/$1,688,370 (storm line of credit payoff). Available fund balance $1.4 million FY27. Assumes FEMA 87.5% reimbursement for Marina Bulkhead and Dock A & B projects. Occupancy ~80%; larger slips vacant due to bulkhead project proximity. Boat ramp revenue moved to General Fund (staff to research other marinas' practices). Marina rate increase resolution expected in September.
• Golf Operations Fund: Charges for services -4.0%/$159,375 (member dues +$181,000 offset by public green fees -$367,000; grandfather rates end January 2027). ~47,000 rounds forecast (-9% vs FY26). Operating -8.3% (reclaimed water +$115,000; offset by ISF/electricity/maintenance savings). Fund balance ~$19,400 end FY27; FY26 net working capital -$175,000 (partly due to $375,000 unpaid $500,000 restoration grant — PPP-related dispute among City, state, and federal government, with City Attorney working on it). FY32 balance projected ~$700,000. 225-name membership waiting list; 275 memberships; 25% resident/first-responder/military discount; driving range needs improvement (future discussion with Stirling Links). Restaurant has separate contract; owner invested $500,000+ with rent abatement (staff to report term).
• Fleet Fund: Charges for services -4.3% (reduced fleet repair/overhead); available net position $10.2 million FY27. General Fund interfund loan: $2.3 million repaid; $2.7 million outstanding, expected December 2026.
• Facilities Fund: Charges for services -7.7%; available reserve 44%/$1.3 million (target 25%); roof replacements FY27-FY29; custodial contract under review; vacancies list requested.
• Risk Safety Fund & Health Benefits Fund: Numbers not finalized; detailed presentation deferred to August 4, 2026 workshop.
• I.T. Services Fund: Charges for services -12.4% (reduced allocations); operating -17.6% (license and maintenance savings; shift to one-laptop model; utility billing license moved to Water/Wastewater). Available fund balance 27%. AI testing in GIS and cybersecurity (~$40/month); Teams phone system possible future expense.

FY 2027 Personnel Requests

• No new positions; FTE remains 405.93 (plus 24.2 variable/seasonal FTE). FY27 final number "to be determined" pending possible freezes/elimination of vacant positions.
• Five recommended reclassifications (total impact $49,406): Administrative Coordinator to City Commission (General Fund, $9,675); Senior Community Development Technician (General Fund/Building split, $8,173); Engineer II to Engineer III (Water/Wastewater, $14,014); Senior Administrative Assistant (Water/Wastewater, $6,194); Lift Station Foreman (overseeing 43 lift stations and 4 employees; Water/Wastewater, $11,350). Impacts by fund as stated in the minutes: General Fund $10,492; Building $7,356; Water/Wastewater $31,558. Commissioners agreed with recommendations.

Health Benefits Fund Discussion

• 15.9% increase ($1,114,414) driven by medical claims and health costs; still under review with Ghering Group and Board of Finance input.
• Final numbers and cost-share options deferred to the August 4, 2026, workshop; Mayor requested information before that meeting and that the topic be placed early on the agenda.

Public Comments & Testimony

• Mayor Freaney opened citizen input; no members of the public came forward to speak.

City Commission Direction & Follow-Up Requests

Commissioners requested the following staff deliverables for August 4, 2026 (or under separate cover):

• Fact sheet on property tax referendum impacts: out-year losses ($4.2 million initially, $6.4 million thereafter per Mayor), EMS/fire/library/CRA roll-down effects, and the combined ~$8.3 million annual reduction picture.
• Storm-expense fact sheet ($17.4 million total, FEMA receipts, state appropriations, insurance proceeds).
• Water/wastewater consumption elasticity analysis (rate-increase demand effects).
• Compilation of state laws affecting revenues, unfunded mandates, and drivers of the ~25%/~$290,000 Fire Pension increase.
• Detailed analysis of General Fund expenditure increases from FY2024 (~$38 million) to FY2026 (~$57 million).
• Stadium Fund analysis: whether the $550,000 General Fund transfer can be reduced, reserve level review, and breakdown of the $1.5 million Miscellaneous line.
• Cost per linear foot of road repair vs. sidewalk replacement (including whether golf carts are included).
• Marina boat ramp revenue allocation research (what other marinas do) with a recommendation.
• Golf restaurant lease/abatement term and when rent begins; current vacancies list; 2-page Efficiency Study cost/savings summary.
• ARPA downtown pavers: impact analysis of moving back to CRA funding.
• Millage rollback scenarios (maximum millage rate to be considered July 23, 2026, Item 3.d).
• Consensus was to provide a clear fact sheet (education) rather than pre-emptive service reductions before the referendum; Commissioner Gow separately proposed no night baseball/soccer lights and a millage rollback as options for consideration on August 4.

Key Outcomes

• No formal votes or decisions were taken; the workshop was informational.
• Staff received consensus direction to prepare the fact sheet and analyses listed above by August 10, 2026, with deliverables due for the August 4, 2026, Budget Workshop #2.
• Next meetings: August 4, 2026 (Budget Workshop #2 — final direction on tentative budget, Board of Finance report, Aid to Organizations discussion); September 3, 2026 (first public hearing on tentative millage rate and budget); September 17, 2026 (second/final public hearing); contingency budget to be presented in October. Meeting adjourned at 4:30 p.m.
• Noted discrepancies: minutes state FY2027 General Fund storm line-of-credit draw of ~$1.4 million while the transcript states ~$4.1 million; minutes reference a $2 million recent state appropriation for Marina storm repairs while the presentation/transcript cites $3 million (plus $1.5 million prior-year, totaling $4.5 million).