Thank

you, everyone, for being here this evening.

They'll call this meeting to order.

Today we'll be conducting a workshop discussing uh proposed budget discussion on commission travel policy as

well.

All right.

Thank

you, Madam Mayor Commissioners, and I appreciate the time that you're taking with us tonight.

We wanted to take this opportunity to get some feedback from the city commission.

We'll first share with you what we're seeing in terms of the current state of the economy and measures that we were already in the process of taking as a result of what we have seen as a somewhat of a slowdown in our economy that we knew was gonna affect the uh next fiscal year's budget.

And then of course that was compounded by uh the legislature's action to put before the voters on the amendment to the constitution.

And so we felt it important to have this preliminary workshop to share with you what those facts are, what we're in the process of doing, um, and to get some feedback on the various services of the general fund provides, um, as well as look at some options as well in terms of revenue enhancement, so that we've got a sense for what the commission is gonna be looking for uh when it comes to the review of our final budget document towards the end of July.

Uh so this will give us a good month to uh get prepared for that workshop.

Um but first we're gonna start off with I'm gonna introduce our finance director um Tavia Richie, who is gonna give you an overview of um the current economic conditions that we're facing, and then uh we'll I'll take over from there or will run us through the rest of our um presentation.

Good evening, madam mayor, commissioners.

When I try to think of uh like phrases to be able to summarize the economy and just the current state we're in and how that affects our budget.

Some of the phrases that come to mind are don't kick a dog while it's down,

you know,

don't um add insult to injury or don't pour salt on an open wound.

And all of those phrases have you know one common theme, and that's you know, don't make a situation a bad situation worse than it already is.

And so, well, you know, to make a bad situation worse, um, consumer spending turn negative to start 2026.

How does that affect us?

Well, in our local budgets, we see that in the form of less revenue for sales tax collections.

Um, in fact, we've seen this region has seen back-to-back year over year declines in January and February 2026.

We've also seen job growth nearly stall.

So in our in our Orlando region, we've seen only 1,500 jobs added.

If you compare that to last year, we saw 9,000, and then if you look at the pre-pandemic average, we saw about 43,000.

So to make a bad situation worse, we're also seeing unemployment rise sharply.

For the first time in a while, we're seeing Florida actually trail that national average, and we're we're seeing us jump into the high fours, whereas last year we were just at 3.5%.

So we're seeing that trend of growth slowing and our our spending being down as well on the consumer side.

And so all of that kind of translates into weaker job creation, housing affordability, headwinds, slowing in migration, meaning less people move into the state of Florida, and uh believe it or not, uh lower numbers in tourism, whether that be in state tourism or people coming from out of state or even out of the country.

And

so aside from sales tax growth slowing in the form of revenues, we're also seeing our local growth value in the form of taxable values, what we see receive in our Avalorm revenues.

We're seeing that slow as well.

So our property tax, we're expected to only see about a seven percent increase from last year.

That number, while it's still growth, it's it's slowing.

So last year we were at about 11%, and we've averaged around 10% over the past several years.

And

so what that translates into is for us, um, we're required to pass a balanced budget.

Yeah, for a balanced budget, you have to have your revenues, obviously, equal your expenditures.

And some years you need to use your savings or your fund balance, but you don't always want to have to depend on your savings or your fund balance.

And so we have increasingly been seeing our cost out run our revenues and the big areas that we're seeing that happen in is our personnel, which naturally our personnel makes up 70% of our budget because we're a government, we're a service-oriented um industry, and so naturally you're gonna see over two-thirds of your cost come from your personnel.

And so naturally you're going to see over two-thirds of your costs come from your personnel.

So what that also looks like is the city also investing tens of thousands of dollars into personnel before they even hit the ground running.

And so the majority of our workforce is going to be public safety.

And so it looks like before you stand up those employees, you're spending tens of thousands of dollars.

And that's just not even on equipment as well.

That's on trading.

And you're also looking at ongoing competition, not only for our public safety personnel, but also our professional level jobs as well.

And costs that are also built into those personnel costs are going to be our pension and our health care costs.

And so our pension last year we saw 25% increase year over year.

I screamed that hey, like this is unsustainable.

Where this year it's not 25%, but it's 20%.

Um and that that looks like $2 million in increase year over year.

So $2 million extra dollars that we have to contribute towards our pensions.

We're not getting anything extra.

We're literally just paying the amount that we are required to maintain those pensions by our actuaries.

And it's not a cost that we can negotiate or say, hey, can we pay a little here, pay a little there?

It is we are mandated by state law to make those payments annually.

And so, you know, that number is not optional, it's not negotiable.