A primary focus of the meeting was the analysis of the proposed fiscal year 2026 budget, which has seen an increase of $1,733,002 compared to its earlier version. This increase is largely driven by several initiatives, including a comprehensive pay study and departmental team-building activities. The pay study alone accounts for $1,145,000 of the budget’s rise, emphasizing performance-based salary adjustments over the traditional cost of living raises. Specifically, employees who receive positive evaluations are positioned to earn more than the baseline 3% increase, aligning compensation with individual performance.

The city manager introduced a $1.1 million allocation for team-building activities. This initiative is part of a broader strategy to enhance departmental cohesion and efficiency. Additionally, a $40,000 increase for the Community Redevelopment Agency (CRA) master plan and $100,000 earmarked for economic efforts at the sponge docks are featured prominently in the budget.

The committee addressed the challenge posed by the overall budget increase of approximately $1.7 million against a projected revenue rise of only $601,000. Inquiries into the funding sources revealed that the perpetual exclusive easement reserve, with around $600,000 available, would help bridge this financial gap. The general fund is expected to benefit from a 4.12% increase in taxable property values, contributing to the revenue stream.

The session also scrutinized the city’s major revenue categories. Total city taxes are projected to rise by $725,000, influenced by property tax changes. Intergovernmental revenues are anticipated to increase by $2.2 million, notably due to a $2 million grant earmarked for electrical work in the water and sewer fund. The charges for services, including water and sewer, are set to grow, further augmenting the revenue by nearly $1.6 million.

Attention was drawn to the city’s financial resilience in light of recent hurricanes. The general fund’s unassigned balance from the previous year was reported at $9.1 million, with concerns about potential decreases due to hurricane impacts. Efforts to secure FEMA funding were highlighted, with the city pursuing category B funds to cover police and fire overtime, expecting clarity by the end of September. An initial $2.5 million in expedited funding was received for debris removal, with a further $2.5 million pending. The city has enlisted a consultant to assist with navigating the FEMA reimbursement process, acknowledging outstanding invoices totaling between $2.5 million and $2.7 million.

The committee also reviewed the capital improvement projects budget, which includes a notable increase in stormwater action plan funding. The fiscal year 2026 allocation for stormwater projects stands at $1.9 million, contributing to a total of $6 million over five years. The planned improvements are aimed at addressing stormwater management, flooding, and infrastructure concerns, which were frequently highlighted in the budget survey conducted by the planning department.

Additional capital projects include the construction of Fire Station 70 at $6 million, Craig Park seawall construction at $1.6 million, and various stormwater projects totaling $3.5 million. The timeline for the Beckett Bridge Utilities project was discussed, with construction set to begin in June 2026, contingent on necessary utility work. Funding strategies include the consideration of bond issues versus bank notes, with a preference for the latter due to lower costs and quicker access.

The committee also addressed the financial state of the golf course clubhouse, which has seen a positive turnaround with a fund balance increase of $600,000 annually. This improvement raises the total to a projected $1.4 million by the fiscal year’s end, a significant recovery from a negative balance in 2021.

In governance matters, the committee discussed maintaining the current millage rate of 5.37, a recommendation that received unanimous support. The potential for salary adjustments for the mayor and commissioners was also noted, with the effective date for changes set for October 1.