There you go.

Building value.

All right.

Good afternoon, everyone.

All right.

Good to have everybody here for our fiscal year 2027 operating budget workshop.

Appreciate all the work that the city staff and city management team have put into this presentation.

Great to see some of our uh city uh department heads and city employees here and some community partners and candidates here as well for your interest and for your uh participation uh and in the collective uh desire to have Hollywood be as strong and robust as we all want it to be, and we all work for it to be.

So with that, um referring now everyone to the city manager and staff for the presentation.

Good afternoon, mayor, vice mayor, city commissioners, uh, and staff.

We are uh very pleased to uh be here at this uh operating budget uh workshop uh with you.

Uh I think it is safe to say that one of the most important things uh you do as a commission each year is approve a budget, and it's also one of the most important things we do as an administration is to bring you our budget proposals uh and to keep you abreast of the city's uh fiscal condition.

Uh it's a responsibility, the fiscal stewardship of the city that we take uh very seriously.

Um, you know, and of course, last week uh there was some you know disconcerting news that we all have to be really mindful of as we uh head into the next budget season uh as to the impact of uh property tax reform and what that means as we uh you know work through our budget and we want to, you know, be prepared and continue to be really responsible stewards of the tax dollars.

Uh it does mean that uh and you'll see in this budget uh and and in the numbers or in this discussion today, uh the value of new construction in our community and how it does uh benefit us as a community overall, uh and certainly uh is an important uh important tactic as we look uh to continuing to ensure uh the the city's financial future.

Um with that I am going to turn it over to our deputy city manager, um Adam Reichbach, and to the budget team.

Uh they have done a tremendous amount of work with our department and office directors, and uh we uh really appreciate all of their efforts.

Well, good afternoon, Adam Reichbach, deputy city manager.

Um today does mark a great opportunity for us to um continue to do our budget development process.

It's a very critical step, the budget workshop, and today's focus is going to be on the operating budget.

We do plan to have a capital workshop, a separate capital workshop, I believe on August 26th, I believe it has been set for.

Um it really does rev into high gear come January with the kickoff of our fiscal strategy kickoff event.

And so we usually take that or we do take that event to take the priorities that are set forth by the commission, our departments, and our office directors are included as part of that process, so that they can go ahead and then take what they're hearing from you as priorities and then formulate that as part of their budget proposals.

And those budget proposals were due to the uh budget office, and then of course the city manager's office, look at those budget proposals in the uh February, March, April timeline.

And then, of course, we all wait on um baited breadth for the June taxable value report, which is our really our first um take as to what our taxable value is going to be for the following fiscal year, and then of course that gets further refined in July as part of the July taxable value, which is which is known as the as the final taxable value report.

So after today's workshop, we will be setting our maximum millage at our July 8th City Commission meeting.

Uh again, our capital workshop has been set for August 26th, and then we will have our two public hearings in September, first one being September 14th, and the second one being September 23rd this year.

So, taxable value information.

So this year, um the city's taxable value growth is 5.71%.

Again, this is the as of the June 1st taxable value report numbers.

Um as you can see from the chart on the screen, unfortunately, this is a decrease from last year's 7.86% value growth, and that decreasing trend over the last five years does uh unfortunately continue into fiscal year 2027.

Um it is worth noting though that our taxable value growth was significantly bolstered this year by new construction, um, which we will touch on in a few slides.

But without that new construction, as you can see from that third bullet, our taxable value growth would have been under 3% this year.

So as you can see, the total taxable value for the city is now a little over or projected to be a little over 28.6 billion dollars, and this is an increase of approximately 1.5 billion dollars from last year.

Again, about a quarter of that is attributable to new construction that was added to the tax roll in fiscal year 2027 or tax year 2026.

As you can see from the chart on the left, most sectors, those values have gone up from last year to this year, with the exception of commercial, which did decrease by just about 1.7%.

Um then with the chart on the right, um, just an important note, especially as part of the property tax reform conversations just to really understand what our residential makeup is, single family, of course, being the largest share of taxable value here in the city.

With new construction, as I mentioned, one trend that continues to be favorable, at least at this current juncture, is the value of taxable value growth that was added through new construction.

Um this year, our new construction growth number was approximately 403 million dollars.

From a dollar value standpoint, uh we are ranked second in the county in terms of taxable value growth that was added from new construction for just for comparative purposes, Fort Lauderdale added 1.73 billion dollars to their tax base through new construction, and then uh after us in ranking would be Pompano Beach at 381 million dollars.

And just to put this into perspective for the actual what this means to the city of Hollywood, the 403 million dollars in added taxable value through new construction will yield approximately three million dollars in additional tax revenue for the city.

So, in terms of millage, um the proposal at this point is to maintain a flat operating millage of 7.4293.

With the growth in taxable value, we were able to reduce our debt service millage by uh.022 mills.

Um again, this number is will likely change as part of the July taxable value report as we'll get our new numbers.

Um, then of course, we're able to reduce our debt service, and just for public consumption purposes, think of the debt service as a mortgage payment.

We as long as we make our mortgage payments, we then are able to, with taxable value growth, we're able to assess a lower millage in order to collect the same amount of money that's due as part of our debt service payments.

And that's what explains the point zero two mill reduction.

Just to put that in perspective in terms of a dollar amount, if all things were the same, uh the based on an average single family home with an assessed value of $391,000, that would be approximately $8 savings at the point zero two two mills reduction.

Okay, so now for the elephant in the room, property tax reform.

So just to go through a little bit, and again, just for full disclosure, property tax reform will be on the ballot come November 3rd of 2026.

Um with that being said, if it is approved by 60 percent of the voters, the impact to municipalities and counties will take place in fiscal year 2028.

So, although this is for the fiscal year 2027 budget, we certainly need to be cognizant of this because we will not know the impact of property tax reform until after we approve the fiscal year 2027 budget, and of course, while we're already about a month into the fiscal year 2027 budget being uh in place.

So, just to put things into perspective, again, just for our just for informational purposes only.

Uh property taxes do represent about 47% of our general fund budget, so about half of our budget comes from property taxes.

And so that's why property tax reform is so critical and so concerning to a lot of municipalities and counties.

Public safety represents about two-thirds of our general fund budget.

And so, again, just putting that into perspective with the dollars uh and the and and and where uh everyone's property tax dollars go, a very large chunk of that goes to providing public safety.

So, again, the November 2026 ballot question does propose a couple of changes.

Number one, it would propose an increase to the homestead exemption for fiscal year 2028 of an additional of additional 100,000, so roughly 150,000 would be the homestead exemption.

Just to put that into perspective, the loss in taxable value would just be over 2 billion dollars, and that would be about represent about a $15 million loss in property tax revenue here to the city.