Speaker numbers apply only to this recording.
The Kissimmee City Commission held a budget workshop on July 28, 2026, at 2:00 PM to review the FY 2027 budget, discuss economic pressures, and set the proposed millage rate. Staff recommended keeping the millage rate unchanged at 4.6253 mills and balancing the budget with reserves. The Commission reached consensus to maintain the existing millage rate and directed staff to provide more detail before final decisions on spending reductions.
And they say what's 9.4 relative to the total reserve that we anticipate. Thank you, everyone, for being here this evening. It is 2 p.m. and we'll get started right away with the FY 2027 budget review and discussion. City manager. Thank you, Madam Mayor Commissioners. We appreciate your time this afternoon. This is going to be a different than the typical budget workshop that we hold in July. And the state requires that the commission set the maximum millage rate to include within the trend notices that go out to all of our taxpayers within the month of August prior to the budget work, uh the budget hearings that are held in September for adoption of the final budget. As we talked about at the last workshop, I think it was June 27th. Um we are facing some pretty significant pressures from the current state of the economy. Uh and yeah, I know that's uh a little bit um eye-opening in comparison to maybe some of the issues that we would also be facing should Amendment three pass. But right now, what we've decided to do is focus merely on the next fiscal year. Um we can't predict whether amendment three is going to pass. So the really the the focus of today's discussion is going to be on balance of the budget in relation to the current economic climate. And so um what I'm gonna start us off with is uh just an overview of what we need to get accomplished today. Um first we're gonna go over uh in general the the economic indicators that we're seeing, and it's a rehash of the meeting we had again in June, uh, but just to give you uh an update as to where we are with regard to the establishment of the budget, uh how those uh indicators have been affecting our current bottom line as well as what we anticipate for the next fiscal year. And then we'll get into some decisions that we're gonna ask the commission to consider, um, and then finally ask you to set the millage rate for next year. I'm gonna go ahead and say it now. Uh, we are not asking the city commission to raise the millage rate for next year. Um, that was uh some discussion that we had as a possibility um at our last workshop. Um we feel that we can make the budget balance, however, it's gonna take an injection of funding from our reserve, which is a rainy day fund, is the commission's aware reserve is well into the 30 percent uh range, I think it's 35 percent. Um, and so um this will be our recommendation would be to utilize some of that rainy day fund for this upcoming year, and um we'll continue to make adjustments uh heading into fiscal year 2028, and then at that point, if things look like there's still an issue, uh we can talk about uh revenue adjustments at that time. Um so with that, I'm gonna turn over the um presentation to our uh finance director, Tavia Ritchie, um, who is going to give you a uh an overview of uh where we are with regard to uh the current situation with our budget with our revenues in relation to the overall economy so as Mike said uh some of this is a rehash of what we previously discussed, but about a month ago, um we talked about how there was growth in all areas, jobs spending and uh revenue growth. So we're seeing consumer spending turning negative to start of this year, job growth has nearly stalled, and it can be argued that Florida is losing its growth edge. So the in regards to consumer spending, so the city's sales tax revenue moves along with consumer spending, and so you know that trend has not changed with the renewed threat of continued tariffs and geopolitical pressures. We're seeing that in the form of collections here, and so we're seeing that in our general fund budget as well as our sales tax budget. And so right now we're estimating collecting less than two million dollars than what we previously budgeted for the current fiscal year. With that being said, our local property value growth is slowing too. So our taxable value is up only 7% for 2026. So we're at $7.4 billion compared to $7 billion last year. So that's and then compared to 2025, we saw an 11% increase. So then if we dial it forward and look at our general fund revenues, which our property tax revenues are a big chunk of that, our general fund revenue is expected to increase only 4.2% next year. And a big chunk of that 7% increase that you see in property taxes is attributed to the CRAs. So that will affect us in the on the revenue side because those funds get transferred out to the CRA funds. Excuse me, three-quarters of that 61% is related to public safety salaries and public safety salaries have seen 9% increases on average for the last three fiscal years. So if you combine that with our pension funds, seeing a 15% increase across the board, as well as our health care plans, looking at a 12% projected increase, you can see that on the previous side and looking at that 4.2%, it gets eaten up rather quickly. And so if you look at that 4.2%, that translates over into about $4 million of an increase in the general fund. So then if I'm transpose that 15% over into real dollars, we're looking at $2 million for a pension fund and then $2 million for a 12% health care increase. So you can see that that $4 million and an increase gets eaten up quickly, and we're not even talking about that first paragraph up there, which is the 61% of our general fund budget being related to personnel. So our increase in revenue is already eaten up by benefits.