City Council - workshop

Good morning, everyone, and welcome to day two of our summer workshop. Madam Clerk, please call the roll. Councilwoman Morgan.

Is it on? Oh, yes. Yes, ma'am.

Councilman Pickett.

Yes, ma'am.

Mayor Martin. Here, ma'am. Councilman Bonner. Yes, ma'am. And Vice Mayor Carvalho.

Here, ma'am. Please stand for the pledge.

To the flag of the United States of America and to the republic for which it stands, one nation, under God, indivisible, with liberty and justice for all.

We have three people signed up for public to be heard. Sean Mitchell. Good morning.

Good morning, Mayor and Council people. My name is Sean Mitchell for the record 192 Southwest Police Circle, Port St. Lucie, Florida. I have the distinct honor of representing the Boys and Girls Club of St. Lucie County. I am the executive vice president of government and community affairs. And I just want to brag a little bit about the collaboration that we've had not only with the city, but with the county. We had a youth of the year that actually, his name is Enrique, and he's actually spoke in front of you. He just went to states. He won states. He went to the southeastern region. He won first time for a St. Lucie County youth of the year to get there. And he had the distinct honor this weekend with our CEO where Coca-Cola and the Boys and Girls Club of America invited him up to the soccer game that was held in the Meadowlands in New Jersey on Sunday. Not only was he a flag bearer, but he had a tremendous time. So it's just great futures do start here in St. Lucie County and club kids need you and you need club kids. And just an additional thing, we have a mobile club that's worked diligently with Port St. Lucie this year, and they're award-winning. And what they do is go to some of the parks that we have here in Port St. Lucie, and they just have all kinds of events for families and kids to get together. And the majority of those children are ones that are homeschooled. So not only does it give them the ability to interact with children and youth of their own age, but they learn fantastic things. I know when I was an elected official, the three greatest words you love to hear is an inconclusion. So in conclusion, thank you so very much, and thanks again.

Thank you so much. Sean, really quick, when does Enrique go to Nationals? Because I'm watching that.

He'll be up in New York City October 1st.

October 1st, thank you.

Thank you. Awesome.

Ms. Goldberg?

Good morning. Good morning. Diane Goldberg, 6470 Northwest Volusia Drive, Port St. Lucie. And I appreciated what a wonderful program you had yesterday and how everyone who works for the city does such a great job. I would hope that some of the pictures of the retention ponds and the canals that you had were just renditions rather than the actual picture because All of them had the grass right down to the water's edge and I am hoping that this will be something that you will change because. The cost of the repairs of the erosion and all the pollution that runoff goes in from the grass areas is very expensive to take care of when you start with. The native plants around the area, the living shorelines, having a littoral zone instead of it being deep from the beginning of the water's edge makes sure that you don't get that erosion problem. It absorbs all the nutrients. and beautifies it to the point where people love going over there and seeing not only all the flowers, but they see all the birds that are there, the fish in the water, once in a while an alligator, but I've even seen otters in the water. It is fabulous, the wildlife. People really love doing that. You cannot make little parks out of all of them because some of them are behind people's homes. But right now you have to worry about your expenditures and as much as people say that this is the main thing they want, these parks where they can walk around and enjoy, seeing everything around Port St. Lucie and you've spoken how you want with these areas within 10 walking minutes of where people live. It can get very expensive and these are the kind of things that you may have to cut because it is not urgent needs for the public. But you do have to have these retention areas and the canals and they can be your parks. The expense for that what I call beautification is actually something that will not only enhance the beauty but also helps keep it clean and in disrepair and all you have to do is put down a couple of trees for shade and a bench which would be very inexpensive for you. in comparison to building a whole new park. So I hope this will be one of the things that you'll think of and consider. Thank you. Thank you.

Mr. Overholtz.

Good morning. Peter Overholtz, 3885 Southwest Rosser Boulevard. I've noticed some important items on the agenda for today. First of all, City Council is issuing a lot of debt for 26-27. You projected carrying $765 million in debt. However, I'm a little confused because on page 11, you list $549 million. That being said, there's a $216 million difference. Those numbers don't match up. But if the debt is $765 million, then from what my people have told me, it's the highest debt level in eight years. Also, most surprising is the $600 million investment portfolio along with the 4% reserve you have. With over $30 million in budget overruns on Floresta, Westmoreland, Torino, and the Gatlin's Roundabout, instead of issuing debt and being over leveraged, it might be prudent to have some of those large reserves used for that project. I also realize that you're going to be voting on the millage. I would encourage the city council

to review the rollback millage rate which would give every citizen some well-needed tax relief thank you yes just have some comments um mr overhauls thank you for your comments i just would like to note that i know that you were here early in the morning and you left shortly after um if you would have uh attended the re i don't know where if you were at if you were able to attend the majority of the meeting did discuss the debt as well as the sales tax and where we're currently at with that sales tax i highly encourage uh for you to go back and to watch that many of the questions and the concerns that you have were addressed as well as mr okia is available and mr just is available to answer your questions as well during any break so thank you very much

Yeah, I know we're going to be discussing the millage rate a little bit later, but I did want to start the day kind of talking a little bit about this because there's a lot of talk about rollback rates now. And the Port St. Lucie City Council and the way we've operated as a government has done something much better than the rollback rate. We've done consistent... incremental tax reductions. And if you look at the county millage, for example, or the school district millage, for example, if they had done the same percentage incremental-based millage rate reductions that the City of Port St. Lucie did today and kept their millage rate the same, their millage rate would be lower than it is today at their rollback rate. So by doing what Port St. Lucie did, it results in lower taxes for everyone. And so a rollback rate is a great one-year headline. But it's incremental relief that's intentional and purposeful that actually results in lower tax rates and actually ensures that the things that need to be funded are funded. And so Port St. Lucie has not been reactionary. We're not new to tax relief. We are the example and we are the model. Thank you.

Thank you. Council Bonta, I love those comments. I appreciate them. And I just, for the record too, when I was reading my budget book, and I just want to confirm this for the record, the incremental lowering of the tax rate over 10 years has equated to, from what I saw, 25% reduction in budget over the last 10 years.

Yes, Madam Vice Mayor, that's correct.

Thank you. And I really do hope that's what the headline comes away with. We have reduced our budget over 25%. There's a difference in the conversation. I hear the state discuss this. I hear many areas of the country when they talk about budgets discuss this, and they say we've lowered our budget. The state says they've lowered their budget. Having an increase in revenues does not necessarily mean you haven't lowered your budget. We've lowered our budget for 10 years, 25%. I don't know the state budget. I don't know this state budget, but I, I would assume they would have higher revenues. Maybe not. Maybe have lowered their budget, but they've had to receive higher revenues. There's no way that anyone in the state of Florida, any city in the state of Florida, any county, any, any business. Any home in the state of Florida who has cut back their budget based upon increase in costs and increase is not is not having these expenditures. These revenues expenditures personally is not seeing an increase in what's happening around us. I mean, it's everywhere. So I just wanted to say we've been doing everything we can to keep costs low, and I know that we're going to continue to do that.

Sure. Thanks, Madam Vice Mayor. Let me clarify that. So in reducing our millage rate, it's been a reduction of 25% over the past 10 years. So in reducing the millage rate, we're reducing the amount of revenues that we're collecting. So by reducing that revenues, that's an essence of a reduction of a budget. But I don't want to misinterpret that the budget has been reduced by 25%. It's the millage rate that has been reduced by 25%.

Correct. And then that would have also got leaned into the conversation about waste. So if we would have kept that 25% in additional revenues and not given it back to the residents who it should go back to, then we could have, I mean, honestly, we would have finished a lot, a lot more projects, but we recognized even back then, you know, we have grown. Valuations are going up and therefore the residents deserve to have some relief and so and I think your comments in regards to the headline is Point on Anthony point on I mean we could have a one-year headline But the truth of the matter is is that the city has been doing this year over year.

So, thank you I could be wrong But I don't think you could look throughout Florida and find another municipality at least as large as this one that's reduced its tax rate for over a decade and And so that's really what we're faced with today. That's how we arrived at having the third lowest city tax rate of the top 20 largest cities. It wasn't a one-year rollback rate to get a headline. It was being intentional. And so I think that context is important in this conversation.

And the debt conversation is important, too. So we've reduced our debt by 44%. But we've talked long and hard about how going forward in the future, well, number one, just because you have debt, that doesn't mean it's a bad thing. And going forward in the future, we are going to be issuing debt because we have significant projects that have to be paid for, whether it be in the utility, whether it be for infrastructure projects as well. And the whole idea about taking out the debt is one because the costs are considerable and we need to do that. Because we don't have a pot of money of 100 or $200 million sitting around to pay for all the things that we need to pay for as a growing organization. But also, we don't want our existing residents to just have to pay for the debt. We want everyone else who is moving in to share in that as well because of the way that the growth has affected us. It's because of the growth that we've had to do all these infrastructure projects and we've had to talk about expanding our utility and talk about addressing storm water projects. So that is the reason why we are going to be going out and issuing debt in the future. It's not because we just want to for the sake of it and it's a fun thing. It's because it's what's necessary in order to move our city forward. Other places, other municipalities, other counties have not done so. And been forward thinking in planning for the future of their municipalities or their county organizations and governments. And look where they are. There's no projects getting done for the citizens. Some of them hold money in a pot and wait years and years until they have money for one project. And we know that if you only do one project, you're never going to get anything done. And that is why we leverage all our resources in the city and have been able to reduce our debt, making sure that we're paying things off early when we have the opportunity, making sure that we have been reducing our millage rate. So you can't just say that there's one thing and then it's all in a vacuum. There's many things that have to be done and many investments that have to be made and many leveraging of resources that has to be done in order to Get projects done that are a huge benefit to our citizens both now and in the future. So I just wanted to make that clear because just talking about debt and acting like it's a bad thing is not accurate.

Mayor, I think the other point to going back to the comment that was made regarding Floresta, we made a promise to our residents. We have two phases completed. We're in our third phase and we really needed to complete that phase. So, and also since then, if you think about it, we went through COVID, we went through wars and we needed to address. And so the cost has tremendously increased since then, since we started these projects. So really Floresta needed to be completed.

YEAH, AND AGAIN, I MENTIONED IT YESTERDAY, THE TOPIC ABOUT BUDGET OVERRUNS. IT'S NOT A BUDGET OVERRUN. IT'S ALL THE THINGS THAT YOU JUST MENTIONED. WE STARTED A PROJECT. FLORESTA IS THE PERFECT EXAMPLE. AND WHEN WE WENT INTO THAT PROJECT, WHICH IS A HALF-CENT SALES TAX PROJECT, We had an estimate of what it was gonna cost. 26 million. I'm sorry? 26 million over three phases. 26 million over three phases, right. And what's happened? COVID, inflation, the economy, costs have gone up significantly, access to getting materials. Everything that has happened in our national market has affected every single thing that we do as a city organization. JUST LIKE IT HAS AFFECTED WHAT HAPPENS IN OUR HOMES AND GO TO THE GROCERY STORE AND GO TO THE GAS PUMP. AND THAT'S SOMETHING I DON'T THINK PEOPLE REALIZE. But it needs to be said because the cost affects everyone and every organization and every business as Councilman Bonham mentioned. And so over time, we've had to adjust. Then we had to split the project from one phase to three phase because we have to make sure that we have the revenues coming in in order to pay for it. And then, so it's not because it's over budget. It's because of all the things that have occurred that have changed the landscape with regard to all of the costs. And as a city, AND MAKING SURE THAT WE'RE KEEPING THOSE PROMISES TO OUR RESIDENTS, WE'VE HAD TO PIVOT. WE'VE HAD TO BE FLEXIBLE AND WE'VE HAD TO ADAPT, BUT MAKING SURE WE'RE KEEPING THAT PROMISE OF GETTING THINGS DONE. THAT'S WHAT WE'VE ALWAYS DONE IN THIS ORGANIZATION, AND THAT'S WHAT WE'RE ALWAYS GOING TO HAVE TO DO AS AN ORGANIZATION, ESPECIALLY WITH ALL THE THINGS THAT WE'RE FACING AND PLANNING FOR THE FUTURE. BECAUSE JUST BECAUSE THINGS ARE HAPPENING DOESN'T MEAN WE DON'T KEEP PLANNING, WE DON'T KEEP PREPARING, because that's what we do in order to move us forward. And that's what we'll continue to do. Like I mentioned.

Madam mayor.

Yes.

And you know, I'm probably getting ahead of the conversation cause I know we're going to probably go along and I mean, We read, right? I read, everybody here reads social media. We read the papers. We're listening. The reality is we're constantly listening. We're listening. I mean, I'm sure we've all been told, I've been told, you're listening to more of this than you should. You know, in the sense of everything you're reading, Julian, you can't absorb it. You know, you have to try to not... take that in so much and kind of look at the bigger picture and it's hard because you don't get into this position because you don't want to help people you get into this position because every one of us has a passion to want to help our community and i think the reason when we have this discussion about and i've just seen the comments fear-mongering and these things i think the reason is when we're sitting here We know what has happened. We know how hard it's been to do these projects, to make these things happen as we have a growing city. And we have to be able to fund the expansion of our police department. And we still haven't gotten to the level of staffing that we need, even in that department. And then on top of that, that comes out of our general fund. And we have all the other departments that we also need to fund, public works, your parks, and everything that goes down. And we look at that and we're like, oh my gosh, how are we going to be able to keep that level that the public is expecting and desires, when the reality is that the funding levels of the conversation do not match. So I'm just encouraging. We're all adults. If you are 18 and over, you are going to be able to vote in this election, and you are an adult making an adult decision. So I'm not going to sit here and lecture people about what's going to happen. I'm just going to ask, can you ask some questions? Just ask some questions like you would in any other situation. The question that I've had, and these are questions I've asked, and I continue to ask these questions. When the conversation started about waste, and waste was identified, and I could use an example locally, the waste that was identified was over a six-year period. So that equated to, hypothetically, was it $46 million over six years? I don't have the headline in front of me.

Clarify, that was the county budget. Correct, that was the county.

That is not our budget. That is correct. That is correct. I just, I'm trying to, I don't want to necessarily call names, but I need to use an example. So it's about $46 million over six years, correct? Correct. SO THIS IS MY QUESTION. IF THAT NUMBER IS ACCURATE, WE'RE GOING TO GO WITH THE NUMBER BEING QUOTE UNQUOTE ACCURATE EVEN THOUGH WE DON'T KNOW IF IT IS. FROM MY ESTIMATIONS OF WHAT I'M HEARING OF THE COUNTY, THEY'RE LOOKING AT APPROXIMATELY YEAR TWO OVER $100 MILLION LOSS. so if you take 46 divided by six what does that give you and if you're equating a hundred million dollars there is a large delta between the potential waste that there is in the conversation versus what the actual cut is going to be if this was to go forward So that's my question to the public is, if now we've gone beyond waste, what does that look like in services for your local community? And then see how that impacts you personally, and then vote accordingly how you feel. And we are elected to do everything we can to preserve safety, health, and welfare as best as possible. I know we're going to continue to do that, but I want to be very real in the sense that there's no way to make up that delta without feeling the impact in your own home and in our community. So I just hope people just ask those tough questions and then ask where's the money going to come from and how we're going to make up the difference. And when we were having the conversation yesterday about the county hopefully reconsidering the sales tax so we can go out to bond in these conversations. I continue to say this. We have very little avenues to be able to recoup revenues because of the way preemption has worked over years and years. And cities continue to be preempted with the availability to get these revenues. So we don't have a lot of doors to open. And so I continue to work with And I'm sure we all do. I continue to advocate to our legislators, and I'm going to continue to advocate in hopes that if this was to go forward, that they would provide new tools for us to be able to deal with the impacts of the community. So thank you.

Madam Mayor, I don't want to belabor this, but I saved most of my speaking time for today. That's fine. I knew. So I think there's a couple of things I wanted to mention. Number one, on the debt, I think the reason there's so much discussion about the debt is because people have long memories about things that happen long before anyone sitting up on this dais and the failed economic debt. And that's bad debt. That's credit card style debt. But to say that we shouldn't issue new debt for infrastructure is like telling someone that had bad credit card debt in their 20s that they dealt with that they shouldn't apply for a mortgage in their 30s. And the fact is that's simply not true. By issuing good debt, we're able to get key infrastructure at today's prices so that we don't pay excessively in the future. And that infrastructure is paid for over a period of time by the people that are using it instead of a burden on today's taxpayer. And so, you know, I mean, I understand why there is so much skepticism. I understand why there is mistrust. I don't belabor, you know, discredit anyone for having that mistrust and having that skepticism but up here we have to make the best and the most prudent and the most responsible decisions for the city and that's that is what we're doing and that you know we're not perfect no organization is no elected official is but i do believe that we act with prudence and we act in the best interest of this city with um with regard to amendment three You know, I think the reason Amendment 3 is on the ballot, and, you know, I'm going to take an unpopular position here, but I'd personally be voting for it. But I think the reason it's on the ballot is because as I have been such a defender of the city's incremental tax relief, year over year being responsible, attacking the military, putting the interest of the taxpayer first. If you look throughout the state of Florida, other organizations are not doing that. And so there is this feeling throughout the state, even in a city like Port St. Lucie where we have acted prudently and we have acted responsibly, there's still all these other taxing authorities that haven't exercised that discipline. and my hope is the implementation that i believe port st lucie is a good actor i believe that we have acted responsibly and in good faith and my hope is in the implementation that good actors are taken care of and treated well and but we do have a tax problem in this state and i know there's a lot of conversation because this organization we feel it in our bones that we have done everything that we can acted responsibly year over year over year. And so I think I just I just think that's that's why it's on the ballot because because of what we've seen throughout the state and you know, I don't want to play this while I'm a lot more talk about taxes later.

Anyone else?

Mr. Morrell, can you expand on what you're required to do as far as reserves? What you're mandated to do as far as keeping reserves? I'm sorry, just clarify your question. It was mentioned that we should use our reserves to pay for things. Can you expand on why?

Absolutely. Typically in the past, and actually probably going back 20 some years, the city council established a reserve for the city. And those reserves have been used when we've had these major hurricanes that have occurred in the city. And if you go back and you think about it, we've probably had three, four major hurricanes that came through here. and be able to bring the city back to its feet as quickly as possible using the staff to be able to do that. Also, if there is a particular project or if there is a major emergency, let's just say tomorrow we were to lose one of our water plants. If you don't budget, you don't have reserve, what are you expected to do? Not provide water to our residents? that that's huge but the potential is there what happens if you lose a major roadway in our city or a bridge if you don't have reserves what happens not do the project so those are typically what the reserves are used for thank you but it even goes beyond that so let's talk about governmental accounting standards let's talk about

OUR BOND RATINGS. LET'S TALK ABOUT IF WE DON'T HAVE RESERVES AND WE DON'T FOLLOW BEST PRACTICES AND GOVERNMENTAL ACCOUNTING STANDARDS, WHAT DOES THAT DO TO US AS AN ORGANIZATION FINANCIALLY? CAROLINE, STEVE, Anyone would like to care to talk about that? Because that's very important. Also, in terms of having money for projects, God forbid we have things happen.

We have regulations that have to be followed. Absolutely. Thank you, Madam Mayor. So being an award-winning organization, we are also guided by principles. We do follow best practices. One is through the Government Finance Officers Association, where it is a recommended policy to set a reserves benchmark for the general fund. It's at 20%, meaning that if there's something that happens, you're still able to operate government for at least two months. In answering your question directly about how does it impact our debt? It's just like taking out a mortgage. How do you look on paper? Are you, you know, if you happen to lose your job, do you have enough money in your savings account to be able to pay your mortgage? So the more savings that you have, having your reserve, it also affects our credit score on paper for a lender to issue debt. So when we are practicing good financial discipline, we are able to lower our interest rates, which in turn ends up being a savings to our taxpayers because we're borrowing money at a lesser rate.

And Steve, can you talk about it from an investment standpoint as well and give us your comments? Because I think this is really important for the public to know.

Yeah, currently right now our reserves are being invested and that interest over time goes to help alleviate some of the burden that we have in the future. We're able to, here and there, we're able to capitalize on a spread, if you will, based on the amount of debt that we issue and based on how much we have in the bank. So that spread comes out and it compounds year over year and adds to the bottom line.

Thank you. And we're going to be going into our investment review in a few minutes. So I'm sure we'll have more to talk about that with John here. So go ahead.

I just wanted to also, because, you know, sometimes things happen and it's been years and people forgot. So in 2016, when I got on this council, THAT WAS A HUGE DISCUSSION. RESERVE POLICY WAS LIKE ONE OF THE THINGS THAT WAS THE QUESTION I WAS EVEN BEING ASKED FROM THE PUBLIC, WHAT ARE YOU GOING TO DO ABOUT THE RESERVE? OUR RESERVE POLICY WAS WELL OVER 30% WHEN I WAS ON THIS COUNCIL IN 2016. AND WHEN WE GOT, WHEN THE NEW BOARD WAS ELECTED, THAT WAS ONE OF THE FIRST THINGS THAT WAS CHANGED WAS AN ACTUAL POLICY THAT WE WENT AND SLASHED ALMOST HALF, MORE THAN HALF, AT 17%. And then because of the bond issues and because of the concerns of the ability to borrow, it was advised to go to 20%, which we've held 20% for the general fund since we've been on this board. And it's by policy, which this is why we also have been able to get some of these projects done. BY POLICY, ANYTHING ABOVE 20% TODAY, THE CITY MANAGER AT THIS MEETING HAS TO PRESENT TO THE COUNCIL. THIS IS HOW MUCH WE HAVE IN EXCESS. AND THE COUNCIL HAS TO MAKE THE DECISION OF WHAT WE'RE GOING TO DO WITH THAT EXCESS DOLLARS AND THAT ASSIGNMENT OF THOSE DOLLARS. AND WE CAN GO BACK TO PREVIOUS YEARS AND YOU CAN SEE THAT THE PROJECTS THAT HAVE BEEN DONE AT THIS BUDGET WORKSHOP AND COMPLETED BASED UPON THAT POLICY. And I can tell you that even staffing wasn't addressed in any of those positions because I remember the advice from the city manager previously and today is these are for one-time uses only, project specific. And I mean, so we've had a very aggressive position on our general fund. And then I know we carry higher reserves for our enterprise funds because when you look at the building department as well as the utility department, those have to deal with emergency circumstances, which I think you were saying. If we have a major hurricane, we lose a major main of some kind or something, we have to be able to go in immediately. We can't wait for FEMA because FEMA is not going to reimburse us for three or four years. We have to have the money to be able to go in and deal with that at an emergency level, which infrastructure at utilities is so expensive, talking into the millions and millions and millions of dollars instantly. And I see, Stephen, you want to lean in. I don't know if I'm missing anything.

No, I just wanted to add into by having those investments, they allow us to incrementally reduce the millage year over year. It provides that stability so that we're able to take a strategic approach or council is able to take a strategic approach to issuing debt along with up and coming CIP projects.

But here's the thing, as the conversation has evolved, I can only speak for myself, I can tell you that I welcome this conversation because, again, we just talked about time. This decision was made in 2016. Many of the members of the public that are new to this community does not know that history. So this conversation around all of these subject matters is giving an opportunity for council to say, like, this is the history and this is how far we've come and also what we're continuing to work on to improve the life here in Port St. Lucie. So thank you.

SO WE'RE GOING TO MOVE FORWARD INTO OUR INVESTMENT REVIEW.

Good morning, Mayor, Vice Mayor, City Council, City Manager, staff, and the citizens of Port St. Lucie. My name is Karen Russell. I'm the Assistant Finance Director. I have been in government 35 years. I've been with this city for seven going on eight years. I have multiple certifications in government finance. I am also, I have a master's in accounting and a master's in public admin. I enjoy working for the city. I think we have a good strategic approach. And today I want to talk about that. I have John with us. He is our investment consultant advisor. We have meetings with the city manager, the city's finance director treasurer, along with myself and other team members to look at the portfolio to see if we need to do anything different with it. and we've done pretty well with our portfolio. It helps us with projects and other things that we work with budget on. But today I do want to give thanks to Dionne Bartley. She is our accounting manager and she is the one who does the day-to-day portfolio. Because we have a hybrid approach, part of ours is managed internally, part of it's managed externally. So we keep money local so that we deal with the banks here and we have reports with them. She works on getting CDs, with getting money market accounts, making sure that when projects come due, we have the funds to pay them. And then we have our longer portfolio that we have John manage. And so with that, I will bring him up and let him talk about the economy and how it affects our portfolio and to talk about the city's investment as a whole. Thank you.

Thank you. Good morning and welcome back.

Good morning, Madam Mayor, Madam Vice Mayor, Council Members, City Manager Morejo. Thank you for having me here this morning. Thank you for that introduction, Ms. Russell. As we'll normally do, I'll just spend a few moments. I know you've had a long day yesterday, and you've got some things following up with my presentation, so I'll be concise. And we'll spend a few moments talking about a couple of economic indicators, which might tie into the conversation that was just had. And just quickly on overall economic growth through the first quarter, second quarter GDP is going to be released actually next week. but as we look at the first part of 2026 economic growth uh quarterly growth was 2.1 percent really the highlight i'd like to share on overall economic growth is there has been a shift in the last several months from consumer focus the business focus and it'll be interesting to see if this has a longer term trend to it. And what I mean by that is everything that we're all reading about and that is spending on AI. And so if we look at first quarter growth on this chart on the far right hand side, consumer spending was the lowest has been in several quarters, but we still had positive economic growth. And a lot of that had to do with hundreds of billions of dollars spent on AI by these large tech companies. and so that has been a shift in overall economic growth again it helps the economy but the question is whether or not the consumer can withstand the continued inflation that was already discussed and continues and we'll talk about that in a moment and shifting from the overall economy so really the two major economic indicators that we like to talk about of course is the labor market and inflation In the top part, we have a few discussion points on the labor market. So through June, the first half of this year, the economy added about 550,000 new jobs. If we compare that to the same timeframe a year ago, there were about 160,000 jobs created. So that suggests a stronger labor market, which is a good thing. Although more recently, we've seen that slow down a bit. In fact, June job growth was around 57,000. It was less than half of what was expected. The really big point that I'd like to share, which is being talked about right now when it comes to the labor market, is not the unemployment rate, which is 4.2%, which is actually a very healthy level, but it's the labor force participation rate. You may have read about this recently. That's at 61.5 is the reading, the most recent reading. And what that is suggesting is that there are millions of working age individuals that are not working or seeking work for one reason or another. And in fact, just yesterday, there was an article released that uh it's called not in the labor force 105 million individuals that are working age are not working or seeking work and that's the highest ever recorded so there's a dynamic going on in the labor markets and why is that important because of course that is how our economy grows through folks working. So that is something we'll be paying attention to that not in the labor force indicator being so high in the participation rate being low. So shifting from that labor market indicator, which again, unemployment rate is low, that's great. participation is low, not so great. That will certainly be something to focus on here in the second half by the Fed and others as decisions are made on monetary policy. When we turn to inflation, which was just talked about a few moments ago, absolutely correct. If we look at this chart on the bottom and we go to the left-hand side, it wasn't that long ago that annual inflation rates were over 9%, the highest level of annual inflation for four decades or more. And it didn't just come down quickly. It took several months and a couple of years to get back down to these lower levels, and we still have not reached the Fed's target of 2%. We got down into the mid-2% levels last year, as you may recall, on a monthly basis. This is released, and these are annualized. Of course, with the Iran conflict and the closing of the Strait of Hormuz this year, beginning in early March, that pushed inflation rates as gas prices and oil prices skyrocketed, oil prices plummeted. Barrel of oil went up to around 120 or closer to the peak. It actually came down back to pre-war levels, but now it's back over $90 a barrel, I believe was the latest reading. That is very inflationary. Oil is used in everything. It's not just the gas that we put in our car. It's used to manufacture almost everything that we use, not to mention the trucks that get us those products to the stores or to our homes through delivery services. Inflation got as high as 4.2% in May. Thankfully, here in June, that rate actually came back down to 3.5%. but still well above the fed's preferred level of two percent uh and so now that we've seen oil prices jump back up this month we may see that number bounce a little bit higher and that's very important because as you all mentioned council members and was mentioned by mr okie is that because prices go up and impact packs everything mr mario i think he mentions Project costs have gone up and we know that they've doubled, sometimes tripled. So I just want to make that comment because it does tie in exactly what you said, and it's reflected in this chart. And that likely doesn't appear to be coming down any time in the near term. The Fed is doing what they can, but they don't have a magic wand, so to speak, and they can't control oil prices. So that will likely be a factor as we look forward. So I wasn't intending to talk about that as much, but because it was part of the conversation worth mentioning. And not just in oil prices, we can look at the price of fertilizer. So you may have read about 20% of oil comes through the Strait of Hormuz. Well, about 20% of fertilizer also comes through that area. And so this chart, that light blue line shows us the spot price of fertilizer coming through the Strait of Hormuz. It goes back a few years just to show us the price of that. And while I'm not an expert on this, we can see what that chart shows. If we go back to 2022, the price skyrocketed to about $902 per ton, $902 per ton. That was actually the beginning of the Ukraine-Russia war. Those prices came down, and now we've seen them pick back up as a result of the Iranian conflict. When fertilizer goes up, that has a tendency to drive up the price of food because it's used to grow our crops around the world. So two big important factors that are likely going to continue to play into inflation in the near term. As we shift from the overall economy and some of those economic indicators, we'll touch on a couple of charts on interest rates, and that'll tie right into your investment portfolio, some of which Ms. Russell just mentioned on the strategy. And that is, if we look back over the last 26 years from this chart, we can see the overnight rate has been As high as 6 1⁄2%, it has been as low as 0%. I wanted to take a moment to talk about this because, as Mr. Okie mentioned, your core portfolio that we manage, the benefit of having that strategy, it provides a balance, and we'll talk about that in a moment, and those accrued interest earnings are continued to reinvest and have that compounding effect, just like we think about for our own investments, and that helps because as the city grows and as your portfolio grows, as a percentage, your reserve also needs to grow, and this portfolio can help with that. Speaking of that, though, when we look at this chart, we can see that more than 10 of the last 15 years, pardon me, 10 of the last 18 or 19 years, we had a zero interest rate policy. So your short term funds were earning close to zero. So having a balanced investment program also helps to manage during those times where rates might be lower. Currently, the overnight rate is 3.75%. And just thinking of that rate, why is that important? That overnight rate actually determines what you'll earn on your overnight investments, which represents around 40% of your overall assets. And those overnight investments, which was mentioned earlier, are required for shorter-term operational needs, unexpected expenditures that you may have, and they balance out your core portfolio. So when we think about that overnight rate and potential interest earnings, not just historically, but looking forward, what we're showing here on the left-hand side, the Fed funds rate earlier this year was expected to drop from around 4% to 2%, maybe less than 2%, through three or four rate cuts. That has shifted as inflation expectations have gone up. The expectation now is not rate cuts, but actually potentially rate hikes. Maybe not in the next month or two, but potentially by the end of the year, the market is pricing in one to two rate hikes. What does that do or what does that look like with the overnight rate at 3.75%? That's the right hand side. We can see potentially an overnight rate of around 4%. And while higher interest rates don't necessarily help with borrowing costs, they certainly help with interest earnings and reinvestments. And so from your investment portfolio, that would be a benefit. It certainly has been a benefit that that rate did not go down as much as what was originally anticipated. And so that's helped with continued interest earnings. then wanted to just show you what the treasury yield curve looks like year over year through june 30th the gray curve represents a year ago and the blue line represents as recent as june 30th at very similar shape as today longer term rates are actually up a little bit higher the big key point for this is that we actually have a blue the blue line represents what we call a steep yield curve or a positive slope THIS IS EVEN MORE BENEFICIAL FOR YOUR INVESTMENT PROGRAM'S CORE INVESTMENT PORTFOLIO BECAUSE AS THOSE RATES HAVE MOVED HIGHER, WE'VE BEEN ABLE TO REINVEST FOR YOU IN THAT CORE PORTFOLIO AT RATES THAT ARE WELL ABOVE 4%, AND THAT'S HELPING YOU LOCK IN THOSE 4-PLUS PERCENT RATES FOR TWO, THREE, FOUR, AND EVEN UP TO FIVE YEARS, AND THAT PROVIDES THOSE ADDITIONAL EARNINGS TO HELP, AGAIN, BUILD OUT THAT RESERVE IN THAT CORE PORTFOLIO FOR THE CITY'S OVERALL PROGRAM. And then lastly, just to show you, we've had a lot of volatility in a lot of our economic indicators. There's a lot of information on this chart, but this represents what those treasury yields look like over the last two years. And I just want to focus on the right hand side before we jump into your investment portfolio. As recently as the end of February, we saw rates drop by 80 basis points plus over the prior 12 month period. Again, his thoughts were that the economy was going to start to slow down. uh and so rates came down you can see that 3.50 and 3.38 that was the five year and the two year treasury rate back in late february since then we've moved higher by as much as 85 basis points uh in in the in the treasury rate so again rates higher mean that we can reinvest at much higher uh security rates for you for for your core portfolio and then keeping that overnight rate where it is or potentially moving slightly higher helps with interest earnings on your liquidity funds So that's a summary of your investment, pardon me, of the economic update. Let me pause, see if the council members or if anyone here has any questions or thoughts for me.

Any questions? No? Okay.

The next presentation that we'll talk about just in the next few minutes is a review of your overall investment program, and thank you for your help with that. SO AS WE THINK ABOUT THE CITY'S INVESTMENT PROGRAM, YOU MAINTAIN, AS I'VE MENTIONED IN THE PAST, BUT ALWAYS REPEATING, IT'S A VERY DIVERSIFIED INVESTMENT PROGRAM. IT'S VERY BALANCED. THE STRATEGY HAS INTENT TO IT, AND THAT, AGAIN, IS TO FOLLOW YOUR PRIMARY INVESTMENT OBJECTIVES OF SAFETY FIRST, MAKING SURE YOU HAVE LIQUIDITY TO MEET BOTH SHORT-TERM NEAR-TERM AS WELL AS LONG-TERM RESERVE NEEDS, AND THAT IS WITH THIS BALANCED APPROACH. SO AGAIN, ABOUT 40% OR SO IN LIQUIDITY FUNDS, WHICH WE'LL SEE HERE IN A MOMENT. YOU MAINTAIN ABOUT 15% IN THIS MID-TERM STRATEGY WHERE YOU HAVE SECURITIES LADDERED OUT BETWEEN call it three months and one and a half years and then your core portfolio that we manage which has about a two and a half year average maturity and that's what we're showing here on this chart and so a few characteristics of your core portfolio again think of this as reserve funds the average maturity or duration at the top of that top right hand chart two and a half years that's been the targeted duration for this portfolio by design The book yield of the portfolio, so going down a few rows, book yield actually increased from 3.83% to 3.97%. That's good news because, again, as interest rates were going lower but have now moved higher, we've been able to reinvest at yields that are on average above 4%. That's helping increase that. When we think about this portfolio for the last six months or so, we've reinvested about 25% or so of the portfolio, so lots of numbers. But let me focus on the maturity structure. If we look at this and we look at the one to two out to the four to five-year area, THAT IS WHERE THIS PORTFOLIO IS STRUCTURED BY DESIGN FOR, AGAIN, LONGER-TERM NEEDS AND RESERVE FUNDS. IF WE LOOK AT THE RIGHT-HAND SIDE OF THAT MATURITY CHART, WE DON'T SEE MUCH INVESTED THERE IN THIS PORTFOLIO, AND THAT'S BECAUSE THAT'S WHERE YOUR LIQUIDITY FUNDS ARE HELD. SO IF WE LOOK AT THIS ALL TOGETHER, THAT'S WHAT PROVIDES THAT BALANCE FOR THE OVERALL INVESTMENT PROGRAM. I ALSO WANT TO MENTION, TO FOLLOW UP ON MR. OKIYE'S COMMENT EARLIER, INTEREST EARNINGS IN THIS PORTFOLIO ARE IMPORTANT. We're able to earn what the market gives us, but by having a strategic approach to this and not trying to time the market or move funds into one area or another at any particular time, but by being disciplined, you're able to take advantage of these moves in interest rates. And over the last year, remember, from your fiscal year beginning October 1st through February, interest rates had actually gone down by 50 basis points or so. And then they've come up since then. So we've had this volatility. Meanwhile, this investment portfolio actually earned 85% more in net income than it did your prior fiscal year the first nine months. And again, I mention that because we're taking advantage of what the market's giving us, but it also goes to show how the city's using this balanced investment program to help with that, and those additional interest earnings will help you with your reserve balances over time. IF WE LOOK AT THE SHIFTING FROM JUST THE CORE PORTFOLIO, AND I'LL FINISH WITH THIS SLIDE AND OF COURSE ANSWER ANY QUESTIONS OR DISCUSSIONS THAT YOU'D LIKE TO HAVE, THIS IS A SNAPSHOT OF YOUR OVERALL INVESTMENT PROGRAM. AND WHAT I WANT TO FIRST HIGHLIGHT IS THAT YOU ARE COMPLIANT WITH YOUR INVESTMENT POLICY STATEMENT AS WELL AS WITH FLORIDA STATE STATUTES WHICH GOVERN THE INVESTMENT OF PUBLIC FUNDS HERE IN THE STATE OF FLORIDA. Again, that balanced approach, you have around 40% in bank deposits and local government investment pools. Those are money market fund strategies for you. And again, the balance is laddered out anywhere from three to six months out to five years in various investments. All fixed income, very important to mention, these are fixed income investments. They are A-rated or higher. A third of the portfolio is in U.S. Treasury, and then the balance, a smaller portion, is in corporate notes, and then a small amount in municipal bonds as well. So if we look at that, you can see the allocation here on the left-hand side, obviously represented by the pie chart, and that is what's provided the liquidity that you need, but also remaining compliant and helping with those interest earnings over time. So a quick summary of the investment program, but certainly happy to dive into anything or answer any questions that the council may have on the overall investment program and our approach.

Thank you so much.

Any questions, Council? I just have some questions. I do have, like, comments and questions. Go ahead. So this is more of the economic portion. I wanted to kind of wait until you were done with everything. So when we look at inflation and specifically what we've dealt with locally with inflation, I can't prove this because I'm not an economist, but when we look at the cost for roads and post-COVID, the ARPA, of funding came out. Never in the history, this is what I have learned, never in the history of the United States did every city and every county and every municipality received an allocation from the federal government. That's never happened, which blew my mind. I was like, that's... So what happens because I have to assume every city in every county for the most part was probably vying for the same services and the same labor pool because most cities probably address infrastructure and other things that are allowed. I have to believe that that market and that impact caused massive inflation for the goods and services that we utilize because we were all purchasing at the same time. And there wasn't as much inventory because we were already dealing with COVID. So now fast forward to today, if that impact is felt nationally and then now we're looking at today and we're having this discussion and knowing that Florida is the third largest state in the union, Florida is also the third largest, well, and probably it's actually a larger economy because I know we do very well in the economy. So you tell me where we rank in the economy. If this affects, like hypothetically, if we have a situation where 411 cities, 67 counties, we start to see massive layoffs, we start to see less spending in these sectors because government does provide on behalf of the city, they purchase. We purchase on behalf of the residents, right? We purchase roads, purchase goods and services. So you're looking at impact to construction, impact to roads, impact to not just the local economy, our state economy. What does that do for the nation when you have an economy that large that impacts the nation? And how could that potentially affect us not just as a state, as a city, as a country? I know it's very speculative, but, again, when I said I have questions, I have a lot of questions because I want to – you said that you're – You're going to be voting for Councilman Bonner, and I still haven't made my decision on how I'm voting on this item. I'm still asking questions, and I'm still seeking answers in that area. So help me understand the economic impact better of this particular Amendment 3 proposal so I can make a better decision.

So if you don't mind, Madam Vice Mayor, I'll address the comments on the ARPA funds and my view on inflation. And you touched on the demand side for labor, and you're right. So if you think of $5 trillion and those funds being distributed, and that was helpful for projects and building out our cities and counties and so forth, But you're right, it resulted in a huge demand for labor. And so that drove up costs. And you remember during that time, we had some of the highest levels of wage growth. And a lot of that was driven by, and it's not just the project, but it's all the operations behind it and all the other folks that are needed to help manage those projects. And so we saw not just in the private, but even in the public sector, it was a challenge. and required higher salaries to bring folks on to help manage all that. The other side of that, though, is also the fact that those funds were distributed. And so when you create that amount of money and that amount of liquidity, that also creates inflation as well. And I'm a big believer that's why we saw inflation go up to 9% on an annual basis and take a while to come down because inflation you had all this demand, but you had also all this new money that was put into our economy all at once. And so all this money, it's like, think of an individual, you get this big pot of money, and by the way, not only do you want to spend it, you had to spend it by a certain time, right? So you had to go out and spend it to meet, in my opinion, That was a big factor of why we saw that inflation. With regards to looking to the future and demand, and the council, you talked about that before I came up here, regardless of what our economy is doing, local governments in particular, We still need roads. We still need schools. We still need those things to function as government. And so you're kind of beholden to what the economy is allowing you to do. The economy is actually, I think, done a lot better than many thought coming out of COVID and not having a formal recession. But it has been challenging for the consumer, and I think it will continue to be. And that ties right back into the inflation part of that. And you're right, with Florida being a larger market, from what I read, I'm not an expert on this, so let me make sure I comment on that. But from what I read, the shift from a net massive migration to Florida has slowed down. And that's happened. And now we're seeing this shift of population that's different than what we saw in COVID. And that's likely natural just as things change. But when we look forward, I think. Inflation is going to be the biggest. I'm just I'm a big demand supply demand person. And so I think if costs continue to go up, you're going to have less demand for that. That potentially could bring prices down, although it hasn't done that. But that could have been artificially done because we had a massive amount of liquidity a few years ago.

I agree with you. I think it's going to be, it's going to be, I don't want to say interesting, but just to watch how the economy responds. And then more importantly, if this was to pass, like if there's less demand and it's to that massive scale, does this pricing begin to, you know, correct itself? And I don't know how much we can change that, that needle or not. Right. And like you said, I haven't seen it change since we've had this massive inflation. So that's, that's my concern. Right. You know, but I appreciate, I do. I appreciate the conversation and, You know, and I'm going to have more questions in the future, so I would love to reach out to you because I just, again, I want to make sure that as I'm looking at this from a voter's perspective, from my personal perspective, that I'm looking at all of those aspects because the economy is a big one, especially the local economy. Yes. And it's going to be, I think you'll feel the impact, too, in those areas, unfortunately. Thank you.

Great. Anything else?

May I just one comment? I didn't mention this during my presentation that it's the reason when we meet quarterly with Mr. Morejo, Mr. Okie, and Ms. Russell and the team, we have in-depth conversations about this strategy and it's very important and it likely will be even more important as we look ahead, especially with the legislation that's been passed. And so know that we're here and we'll have those conversations to ensure that you still have liquidity and we'll look and make sure you have the best strategies in place to continue moving forward here at the City of Port St. Lucie.

Great, thank you so much, really appreciate your presentation.

Thank you for your partnership.

Thank you. All right, next we are gonna move into our state legislative update, Kate.

I just want to welcome Chris Carmody to the podium. And we're very grateful to have Mr. Carmody's leadership in the state legislative level. Mr. Carmody has served us well for many years as the city's lobbyist and has really helped to bring forward our appropriation requests, working with our entire delegation. So I know we're very grateful for Chris to make the drive down here this morning to be with us. We were planning on having Mr. Carbony come in August, but we thought at the great suggestion of our city manager, it would be helpful to talk about it now, given the focus on property tax reform that occurred this last session, since that's a big focus of Mr. Carbony's update, as well as discussing all the other bills that passed. Because, as you know, we are dealing with some legislative impacts today that have already passed this session, as well as other changes. We want to make sure that the Mayor and council are informed of all of those new changes in legislation as well as the city team and to have a clear-eyed look at what we have, what has occurred and what is likely to occur in the future. So thank you, Mr. Carmody, for coming this morning.

Of course. Good morning, everyone.

Morning.

All right. Well, we'll get right into this, and obviously there's time for questions at the end, but if you see something you want to ask a question on then in the slide, don't hesitate. These are all obviously available, so you can keep them in those notes. So as a result, I will probably breeze through some of them, knowing that either you already know it or you have access to the slide if you want to dig in later, more just to keep this going as there's, I know, some questions and pressing issues you want to get into. So we'll go right in. All right. I bet this is a picture of me. Our marketing team helps put it together, and I'm sorry for all those words up there. That's them. But we stand by it. We work hard. Okay. When we do a presentation like this, as every year we like to talk about who the players in the room are, I'll go through this quickly, but it kind of helps to understand what happened if you know who was in the room there. And we'll start with our delegation, right? We have a great delegation. You can see them and their names and faces up there. Mr. Overdorf's terming out, so we'll have someone new in that slot. But otherwise, the other three we expect will return next year. And they all work hard for us, right? Some are more focused on appropriations than others, but collectively, between policy and appropriations, we have a great team, and our lobby team enjoys working with them on your behalf. So when you see them in the grocery stores around town and what have you, please thank them. It's not... Always easy work, that part-time job they took on where they have to travel to Tallahassee frequently and take in a lot of input, but they do a great job with it. So please thank them when you see them. And then so going into this session, this, and we'll get into it at the end, was the big thing looming over everything, property tax reform. It was how they were going to do it. Was it going to be governor-led, House-led, Senate-led, a combination thereof? As you saw, the House took some of the lead during session. The Senate didn't really do much with it. And then we had a special session, which we'll get into. But this loomed over every decision. When you look at the tax package that they put forward from the House and Senate, there wasn't anything that affected local governments. Why? Because they knew something was coming on this. When they looked at policy bills and such, unofficially, they were looking at just about everything of, OK, but also we're going to do something here. So how is that going to impact it? So this kind of loomed over everything. There's one other thing that loomed over everything, and that was congressional redistricting. They obviously did go through with that and made changes. Basically, anything south of Central Florida, think of what is presently the Mills seat up in Volusia and Dan Webster's seat in Lake County. Anything south of there, a lot of changes occurred, right? So starting with the Soto seat in Central Florida on down, you saw different changes in congressional seats. We'll see how they play out, right? You can't take the politics out of politics. Obviously, this was an effort that pushed from on top from the feds at the White House level to update the maps based on what they thought were flawed maps from the COVID time period when those were drawn to give the president the White House a more competitive chance in this midterm to keep the house. we'll see the results, but this loomed over everything as well. And we kind of say it creates interesting politics, right? Folks who weren't necessarily even thinking about running for Congress start to think about running for Congress when redistricting occurs, right? Because you change one line that includes this neighborhood or takes out that neighborhood and obviously is before that a seat you weren't thinking about, now you're thinking about. And so that obviously loomed over all of this and during session. And then, of course, budget building for the second straight year. You had our budget writers come in and declare pretty openly. They planned on cutting the budget. There is a belief amongst those writers that the future years are where we're going to have some storms where our even though revenue is still strong that the. expenses that we're incurring in Florida are going to outpace the revenue. Now it's worth saying that ever since I've been doing this, and LinkedIn told me I've been doing this for 20 years, the state revenue estimators have been every summer around this time, they do their projections for the next year, and they say next year you're fine, but two or three years out, that's when the storm is coming. We've had a couple storms in that period, and every year we've managed to thrive as a state. So knock on wood, hopefully they're wrong again. But the budget riders took this approach of the budget has been increasing, and mostly because of collections and sales tax and everything else with inflation has gone up. and we need to do something to decrease. Could it also be that they knew that they were going to do something on property tax and it would look a little disingenuous if they have increases on their budgets and tell everyone else to decrease it? Maybe. I'll let you make that conclusion. There's a lot of theories about this, but the bottom line is as they came into this session, eyes wide open to everyone, we're cutting the budgets again. get ready for that. And so that's what they did.

So I was going to say, so Madam Mayor, I want to pause here for a second because, and I'm not, I'm going to try not to get you in any trouble, Chris. But I just want clarification because this has been my question. So when we hear from Tallahassee that the budget has been cut, does that mean revenues have decreased to what would be quote unquote their rollback rate? Or is their budget larger as far as what they have to spend?

I would have to look at it to see what would be the equivalent to the rollback rate using that term. It is a genuine cut year over year. It's not a significant cut. Yeah, exactly. It's not a significant cut, but it is a year over year cut or last two years. And, you know, this was a speaker priority, Speaker Perez, President Albritton went along with it, again, kind of under the theory of we've got some headwinds in the future. But it was a cut. To be sure, we have significant sums now that are unspent. They're just unallocated. And only so much can go in the reserve fund. So the good news on that is if we had storms, major storms come this summer and or another COVID-like situation, we have more than enough funds now to cover the balance of what those would be.

And listen, I believe in rainy day funds. It's very important because, you know, we don't have I would love to say I can rely on the federal government to come and save us in a major storm. But guess what? We know the challenges with that, too. We've seen it. We're Florida. So I don't be I don't. I don't look negatively on the fact that the state does hold a good amount reserves and has a safe rating day fund. I think municipalities and counties have to do the same thing too. And that's just been my chief thing is, it's all, what is this saying guys? It's like, it's not what you say, it's how you say it, right? So there's this constant conversation of, The state of Florida has cut their budget. The state of Florida, you need to also cut your budget. Because I've had these conversations. It's like, we have cut our budget. That doesn't mean revenues are down, though. That doesn't mean they have less money in the bank. And why don't they? It's common sense. They also have projects to pay. Thank you to the governor. Thank you to the legislator for doing what you need to do to fix roads in the state of Florida, fix roads in our community, help us with economic development. Very grateful. But that all also costs us very real dollars. And they're dealing with the same challenges that we are. But I don't want to... I feel like sometimes it's, and maybe it is personal, I feel like it's an unfair discussion sometimes because I feel like we are trying to do the same thing and we're just not speaking the same language. And I think that's a challenge and I need to do a better job. I think we need to do a better job to speak that same language to the residents so they understand we are in many ways in alignment with the same language. GOALS THAT THE STATE HAS, INCLUDING SEEING HOPEFULLY ONE DAY PROPERTY TAX REFORM, BUT IN A WAY THAT'S ACTUALLY SENSIBLE AND REASONABLE AND ENSURES THAT WE'RE NOT CUTTING SAFETY. THE CONVERSATION IS IMPORTANT.

Absolutely. Yeah. And so but more just to set the scene is these were the three things that were kind of like going into session that we knew we were going to be dealing with. It was going to be hanging over the heads of the budget. And we say that we take up air in the room. Right. As you'll see, there's a lot of bills that pass and don't pass. But some of these big, juicy topics take up a lot of the air in the room and a lot of the conversations. I'll quickly go through the leadership priorities. We'll start with the governor. He had some priorities going into session. A little light, right? And it's not so much that he didn't have stuff he wanted to do, but this is his eighth year. He's gotten a lot done in those first seven years. And so at some point, if you've got everything you've asked for, what else do you ask for, right? There's only so many Christmas gifts they can put under the tree. But data centers, this is when he came in. He wanted to, and we've seen this go, you know, A dramatic shift in the politics of this particular issue, and I'm sure you all deal with it here at the city level as well. Not a year before the governor's, if you will, his staff and lobbyists were asking the legislature to extend a tax certificate program that would help recruit more data centers and about a month or two later. It was shifting into, well, we don't want them in our state. So obviously the politics on this have changed very quickly. And the governor and his team have kind of done their research and decided there's some problems there. But so what this bill ultimately did was it leaves a lot of authority here at the local government. Some of the early versions of the bill were going to make it almost impossible for a local government to make decisions on these for their community. But it just put some guardrails in around the water, consumptive use permits, around water. um some of the sounds and um the approval process at a local level probably a good product right it wasn't what was asked for at the governor's level it wasn't wasn't presented by the house or senate sort of that benjamin franklin compromise where they all got together and said we think we need to do something let's come up with the right solution and so i think it was actually probably a good thing in the sense that locals still have control they can make decisions for the communities wanting to what they want to do with these But there's also some guardrails there so they don't give away the farm, if you will. He also wanted AI Bill of Rights. That died. That was one of those. The House is pretty aligned with President Trump's in the White House where they said they want AI to be handled at the federal level with little regulations right now. Congressional redistricting, you saw that passed. I covered that or mentioned that it passed. And then vaccine mandate rollout that died mostly on the House side. renewal of the Emergency Trust Fund for Immigration Enforcement. Anyone heard of this thing called Alligator Alcatraz? It was kind of a small story on the back page for a while. Okay, see? Put a little humor into here, everyone. This obviously was very much talked about last summer, but Republicans and Democrats criticized it, not so much on the immigration side, that's a whole other conversation, but the way it was being spent, right? These funds are typically being used for hurricanes, right, or COVID, something that is I think universally accepted is that's a crisis and emergency. We need to deal with it. And but there's not a lot of transparencies. It's kind of like a cheat code on a video game. Once you plug that in, you can do whatever you want. You don't have to procure it. You don't have to public procure it, what have you. And there was criticisms on both sides. So they they reenacted it. Right. Because you want to have this fund in place. God forbid we have a hurricane or another covid. but they put a lot more parameters around it. So if this governor or future governor needs to spend those funds on something that they've declared an emergency, there'll be a lot more oversight by the legislature on that. The governor obviously has pushed for a federal balanced budget amendment that's ongoing and then a state level save act. This is about IDs and voting. what's holding up a lot of legislation at the federal level right now, but that passed and was signed. On the Senate side, President Albritton unfortunately two years in a row now he hasn't been able to get his Royal Renaissance Bill through. He is sticking around for his final two years. He's one of those that got a 10-year term because of redistricting, so He's got two more years and we fully expect this is something that he will push in those final two years. School district deregulation. This is kind of going under the theory of we've changed the rules and schooling with vouchers and everything else. And so, and if you've seen, if you're former school board member, you know the school members, it's thicker than the Bible. The regs in our state for school districts and then the rules for charters and private are like a pamphlet. And so the Senate has over the last couple years taken the approach of if we don't require it of the privates and charters, why do we require it of the traditional publics? And if they don't, Then they try to cut it out or make it make sense, if you will. That died again. They got some stuff done the previous year. It died this year. And the last one, this is an interesting one. You've probably been tracking this. You've probably heard of the voucher program. There was a study done, commissioned by the state, that showed that there's Hundreds of millions of dollars that they cannot properly tracked. There's tens of thousands of students that they cannot properly track while the program is wildly popular and it's seemingly being a success. They still have some. For lack of better terms, auditing issues that they're trying to work out the Senate put forward a bill that was going to try and better track that information so that the state itself and you and your community could better understand. how well your education system is working. That died. I think this will again be pushed back every year because you're starting to see this not be a Republican or Democrat issue, but just a moms and dads saying, hey, we just need some accountability. If we're going to spend the money in other places, great, but let's make sure we can have some transparency around that. I think you'll see something happen next year.

So, Chris, really quick on a question on the schools, because this has nothing to do with us, but I've always wondered this, and I've been advocated by, well, not necessarily advocated, but in my conversations with school board members, one of the things that they've brought up to me on many occasions is the requirement by the federal government for transportation, regardless of ridership. And so we see it right now in Port St. Lucie. We have a ton of parents that want to drop their kids and pick them up, and they're able to do that. And that's great. But the bus ridership is down significantly from my understanding. And by law, they still have to provide transportation. So has there been any discussion with that by the legislator or any advocacy to the federal side to see if that can be adjusted? Because that, I would assume, would help free up significant funds if they had some flexibility in that.

Yeah, those are categorical funding, right, like for bus travel and such. There's been discussion, and you saw some of that in deregulation on the Senate side, and that bill is taking a lot of those categoricals. whether it's for after school stuff or bus or whatever, and freeing those up, I think that conversation will continue to give more flexibility to the school districts to spend the money however they see best. Because you're already starting to see issues now where developers are suing for their impact fees back because they don't believe there's an impact if the kids aren't going to school there. There's definitely an impact, obviously, if you build and you add residents. but now where does that need to be distributed? This is, while the voucher, like I said, while the voucher program is wildly popular and it's being used, it's having quite a few trickle-down effects that just weren't thought of, right? Who would have thought some of these things? So they're starting to work through some of those and figure out how to make the system work and not have the school system crater under its own weight, right? Because they've got a lot of buildings. They still have to have officers in all those buildings. They still have to have teachers in all those classrooms, right? But they're also trying to figure out how to make it work if half the funds are going away through either charter or voucher or what have you. So, but yeah, that's one of the things they're looking at in the categoricals. And again, I think the drumbeat is now coming from kind of like about 10 years ago they cut back significantly on testing, right? The Jeb Bush era is we put tests sort of like if your kids are doing well, then sure, get a raise. If they're not doing well, you get rated as a D or F school and you lose funding. under the premise of, you know, sing for your supper. Well, they realized that the teachers were teaching to the test and they were doing testing all year. And as a result, the kids weren't learning anything. They were just stressed out. And so it was the soccer moms, if you will, and I'm using air quotes, my hands in my pocket here, but Republican and Democrat that went to Tallahassee and said, enough is enough. CONSTITUENCY POLITICS IS THE MOST EFFECTIVE FORM. YOU ALL KNOW IT BECAUSE YOU ALL SEE IT DAY IN, DAY OUT. I THINK YOU'LL SEE SOMETHING SIMILAR ON THIS, LIKE THANK YOU FOR THE VOUCHERS, THANK YOU FOR THE OPPORTUNITY TO SEND MY KID TO THE SCHOOL I CHOOSE, BUT ALSO CLEAN THIS UP BECAUSE IT'S NOT GOOD FOR THE OVERALL SYSTEM IF YOU HAVE ALL THESE ISSUES AND YOU CAN'T TRACK WHERE THE MONEY IS GOING. I THINK YOU'RE GOING TO SEE THAT BEING A REPUBLICAN DEMOCRAT ISSUE. WE'VE ALREADY STARTED TO SEE IT THIS YEAR, BUT I THINK IT WILL BE EVEN MORE PRONOUNCED IN FUTURE YEARS. Thank you quickly on the speaker's priorities. He pushed for an increase on the caps of sovereign immunity. The Senate went along. It was the good version. If there was a good version, if you can take that approach that passed on the Senate, that was more reasonable. But thank the governor. When you see him, he vetoed it. And some of that's not surprising. He hasn't been a friend to the trial bar. There was also I've given some presentations earlier, said that the The best thing that could happen in the city of counties is that they're looped in on this particular bill with our hospital districts. And the governor, I think, and his team looked at that and said, well, maybe they could live with you all having increased torts, although that's not necessarily a good thing for the taxpayers. The hospital systems is where it was really going to crush them. And so as a result, it got vetoed. That doesn't mean this issue won't come back every year because next year will be year 13 since they've changed the caps. But at least one year of relief. I think I saw Ella earlier, who helps run your risk management and such. So good news, Ella. Maybe make it easier for one more year. The medical malpractice bill, sometimes called the free kill bill, that died. Material harmful to minors. This is stuff in schools that died. And then DEI. This has been something coming for a while now. And so no surprise there. This bill probably had four or five pages in there. It covered a lot. And we can get into it if you'd like. But it covered... You know, the joke was it was going to get rid of St. Patrick's Day parades, and it might, depending on how they're treated. But it essentially is to get rid of diversity, equity, inclusion positions or funding in cities and counties and certain districts. So no surprise it passed. It's kind of been forecasted for a couple years now that it was coming. They did it. The devil's in the details. I heard people concerned that, oh, well, we can't contract with a Hispanic chamber or an African-American chamber. The way that bill's read, I think you can, and a lot of cities are still doing it. It's just so long as it's not promoting DEI. But it'll be interesting to see how this is implemented come January 1. There will certainly be stuff that's litigated, and we'll see how it plays out. And my guess is there'll be a glitch bill, right? Because the joke, I said the joke about St. Patrick's Day, but there was others that they said, like, clearly this wasn't the aim of what this was going after, but it could be the consequence. So I think in next session you might see once January 1 rolls around and you're seeing it in effect. Some bills passed, just tweak it a little bit here and there to make it accomplish the spirit of it, but not crush a local government's ability to engage in its community, right? WITHOUT PROMOTING DEI. SO THAT PASSED AND WENT THROUGH. OKAY. AND THEN WE'LL TALK ABOUT, I MENTIONED THAT. SO THIS IS WHAT IT DOES, THE DETAILS ON IT. I THINK YOU HAVE SOME OF THAT. THOSE ARE JUST FIVE BULLETS. IT'S NOT A SUPER LONG BILL, BUT IT DEFINITELY COVERS A LOT THERE. THE PROBLEM THAT PROBABLY MAKES EVERYONE NERVOUS IS THAT FOURTH BULLET MAKES IT A VIOLATION TREATED AS MISFEASANCE OR MALFEASANCE AND ALLOWS RESIDENTS TO SUE. The good news is, is if it's connected to any national holiday or cultural event that was recognized previously, typically those can stand. It's just bringing new stuff in or promoting DEI that would get a city or county in trouble.

All right.

The budget will go through this quickly here. And now that it's all been signed and what have you, as you know, for the second straight year took us a little extra time to get this done. But they did get it done. As you can see in that third bullet, it came in around 114.5, which was less than the previous year. And then, but they had that special session in May. Here's a little pie chart to help you kind of visualize what that is. No surprise in a state our size, Health and Human Services, that blue large part of the pie is 49 billion. Education, which goes all the way through our universities and state colleges, is 31 billion. You mentioned the roads, Councilwoman. For I think now the 15th year in a row, they fully funded the road fund, which is not wasn't always the case. They used to rob that fund to do other things, but they recognize that as our roads go, so does a lot of our commerce and our citizens. So that's fully funded as well as visit Florida and the job growth grant fund and some other things that the city certainly benefits from. Ag and environment, that's a growing budget. Part of it is, I make this joke every year, but it's important to remind you, the Hard Rock app that many have in their phone and make a little fun sports bet here and there, that funds almost all the water projects now. The revenues from that, I think 96% of what comes from that compact to the state goes directly back in, which probably means they'll never get rid of that compact because now that's their funding source for water projects. They did not cut that part of the budget. That only grows because people enjoy gambling, apparently. And then criminal justice, $6.5 billion. That's about flat from where it was the year before. And you can see in there $14 billion in reserves. I think based on the recent estimates, that number's actually even grown to $15 billion. And then, you know, 8.6 in unallocated, 5.7 in this budget stabilization. That's a lot of money. It gives us a lot of cushion should we need it. Hopefully we don't have a hurricane, but if should we do, that we have some cushions there that will help us. The budget highlights, you can see some of these quickly. I'll go through them. State employee benefits protected. The education infrastructure projects, a lot of that on the college and charter school level, 150 million in tax relief, not a big package this year. They did a lot last year with the business rent tax, but back to school sales tax holiday and some home hardening projects and propane tanks, and then shift in some of the conservation funding. As you know, I'll address it. We had three projects make it to the budget. Unfortunately, all three were vetoed. The vetoes this year were a little rougher than in previous years in the sense that it was a lot more projects. There weren't some giant projects, a billion dollars of this or that, for the governor to sink his teeth into to eliminate to then have a lower budget. To get there, they had to cut a lot of projects. And the governor was clearly focused and motivated to go even lower on the budget to kind of finish off his eight years or eight budgets saying that he was able to cut. We've been trying to get a better feel of why these particular projects were targeted, other than the fact that they were just money and easy to go get. If we have an update, we'll certainly give it to you. Could it be politics? Maybe, although our delegation generally stayed out of hot water with the governor's office. You know, it could just be eeny, meeny, miny, moe, and I'm not suggesting they don't do their homework up there, but we couldn't quite come up with a real honest good reason for some of these cuts, right? Some years ago, okay, yeah, this is where they're focusing. We don't like it, but this is why they did that. But we do acknowledge it. I was asked by Kate and the team whether these should go forward next year. I would say 100% for Two reasons. One, they're great projects. And when we met with our legislative delegation, including with the budget chairs, they were very intrigued with these. The smart city policing was one that they definitely honed in on, recognizing that's a way to keep your costs down, but also keep public safety high. And so they love that. And obviously, in a state like ours, in a city like yours, where we're so close to some of the major water bodies, those other two projects were very important. The other reason is it's a reshuffling of the deck. You've got two new leaders coming in next year in the House and Senate, thanks to term limits, new budget chairs, and you're going to have a new governor. Regardless of which party this person comes from, you'll have a new governor, which essentially makes all these projects brand new in the eyes of the budget writers and in the governor's office, because there'll be new staff reviewing this. So I would encourage us, not just these, but others, obviously, that we move forward with because we have a great delegation. We're going to miss Mr. Overdorf, but I'm confident in who replaces him. We'll also do a good job, and we'll have a great delegation going forward, and we should work with them and fight for the projects that we want. Thank you. We should definitely work for these again.

So with the project list, you know, I think, and I can't speculate either, but I think, you know, there's hard decisions that are having to be made. And we all feel the affordability issue. And so I believe the governor had to make some hard decisions. And just what concerns me about the way that these items were cut is this just furthers our challenges in the sense of if these are projects, especially like Hogpen Slough, our water quality project. Can you go back one more slide just so I could reference it? Yeah. The deep injection well, which we had a fun conversation about deep injection wells and how they impact your local waterways. If the state of Florida is having a hard time figuring out how we can fund these projects, especially, these are matches, correct, Chris? We're also providing a match. It's not like we're asking the state to provide 100% of it. If we're not able to fund this and they're not helping us and then we also have an impact of Amendment 3, for example, in the future, I just don't know how we're going to make those funding opportunities available. And then more importantly, we're going to have to make the same decisions too. So again, I think the conversation about fairness in this discussion is truly important. I completely respect and understand that hard decisions have to be made in the state. And we're just going to have to make some hard decisions also on projects. I know you have a list, Mr. City Manager, you're going to be discussing later. And sometimes you're right. There's no rhyme or reason. But the rhyme or reason usually is there, like, you know, we can't bond it out right now because of X because we don't have this, or we have to delay that project because we haven't started it yet, so we don't want to start it and have to stop it, you know, if we don't have the funding for it. So I'm sure there's a good reason for it, but I just wanted to state that I'm sure hard decisions were made, and I hope that we're going to be able to get through it together.

We will. And I mean, I won't go all the way back to our delegation slide, but, you know, some of the sort of put paint the picture. You're going to have Senator Harrell going into her final two years as a senior member of the Senate. Well, nothing's a guarantee. Senior members are typically guaranteed. given a little more leeway and blessings in their budget requests. And she and her team have been excellent whenever we brought forward our requests. And they've always tried to help. Like if one senator didn't want to run one, she's tried to help out and run additional projects to help us get to the finish line. You're going to have Representative Trabulsi. We expect moving into leadership these next two years. And even if it's policy leadership, if you're in leadership, you're sort of, quote, there's a term up there, on the team or on the leadership team. A LOT MORE IMPACT ON APPROPRIATIONS THAN SHE ALREADY DOES HAVE NOW, RIGHT? WHERE SHE CAN GO DIRECTLY TO THE BUDGET WRITER BECAUSE SHE'S PART OF LEADERSHIP AND SAY, THESE ARE IMPORTANT TO ME. I NEED YOU TO FIND A WAY TO GET THESE DONE. SO WE'RE GOING TO BE IN A VERY GOOD POSITION WITH OUR ALREADY GREAT DELEGATION. IT ALWAYS HELPS WHEN THEY MOVE UP THE RANKS. And, you know, I'm bullish going into next year, but still disappointed. This is the first year we've given this presentation that we don't get to do a little bit of a victory lap on these, which is frustrating for me, obviously, and I know for you. But I'm very bullish going into next year with the clean slate and the opportunities there. Everything you said about Amendment 3 is a very – Harsh reality, though, if it is to pass and it's something we'll have to deal with, could we even match the projects that we're asking? Will they require matches when we have less funds we know that will be in the bank the following year? And I think they're having some of those conversations up there, should it pass, of how to address some of that. Because now more than ever, or then more than ever, if it passes, local governments will be that much more reliable on the state to help them with projects because they won't have the funds, right? So we'll see where that goes come November, but if it does pass, that will put all of us in an interesting position at the state level. Quickly here on some notable bills. And some of these you already know. Some on the ag area, the farm bill passed. A lot of it's with agritourism and rural events, but sort of tweaks on that. Land use and development. It streamlines those permit approvals. And then 803, which building permits inspections. There's a lot on 803 that we can get into and we can, but that has some impacts there. Affordable housing. Every year since they've done live local, they've been tweaking the live local act. This one did some tweaks on ag land. What they found, what you're seeing across the state is some people are starting to enforce the live local provisions in ag land. And I think the farmers and others didn't want to necessarily be completely linked up with all that and have, you know, 10 story land. RESIDENTIALS SHOWING UP IN AG LAND, SO THEY KIND OF TWEAKED SOME OF THAT. AS WELL, YOU PROBABLY REMEMBER HEIGHT, DENSITY, AND ZONING WERE THE THREE NO-NO'S, RIGHT? THE THREE THINGS THAT A CITY AND COUNTY COULD NOT RESTRICT ON AN AFFORDABLE HOUSING PROJECT IF IT WANTED TO SHOW UP SOMEWHERE. SOME GOVERNMENTS STARTED USING SETBACKS AND STEPBACKS, AND THAT DIDN'T SIT WELL WITH SOME OF THE LEGISLATIVE LEADERS, SO THEY PUT THAT TO SORT OF SACRED COWS OF AREAS THAT A CITY OR COUNTY CAN'T USE AS A REASON TO DENY A PROJECT. on the setbacks or stepbacks. I saw it somewhat in Central Florida and some other parts of the state, but now you'll see that. And then airport, you may remember they put some provisions in there that said you couldn't be within certain distant proximity to an airport, right? For some of the obvious reasons, right? If you have a 20-story residential affordable housing project next to an airport, That makes it difficult for airplanes to land, sight lines, and safety issues. What they did was they realized, well, maybe we don't have to have just a blanket prohibition, but have some collaboration. So now it's if they work in concert with the airport, they can do something like that, right? Because if it's obviously to the right, nowhere near the runways, and it's not going to affect runway patterns, you could probably get away with something like that. And a lot of those properties over there tend to be cheaper than it is in some of the more core areas. Quickly, net zero, you probably caught some of this stuff happening. Some of these are national or kind of red meat issues that you see happen. We already covered 1134. PFAS, this is one that would further ban the uses of those with exemptions on airports. Public nuisances, you probably have seen some of this. If you have a public nuisance abatement board, there's a cap on the amount of fines you can put in place. And what we've seen across the state is that as a result, some property owners, they look at the fine where it's capped and say, I'll just eat that, and when it's time to sell the property, I'll make it up later, because the fine's not so exorbitant that it makes their property unsellable. And as a result, they never clean up the property, and that nuisance that's there, whether it's crime or other things, continues. And so this lifts the caps. It also adds illegal gambling, a little more feather in the cap of local government to just keep the communities safe. as wholesome places and good for their citizens. Clerks to the court, multi-year effort. Your clerks are finally getting a little more flexibility to better serve and have some pay increases and such. And then local administration of vessel restrictions allows you to expand your local enforcement if you have vessel area issues or derelict vessels. And here's 803. Kate and the team asked me to just have a slide and give a little more detail on this. You can see some of the stuff on there. Probably the first bullet is the most interesting. We'll create maybe some friction points in building departments. You can see you exempt certain low-value work. at 7,500 or less, excluding electrical, plumbing, structural, mechanical gas work, and specify temporary hurricane flood protection walls from permitting. On one hand, it helps speed things along. On the other hand, that's a lot of projects that are going without permits that the city can't document and make sure that there's safety. We'll have to see how that plays out. That 7,500 number in a no projects right it's hard to do anything for less than 10 grand on a housing project but we've been paying attention to that there's another part of that that requires the state to come up with a uniform commercial and residential permit application to avoid a patchwork of the permit in port st lucie is different than it is over in the next adjoining city or in this county st lucie county to martin county That's kind of a common sense thing. Will there be friction points? Absolutely, because certain cities and counties have different things they want included. And so that's something we may have to in a future session work to tweak if it doesn't quite meet our needs. But we wanted to put that on your radar there as well. A couple more bills that passed. This was something pushed by the Florida Bar dealing with nonprofit corporations. But I know you have a lot of nonprofits. It's meant to clean it up. It was considered a friendly bill to just kind of generally clean up the regulations around them. We have a new state flagship. It used to be in Key West. Now it's in Tampa. So good for them. And maybe you've already had a chance to fly it. But nearby, Palm Beach International is now known as President Donald Trump International. That was passed during session and signed pretty quickly. I think the inaugural flight was his sons on the Trump airline. Bills that died, but ones we want to keep put on your radar because we think they'll come back. Blue Ribbon Projects, this was a very interesting one, and I don't know if this necessarily would affect us right now, but it could affect us in the future. YOU CAN SEE WHAT IT DOES. IT ALLOWS THAT IF YOU OWN AT LEAST 15,000 ACRES AND A PROPERTY OWNER DEDICATES AT LEAST 60% TO BE PRESERVED FOR CONSERVATION, AGRICULTURE, OR PUBLIC USE, THAT PUBLIC USE, BY THE WAY, HAD A VERY BROAD DEFINITION, THEY ESSENTIALLY GET THE DISNEY TREATMENT. WE LOVE OUR FRIENDS AT DISNEY, BUT IF YOU REMEMBER REEDY CREEK, THEY COULD MAKE MOST OF THEIR OWN RULES AND BYPASS THE PERMITTING AND THE REGULATIONS AT THE LOCAL LEVEL TO DO THEIR PROJECTS. It was problematic for big counties, obviously, with those lands, some cities with a lot of that land. It died in the Senate, where a couple senators banded together to push back on it. Most of those senators are returning, but I do think this bill will come back. And the push against it was, hey, we agree that there's problems in regulating and permitting and all that stuff at the local level. No one's perfect, but if you're going to do it for one, you got to do it for all. You shouldn't just give people that have a lot of money to buy a lot of land. the keys to the kingdom. Everyone should have the right, if that's the approach you're going to take. We'll see where this goes next year, but it's certainly going to be back. Local business tax, they were going to repeal some of that. Again, talking about the property tax reform, I think some of these died knowing that they had property tax reform coming. The HB 203, that was one of the original property tax proposals that died. Large-scale county changes to TDT, that died And then I know it's near and dear to some folks in Senator Harrell's team, but changing the state bird to the flamingo also failed. The House, everyone dressed in pink and passed it. The Senate did not move in the Senate. Maybe we'll see it move next year. Does anyone know when our state bird is? Yeah, there you go. Okay. So we do know. So for the audience here in Mockingbird. That will come back next year, I think. There's a big push to make it the flamingo. Maybe they can come up with the state tropical bird and the state tree bird. I don't know. Maybe they'll come up with a way to Split the baby on that. But here's some more bills that died. Department of Education package was a big omnibus bill that ultimately fell down under its own weight. Term limits for county commission and school boards is something that I think you'll continue to see folks push, but it hasn't quite made it to the finish line. Department of Health had a big package that was also the one dealing with the vaccines. That was, while medical freedom and the Maha movement, Make America Healthy Again, has a lot of momentum in Tallahassee, Dealing with the vaccines, that was something that was maybe a bridge too far for some of these legislators, and that didn't make it to the finish line. Again, a lot of bills died, as you can see. Some of these are already covered. Municipal utilities, there's a constant push now coming to rein in municipal utilities and how those funds can be transferred to governments. That's probably going to be an even bigger issue if Amendment 3 passes, because the governments that have the option to have those transfers will probably need to rely on that more so. We'll have to see where the legislature goes. So far, they've been able to kill those bills up there. As you recall, last summer, there was a case that went through one of the DCAs that essentially allowed for open carry when the Attorney General James Uthmeyer said that he was no longer going to enforce that law based on that court ruling. And as you know, open carry and concealed carry are sort of like you know, two snakes intertwined. Think of that symbolism, right, where it's hard to pull them apart, but you take one out of statute and you still have the other one there. There was the premise of someone couldn't conceal carry in this room that we're in here today, but could open carry, which seems sort of, you know, that doesn't make sense. Fortunately, Florida has not florided yet on this particular issue, and we haven't had any issues so far, none that I'm aware of, but there was a push to pass a bill that at least would put all that in congruence either get rid of concealed carry altogether and just say it's all it's the wild west or reign some of it in i don't know where that's going to land second amendment i'm not telling you anything you don't know is a is a very hot political topic on both the right and left so it's hard to pass anything in this state regarding that obviously there's a focus by cities and counties and others to just have some congruency of what the rules are as you saw last week city of wooden garden had a no firearms at a kids park And the Attorney General sent him a letter and said, you take that sign down or I'll come sue you. So that's kind of the world we're living in right now. They took the sign down, by the way. And so that's where we're at on that. AI Bill of Rights, it didn't pass last year. We'll see what they do this year. And then transportation package. This is the bill that every year, you know, there's always a transportation package. Some year it passed, some year it doesn't. This year it didn't make it to the finish line. So we'll see what they do next year. Some notable dates. Then I'll get into the Amendment 3 primaries in August, general election November. And then we'll be right back at it November 17th with the org session where they elect the new leaders. And then regular session convenes in March. As you know, we'll have plenty of committee meetings between now and then. You're always encouraged to join us up there for that and for regular session. And then last day of session, this is kind of a weird calendar thing. It's almost always in May. This will be the first year. It ends in April. If it ends on time, I'm really hoping it does, but we'll see. And then here I'll go quickly into Amendment 3. So you heard a lot from the previous presenter on this as far as some of the tax and finance implications. This is what's on the ballot. It would increase the homestead from 50 to 150, the exemption this year, which would affect next year's budget. And then on January 1, 2028, it would go to 250,000. and then index the CPI thereafter. School taxes were originally part of it, but they were exempted, and that's created for some interesting politics. And then the impact county by county is not fully known, although we're starting to see some numbers from Tax Watch, but we know it's quite a bit. And then it reduces the cap. So on non, think non-home, most people think commercial, but non-homestead apartments fall into this, others. It decreases the cap on your annual increase that can be appraised from 10% down to 5% if it were to pass. That was sort of the olive branch to the commercial properties that were concerned about this project. And then allows local governments to still increase millage with supermajority vote. Let me check my next slide before I go forward, make sure I... Okay, let me go back. One thing on this is in the implementing bill, they called it the implementing bill, but this has nothing to do with implementation. They dealt with the rollback rate. And so as you know, currently, if you all just did nothing and said we're going to keep taxes exactly as they were last year, that might meet a slight increase in taxes overall, like the millage or whatever it has to go. But you're not doing anything to effectively change it. That's a majority vote. And that's based on the calculation that used to be in place for the rollback rate, which dealt with personal income and then the max millage rate. It's sort of like a little formula. It's like the old BCS, like college football, right? Like if you know it, you can understand it. But it's a formula, and then it kicks out a number. What they did was they rolled it back in this bill to the base rollback rate, which doesn't have any of the sort of qualifiers on there, which would allow it to appropriately increase. So now, should this city or any city want to keep sort of status quo, it would need a super majority vote by this council, as opposed to in previous years where it would just be a simple majority. That will probably make for some DIFFICULT POLITICS AS YOU APPROVE YOUR BUDGET THIS YEAR OR NOT. AND I KNOW IN ALL THE OTHER CITIES AND COUNTIES THAT'S GOING ON BECAUSE JUST TO DO EXACTLY WHAT YOU DID LAST YEAR AND JUST LET IT BE STATUS QUO NOW WOULD REQUIRE SUPER MAJORITY. THAT WILL PROBABLY LEAD TO TAX CUTS ACROSS THE STATE AND SEVERAL JURISDICTIONS THAT CAN'T GET THAT EXTRA VOTE PAST THE SIMPLE MAJORITY. OR MAYBE EVERYONE DOES IT AND SAYS, HEY, WE DIDN'T ASK FOR THIS. THIS IS HOW WE'VE ALWAYS DONE IT. WE'RE GOING TO DO IT. But that is something to put on your radar regardless of whether Amendment 3 is that's going to be an impact immediately felt here at the local level of how you craft your budget. There has been legal challenges to this. As you know, and I'll probably state, it needs 60% of the voters. Not 60% plus one, just 60%. So if 40% plus one say no, it would fail. And most ballot initiatives do fail. It'll be interesting to see what happens with this. But there has been a challenge on the language. And this is quite, frankly, just objectively looking at this, it probably is going to have to be rewritten. The way it's drafted, it was one drafted to the original version of the language that had the complete elimination, sort of school and regular taxes. in there, but school taxes were taken out. So save our homes from excessive property taxes is probably not an accurate ballot title or summary. But here's the key on this. It's reviewed by the Supreme Court, and they'll review it. If they find it misleading, the Attorney General rewrites the ballot language. So some of you even joke, be careful what you wish for. Now you're going to have... AG Uthmeyer writing that language for you, who I'm pretty sure is aligned with the legislature on cutting these taxes. So that said, we'll see where it goes. There's also some language in there, and I'll leave this as the last thing. As you remember, when it started on the language, there was a list of things that cities and counties can do with their property tax police and fire but that didn't cover the full gamut of your first responders right so that was a little concerning it dealt with schools it didn't include flooding originally or stormwater issues which in a state like Florida seemed like maybe an oversight they added that back in and it didn't have anything to do with administration so there was a question of whether you could pay the folks that sitting on this side of this table any out of the tax revenue or would have to come from somewhere else. They did add the amendments and clearly some of it they were working fast as you may recall they got the language from the governor's office Thursday they were already voting on it by Monday. So they did to their credit put some amendments in there to clean some of it up again add flooding in which made total sense right this is Florida. where we have water everywhere and rain constantly. And they put the stuff in there about administration. I've polled some very smart attorneys at my firm and at other firms on what they think that language means. It's a full paragraph. It says for administration, then it says, and then it goes on to say whatever a council or commission approves on its agenda. Some are saying that's anything. As long as it goes before you and it's on the agenda, sort of a line item, and you've approved it, good to go. Others would say, well, no, if you read it quite literally, it means... You can pay for your parks and recs director, but you can't pay for parks and rec, right, if it's not on the list. The basic legal premise that most courts have held over the 200 years of jurisprudence in ARC 250 in our country is if you have a specific list, if it's not on the list, it's probably excluded. The ballot language wasn't including but not limited to. It was just including. So if that administration paragraph is not read to be a catch-all for everything else, all cities and counties are going to be in a pickle If that's how it's interpreted by our courts, obviously, we're hoping this past we're hoping for the more broad interpretation to say, yes, that meant anything they put before. Maybe it's just a requirement that it has to be line item, right? That you can't just have a blanket budget approval, but every park purchase has to go before you, which would be. arduous that make for some long meetings. Maybe you can do it on consent, but at least maybe you can get it through there. But that's kind of where that's going to land should it be approved. As I said, it's 60%. We're seeing, I did have some of those numbers I pulled from Tax Watch, so you can see some of those there. We're on the right column, kind of middle of the way down, St. Lucie County. You can see the impact that they think it'll have. And that recurring number is for out years, sort of, and you can see it, thanks, there. 28, 29 is the cash column. RECURRING IS IN THE FIFTH YEAR. YOU SEE SOME OF THE DRAWBACK ON THE NUMBERS IN PARENTHESES. Now, and I can answer any questions. One thing I will say is some interesting politics have occurred on this, and we'll see how it goes down, right? I mentioned it needs 60%. That is a tough threshold to hit, no matter how popular an amendment is. You've already seen the governor sort of distance himself from that, kind of pointing out that he wanted the full bite, not the half bite on the apple, as far as the school taxes. And so, you know, the governor distancing himself from that has probably created an opening for those who do not like this tax. And we're already hearing from commercial interests that are getting together and organized because there is a, I think, a somewhat genuine fear, right, of, okay, this passes. For the first year or two, you all do what you have to do. You cut your budget. You do everything you can to make it work. But eventually, the dollars don't add up. That's just going to probably likely be a reality. because police and fire will cost more everything cost more so you say we're gonna raise the millage well the millage won't impact those who have already had their their homestead tax sort of protected there it'll impact the commercial properties and so you've already got commercial properties who not blaming you at all saying it makes total sense at some point you're going to say the only way out of this hole is we have to raise our millage to come up with the funds and that will be on the backs of our commercial industrial properties your apartment communities that fit under that into that bucket and And so they're now banding together to say, we've got to do something to fight this as well. But that non-support from the governor, or I wouldn't say non-support. I think he said he'd vote for it, but he's not going to campaign for it. But the fact that he's going to be mostly quiet on that issue, I think has left open. a window where it might not pass. We'll see. The leading Republican contender for governor has even said that he has concerns with it of what it will do for fiscally constrained counties, which there's more than you think in the state of Florida, right? There was original provision, I didn't cover it here, of that constitutional amendment that required the legislature to create a fund to take care of those, and it could have been cities or counties here, not that it's fiscally constrained here, but that couldn't make ends meet. Well, that was probably going to be everyone by year two once that thing kicks in. And so I think the legislature, kind of like with the school thing, looked at that and said, no, thank you, right? Because on one hand, they don't want to necessarily be responsible for having to come up with the fund to fund all that. And on the other hand, the politics of all of us, and I'm saying us because we represent you, having to go to Tallahassee and say, can you just help us pay for our police and fire? And then the inevitable politics of, well, I don't know. Were you guys good to us this year? Did you align with us this year? Did you bad talk us locally? You can't take that politics out of politics. You see that all the time at the state level and the federal level. I think a lot of folks wisely said, get that out of there. That's going to be problematic. But the downside of that is all those fiscally constrained counties now have zero assurance that they will be taken care of should this pass. And so I think that's another window that you're seeing where it's got some flaws there. But we'll see. Obviously, cutting your taxes is something that's alluring to anyone that owns a home that would like to pay less. and we'll have to see what the voters decide. But that's kind of the crux of where it's at. I think you're going to see once these primaries are over, this conversation ramp way up as we lead to November with a lot of ads, pro and con, and I guess we'll see what the voters decide.

Thank you so much. Of course. Really appreciate the presentation. Comments or questions, counsel? No?

Anything? No? Thank you for your presentation. A couple things I just wanted to say is, one is, I know we didn't win on the appropriations front, but I do want to point out, because I have been telling our constituents, the work that you do beyond just appropriation requests for the City of Port St. Lucie. A couple years ago, we had SB102, and you brought up housing. And obviously, our residents in this city are very concerned about the continued growth. beyond what's already entitled. And through your hard work, our team's hard work, you worked hard to get a provision which excluded our city. I think it's one of the 10 cities out of the 411 that the maximum amount of use is mixed use, which mixed use is 50% residential versus high density residential. Think apartments, multi-level stories that SB 102 allows in industrial and commercial. So I really want to thank you for your efforts on that front, because what you do is beyond just bringing us money, which is very important, obviously. But the policy side is critical. So thank you for that. The other thing, too, is, Chris, we had a long discussion yesterday in regards to the utility. I saw you had a utility watch. I know Senator Mayfield proposed or she might even have a proposer, I think. What was the bill in regards to utility capacity? Was that a Mayfield build?

I can't remember that was a Mayfield bill and it was. Staring right at her the. I'll think of the name in a minute of on the House side, but yes.

So if that bill was to come back next year, I just really want to make sure that you're aware that we have very, very serious concerns. There was a question from the audience today in the public comment portion of our bond amount increasing from $500 to $700 million. That's directly from a result of our utility growing, and we're going to have to grow glades. So growing capacity for the purpose of population growth, as you well know with our city, is we need to do and we need to be able to retain that capacity for the incoming population. So any threat to that capacity and being shared amongst neighboring communities when we have to use that ourselves concerns us. So I really want to make sure we're advocating if that bill comes back on that. The other point, too, about Amendment 3 is the conversation is not done no matter what happens. And I didn't see you put a slide on the Tax Reform Commission because you can't put slides on everything. But constitutionally, there is a Tax Reform Commission. And I do believe, as a constituent, as one person, I do believe we need to talk about property tax reform. I we we we as a city recently in the last couple years reformed our impact fees to mobility fees because the rational nexus of impact fees didn't make sense right. You know you pay for an impact fee you should be able to use it for bike lanes and other forms of mobility not just a road right. So we reform that knowing that that would make sense. So I understand the public when they say, why am I going to pay for a property forever? Or how does this equate to being able to pay for my services? And so I think property tax reform is an important conversation. But we have a reform commission coming up constitutionally, correct, that's coming forward?

Yes, great point. For future use, I'll add that slide. But it is a post-election. So for those, remember the Constitution Revision Commission from 10 years ago. It's a body that's appointed by the governor, the president, and the speaker, and I think one from the Supreme Court. And citizens, although legislators have been appointed to that before. And this body, now it's budget and finance, they will have, or finance and tax, excuse me, They will have a similar authority, which will be appointed in 2027 to put stuff onto the 2028 ballot all focused around finance and tax. So I will say this if amendment 3 fails. And, you know, I heard more recently was pulling at 63%, but at this point, that's actually probably not good if you want it to pass because it. these amendments only go down in their popularity as you get close as people take a closer look. If it fails I can assure you in that com in that revision commission there will be lots of proposals that come forward and hopefully some that are are thought out fully baked right like not where you have to go oh yeah we should include flooding um into these uses um and it'll be something that the the citizens can really chew on and have a choice right and they might even come up with an a b or c right knowing that if a passes then b or c or no don't matter, but if A fails and B passes, so that the voters can actually make an informed decision and do something, if that's what their hopes are. If this does pass, it'll be interesting to see what occurs in that commission, right? Because that'll be a major tax reform that our state hasn't had for probably 30, 40 years. And what else do you do? Of course, they'll find something to do. But yeah, that's where a lot of the ideas will come out of. And it'll be interesting to see what they do. And we'll be working with that commission as well as the legislature in 2027.

And I also heard that there, and I couldn't be wrong because of the way that the bill was, the bill language was drafted or the ballot measure was drafted. The five-year, or it's actually not, no, the five years in the legislative bill, I think. The five-year, essentially if you're a non-resident, you have to wait five years to be able to participate in this taxation. I've heard rumors that that could be a federal challenge because of, The federal law, I'm not an attorney, so do you ever heard anything like that?

Commerce Clause is something that has been invoked on this, and that will also be another provision of this constitutional amendment that could create problems, right? That you're treating non-Florida citizens differently than Florida citizens on a commerce type of transaction, purchasing a home. There, again... I took con law in law school and I dabble in it obviously in the nature of my work, but obviously there's people who live in it and I've talked to them and what they've told me is there are legitimate concerns there, right? If the Supreme Court upholds previous precedent in Florida. In fact, I think there was a constitutional amendment 10 or 20 years ago. that failed under similar grounds, right? That they tried to do something that was going to penalize non-Floridians trying to do commerce in Florida than Floridians. So we'll have to see how that goes. Maybe they would say, yeah, but the homestead exemption is a very Floridian concept that protects your home. But if they approve it, they're going to have to do some mental gymnastics to approve it because most precedent have said you can't treat

the two separately if they're both purchasing a home so if one purchases a home december 31st and one goes january one january one gets the higher taxes yeah and i think the last point is um the in regards to the what they call the implementing bill um you know again in my conversations with future potential future administrations that's been a very deep concern because i think there's a public perception from what i'm hearing that We'll be able to recoup the dollar somewhere else. Tourism's going to pay for it. Sales tax is going to pay for it. You're just going to raise the millage, and they're going to pay for it. And I think that it's just the implementing bill and the education on the implementing bill as well is very important for the public to understand the limited amount of resources that we have to be able to deal with their needs and actually be responsive.

Yeah, I was always surprised when I heard tourists will pay for it. And I understand the concept of it's snowbirds, right? That this is their second home, not their homestead home and that. But it's looking at the numbers, that is a drop in the bucket, right? It's one thing if you were going to charge tourists. I'm not saying we should, by the way. But, you know, it's... It's a misnomer of sorts. They should have just said snowbirds, but that probably wouldn't have worked out well either because they would have had a lot of folks getting upset at them when they say that. But as you know, you look at your numbers, that's a small, small, small population. In certain communities, it might be slightly higher, right, where there is an active snowbird community.

If I had Mickey Mouse in my neighborhood, I may not be as worried, but I don't.

Right, so there's no doubt this amendment has flaws. And I'm not trying to advocate one way or the other, voters will inform themselves. But from even just the implementation, once it's passed, it's going to create problems. And its impact and how it's being sold, there's obviously problems there. And we'll have to see how the voters decide on that. But if they do vote against it or it doesn't get the full 60%, the hope is, is with that commission that you mentioned, that there would be a much more thought out proposal or proposals that can give voters a real chance to both vote for something and understand the real impact it's going to have on them. Because the last thing I would say, and I've learned this as we were going through the process, is you hear a lot about fees, right? You know, the local governments that we work with, you know, they're careful to mention adding new fees in, right? Because they don't want to make it sound like they're like, sure, yeah, do whatever you want. We're just going to tax you this other way with a fee. But, you know, some are going to have the reality of they have no choice but to put forward fees. What's the interesting thing there is, as you may know, and I learned this during session and did a little research on this, Federal laws allow us to deduct our state and local taxes, right? We don't have an income tax in Florida, so we don't get to really take advantage of that like other citizens in other states do, like New York, California, where you get, that's a nice little kickback on your federal tax return. However, we do get to take some advantage of it in our state and locals. It does actually factor in there. If you're now getting rid of taxes and replacing it with fees, and some governments are gonna have no choice, whether it's garbage or wastewater or something else, those fees are not treated the same under the federal guidelines. So that tax deduction that you got used to, even if it was only a little bit, will now be gone, which I thought was interesting. So it's in some ways now you get a new tax which inevitably cities and counties are going to have no choice but to do in the fee, but you now won't have the benefit of being able to write that off when you do your taxes later that year. So that'll be an interesting wrinkle. That's kind of hard to explain in a 30-second ad on TV, but when you get into the nuance of it, You see, and then there's the whole other issue of if someone comes to you and wants to get a big project approved of affordable housing under the value of $250,000, right? Think micro homes or whatever. What is the city's incentive to do that when it'll cost you money to approve a project that will lead to no tax revenue to you? And that's a reality, right? You have to make a dollars and cents for your other citizens of how do you approve a project that's going to make all your other citizens essentially have to pay For the services for fire, garbage, everything else provided to these. You're going to have those haves and have nots because that's a lot of people think the only way out of our housing crisis is to go these micro homes or go to these like more affordable, less than 250,000 units. Well. If you're telling me those are tax-free or telling a city those are tax-free, that puts them in a real pickle of, hey, go ahead and approve this so you can just now have to pay more for all the services on the backs of all your other citizens that are still paying taxes. Those are going to make for some interesting NIMBY politics, I would imagine, even though obviously more supply and more housing would alleviate some of the other concerns you have in your community on affordability, but it's going to create have and have-nots.

You know, great conversation and excellent points. You know, I just I want to thank you. I also want to thank our delegation because they did the work they they had. They passed both House and Senate and so but hard decisions had to be made. So I also understand that I wanted. I do want to thank the governor's office for breaking sovereign immunity and vetoing that because that could have been very detrimental to cities and hospitals and such. But you know, we're going to continue to work together. I really appreciate your hard work in Tallahassee, and hopefully we'll get these projects approved in the next session. Thank you. Absolutely.

And on the policy front, if I may, one more, Mayor. Thank you for saying that, but also that is a team effort, and you've got a delegation. On that particular one, we... The delegation, I call them teammates, we got together, they understood the issue and understood how we were going to be unfairly impacted by just a broad brush approach to this. And we all worked together to kind of help, because that bill was on, to say lockdown is an understatement.

That was a heavy, heavy, heavy.

I'm very friendly with all that staff there. Fortunately for us, it's been the same staff the last four years. And as soon as I told them what I wanted to do, the countenance on their faces all changed. They're like, oh. And I'm like, well, okay, what does O mean? Let's walk through this. But to their credit, they listened. They heard from us. Our delegation members weighed in and said, this is actually really important. You've got to treat us fairly. And so they did. But I always tell Kate and Sabrina and the team, you know, We should always look for opportunities and I won't always know every little wrinkle that's going to affect the city but if we see something that's going to impact us get it on our radar because it's not uncommon that like that we do something in Tallahassee where we add an amendment that says This impacts everyone unless your city rhymes with Goosey and it has a port in front. I joke, but I mean, we do. If it's defined by this, because the truth is sometimes you can't artfully write out whether it's our city or a different city from being enforcement, even though it makes total sense to do so because there's other parameters. And so the only easy way to do it is go, a city of this size with less than this many people are not impacted by this. And you see that all the time because we go and we make the case and say, this shouldn't impact us right like for example on property we cut our budget property tax every single year we're doing x y and z um and if we can convince them that it is correct then yeah usually we can come up with some language sometimes inartfully like i make the joke about rhyming it and other times it's well no just with mixed use you know this is how we're going to impact this but either way we love when you give us those opportunities because that's like you said it's not just a probes You have to do what you need to do to continue to provide for your citizens. And if Tallahassee takes away something from you that makes no sense why it's being taken from you, you can't do that, right? So our ability to kind of be a shield to some of that and say, no, no, no, let me explain what's going on here down there. We love that and also gives us a chance to remind them how big the city is and how it's growing thoughtfully with your commerce and do a little bit of a commercial. It's always fun to do that too.

Thanks, Chris. Thank you very much. Really appreciate the presentation and how in-depth we went with everything. And look forward to working with you again next session. Absolutely. Thank you very much, Chris.

Thanks for not cutting my tie, Councilwoman.

Mayor, if I may. Yes. If I just wanted to thank again Mr. Carmody and also the delegation. We had the most number of projects in the budget actually in our history. So it was the delegation did an amazing job on that. And that was I know that sometimes just happens sometimes with vetoes. I just want to also thank the members of the legislative strike team. We formed an internal staff team this year that have really, and Chris, so not only advises us on legislation, but also participates with our grants and advocacy strategy. So he's helping us with our state contacts as we advocate for needed grants, which is in the tune of multi-million dollars. So even if it's not an appropriation, Chris's work is also helping us secure needed grants. And I know that many members of the staff team really stepped up to support these efforts. I know our vice mayor led delegations to Tallahassee with the Florida League of Cities. Steven Okia, Scott Samples traveled and helped testify before committees. Caroline and Steven also gathered needed data. Our utility system quickly reviewed bills. And John and Kevin gave us feedback. I mean, so we, it's a whole team effort, the legislative process. Thank you to Teresa for covering while I was out. and Sabrina. So I just want to let you know that the whole team was on deck this session and it was really, did their very best work and worked very hard and represented the city very well in tough times. So just wanted to thank everyone for their efforts.

Yes. Thank you everyone. Thank our delegation as well. And we'll continue moving forward. Sure. All right. Thank you. All right. We're going to take a 15 minute break and we'll come back and start our budget. Okay, we're back from break, and we're going to go right into our budget, starting with our city manager, Mr. Morejo.

Thank you, Madam Mayor, Vice Mayor, Council, staff, and residents. Typically, coming into the budget, we typically celebrate, like we did yesterday, everything that is in progress, what has been accomplished. But this year is a little bit different. And the challenge for our team has been is things has really been changing on a regular basis since we started back actually in December putting the budget together for this moment. I believe I think we changed the budget three different times in that process. And there are a lot of uncertainties, as you know, that we have right now in place that are really challenging the whole team on how we're going to really pivot and really, how can I say, how can we make this happen? How can we continue to provide the level of service that we have? You know, the biggest thing is infrastructure, the operating calls, public safety is so important to all of us here that we want to make sure that we maintain that through the whole process. So really, we've done a huge deep dive, really evaluated our budget to, I think it was yesterday, we're still going through that process. So really, what is creating this uncertainty? Number one, the Bill 4F that maximizes the property tax rate approved by a simple majority is now limited to the true back rate. And we kind of went through that with you personally, and that's going to be a challenge. And really, with that one, it actually has already been approved. So if the council chooses to increase the military, it's going to be kind of very difficult because if one member chooses not to, then they will not be able to move forward. Amendment 3, the fact that the exemption goes to $150,000. January 1st, 2027, and then year two, we'll go up to 250,000. That, to me, that is a huge amount. And really, at the end of the day, everybody says, well, how does it affect us? Really, what truly happens? So really, this is actually what happens. So basically, year one, we need to be able to eliminate $26.3 million, which is 20% of the general fund budget. $26.3 million. We have to eliminate year one. Year two, $22.1 million, which is a 17%. Overall, in the two years, we need to eliminate $48.4 million. If you think about eliminating $48 million, that's a lot of money. for the general fund. We also have to look at it in perspective. Yes, our budget is a tremendous budget. But remember, we've got to think about it. You have the building department there. You have the utility department. You have all these enterprise funds that are not part of the taxes that our residents actually pay. Going back, we have to set priorities. And this is kind of where everything really started for me. This is where I had those sleepless nights and figuring out how am I going to get there? What am I going to do? How am I going to figure this one out? Because this probably is probably the most difficult one that I've ever had to figure out. and the 27, actually 37 years that I've been here. First of all, when we received the budget early in the year, we had 184 requests for positions. By the time the team got through it, we were down to 25 positions that were left. Those 25 positions encompass safety, which I think it was police, it was 10 positions, and there were roughly 15 positions, give or take, for parks and recreation, understanding that we have Tradition, BMX, Torino coming online. So then you're probably going to ask the question, well, what did you do? What actually happened? Well, those 25 positions going into this budget where you're being presented, you're going to get a balanced budget, is those positions were eliminated right off the top. Why? Because we have to prepare. November 3rd is right around the corner, and we have to figure things out today. And let's just say it doesn't happen. We can always pivot back. But moving forward, we have to be prepared on what's to come. what actually had to be cut. And I'm just going to name a few. A public works building that actually public works has been in need for over 20 years. That's one of the projects that had to be eliminated. Another big project which is not here on the list is City Hall expansion of the actual City Hall that was built close to about 30 years ago. That has been eliminated. The parking garage at City Hall was also eliminated. And then as you can see here, another big one here which we're thinking of the future is the P&E study for Marshall Interchange, $2 million. That P&E study will really truly help us set the foundations to be able to put that other interchange. And then as you go through the list, you'll see a lot of parks and recreations, projects that right now are completely eliminated from the budget. And really, that's kind of the focus has been is figuring out, OK, let's continue to just eliminate, eliminate, and start creating that reserve. That way, we can make up the difference on year one. And then year two is going to be even more difficult. Not all the cuts have been made. And I don't recommend all the cuts we made, but come November 4th, that's going to be another starting point for the team. So figuring out, okay, what can we eliminate part of the 26-27 budget year so we can continue to increase that reserve so we can go ahead and be able to make up that gap. The last thing that I want to do is be able to lay off a bunch of employees. That's not fun. I've gone through that already. And back in 2008, 2009, I had to lay off roughly 52 employees. It was the most difficult part of my job that I ever had to do. Be able to look somebody in their face and say, you know what? You're no longer here. You've done a great job, but I have to send you home. That is difficult to do. So anything that I can do to prevent that from occurring within my powers, I would do it. Because these employees have given you 110%. And I think the presentation that you had yesterday on the job, the projects, the attitude, the experience that these employees have is tremendous. And I do not want to lose not one of them. That being said, really, Amendment 3 is really what's at stake for us. We will pivot. We'll do whatever we have to do. Some of the core projects that we know we have out there that may have to be cut is do we need to not man some of our park sites? Do we not cut the grass and let the residents cut the grass, no different than it's done up north? And I know some of you council have experience up north. The swirl liners, that's a responsibility of the residents. The city picks up the tap and actually goes out there and cleans those swirl liners. But we know what the effect of those swirl liners are going to be. If you don't clean up those swirl liners, water is going to be backing up. You can have mosquitoes out there. It's going to flow onto the roadway system. Your roadway system is going to fail out sooner than later. You're going to start getting potholes. Think about every time you have a hurricane and you have three or four inches of rain throughout the city. What happens next? You get potholes. So that would be one of the side effects that actually is going to occur. You know, code. We pride ourselves to be a beautiful city. We pride ourselves to make sure that code's out there taking care of that. Well, we may have to cut some of those services, maybe cut back to some of the employees who will not have as much out there. The other one that we pride ourselves in is that when you drive into Port St. Lucie, it's beautiful and clean. Our right-of-ways are spotless. No trash. Trash is perfect. That may have to suffer. So these are some of the things that we're going to have to go through come November 3rd on what services are really, truly important to the city and what we're going to be able to do. So with that being said, I'm going to turn it over to Caroline, and we're going to go through the budgets. And I know you're probably going to have a lot of questions, so we'll be prepared. The team will be prepared to answer a lot of those questions. Thank you. Any questions?

Any questions for the city manager? All right. Thank you very much.

Good morning. Good morning, Madam Mayor, Madam Vice Mayor, City Council, City Manager, staff, and all those that are present. Caroline Sturgis, Director of the Office of Management and Budget. And I will say that I am very proud to lead our Office of Management and Budget. We have had the pleasure of receiving the Government Finance Association Distinguished Budget Award presentation for 37 consecutive years. In addition to that, with our most recent designation of earlier this year for our fiscal year 25 through 26 budget, We also received three special recognitions. One was for performance measures. One was for strategic goals and strategies. And the third one was for our budget process recognition. So we have just been really proud of what the city team led by the city council and city manager have been able to accomplish. Caroline Sturgis. That's who I am. So I have 29 professional years of experience, including that is 25 years of government experience. I am passionate and advocate of public service. I've been with the City of Port St. Lucie for the past five years. Prior to coming to the City of Port St. Lucie, I did over about 20 years working for other one big city government and Maryland as well as one large government. So definitely bring quite a bit of experience to the city of Port St. Lucie. I live in the city. I have family and friends that live in the city. So for me coming into work every single day is really a personal goal. Love seeing what we do on paper every single day and when I'm out in the community and driving and seeing the work translate from being on paper to being out there visible is really a sense of accomplishment for what I do. But in addition to that, let's see, I am a certified public finance officer as well as a certified government finance officer. I do serve as the president for the Florida Government Finance Officers Association right here in Treasure Coast. I grew up in South Florida. My master's degree is from Nova Southeastern University, and I also have a bachelor's degree from the University of South Florida. So I stand before you to present the fiscal year 2026 through 27 proposed budget. As the city manager acknowledged earlier on, that it was very challenging and uncertain economic climate that we are facing as we were developing the budget. Today, I am joined by members of the budget team and representatives from all of the city departments, all of whom have felt the strain as we navigated through these unpredictable financial circumstances. I want to express my personal gratitude for their perseverance and dedication over the past couple of months. I may stand before you to try to consolidate this 700-page document into a 99 slide, but it's really all of the team members that are sitting next to me as well as behind me. It is really their work that has poured into the development of this budget book. through the collective effort and under the direction of the city manager we have managed to develop a balanced budget for the upcoming fiscal year although it was a difficult task but it does include the funding to support city council's strategic plan port st lucie continues to grow we heard that theme yesterday Over the past year, we have welcomed over 10,000 new residents, making us one of the fastest growing cities in the nation. A lot of growth means a lot of responsibility. Unlike in prior years where we were able to enhance services to meet our growing population, this proposed budget was one of the most challenging ones we have had to produce in decades. And that is because we were not able to enhance our services to meet the growing population. But despite facing those economic uncertainties that we heard about earlier today, including inflation, rising costs of delivering public services, and potential reform of property tax administration, this budget addresses these challenges while we are maintaining current service delivery. City staff is committed to excellence and investment. Over the past 10 years, we have been able to lower our property tax rate by 25%. We have reduced our debt by $400 million, and we have completed over 50 infrastructure projects using the half-cent sales tax dollars. The recommended budget for the upcoming fiscal year is responsive to the needs of the communities that we serve, and it will allow us to continue investing in roads, water, drainage, and public safety. The proposed budget implements the City Council's long-term strategic plan by investing in capital projects that are important to our residents. As an organization, we are committed to maintaining our ranking as the safest large city in Florida. This budget includes investments in utility system renovations, road improvements, stormwater management, and public safety. We are proud to be an award-winning organization, including recipient of the All-American City Award, What Works Cities Silver designation, and countless awards and accreditations throughout our city government. This requires us to retain valued employees as well as attracting new employees that will help support us in delivering exceptional public service. This budget exemplifies our dedication to fiscal responsibility, strategic growth, and maintain community services. We remain committed to supporting the City Council in making financially responsible decisions. The General Fund Emergency Reserves is maintained at 20%, which will meet the City Council targeted level. We will continue our discipline approach to long-term debt management, which allows us to smartly finance capital projects that will benefit current and future residents. And finally, as a team, we will continue to plan wisely and prepare the city to meet potential emergencies and future challenges such as Amendment 3. As I lead into introduction of the budget, things that will discuss today include a budget overview, operating recommendations by city funds and city departments. We will do a recap of the capital budget that was tentatively approved by City Council. We did come before you on April 20th. Today I will discuss the changes that we had to make to that proposed capital budget. And then we will wrap up with staff recommendations for City Council action. Let's begin with an introduction of the budget. The proposed budget advances seven priority goals of City Council. This development of the proposed budget is guided by the strategic plan that was adopted by City Council last summer. Several economic factors did play an integral role during the development of our budget. We've already had healthy conversations regarding that earlier today, some of that being the economy and inflation. Prices for everyday consumer items and construction supplies are still high. This has had an impact on our city capital projects, which continue to come in above budget. The unemployment rate of 5.2% in the city is higher than the national rate, although the screen is saying 4.3%. We did hear earlier from our economist, Mr. Grady, that we are now at a 4.2% unemployment rate. As the city population grows, the demand for public services increases. Staffing levels across all departments are feeling the impacts. Property values in the city have increased by 8.36%. For property owners with a homestead exemption, they will only realize an increase of 3% for the upcoming fiscal year. The housing market in the city continues to cool after steady gains following the COVID pandemic. Last year, we realized a decrease of 8% in new housing in comparison to the prior year of 2024. Ad valorem taxable value increases are expected to continue at a lower rate. Amendment 3 for property tax reform was also a major consideration during the development of this proposed budget. The proposed budget for fiscal year 2026 through 27 is responsive to this city's continued growth. The total budget is at $975 million. This is an increase of 12% from the current fiscal year, and most of it is related to capital projects by the enterprise funds as well as inflation. The general fund budget is increasing by 8.5% to $230 million. Less than half of this fund is supported by ad valorem property taxes. As these taxes fund the operations of police, parks and recreation, neighborhood services, city programming and events, and all city administrative department operations and staff. There are two key drivers that are driving the $18 million increase. We do have a $10 million transfer from the Governmental Finance Corporation, which will support the road construction of Sundance Vista, North South A. There's also an $8 million in new revenue, which is due to growth, both in population as well as property valuation. The funds are being set aside in the reserves budget to offset a potential revenue reduction for Amendment 3. So I do want to take a pause here because we did have conversations regarding our reserves earlier when we were looking at our investment portfolio. Somebody may notice that we have $600 million in cash that we are investing. So if we have that much money in cash, why is our budget still continuing to grow so much? So I do want to give Stephen an opportunity to elaborate on the $600 million that we do have in cash.

Thank you for that. The reason the $600 million is pooled together primarily is for efficiency, and it offers us better returns. The key thing with that $600 million is that our accounting system tracks the money by fund. So we'll have a utility system fund, stormwater fund, solid waste fund, along with all the other funds. So that $600 million is appropriately put into those different buckets, if you will. Some of those buckets are legally restricted, meaning that it's required that we do this. Others are committed for future projects. So that money is being tracked by that mechanism. But I just wanted to have that conversation. And if you notice, the reserve policy that Mr. just mentioned earlier was that we'll have $37 million set aside in the general fund. So the general fund of that $600 million represents roughly 10% of that.

Thank you, Mr. Okia, on that. So I just ended that with the $8 million of new revenue that we are anticipating and receiving in our budget for the next upcoming fiscal year. We will set that aside in reserves, just pending the outcome of November 3rd. And then after that, depending on what happens on November 4th, we'll make a decision on how to spend those $8 million. What's driving the 12% increase? The main drivers are inflation and capital projects. We have a total of 62 projects in the proposed capital budget. Yesterday, hearing from the Public Works Department, as well as the Utility Systems Department, were some of the main projects that we have going on. But there are definitely, I don't believe we heard all 62 of them yesterday. This screen here is just only highlighting some of the projects as well as the funding sources. Port St. Lucie Boulevard road improvements from Becker to Parr, Glades wastewater treatment plant expansion, Oak Hammock watershed improvements, California widening and Gatlin resurfacing. I did highlight those yellow prior to The counties vote on Tuesday night, but these two projects were subject to move forward based on the outcome of the half-cent sales tax. So our ability to move forward with these projects will really depend on if we are able to extend that program.

Madam Mayor. Yes, go ahead. If we could just pause here and break this down a little bit because it is, I think from a citizen standpoint, it's sometimes confusing and then more importantly, it's frustrating, right? Because we're having this broad discussion about property taxes and how do we start saving money and making it more affordable. And so when you see a 12.5% increase and you see an $18 million increase, you're like, oh, the city's got all this money and so they should be fine. I think Government standards, and that's what's frustrating. I think we would like to explain it as simply as possible. But unfortunately, because of government accounting standards and the way things have to be reported, it's in a way that it is confusing. Surprise, government can be confusing, right? So would you say then the half sales tax, the half cent sales tax, when that is collected, it goes into its own account, correct? Correct. Because we can't use that money for anything else. So it is earmarked separately in its own fund. Then when we need to use that money to actually do the project, if it's say we're going to make it easy, let's say it's $1 million. Mm-hmm. we have to then transfer that money from that account into the general fund which in turn because we have to spend it from the general fund which in turn then creates almost like this false number in a sense because we're just moving money we're just transferring where we've increased our revenues by a million dollars so on the previous slide The general fund is increasing by $18 million. And I just want to make sure I understand this. $18 million. $10 million are in transfers, which means those were other funding sources. That's not ad valorem revenue. That's money that's held from the Governance Finance Corp., which is completely different and is collected as an SAD. It's a completely different fund. Into the general fund. So it's showing 18 million, but the truth is the actual amount that's increased as far as other revenue, which the 8 million isn't all ad valorem either because you have franchise fees, et cetera, et cetera. Part of that 8 million is in the additional revenue coming from ad valorem. Is that correct? Correct. okay and i'm sorry i just really want to like because it is confusing and it's frustrating because i even when i look at the budget and brief i'm like come on now like what's happening and it's it's it's not an easy process to understand it's not the city doesn't want to make it easy to understand it's the way that we are required to report it and actually capture it in a spreadsheet and in a pnl essentially vice mayor i think you make a tremendous point there with the expenditures that we're going to be having the utility just use for an example

most likely in one year, probably the next two years, you're going to have $100 million expenditure. But those are rate users of the utility. That $100 million is going to show up in the general fund, which then is going to kick the number up from $900 million to $1 billion. And a resident is going to ask the question, where did you find all this money? Well, it comes out of the utility. So that's a tremendous, great example of what's to come in the next three to four years. Thank you.

Yeah, and that's not real money that we can use, right? I can't use that $100 million from that transfer to build a road or to lower taxes. I have to use it for utilities. Is that correct?

You have to use it for utility. Absolutely. Because I'm sure the rate payers of the utility would not be happy that that fund is being spent on the general fund for roads or stormwater.

Right. I really appreciate the breakdown of this and being able to explain it to our residents because it does look a certain way, but we know the reality is very different. I've talked about in the past about how we have our capital budget. And then and then our overall budget. And then when you do make those expenditures, you have to move the money into and how it does expand, make it look like it increases the budget. But that's because you have to put the expenditure into it. So hopefully with the questions that we may get asked that we can explain it as we are explaining it now so that it can translate properly. I'm sure all of us will be having those conversations as we continue to move forward in answering why it increases, be able to provide those details. So thank you very much for that. Thank you, Vice Mayor, for explaining it.

I appreciate that. And as we move forward, we do have additional illustrations on the budget, how the whole allocation is. But it is a very important conversation to have that we are spending public taxpayers' dollars as well as public dollars, even with our enterprise and our users' rates. Correct. So with that, there are stricter guidelines around that. We are not a private corporation. So with those guidelines, we have different funds. And with each of those different funds, you have specific uses for those funds. The general fund is the only one where you have flexibility. But with all of the other funds, with our utility systems, our stormwater, our building, road and bridge, there's specific guidelines and purposes for spending of those funds. public financing it is complex and there's a reason why it's meant to be complex is because there are tight rules that we are required to follow so later on this afternoon as we go through each one of those funds will have more description on the purposes of those funds the dollar amount another point that came up in the conversation is that our budget looks big It also has to do with the way we are transferring money. Madam Mayor, you mentioned the capital funds. We have monies coming out of the general fund, out of the road and bridge fund, going over to the capital fund. And with that, the money is being reflected on the operating side, and then that transfer is also being reflected on the capital side. It makes our budget looks inflated. However, legally, that is how we are required to display our budget for financial reporting. We have to show where the money is, where it's currently housed, if it's coming out of our reserves, the transfer from out of our reserves over into the capital side. So you may see it show up twice, which is kind of reflecting that, oh, it's higher. But those are some of the things that we are legally required to do. And something that we also tend to remind our residents is that we do have to get all of our books audited. Our books are audited on an annual basis. And I believe we just had our annual comprehensive financial report released. recently completed this past week. And those are measures that they are checking. They check our budget process. They check all of our financial and all of our accounting process. I don't know how many years of service, how many years that we've actually been able to receive the accomplishment from

Go ahead. We received it over 30 years in a row, the certificate of achievement for financial reporting from the GFOA. And it's a testament to how serious the city takes transparency, accountability, and ensuring that the funds that are received from the public are utilized for the appropriate purposes.

And I appreciate that. I wish so much that the public understood those certifications and understand what that means and how that equates to transparency, accountability. But unfortunately, I don't know if that translates. And so I think that Mr. City Manager, upon budget presentation, I would like to consider maybe having our outside auditor. I don't know if he can appear. I don't know how that works, if they can legally appear or not. But I would love for our auditor's to appear and kind of speak about the process, speak about how, just like we provided our backgrounds on who we are and then more importantly what our backgrounds are and our expertise, I think it's important for that person to, because they're an independent party, basically say legally this is how I'm obligated, this is how I'm checked, all that. Because the more the public's aware of the process, I think the better they're going to be.

Yeah, the city is actually audited by Forbis Hires, which is one of the top 25 firms in the nation. Prior to that, it was audited by CRI, which is another top 25 firm in the nation. And the reason why I mentioned top 25 is because the process that they have to go through is rigorous as far as what they have to check, what they have to look at, the conversations they have to have, and the investigations that they have to do. So that's why I wanted to be clear that we are audited by a top 25 firm in the nation.

And don't we have an auditor that comes before City Council and discusses the CAFR? Yes. Yeah, we have that every year. Right. Right.

And I agree. I know we have it every year. I just think in the critical nature of like where everyone's asking these questions right here, right now, they're not watching that meeting, unfortunately. It's like they're watching right now. So how do we let them? I hate to say it. How do we have to be redundant and do that again so people can, right now while they're talking about it, understand the answers to these questions?

Well, we can always take the clip from it and put it on our website as well. True. Right? True. To make sure that people who access our webpage understand that we get that clean report and it is presented. in an objective manner to the city council at a public meeting. At a public, yes.

And I think Councilman Bonner in his opening comments made a very good point. We know how we operate as a city. I can't judge how all 411 cities operate, how 67 counties operate.

And can I just say something real quick? Because everyone else has said their credentials. So I just want to say something real quick. I have a master's in accounting and financial management. I am also a licensed CPA. I've been in the workforce for 29 plus years. I've worked in the government for roughly 13 of those 29 years. I've come from the private sector. I was in banking. In banking, I'd lended. to different agencies and different businesses. So I was on the issuing side of debt where I'd underwrite and look at it and issue that debt. I worked as a liaison between the federal government and the territory of the Virgin Islands where I audited financial statements along with federal funds that were received. I've been in the construction industry. I've been in nonprofit organizations before. I say that all to say that myself, along with Caroline and the rest of your financial staff, we do have the credentials. So I just wanted to say that. Thank you.

Thank you. That's very good. Thank you. Continuing, just emphasizing additionally on what else is driving the 12% increase, it totals to $105 million. Of that $105 million, $78 million of it is related to capital and infrastructure projects. And of those capital projects, majority of those capital projects are our enterprise funded operations. It is utility systems department as well as the special revenue fund of road and bridge. We had a lot of discussion yesterday about our capital projects. All of those capital projects that we were hearing about yesterday, the bulk USC utility systems, that is an enterprise-funded operation. User rates are funding that. It is not taxpayer dollars. The road projects that we were hearing about, those are coming from a combination of ad valorem, gas tax, and half-cent sales tax. Other drivers of the increase are inflation, contractual obligations, increases, as well as personnel services. Similar to how inflation is impacting our residents at the grocery store as well as the gas pumps, government also is realizing the increases in buying goods and services for the public benefit. Personnel services increase is mostly driven by new positions in the enterprise-funded operations of the utility systems and salary increases for police officers. A smaller portion of our increase is due to ad valorem revenue, which is being set aside into reserves. In developing our budget, there are assumptions that we need to make. There are revenue assumptions as well as expenditure. For the revenues, our assumption is based on property values have been increased by 8.36%. We are recommending maintaining the total millage rate at 4.9750%. Included in the proposed budget are rate increases for water at 3.5%, stormwater at $6, and solid waste is increasing by $14.83. I know usually on this slide, for the past 10 years, I was able to report that we are recommending a reduction into our millage rate, but based on the conversations that we've been having over the past two days, and more so what we've been having since the end of late last year, is that we had to be more conservative and not recommend a millage rate reduction until we know the outcome of Amendment 3. For all of the items that are seeing rate increases, these will support the increased operational and capital project costs resulting from the state of our economy and inflation. Across the board, all city departments and operations are realizing increased costs for delivering public services. The proposed budget includes expenditure assumptions to fund these increases. Capital projects are still coming in higher than the amended budget. Fiscal year 27's budget has been adjusted for these increases, which is why we're seeing an increase in our budget, as well as including the deferral of projects that we cannot afford to move forward with. So as we're seeing some of the project costs increase, we're having to defer other projects that we cannot afford in order to generate savings to complete the projects that are ongoing. Health insurance claims are steadily rising as our workforce grows in staffing numbers as well as the age of our workforce. Police sworn officers will receive a contractually salary increase. The budget does include seven new position for the utility systems department to support growing demands in the city. Beyond the seven new positions for the utility system department, the city manager did not approve any other positions for other funds. During the development of the proposed budget, the constitutional amendment for the property tax reform that will be on November's ballot was at the forefront of our planning. If the proposed tax amendment passes, homesteaded property owners may potentially receive a tax reduction. In year one, the property tax revenue the city will expect to receive will decline from $131 million to $105 million. 56% of the general fund spending is related to public safety for law enforcement, code enforcement, and emergency management. The passage of Amendment 3 will reduce the city tax revenue by $26.3 million in revenue for year one and an additional loss of revenue of $22 million in year two. For the two-year total loss is $48 million, which will impact the way the city funds and provides services that our residents rely on every day. This chart here, this slide here is displaying all of the revenue sources that are supported by the General Fund, Road and Bridge, and the Crosstown Debt Service Fund. These three funds do receive a portion of the property taxes. The total budget is $268 million, but not all of that is ad valorem. A reduction of $26 million in year one will decrease the funding available to provide the services that our residents want and what they've been asking for, such as road improvements, parks, recreational programming, special events, and more sidewalks.

Caroline, to clarify, the $268 million is general fund, road and bridge, and debt service fund, correct?

Correct. It is all of the revenue that goes into that.

I just want to make sure. It says it here in parentheses, but I just want to make sure everyone hears it. Yeah.

Another thing that's, you're right, Shannon, that's confusing because people think, oh, they get that much in property taxes, but that's not. Only about half of that is made up of property taxes, correct?

That is correct. Only about $110 million. We'll have another slide that will show that. The purpose of this slide was showing that we do receive property taxes. It does not only go into our general fund. It also goes into the road and bridge fund. which is the fund that we use to do our road construction, maintain our roads, maintain sidewalks. So a portion of the property tax does help support the road and bridge fund, as well as a portion of the voter debt goes into the crosstown debt service fund, which was something that was put on a ballot and our residents voted for the expansion of the crosstown.

So essentially, it's fair to say that if this was to pass, that essentially what we collect in property taxes would just pretty much cover our public safety.

Pretty much, yes. The public safety budget is about $100 million. So we'll use round numbers. I know later on we'll go more into details. But the taxes that we're bringing in for property taxes is about $100 million, and the police department is about $100 million. Yep.

And so I think that's an important point. So I'm going to throw this to Chief. Ready? Ready? If that's all we receive and we stay at 100 million and we're capped and officers don't have futures for raises, promotions, all of this, besides the fact that we need to add more because we know we need to add more because we're growing, what is the likelihood that you'll be able to retain everyone over the long term? Maybe over the short term while we're dealing with challenges, but what's really the realistic outlook of how do we retain people in that type of environment?

Well, our costs continually rise, just like everybody else. So the only place that we can take that from is personnel, so we'll have to reduce the size of the force.

And I say that because I feel that you have worked. I want to thank you, Chief, for your efforts, Mr. City Manager, for your efforts. We have tried to get to this magic 1.6 number, which is way below the national average of 2.1, because we realize our population is growing. And yes, we have done more with less, with much less. But there comes a point in time where your safety in the organization becomes strapped, and you only have so many officers to watch so many people. That's just the reality. And you are doing everything you can to be efficient with the drone program and everything that you're doing with working with the technologies available. So I commend you for that. I 100% know that this is going to be an extreme challenge moving forward. Even just watching discussions of salaries and seeing how cities and counties compete for this very important resource of personnel in this department. And a lot of times it is what city or what county is able to provide them a competitive wage and competitive benefits. Um, and we have pulled not just 14, but the state of Florida has pulled a lot of officers from other states to be able to come here because we do have a competitive salary with competitive benefits. So I have concerns about. Just like they moved here, they can get up and move somewhere else. And I have concerns if we're not able to be competitive in that market, especially where. People, I mean, we have an academy. We have a lot of people signing up for the academy. Thank God for that, that we have people willing to jump in for this type of service. But people aren't running through the gates of City Hall wanting to become a police officer. So already dealing with a difficult pool. um you know i just say all that because again this isn't this is the reality of what the future is for not just our city but all the cities with safety if we're not able to be competitive and keep our officers so i i just i don't know if you have any thoughts that you want to add oh one more question i have for you because we've i've actually thought about this we always talk about public safety and uh essential services Tell me, what would happen to the police department if we didn't have human resources doing our background checks?

We'd be hiring the wrong people.

If we didn't have IT handling all of your data and everything from your body cameras to your laptops to your police reports, your AI that's helping us write our police reports so we can be on the street more, what would happen if the IT department didn't exist?

We'd lose the public trust very quickly.

What would happen if finance wasn't here to check and audit your budgets to make sure that you're spending at the level that you should be spending responsibly?

We would have a heck of a time doing that without them.

I mean, what if we didn't have parks and the ability for children to actually do something? Because I remember growing up here, we didn't have a lot. So they're like, these kids are getting in trouble and they have nothing to do. If we didn't have programs and soccer and football and parks and our children had nowhere to go, what would happen then as far as potential crime opportunities in the community with our youth?

obvious challenge, right? If they don't have anything to do to stay busy, a place to be where they're safe, they're going to get into mischief and they're going to produce calls for service whether or not they're criminal or not. They're still going to produce a babysitting, if you will, situation for us. You asked me if I had anything else to add. You'll see our budget is always about 86% salaries. This is very, very little room for us to mitigate what our expenditures are, right? It costs what it costs to hire and outfit a police officer. So again, if we end up reducing, all we're going to do is create a dangerous environment for our police officers, which is why we spend what we spend on overtime.

And I highlight that, and I appreciate that candidness and that honesty, because that $157.4 million that remains that people might assume, I mean, obviously we're going to cut, we're going to find ways to cut. That public safety goes just beyond the police department. In order for us to maintain public safety, we have to also support... financially our police department with the other departments. And so this is again my questions, right? I had questions in the beginning. I still have questions. What happens to the police department if I have to cut back my human resources and we're not able to produce background checks quickly and now we're waiting on hiring and all kinds of things? These are the questions I have if this was to go forward. Thank you.

Clearly all the departments are interdependent.

That's the most excellent point. All of our departments are interdependent. We all work together. All the departments work together in order to get things done. And I've long said that public safety is not just about law enforcement. It's not just about fire. It's all of our departments working together. If our roads aren't... HANDLED PROPERLY, AND IF OUR ROADS AREN'T SAFE, HOW ARE OUR OFFICERS, HOW ARE OUR FIRST RESPONDERS GOING TO GET THERE? ANIMAL CONTROL IS PUBLIC SAFETY. CODE IS PUBLIC SAFETY. WE CAN GO ON AND ON, JOLENE, COUNCIL, WE CAN GO ON AND ON ABOUT WHAT REALLY PUBLIC SAFETY IS ALL ABOUT. SO ALL OF OUR DEPARTMENTS, AGAIN, HAVE A HAND AND PLAY A ROLE IN MAKING SURE WE'RE SAFE. COMMUNICATIONS. No one thinks about communications. We strive to have an award winning public facing communications department that works terrorously every day getting out information. When we have a storm event, we rely so heavily on our communications department to get out information to the public. What if we can't communicate with our public anymore? And this is just being really open and honest and transparent about everything that's happening. And like we've mentioned, we've said several times, whatever happens, we're going to deal with it. We're going to address it. We're going to do everything we can to be what's in the best interest of our residents. But it's important just to share all these real things. realities of what our government does and what services that we do provide to our community.

Madam Mayor, just the fact that our residents can view this meeting is a tremendous change from what it used to be. At every council meeting, our residents can actually view what goes on here. And to me, that can go away very easily.

Thank you. So what this slide was illustrating is all of our revenues that we're collecting on the general fund, road and bridge, and the crosstown debt service fund. And once you back out public safety, what is remaining for other operations of city government performs? Currently, we're at about $157 million. Looking at the same scenario, looking at a year one impact, If Amendment 3 passes, it's saying that our starting starts at $268 million in revenue. We reduced to $26.3 million due to a property tax reform. We have left $242 million. If you back out public safety, which is in our books, we backed out police, code enforcement, and emergency management. Then you have $131 million. So that's the difference from before you had $157 million. Now you have $131 million. And this is what is left to operate and maintain parks and playgrounds, maintain streets and sidewalks. maintain right-of-ways and landscaping, fund city events and recreational programs, and support all city departments, staff, and their operations. So we're hearing the message clearly that if November 3rd happens, we will do what we need to do. But the reality is that we're going to have less money to do what we need to do. Next up, with the increase in homestead exemption up to $250,000 in year two, the city would lose an additional $22 million in ad valorem. So for year two, going through the same exercise, Starting off with $270 million in revenue, factoring an incremental inflation, we would be losing $22.1 million. $248 million is left. If you back out public safety, we have $132 million to operate and maintain parks and playgrounds. maintain streets and sidewalks, maintain right of ways and landscaping, fund city events and programming as well as supporting all of the city departments, their staff and operations. Although we do not know the outcome of November's elections, city staff is preparing for a potential property tax reform and we have already adjusted the budget and spending. Forecasted new revenue related to growth and population and assessed value has been set aside in reserves. Funding levels for all our operating departments have been maintained at current levels, with the exception of the utility systems department, and increases that are tied to inflation and contractual obligations. So if someone is reviewing our proposed budget book, They hear my comments saying that we've maintained our funding level. We have, but there are some areas that we were not able to maintain because of inflation, because of contractual arrangements that were made prior to Amendment 3. So those contractual obligations we still have to meet. We are not adding new forecasted police officers to keep up with population growth. Earlier, I mentioned that we are bringing in 10,000 new residents. The police department requested new positions. The city manager early on had approved 10 new positions. But once we found out that there was going to be this constitutional amendment, the city manager had to pivot and eliminate those 10 positions. So they are not in the proposed budget. nor do we have any new positions for park staffing. We have the Torino Regional Park that's planning to come online next year, as well as the tradition BMX facility. Neither one of those facilities are going to get new staffing. I don't know if Brad wants to chime in on how we're going to meet that because these are realities that's happening, but we don't have any new staffing to support those parks. Of the 184 new positions requested by city departments, the city manager was only able to approve seven positions for utility systems. Maintaining the existing level of service effectively means a reduction.

So I think it's important to talk about the fact that we have been preparing We have new parks coming online, so I think it's important to share how we're going to address that.

So, Jesus, can you please go ahead and start and Brad, you can back me up at any point in time. Basically, right now we have the Torino Park that most likely be coming online sometime in October. Maybe tradition. Tradition, I'm sorry. Tradition and also the BMX. But in the future, you'll have Torino coming online. Currently, conversation with Brad, you do have certain park sites out there that we're probably going to use some of those resources, employees, to move them to these new facilities, understanding that the existing facility are going to suffer. to the point where the grass may not be cut as often as we do. You may have to cut back on the amount of hours of operation that you have in those facilities. And also at nighttime, whenever especially you have the softball team, girls softball team at nighttime, you may have to shut those a lot earlier because you may not have the staffing to be able to support and keep these facility open at that time. Brad, I'm not sure if there's anything else that you may want to add.

Well, I think I would assume it would be more than one sport that would be affected.

All sports will be affected.

Right.

Thank you, Asus. You hit the nail on the head. To answer Caroline's question, we're going to do what we have to do. to keep the parks and programs going to the level that we can. But there will be impacts. With no new employees to bring on to two major regional parks, we're going to have to be very selective and judicious in selecting current employees and getting them to these new facilities. I think it's safe to say that these new facilities will not be staffed at a level where they should be, whether you base that on the national trends for staffing a park or just the assumed need for a new park facility. How does that look? Torino Regional Park, we might have one or two employees that have to go through there throughout the day, but not necessarily stationed at the park. They may be in a truck with a trailer with some equipment to be able to go in and service the park facilities on an as-needed basis, trying to stay ahead of the major issues that come with, I dare say, the dirty words of deferred maintenance. But that's the reality when you don't have the people in the parks to maintain them at the level that we've been accustomed to doing.

Thank you.

Madam Mayor, I know I am in between lunch, but if you would kindly allow me a few more minutes just to wrap up this slide. Yes. And we can pause? Okay.

Yes.

So one thing that I do want to mention is long-term financial planning. We are required to do long-term financial planning in managing public taxpayers' dollars. So not only are we developing a proposed budget for the next year, we also look out four years out. So we look about five years out to see what our needs are. So when we stated that we needed new officers for growth, we needed new officers, Positions for parks and recreation because of capital projects that had been approved 16 years ago. These were things that were forecasted that we were planning to add to the budget. I'll also mention utility systems yesterday when they talked about all of their projects. Those are things that's being planned years in advance. uh road and bridge i've mentioned that road and bridge does receive a portion of property um taxes so as we are expanding our road network there also comes the the maintenance the operating of those um expansion so those are things that are that are being vulnerable depending on what happens with our with the reduction in revenue so i wanted to state that you know when the city manager approved 15 positions early on those were things that didn't just come these were things that we had been planning for years in advance and now all of those things are having being turned upside down. So maintaining our current level of services, meaning that we're not using any of our new revenue to enhance our budget, effectively is a reduction. Our departments right now, they are already facing challenges in accommodating the influx of 10,000 new residents at the same level of service without being able to increase. This budget does not include funding for cost of living adjustments for our city employees. Earlier I mentioned that the police sworn officers will be receiving a contractual mandated increase, but all of our other city employees, we did not factor in a cost of living adjustment for them. We heard earlier from the city manager that the construction of the public works building has been deferred. Renovations at City Hall for expansion, parking garage, that has been shelved. We are exploring increases or establishing user fees to cover the actual cost of public services. We've had discussions about, you know, the services that we are providing right now. We're not recouping our full cost. A hiring freeze has already been imposed on the organization and that will continue as well as a spending freeze for non-essential goods and services. We are also considering additional service level changes to offset the potential impact of Amendment 3. Despite all of these measures that we are taking, we still have a huge funding gap to close. With that, Madam Mayor, I think we are at a time to take a break.

Okay. Any comments or questions before we go to lunch? All right. We're going to go to lunch and come back in an hour. Okay, we're back from lunch. Hope everyone enjoyed it. Going to continue on with our budget presentation. Caroline? Thank you.

I believe we left off on slide 27, so we will pick up on 28. Looking at our presentation here, I have 99 slides, so I will do my best to keep the numbers as informative and as engaging as possible. On slide 28, the tax base for 2026 has increased by 8.36% over the 2025 taxable value for the city. With this increase, the final taxable value of all properties in the city is at $27.7 billion. The proposed budget maintains the current millage rate of 4.9750. As illustrated in this chart, the city has reduced its millage rate for 10 consecutive years. Due to the uncertainty with the November's election and Amendment 3, a millage reduction is not included in the proposed budget. There are two items that make up the city's total millage rate. The first is the operating millage rate that funds the city services like police, parks, recreation, road and sidewalk maintenance, and neighborhood services. This millage will remain at 4.6607. The second is the voter-approved debt millage for the Crosstown Parkway Bridge. This millage will remain at 0.3143. The proposed total millage for both is 4.9750. By maintaining the current millage rate, a homesteaded property owner is still benefiting from the 10-year incremental reduction from the high of fiscal 2016 when the millage rate was at 6.6289. This illustration shows the total savings a property owner is realizing because of the City Council's approval to reduce the millage rate steadily over time. For an average assessed home value, this property owner has saved almost $2,000. In comparing our cost of city services per resident for the top 10 cities in the state of Florida, we are the second lowest. Being the second lowest city service cost provider is a value to our residents. A few of the abundant and excellent services we provide include being the safest large city, maintaining the city's appeal through beautification efforts of city neighborhoods, offering over 50 parks and recreation centers, dozens of free special events offered yearly, and being an award-winning organization that enhances our reputation, drives economic growth, fosters community pride, and ensures continued delivery of high-quality services. The city's investment in infrastructure through bonded debt has allowed us to advance a number of capital projects and be the city we are today. We have been responsibly managing the city's long-term debt for more than 15 years. From a high of over $1 billion of debt in fiscal year 2010, the debt was reduced to $619 million at the end of fiscal year 2024. For the upcoming fiscal year, the proposed budget includes a plan to issue bonds necessary for road and bridge, utilities, and stormwater management projects. The outstanding debt balance is projected to increase to $765 million by the end of the fiscal year 2027. This projected debt balance still represents a substantial reduction of $277 million from the high of fiscal year 2010. As the city continues to grow, so does the need for essential services. To keep up with the increasing demands, staffing levels were considered during the development of this proposed budget. The proposed budget includes seven new positions for the enterprise funded utility systems department. The staffing increase recommended is directly tied to the growth happening in the city. No FTEs have been added to the general fund or other departments. For the upcoming year, the staffing ratio for employees per 1000 residents will be 5.78. Although the recommended number of positions at 1,550 employees is at an all-time high level, the ratio per resident is still short of the level of where we were before the great recession of 2008, almost 20 years ago. This demonstrates the city's ability to maintain excellent public services at optimal efficiencies. In comparison to our benchmark cities, our staffing ratio is the lowest, almost by half. Gainesville, Lakeland, Cape Coral and Tallahassee, they all have populations smaller than PSL, but they have a higher staffing ratio. As the city evolves and maintains its place as the sixth largest in the state, the budget outlook includes many opportunities. New commercial and economic development, including Walton and one in the Port District. The development of tradition in Torino Regional Parks and we will continue to leverage grant funding from the state and federal levels to offset pressure on the city budget. As we are monitoring our opportunities, we are also evaluating threats to the city, which is a part of our routine responsibility. The nation's economy continues to experience deflation above our current level, which we as economists are comfortable with a 2% change year over year. Earlier, you heard us mention that we are above that with a 4% change. The cost of everyday consumer goods, operating supplies, construction materials are still elevated and pushing the cost of doing business higher. Growth is fueling the increased demand for city services, including the impact to our traffic system and development that are happening in adjacent cities. Earlier, we discussed the potential impact if Amendment 3 passes in services for our residents. To reinforce some of the conversation from yesterday and this morning, property tax revenue backs the bonds, the city issues to build and maintain infrastructure. When the tax base shrinks, so does a city's bonding capacity, and that means higher interest rates. The riskier we look on paper, the more we pay to borrow. That translates into less ability to finance the things that keep us moving. Roads, stormwater systems, utilities, and public facilities. When we don't invest in those things, the impact shows up in everyday life. More traffic, slower emergency response times, and greater vulnerability when the next storm hits. The bottom line is taxpayers end up paying more and getting less. Although the preparation of this budget presented numerous challenges, it is a conservative, responsible spending plan for the fiscal year 2026 through 2027 that will allow our city to maintain current level of service by implementing the strategic plan priorities approved by you, City Council. Your staff is dedicated every day to outstanding customer service through efficient and effective operations, improving the quality of life for every resident in our great city, and being an award-winning organization that we all can take pride in. We will now take a look at the overview for the proposed budget. The city adopts one budget every year. 76% of the proposed budget is for operating. That is the cost of keeping the city running on a day-to-day basis. For example, personal cost, office supplies, computers, and insurance. The remaining 24% is for capital. That is made up of projects for maintaining or upgrading the city's infrastructure, roads, bridges, buildings, conduits, and sewers. The total budget is $975 million across all city funds. Property taxes make up only 13% of the total budget. The bulk of the budget is supported by user fees and other revenues such as gas and sales tax, permits, licenses, and sometimes transfers from other funds.

Caroline?

Just really quick, Shannon, I just want to bring this up. So I've seen this slide, and I know the next one is similar, and the next one is similar, and going back to discussing this with the public. I remember seeing these two when they were presenting similar slides for the entire state, Tallahassee. They presented them almost like the exact same way. Again, I really think it's important because we need to have a slide that just shows THE GENERAL FUND. AND HOW THAT'S BROKEN OUT AND HOW THAT'S UTILIZED. AND THE REASON WHY I SAY THAT IS BECAUSE CIP FUNDING, MOST OF IT'S RESTRICTED. ROAD AND BRIDGE FUND IS RESTRICTED. STORM WATER IS RESTRICTED. BUILDING FUND IS RESTRICTED. UTILITY SYSTEM IS RESTRICTED. GOLF COURSE FUND, GOLF COURSE FUND, WE COULD PROBABLY, THAT'S $2 MILLION, BUT THAT'S NOT MUCH TO HELP THE GENERAL FUND. AND THE SPECIAL REVENUE FUND IS ABSOLUTELY RESTRICTED. When you look at, again, this is where people look at this and then they say they have all this money. They have $975.3 million. My little old 13.1% means nothing, right? That's what, I mean, if I was just looking at this from this slide alone, that's what I would assume. Because I didn't know that all these other funds... Our funds that are restricted, we're not able to use them to pay for police or for we're not allowed to use them to lower their taxes. We're not allowed to use them for all of these other things that are necessary to be able to run most of their services, if not all their services, because of the restriction of those funds. So I don't know how we reimagine slides like this. But I really feel we all have to work together to make sure the public understands that the thing that when they walk out, and I had someone bring this up to me, when you walk out and you touch that sidewalk and the city, you know, that's a city service, like how does that work into where their tax dollars are going? And I just think that people need to understand that most of these funds are The city, this council, cannot just use on what we want. It's very, very minimal, which is most of that, basically that 13% is really mostly of what we have to actually work with. Is that fair, I guess, to say?

Absolutely, and that is something that we can definitely do. What I'm hearing from you with this pie, we have the general fund component right here, and that's at $230 million, right? That includes property taxes, which is less than half at $110 million. We also have licenses, permit fees, and other taxes in here. Rest of the budget, you can see a big portion of it right here, the utility systems, that's another 25%, is all on user rates. Stormwater here, that's user rates. Road and bridge, you have a component, $9 million out of the $25 million is in property taxes. Special revenue here is where you have our building fund. And then the internal service fund right here, this is for our medical fund. And then another almost quarter portion of our budget is on capital. So we definitely can work on breaking these out into different slides. And what we can also add is the uses for those different funds and their restrictions.

I appreciate that. Thank you so much.

This slide here is showing where is the money coming from. So these are revenue and sources of funding, including ad valorem property taxes, gas and half-cent sales taxes. This makes up about 17% of the budget. And the reason why this 17% number is different than what... I'm sorry, what I may have stated earlier, about 13%, 13% was just looking at the general fund. But I did mention earlier on that we do have property taxes in our road and bridge fund, our crosstown debt fund, and the general fund. So in totality, you got about 17% and then 13% in taxes. Where does the money go? The proposed budget is balanced. So the amount of revenues that we're bringing in, we also have a spending allocation plan. About a third of the budget is programmed for a capital outlay and capital projects. So on the slides, two slides before, we showed the CIP, the Capital Improvement Program, was at about 24%. It goes up to 30% because there are capital expenditures in our operating budget. Those are for items that are less than $100,000. So when you take both of them, you're looking at about 30% of the budget. And then another half of the budget is planned for personnel services and operating expenses. We will now take a closer look at the operating budget. As you've heard us describe earlier, the city does have multiple fund types to account for various operations we manage. The general fund is the main operating fund for the city. Majority of it is tax funded, tax funded being property taxes and other taxes. Generally, it performs the functions that private businesses would not, like parks and police services. The special revenue fund include the road and bridge and the building fund as well as the governmental finance corporation. Debt service fund is for the voted debt for the Crosstown Parkway Bridge. Enterprise funds operate like businesses and generate revenue to support their operations. Examples are the stormwater and utility systems. Internal service fund is for the city's self-insured medical fund. And the trust funds are established to pre fund long term liability in the city. We do have two trust funds. One is for the municipal police officers retirement trust fund, and then we have another one for other post employee benefit fund for retirees health insurance. Unlike the private sector, city funds are highly regulated by state laws, federal and state regulations over grants. Only the general fund can support other fund types. The other fund types cannot support, they can only support operations that are specific to their purposes. We have policies on maintaining emergency reserves to support government operations for unanticipated expenses or financial emergencies. The capital project funds, the enterprise funds, and others sometimes will save money from year to year to complete large complex projects. Earlier we did mention the utility systems, forecasting during their long range planning, see the need to expand and renovate. Those are big dollar projects. So there are annual savings that will be put aside into the reserves to help with those capital projects moving forward. Due to government fund structure, internal transfers from one account to another may appear as double counting of the same dollars. Examples are transfers that are made from the general fund to the capital projects fund. So sometimes you'll see that being represented twice in our budget. The proposed budget includes adjustments that will be seen in most funds and departments as we proceed with a departmental review of the budgets. Operating costs have been based on inflation. Capital spending fluctuates based on the needs of the departments. So with the department's budget, sometime you may see the capital outlay increasing because the department may have the need to purchase a vehicle or equipment. And then in a subsequent year, you'll see that funding go down, and it's because it was a one-time purchase. Liability insurance is a risk allocation and that varies annually. Personnel services include adjustments for increased health benefit costs. Here on this slide are abbreviations that you will see as we go throughout the presentation. Fiscal year is abbreviated with FY. Prior fiscal year actual is abbreviated with A. The current fiscal year budget is abbreviated with B. And down the line, you may hear me use the term FTE, which stands for full-time equivalent employees. Once again, the total proposed budget for all funds is at $975 million. The total millage rate remains the same. The city has established emergency reserve level, and we are meeting it for all of our funds. We have also set aside new ad valorem revenue into the reserves, which will be used to offset potential impact of Amendment 3. The proposed budget will advance over seven, I'm sorry, over 60 capital and infrastructure projects. I will introduce each department budget starting with those that are supported by the general fund and then we would transition into the other funds. As we go through each, I will ask that we move forward by exception. If you are satisfied with the department fund budget, no action is required during this presentation. Those items will advance to the proposed adopted budget. However, if you would like to pause and review or ask any questions of a department, we shall pause to allow that discussion to occur. The proposed budget for the City Council is at $1.3 million. The funding level will support three positions. The city manager's proposed budget is $2.3 million. The funding level will support nine positions, of which two are currently vacant. Strategic initiatives and innovation, proposed budget, $444,000. The funding level will support three positions. Here you notice an increase with our operating expenses, and this is to secure professional services that will support innovation and strategic planning. City clerk proposed budget $1.3 million funding level will support 9 positions. Finance is proposed at $6.3 million. The funding will support 42 positions. Proposed budget for human resources is $3.1 million. This will fund 16.8 positions. The medical insurance fund is at $45 million, and this funding level will support three positions. Communications is proposed at $2.8 million. This will fund 14 positions. The general fund proposed budget for neighborhood services is 4.4 million dollars and this will fund 31 positions. Neighborhood services also oversees the community development block grant which has a proposed budget of $962,000 the funding level will support 3 full-time positions. NSD also manages the State Housing Initiative Partnership Grant, which has a proposed budget of $2.2 million, and this will support two full-time positions. Risk management proposed budget is at $741,000, and the funding level will support four positions. Information technology is proposed funding is at $12.6 million. This will support 43 positions. The Office of Management and Budget proposed funding $2.9 million. This will support 17 positions. OMB monitors the general government budget. This budget captures general activities that don't neatly fall within a department, such as professional services for the Southern Grove, maintenance for the city hall building, and special assessment district payments. The proposed budget for the upcoming fiscal year is at $15.2 million. This one has a significant increase. $10 million was included in the proposed budget, and this will fund the Sundance North South A Road construction. Fleet management proposed budget is at $258,000. The City Attorney's Office proposed funding is at $3.5 million, and this will fund 17 positions. Planning and zoning proposed funding is $3 million. This will support 17 positions. The department also oversees art in public places, which has its own cost center. Although we don't have a separate slide for the program, I do want to mention that the proposed funding for fiscal year 27 is $650,000. Police, the proposed budget is $104 million. The funding level will support about 468 full-time positions. Emergency management is proposed for funding at $696,000. This will support three positions. The proposed budget for the Office of Solid Waste is at $2.5 million. The funding level will support 11.5 positions. Keep Port St. Lucie Beautiful proposed budget, $979,000. Funding level will support 7.5 positions. Proposed budget for facilities maintenance is at $4.2 million. This will support 20 positions. The proposed budget for the Office of Economic Development is $631,000. The funding level will support one position. Parks and Recreation proposed funding $23 million and this will support 142 positions. The Saints golf course proposed budget is $3 million. I'm sorry, that should be $2.8 million and the funding will support 10 full-time equivalent positions.

Caroline, I think we may want to just note that the Saints golf course itself supported is not being funded at all by the general fund.

Yes. Thank you, Mr. Manager, for that. Yes.

Caroline. Yes. Just to add to is that as people are going, number one, I want to compliment you on the transparency in this document. I really appreciate that. IN THE CORNER IN THE TOP LEFT-HAND CORNER OF EVERYONE'S PAGE, YOU HAVE PUT THE ACTUAL BUDGET BOOK PAGE THAT THIS IS IN REFERENCE TO, TO ALLOW PEOPLE TO UNDERSTAND, BECAUSE WE HAVE A, LIKE YOU SAID, 700, 800-PAGE BUDGET BOOK. IF THEY WANT TO GO AND CHECK IT OUT ONLINE, THEY CAN ACTUALLY GO TO THAT PAGE, WHICH I THINK IS EXTREMELY HELPFUL. I ALSO WANT TO NOTE THAT THERE'S LOTS OF CHANGES IN THE actually not increases, they're actually decreases, because I'm seeing a lot of negatives as we look at changes and differences. These are in the direct expense lines, and then a part of my review of the budget, when I was looking at the indirect expense lines, which are all the other expenditures that we have, many of them are zero, it's zero all the way down. And so I just wanted to put that on the record that we definitely have, you have worked, the city manager has worked to cut back and to also cut back and not increase and as much as possible reduce funding and expenditures as much as possible. So I just wanted to make sure we highlight that.

Yes, thank you very much for that. You know, city departments, they received the communication from the city manager that we needed a flat budget. So in doing a flat budget, there are some areas where you can do it and then there's some areas where you could not. The areas that we could not were where we had inflation, or if we had a contract that we had already signed three years ago and that contract has increases, we needed to, the same way we ask our vendors to be good partners as city government, we also have to be good partners for them. So if we signed a document that said there would be a 2% increase, those increases were factored in here. But wherever else we could hold the line on the budget, we did do that. And then there were some departments that even went further, where there were opportunities to reduce those departments to take those measures.

Well, and in fairness to some of the personnel increases, we do have contracts with, we have union contracts, and we have obligations to fulfill those. And so nine out of ten times, that's what that is, correct? It's just we have to fulfill those contracts.

Right, and so also in personnel services, that is also, it's rolled up here, but it's also capturing our health benefits. So at the time that the budget was being developed, we were anticipating a 9% health increase. with our insurance because we work with an actuary and they help us to determine what would we forecast. So 9% was part of a three-year planning, so that was included in our proposed budget. You heard earlier, the city manager mentioned that we start planning our budget as early as December is when we're looking at the economy. the first look that the city manager gets with all of the departments is in February and in March. So there's a lot of things that go into play, but then there's a lot of things that change. You know, as Mr. Morejo mentioned earlier on, we had to revise the budget three times because of activities that were happening in Tallahassee. So those are things that we see reflected in the proposed budget.

Thank you. And I know we don't have time to spend the whole time on budget, but one of the things when I was meeting with the manager and I just wanted to share this, Council, I was like, I wish we could show that process. I wish that the public could see the entire process of how he starts with it and then he cuts and then we do it again and again. And that's not just this year. That's every year. And then when we usually get to this point, then we also throw things into it. Either we cut the rate or we make him do another project. So it's a constant refining of the budget. It's not like he wakes up in the morning and says, OK, we've got this money coming in and we're just going to spend it. It's like, no, we're always looking how can we be fiscally responsible with everyone's tax dollars as much as possible. But I guess we don't have time for that because you didn't do that. I would like to be a fly on the wall, because even I don't get to see you do that. It's a lot.

Sure. So we may not have time for it. I'll probably give maybe a one-minute snapshot of what happened. So we do not do a wash, rinse, and repeat. That's not how we do our budgeting process. It is very detailed. So the departments, they start working on it. At the end of the year, and even before they meet with the city manager, they are meeting with their respective ACM assistant city manager. And there is a thorough review of every single line item. So this budget of $975 million represents thousands. Of line items across all city departments. So you have representatives from the city manager office in the form of the assistant city managers that are meeting with every one of their departments to understand, you know, what is in each of those budget line items and does it need to stay flat? Can it go down or if it's going up, why is it going up? So that meeting happens. Then we meet with the city manager. I think it's around March or April. We meet with the city manager and the executive team, and then the departments have to come and defend the budget that they're asking for. I mean, that's what we're doing right now. We are presenting a proposed budget to you. We don't assume it's a done deal. Everyone that's sitting, you know, near me and behind me know that they have to defend the what they are saying. So Parks and Recreation has a budget of $23 million. Brad and his team need to understand every single line item. And the city manager will ask questions. You know, do you still meet that funding level? You know, how can you sharpen your pencil? And so that's the exercise that we go through in April. We hear that feedback. The departments work with OMB. We fine tune it. And then we get into publishing a budget book. So 700-page document takes a lot of months and manpower. But it's not one that we recycle. There is that detailed review every single year so that we can stand confidently and say that, you know, I've requested what I need to keep services.

I really appreciate you going through that because I think that breaks it down for the public. I JUST THOUGHT OF AN EASY WAY IF THE PUBLIC WANTS TO SEE ON A SMALL SCALE WHAT THAT LOOKS LIKE, NOT JUST THIS YEAR, AS LONG AS I'VE BEEN ON THE COUNCIL I THINK PROBABLY We've actually, the city manager puts in all of the positions that are requested by each department. That goes into the budget book. And we notate what's been approved, and he notates what hasn't been approved. And if you're a resident, it will give you the perspective of how many positions, not just the line items he's evaluating, just the positions. that he has to evaluate what those positions should do. And it's always fascinating for me because I'm like, oh my gosh, this position looks like it's really needed and he can't fund it right now. You know, it becomes a very real thing of how he has to cut and the balancing act that has to be played. But that's in this current budget book, some previous budget books, if anybody wants to look at it. It's a very interesting exercise if you want to see how the manager has to cut. Thanks.

And then I am going to go right back to our long-term planning, right? So how are these departments coming up with how many positions we need? We heard the manager mention early on there were 184 requests for new positions. Those positions totaled $28 million, right? Departments aren't like, you know, coming up with this stuff. This is part of the long-range planning. We've seen over 55,000 residents move into the city over five years, 10,000 just in one year, half the size of the city of Stewart, right? So there are real services that, you know, need to. So departments are looking at, okay, where are we today? Where are we going to be? How do we start planning for when we ask for positions, positions that are approved? USD, they have seven positions in the budget. If we counsel adopts and grant those, USD are not going to be able to bring those positions in on October. They'll be lucky if those positions can come in in January because there's a process that we have to go through with recruiting and advertising and all of that. But I preface the long-range planning because that goes into how do we determine that we need to grow government by 184 positions, but we can only afford seven. The parks impact fee fund. We are planning a budget for $1.9 million for the upcoming year and this fund will help support new growth and development in the city. The special events department proposed funding is at $2 million. The funding level will support six positions. Mid Florida event center proposed funding is 4.4 million dollars. This will support 25 positions. The Community Redevelopment Agency proposed budget is $7.7 million. The funding level will support two positions. Need to make a note here that this year you're seeing a significant increase in funding, and this is due to a bond that will be issued for Mid-Florida Event Center renovations. The Southern Grove CRA proposed budget is $6 million. The revenue in this fund is generated by 50% of the increase in property valuation in the TIF, Tax Increment Financing District. By agreement with the purchasers, 95% of the amount collected is shared with these developers to help offset the cost of their special assessment district payments. Public Works Operations is supported by four funding sources. Starting off with the road and bridge, the proposed budget is $25.7 million. This funding level will support 80 positions. The stormwater fund proposed budget is $55.5 million. The funding level will support 68.5 FTEs. The increase in capital outlay in debt services is directly tied to projects that are included in the capital improvement program, which we heard about some of those projects yesterday, as well as we did present those projects to council at April's workshop. Urban beautification is a program that is supported by the general fund. The proposed budget is $605,000 and it will support three and a half positions. National Pollution Discharge Elimination System is a separate fund. The proposed budget is $347,000. The funding level will support two positions. The mobility fee fund tracks revenues and expenditures for mobility improvements, including roads, intersections, sidewalks, crosswalks, and trails. The proposed budget for fiscal year 27 is $3.6 million, and this will help support three new capital projects.

Caroline, it's important to note that the mobility fee back a couple years ago was generating revenue of about $9 million. and now you're generating revenues of $3.6 million, that's a substantial change from what we were used to. And that's the other reason why we can't go out there and start bonding because the revenue is not coming in to support these projects.

And that is also, thank you, Mr. Manager, but just a direct reflection of what's happening with development. As development is slowing down, we're seeing less collection in our impact fees. The building fund proposed budget is at $17 million. Funding level will support 101 positions. The utility systems operating fund proposed budget, $154 million. The funding level will support 346 positions, including seven new positions for the upcoming year. Yesterday we did hear from John and Danny regarding the number of capital projects USD is currently managing and forecasting the city's growth is the main driver for the increased service demands and the staffing that is required to respond to community needs. The utility systems connection fees fund proposed budget is at $11 million. This will support seven FTEs. So that completes my overview of all of the departments and their respective funds. Now before I move on to the capital budget, are there any additional questions for operating? Okay. The proposed capital budget was tentatively approved by Council on April 20th. Today, I will highlight the changes to the proposed capital budget and request approval for the amended budget. The recommended budget, capital budget for fiscal year 27 is $229.8 million. Here we do have six individual capital improvement program funds. Due to accounting rules, stormwater projects become part of the overall stormwater enterprise funds. So the projects that are being funded by the stormwater fund, they have been reflected in the stormwater operating budget, so they are not part of the $229 million. On April 20th, the City Council tentatively approved a capital budget of $245.7 million. At that time when we made that presentation to you, we included stormwater and golf course projects just so that you would have the totality of all funding. The fiscal year 27 proposed capital expenditure plan is being recommended to $244 million. The significant change of $1.2 million is related to the deferral of 10 projects and the addition of one new project. As we mentioned earlier, with the budget having to change three times after the announcement of Amendment 3, the city manager and his team did have to make the decision on what projects do we need to pause on. So it's part of that step of identifying ways to reduce spending due to the potential property tax amendment. The top portion. These are the 10 projects that have been deferred. The total is $7.8 million. And we added one new project, which was PAR Savona and the DAR intersection. The projected cost for that project is $9 million. So with us reducing 7.8 million and then adding in 9 million, it was a change of 1.2 million from what we presented to you back in April.

Madam Mayor, I just have a question really quick in the sense of previous conversations and desire of counsel. WAY BEFORE THIS CONVERSATION OF AMENDMENT 3, COUNCIL HAS BEEN DISCUSSING HOW DO WE SHIFT REVENUES, RIGHT? BECAUSE WE'VE CONTINUED TO LOWER OUR TAX RATE AND WANT TO CONTINUE TO DO THAT, SO HOW CAN WE SHIFT REVENUES? ONE OF THOSE IDEAS WAS SPONSORSHIPS, AND WE TALKED ABOUT MAYBE PLAYGROUNDS GETTING SPONSORED, PARKS GETTING SPONSORED, AND I KNOW THAT WE PUT FEELERS OUT THERE. to the private sector, whoever in staff is in charge of that, have we had any response from the private sector to the feelers that we've put out and the requests that we've put out that they're interested in sponsoring some of these projects? I'm just wondering.

Not that I heard of anything at all whatsoever.

And I know we reached out to major companies, and not just in the community, but other companies as well.

No, I have not heard anything at this time.

i just wanted to make sure because i i these are projects like i i you would think machete park inclusive playground replacement the new playground there's a there's a company out there that says you know what i want my sign there and the council said we're willing to do that i just i don't think we've heard back from anybody and i hadn't heard back so if there's you know the council already approved this sponsorship if anybody would like to sponsor any of these projects that'd be amazing

Did you have something?

I was going to say, I know we had that engagement with superlative group. Did we ever, like, what happened after that? Nothing. Refresh my memory.

They didn't produce, correct? Correct. We no longer are working with the superlative group at this time.

No, I know that, but, like, did we move to work with someone else, or what's happened after we've kind of ended that engagement?

We have not gone out to work with the third party yet. We have worked internally on sponsorships. We mainly focused on it this year on special events where we were able to bring in some sponsorships like we did for the 4th of July. And that's where we've had that. And then we've had some minor sponsorship requests from small local businesses that want to participate, but not at the level that Vice Mayor was thinking of.

OK, but we can still do stuff without engaging in third party. We don't need that to move forward. I just want clarification. Thanks.

Anything else? So you're asking for approval of the capital budget? So moved. The amendment.

So we do have seven action items that we will be requesting at the end of the presentation, and this is one of them, one of the seven. So we've got it all organized for you at the end. Okay. But thank you. Due to the time and required coordination to meet an early July publication date for the proposed budget book does reflect a 5.45% increase in city taxable value. Since the timing of us pulling together the proposed budget book, the county property appraiser has certified city taxable value increase over 2025 is at 8.36%. This means ad valorem revenue is increased by $3.5 million. The city manager is recommending the additional funding be set aside in reserves to help offset a potential reduction in revenue for fiscal year 27-28 should Amendment 3 pass in November. The total proposed millage rate is maintained at 4.9750. So this concludes my budget presentation. And before I read staff recommendation for city council action, I'd like to take a moment to share with all of our viewing residents here and those online about upcoming key budget dates. In September, there will be two budget public hearings with the City Council. The first one will be on September 14th, and the second one will be on September 28th, so those are done prior to the adoption of the budget. Council, do you have any additional questions before we proceed with the recommendations?

Any questions? No. No.

Nope. Okay. Oh, so we have a total of seven recommendations. So, Madam Mayor, I can take them. You want me to read them one at a time and then allow discussion to happen and vote? Okay.

Yes, let's go. Fair enough. One at a time.

Yes. All right. The first one, we asked City Council to formally set the preliminary millage rates. This is the millage rate that the city cannot exceed and will be used for preparation of notice of property taxes, which will be prepared by the property appraiser. The operating millage rate of 4.6607, which is the same as the current year rate. DEBT SERVICE MILLAGE OF 0.3143, WHICH IS THE SAME AS THIS YEAR'S RATE. THE TOTAL MILLAGE TAX RATE WOULD BE 4.9750. OKAY.

COUNCIL DISCUSSION.

WHO WOULD LIKE TO START? I'LL START. I HAD GIVEN A BREAKDOWN OF DIFFERENT, TO YOU, PASES REGARDING TO SEE WHAT THE INCREMENTAL, IF WE WERE TO REDUCE, HOW IT WOULD AFFECT.

I THINK WE HAVE A SLIDE THAT WILL SHOW THAT INFORMATION. I THINK YOU ASKED FOR .002. .002.

Well, I did two different scenarios. And this was on the operating budget. And just to put it out there, I'm for some type of reduction, something. I don't want to stay flat because it's an increase anyway. So I had asked for a couple of different scenarios.

Okay. So before we go through scenarios, let's just take the pulse of where everyone's at, and then we'll talk about the scenarios. Who's next? Who would like to speak? That's not it.

After talking with the manager, I give it a lot of thought, and I would love to see at least a tenth of a mil reduction. Okay. If that's the temperature of the council, then so be it. But I'm with Councilwoman Morgan. I don't want it to stay flat. I want to see some sort of reduction.

Okay. Councilman Bonner.

Thank you, Madam Mayor. Well, you know, I too would like to see a reduction in the millage. I think one of the reasons I'm so proud of Port St. Lucie is the fact that, you know, there's a lot of folks that are going to talk about the rollback rate. And the rollback rate is a great headline. but we have delivered something much better than the rollback rate. We've stayed disciplined, we've stayed ahead of the game, and we have consistently cut the millage rate year over year over year to be the third lowest city tax rate of the top 20 largest cities. You look at some of these other municipalities in the area that may be going to the rollback rate. If they had done the same decreases that Port St. Lucie has done year over year over year for the past decade, their millage rate today would be lower than it is at their current rollback rate. And so Port St. Lucie has done the hard work. You guys have sharpened the pencils. It's you, the staff. And part of that is because we've put reducing the millage rate in our strategic plan. It is still part of our strategic plan. We're delivering quality services. And so I think we do have to do something. The rollback rate, we can't do that. If we had done the rollback rate every year for the past decade, I think I'd run a model and our millage would be like 2.6 or something crazy. So that's why the rollback rate is a great one-year headline. But it ultimately results in higher taxes. The way to do it, especially in a growing city, is to incrementally reduce the rate and always keep the taxpayer in mind every single year. So that's kind of where I am on it.

Thank you. Vice Mayor?

Thank you, Shannon. I agree with my colleagues. I mean, we've lived in Port St. Lucie together for a long time, and I know when I moved to Port St. Lucie when I was a kid, my parents didn't move here because they were wealthy. My parents moved here because Port St. Lucie was affordable. And most people that move to Port St. Lucie is because it has been and continues to be one of the more affordable communities in the state of Florida in comparison to even our nearby southern partners. That's why people have moved north. And so affordability in Port St. Lucie has never been far from mind. It's never been. So as we have lowered our millage rate, and please, Shannon and Stephanie especially, if I'm wrong about my history and my reflection of history, please remind me. When we've lowered a tenth of a mil annually every year, it was because when we have increases in the budget, we recognize that there's a balance. There's a balance, and we need to make sure that we're checking that balance. We need to make sure that we have roads addressed. Police address. Any park needs addressed. Sidewalks addressed. All of these items, but we never have forgotten in the 10 years that we've been doing this, that at the end of the day, some of this money does have to go back to the resident as well. Because that is also part of the balancing act. And we have been consistent on that, so consistent and so successful that according to our staff and that budget book, because we've done it 10 years in a row, 25% of the budget has been lowered. And because of that, we continue to have growth because we have been affordable. Because of that, we have an excess. we have this excess we need to make sure that we're addressing projects because i understand mr city manager you want to put the rest in reserves to ensure that we have the ability to pay for projects outstanding if this was to pass i understand that but still regardless of whether that decision was today or tomorrow i really believe that we give a tenth of a mill back we stay consistent within our budget because i feel like we've done the right thing I feel like year over year, reducing our budget, not because someone is telling us to do it in another place or in Tallahassee telling us we need to do it. It's because we've done it because the city, our council, and previous councils always believed in doing the right thing. And so I want to stick with what we've always done, what we know that works, what is consistent, what is right, and I want to lower the budget, and I want to lower it by a tenth of a mil. And then if this council, we can discuss what the remainder is and what we want to do with it. I would like to see a little bit to repaving. I am concerned about the condition of the roads. Not necessarily, Mr. City Manager, that we assign it to repaving, but maybe have it earmarked that as Public Works does their assessments, if there's things that need to get addressed, immediately we're able to address it. But if the council desires to put the remainder in reserves until November, then I'm okay with that too. As long as after November it does come back for council for discussion of what those funds are going to be utilized for, I'm okay with that. Thank you.

Thank you. Okay, let's look at the scenarios. We have been very consistent in our conversations in the past about balancing out our needs, but also making sure that we are giving back to the residents. So whatever those scenarios are, can we pull them up?

Sure.

So, Madam Mayor, I'm not sure if we want to consider the crosstown millage reduction rather than the general fund because we'll have left impact if we were to move forward November 3rd.

It just depends on the bond. Do we have the information with regard to crosstown millage versus general fund millage? Because typically we look at both of those. Yes.

No, I got it.

What we may be able to do with regard to or afford with Crosstown, because there is debt there that has to get paid back? Yes. Yep.

So in looking at our military scenarios, the first one is looking at a .005 reduction. This would be a reduction of $132,143. Looking at 200s, 0.02 would be a reduction of $528,574. Looking at 0.0250 would equate to a $660,717. A tenth of a millage reduction would be a reduction in revenues of $2.6 million.

But if we have $10.4 million that you're asking to put in reserves, that would actually put $7.7 million, essentially, correct? Instead of the $10.4? Where's $10.4? It's on the last slide here. It says...

Oh, for putting aside into the reserves. So, yes, just a reminder. The reason why the city manager recommended the reserves was, of course, for November. We mentioned earlier on that if November happens, we're going to have to identify 26 million dollars in reductions. So by placing the overage in reserves, that would allow us to offset that reduction. But even after that, we're still going to have to identify additional cuts. So that's why that was that recommendation for reserves.

Madam Mayor, Vice Mayor, I would not recommend touching that $10 million. Because if that were to pass come November 3rd, 4th, that's a $20.25 million impact. on year one. The reason you have that is because of all the cuts that I've made affecting the police, affecting parks. So what I would do, I will come back to the council come November, depending on what happens, and probably reinstate some of these positions that were cut. So if we start pulling out of that funding, then you're really going to be leaving the department short.

What's on the screen here is general fund. We're not talking about Crosstown right now, correct?

It's either one. It's just what is the value of it. We have to decide how we want to split it. We're just giving you the dollar amount associated with each reduction.

So we need to know if we're going to – we've always considered them separately in looking at what we need to do. So I know that we can only afford to do so much in the Crosstown fund. Because we have to make sure we pay back the debt and we have enough money for that. And then we have to make sure the reserves are there for what is required. So we need to see what we can do cross town and then what we can do general.

Correct? Am I wrong?

This is what we've done every single year.

But typically, we'll take a 10, 15-minute break. We'll go ahead and look at the crosstown, see where it is, and see what the difference would be. Take the general fund, see what the millage is, and see what the reduction would be.

Yeah, let's do that. We're going to take 15 minutes, get up the crosstown, and look and see what we can do combining the both together.

Thank you.

Okay, let's continue on with our discussion.

All righty. Thank you, Madam Mayor. So during our break, thanks everyone for your patience. We did run a couple of additional scenarios, which I will walk us through. What city staff heard was we wanted to see the options for a tenth of a reduction. So at 0.1, this is what we are illustrating. Column A is the total taxable value properties. Our current millage rate is on the operating side is 4.6607. That makes up our general fund as well as our road and bridge. We're offering to split the reduction of a tenth by 0.04 on the operating side. That will bring down the general fund from 4.2991 to 4.2591. On the road and bridge, we would maintain the road and bridge at 0.3616. The new millage rate would come down to 4.6207. On the crosstown side, we're suggesting a 0.06 reduction. That takes the millage from 0.3143 to 0.2543. THE TOTAL REDUCTION FOR BOTH OF THOSE ON THE OPERATING SIDE WOULD BE ABOUT A LITTLE OVER $1 MILLION.

So for the news back there, Port St. Lucie is reducing taxes by a billion dollars.

Oh, gosh.

If you can make sure that's in the headline.

There we go. Doing some quick math here. All right. All right. Or was that one already correct? That one was already done.

All right. That one was that one. Okay.

So for the general offer.

I'm sorry. Up at the top left, it's showing $26 billion. Okay.

Yes, so $26 billion is the total valuation of all properties in the city. Okay, thank you. And that is what is used to determine our revenue. So the millage rate times the total value, then divided by 1,000 is how we determine what our revenue would be. Okay. So earlier on, we stated that the certified taxable value of properties in the city is at $27.7 billion. We are using $26.4 billion because that is at a 95.5% collection rate. Although we send tax bills, we don't necessarily collect all of it.

Correct. That's standard of how it's always been done, correct?

Correct.

Yes.

So is the number under current operating correct being 123 billion? It should be divided by 1,000.

Yeah, that one should be divided by 1,000 as well. Right, so this is the first scenario that we ran. The second scenario is a 10th of a millage reduction as well. However, here are split is different. We are splitting the proposal for the general is at 0.05. And the split for the crosstown debt is at 0.05. AND WE HAVE SOME FORMULA EDITS TO DO. I think I do. That needs to be... Bear with me. Did I get it? Nope.

That one doesn't need a formula.

No?

So that one's good.

No, no, no, no, no. Okay, this should be 1.3 million. Oh, that one on the left. It's that one. It's off? Okay.

Yeah, you can divide by 1,000.

Okay, and so then this one needs to clear out. Yeah. Okay. Thank you for your patience. In splitting the 10th reduction by .05 for both the general operating and the crosstown, we are looking at a reduction in the general by $1.3 million, as well as a reduction in the crosstown by $1.3 million. So we did those two scenarios. We also created a scenario looking at a millage reduction of 0.08. This is the same as the reduction that we did last year. Last year, the adopted budget included a reduction of 0.02 on the general operating side, and then a reduction of 0.06 on the crosstown side. So we ran that scenario. The total reduction on general would be $528,000. And on the cross-time, it would be about $1.6 million. And the reason for us looking back to see what we did last year is because what we're seeing that in recent years that our taxable valuation, the percent increase has been going down. So with the increase going down, we've been reducing what our millage rate has been. In prior years, we were able to reduce the millage rate by a tenth or above a tenth. And then last year, we started decreasing. reducing our reduction because as we are looking forward and thinking about the possibility of a reduction in our year-over-year increase in taxable valuation.

So what you're referring to is I think last year it was around 12. The prior year was around 15. This year is 8.48. So that's what you mean to be more specific. So there's a better understanding of that. That's going down. Correct. Okay. I just want to make sure. Yes.

Thank you, Madam Mayor. Yes. Your explanation is clear.

Okay. All right. The proposed is still up to. Where it says 122, 647, 475. Wait a minute, sorry. There you go. Thank you.

Okay. All right. So? So I have a question. The crosstown

What is the current outstanding debt? What is the annual payment? And then also how much for maintenance?

Sure. So our annual payment on the crosstown is about $8.2 million. So with that, in all of these scenarios, We're seeing with the reduction in crosstown, we're not going to be able to bring in enough to pay for the debt. So we would have to dip into the reserves for payment. Of that $8.2 million, the reserves for crosstown is at $12 million, so we would be able to meet that requirement for the first year. The payoff date on the crosstown debt is 2030. 2035 2035 2035 and do we have the balance?

Isn't it like 85 million, I think, something like that? We had it in the investment conversation.

Is it in the budget book? The budget book?

It's 71 million.

Seventy-one million?

Yeah. Seventy-one million balance. Okay. So could you scroll up to where it says the .05 and the .05? So the crosstown would bring in seven. We would be short for the payment of about 1.2, which it could come out of the crosstown reserves.

Correct. There's about $12 million in there right now.

And those reserves are there for?

To cover one year of payment. And then the rest of it is just additional interest over time that's accrued. So right now we have $12 million in there. The payment amount is $8.5 million.

Okay. All right. I like this one or the one above it.

I do want to say that I think if we go this route, I would highly recommend next year if, depending on what happens, you know, November, that we – let Crosstown breathe for a while just because we don't know the rate of growth that's going to anticipate year over year after this on this trajectory.

So I'm okay with that. I have a question that was, I'm sorry, Stephanie, I didn't mean to cut you off. Are you done? I didn't, sorry.

Go ahead.

So The options were... Can you scroll up? If you could scroll up one more time for me, please. So 0.04, 0.06. Yeah, I don't like going that deep into the... I'd rather leave the Crosstown alone. But if we're going to get to a tenth of a mil, which it seems like a majority are in favor of, I would probably lean more towards this one, the 0.05, 0.05. Okay, I'm done. Thank you. Jolene, go ahead.

Sorry. I'm okay with that. I just think that this is, and this is where I think you and I discussed that, Casey's depth. It's, we've reduced the millage a tenth of a mill year over year, except for I guess now it's 0.08 last year. I almost want to be like, we're splitting the baby with the bathwater. At least we're making up that 0.01. But my concern, obviously, is that the fact that we've reduced the 10th of mill, 10th of mill, and obviously we can't reduce it forever at some point in time, we need to figure that when the best time to hold. And for me to feel comfortable doing that, I really want to make sure that next budget season as we go into these conversations, is just that discussion of when it's going to be the good time to hold. We meet with our analysts and our different partners to really look at that. Because obviously, once the city is built out, that's going to change things. We'll still have maintenance. And I was just explaining to this. We don't get money for maintenance from the federal or the state government. If you have a new build, you might get a project. Developers are not going to be building if we build out. So we won't have additional new revenue coming in through the mobility unless it's a redevelopment project. And so we'll be losing the ability to actually deal with new projects and those kind of things as much as we do today. So I just want to make sure that we figure out where is the best place to hold so we don't end up having to raise it. Because I don't want to end up in that situation.

No, absolutely. And staff is constantly looking at that. Just the past two to three years, we've benefited from the extreme growth as we've seen in the city. And with that, those new rate payers have been coming in and allowed us to have that benchmark where we're at that 12 million mark. Whereas if it had been historically where it was just a straight line across, we'd only have that $8.5 million in that reserve.

So the new growth has enabled us to do the projects that we've desperately needed to do. But it's important also to point out that it doesn't pay for itself.

Correct.

Because if it did pay for itself, we wouldn't be in all the positions that we're in, correct? That's correct. Right? And not only that, but- We have to be careful how we say that.

Yeah, and the growth has allowed you to be able to staff, to be able to keep up with the demand, to be able to provide the safety that the citizens need by having that increase.

Right, and that's important to point out. We can run like a business as much as we want to, and which is very important. However, as we've talked about many times, we don't have products. We don't make profits off anything. And the majority of our services are personnel, people actually providing the services, doing the work. in our organization.

I think personally, just so you know, I think going to a .10, I think it's a little bit too much. I think you're going to be forcing the organization, if this were to pass into our third, to really struggle with the service that we have to provide. And, you know, I wish it would have been flat. I understand we should lower it. I think we made a commitment to our residents to continue to lower. But there's only so much you can squeeze out of an operation in the business of this magnitude. We're looking at a billion dollar operation that we have here in the city. And the demands for first services increase every single day. And, you know, I just hate to see what the city would look like continuing to lower the millage rate, which I don't have an issue, but I think it needs to be slowed down somewhat. And do I like the fact that we can lower it 11 years in a row? And can we justify it based upon the growth? Absolutely. But going to .10 in the situation, the unknown that we have in front of us, I think it's a chance that we're taking right now that shouldn't be. And bottom line is that if we want to do better next year, we can. There's nothing stopping us from making up the difference. But this year, with the unknown that we have, I think it's very difficult to swallow. Thank you.

Thank you. Can I just make a – but it's not .10. It's .05 for the general and .05 for the crosstown. It equals 0.10. But if we were going to do 0.10 for the general, it would be a lot different.

So I was going to say, I was like, hey, Suisse, I hear you. I mean, I know, I understand. We run a lean organization. We can say it 100 times, and it doesn't mean that people are going to believe it. But we do. We run incredibly lean for an organization. We run below normal staffing levels of most organizations. We have been working with less for a long time. So I understand where you're coming from. I think that despite the uncertainty, I believe that the commitment's important, and I believe that I have to trust our residents to understand these challenges and make their decisions accordingly. The only vote I control is the vote I have right here. I don't control how they're going to vote in November. I don't control what decisions they're going to make for their own household. I can only control this right here. And, you know, for me, I have to... continue to hope that people will learn more about this, how it's going to affect them personally in their daily and day and out life. I will continue to share the story of what their city has prepared for them because we want them to have a high quality of life and for them to live here, to raise their children here, to raise their grandchildren here. We want to create a beautiful environment for um for our residents and we're going to continue to provide that and i have to trust that you know that story is going to hopefully win the day um you know when the discussion comes forward of the decisions that have to be made you know and i um i know that if if it was to pass we're going to have very hard decisions to make next year But I'd rather deal with the certainty of that than not make a decision that I know is right for the uncertainty of today. So I appreciate all of the hard work that staff does. I appreciate all of you sharpening your pencil. I appreciate you working with more work and less resources. And we're going to continue to work as a council on innovative ways to make it AS WORKABLE AS POSSIBLE WITH THE CONSTRAINTS THAT YOU HAVE AS WELL AS TRYING TO FIND A WAY FOR THE PUBLIC TO ALSO CONTINUE THE HIGH QUALITY OF LIFE THAT THEY EXPECT WITH AN AFFORDABLE TAX RATE AND AN AFFORDABLE PAYMENT. AND JUST ONE OTHER THING I WANTED TO TOUCH ON TOO IN THE SCOPE OF THE CONVERSATION IS WE ONLY CONTROL THAT RATE THAT WE SET. WE DON'T CONTROL THE FORMULATION OF HOW these items are collected. And so sometimes I do. I'm in the grocery store, and I'm shopping, and someone comes up and says, you raised my taxes by X. My bill went by this to this. And I have to try to explain to them, it's kind of like, this is the money that we need to pay all the bills with, and this is the line that I have to use to pay the bills. I don't have the ability to go in and check. There's no way. That's not what we do. We can't go in and say, this individual's paying more than this individual. they bought their house this day i mean there's a lot to this discussion that we don't control and so um as always i know we're welcome to to educate individuals of how the process works but you know this is what we can control and hopefully i know it's not going to be enough for some people but i hope people see that we're trying to make as much effort as we can thank you

So can you look at the choices and determine which one that you prefer so we can get it with what comes from working half and half?

Okay, next.

Thank you, Madam Mayor. This is like deja vu for me. So eight years ago, I was serving on a county commission. There was Amendment 1 on the ballot, which was $25,000 additional homestead exemption. There was uncertainty on the future of the sales tax. And there were other funding demands, like school resource deputies, et cetera. And it was a very stressful time. There was a similar environment, similar concerns that I've heard over the past couple of days. At the same time, I had also learned that St. Lucie County had the highest aggregate millage rate in the state. And trying to balance those two things as someone who had never stepped into a local government situation before, how do I address the fact that the county had the highest aggregate millage while also hearing these very real concerns about potential losses of revenue? Ultimately, I proposed a 20th of a mill in property tax reduction for the general fund, 0.05. And it amounted to about a million dollars in property tax relief. And I didn't have anybody there that was supporting it. So different environment there. But when the final vote came, ultimately I was convinced that we should hold off for a year and we should leave the millage rate the same. because of all of the uncertainty. And it was honestly one of the biggest regrets that I've had because I didn't really hold the line and I didn't really continue and push forward with something I thought was right because of the uncertainty. And what happened the next year? Well, that property tax amendment that everyone was concerned about didn't pass. The sales tax that was so important did pass. There was solutions for the school deputies that no longer required the county to fund them in a way that they had been doing. Property values continued to go up. And I was no longer on the commission, and they didn't reduce the tax rate. And I'm not going to be here next year. I can only make the decision that I have to make today on the information and the facts and the environment that we are in today. And so this time, I am going to make the decision to support the half and half. Sorry for going on and on, but I kind of wanted to walk everyone through. I wanted to walk everyone into how I arrived at the decision and why. It's not a decision I made lightly. It's a decision I made based on history and based on a core belief that I believe in what this city does. I believe that this city's incremental approach to tax relief is a model for the state of Florida. It's a model for Saint Lucie County. It has produced the lowest tax rate possible. And that if other organizations had done the same thing that we're doing. We wouldn't be having amendments on the ballot because property taxes would be at their proper level. Thank you.

Thank you. Councilman Pickett, Dave.

Thank you, Mayor. I'm sitting here looking at the two scenarios, and I'm back and forth between both of them. I can control what I see right now. I can't control the uncertainty of are the voters going to approve a tax cut or not. So I want to deal with the here and now, and I want to support the half and half.

Okay. Thank you. All right. I will also support the half and half with the rest of the council. So can we go over what the millage rates would be, please? Because I know we're going to have to set each one of them and then set the total millage. So can we have that? Sure. Based on the decision of the council so far.

Sure. So that would be reducing the, sorry, the operating millage rate would be set at 4.6107. Okay. Which is a reduction of 0.05 to the general operating rate.

Okay. And then Crosstown or debt service millage? In Crosstown, debt service. Is it .2643? .3093. 43, yeah.

That was 0.2643? Correct.

And our total is? Our total would be? 4.875? Correct. Okay. OK. So is there a motion to set the operating millage at 4.6107? So moved.

Second.

Motion and a second. All those in favor? Aye. Any opposed? Motion carries. Is there a motion to set the debt service millage at 0.2643? So moved. Second. I have a motion and a second. All those in favor? Aye. Any opposed? Motion carries. Is there a motion to set the total millage at 4.875? So moved. Second. I have a motion and a second. All those in favor? Aye. Any opposed? Motion carries.

Okay.

We're on to action two, tentatively approve additional staffing level recommendations for the utility systems department. Is there a motion? So moved. Second. I have a motion and a second. All those in favor? Aye. Any opposed? Motion carries. Okay, action three, tentatively approve the proposed operating and amended capital budgets for the next fiscal year. I'll go ahead and make a motion. Second.

A motion and a second. Just under discussion, Madam Mayor, that the remainder, because we had the remainder that's been decreased, will be moved into the reserves, correct? Yes. And I just wanted to clarify my motion on that.

Yes, thank you for that. Since the change. All right. Any other discussion? All those in favor? Aye. Any opposed? Motion carries. All right, action four, set the water rate 3.5% increase, which is $1.98 a month for the average user, and no sewer rate increase. Is there a motion? Motion to approve? I have a motion and a second. Any discussion? All those in favor? Aye. Any opposed? Motion carries. Action five. The solid waste rate, this is an increase of 14.83 cents a year for a new annual rate of 482.16. And that is as a result of the CPI increase that is a contractual obligation. Is that correct? Correct. Under the contract with FCC?

Correct.

Okay. And as we have previously discussed and voted, there will be credits associated with the $24 million settlement that has already been determined by the council. Is there a motion? So moved. Second. I have a motion and a second. Any discussion?

Just really quick, because this is an opportunity to discuss it, just to say it, is... Correct me if I'm wrong. When they get their bill, they're not going to see the decrease on their, when they receive their property notice. Trim notice. The trim notice. Thank you. I was trying to think of the word trim notice. When they receive their trim notice, they're not going to see the credit. So they should not be alarmed. The credit is going to be on the final bill.

Correct.

Okay. I just want to make sure that that's clear.

Yep. That's correct. It'll be on the tax bill in November. Yes. The credit will be on the tax bill in November. Correct. Okay.

Because I don't want everyone getting their trim and then saying it's not on here. Right. All those in... Did you have something, Anthony?

I'm sorry.

I was just going to say, wasn't there a discussion of some characters or something for one of the line items that we had? That's right. Because I think if... we send out these trim notices and there's nothing in the characters that indicate the credit is coming there's going to be mistrust people are going to say we see we see we told you the city said they were going to give it back and they didn't give it back look here's the proof on my trim notice so i would like to see you know i know there was a discussion of 60 characters or something we had but where did that end up

Madam mayor, mayor, council. So yes, um, we are, there's a couple of things that staff is doing right now that we will have a flyer that will be mailed out to everyone explaining what the credit is and how they're going to see it in the property tax bill. And in the 40 characters we were able to put in there, um, does not include credit. And then our, a number one PSL, I believe is what was there. Cause we couldn't put all the things we would like to say in there. But the flyer is going to follow the trim notice so that they're aware that the trim is not going to show the credit, but when they get their tax bill, it will.

Yeah, so when people get their trim notices, they're also, at the same time, they're going to get a flyer from the city explaining that it won't be in the trim notice, it'll be in the tax bill. Correct. Because we couldn't.

Okay, and then just on the line, I mean, is it plain English? Is it something like doesn't include Waste Pro Credit or something that people are going to understand? Because you can be very blunt with those characters. I think, as was brought up yesterday, we need to be more plain English instead of, government speaks. So did we finalize that yet or how did that?

We do have that. I don't have it in writing, but I believe it says it's in pretty plain English.

I believe it said one time solid waste credit not included or something like that. It was very plain. Okay.

So, sorry, because I'm like thinking that might be a problem. Because even though we know what that means and someone says that, you're going to have people saying, see, they're not going to do the credit. It does not include the credit. They're not doing the credit. So there's a disconnect there. I can see how that can be confused. My question is, I know that we've done, this is just food for thought because I think we can continue to massage this. Can we continue to massage this for a minute? Or are we going to have to do this today? We can come back another time to discuss this, maybe at the next council meeting, too.

For the solid waste?

Yeah, for the wording.

So I think our dilemma.

So just hold on a second. What we're voting on is the increase. Right. So let's do that. Let's finish that vote, and then let's talk about the wording. Okay. So I just wanted to say something real quick.

So we don't mess things up.

All right. So we had a motion and a second. All in favor? Aye. Any opposed? Okay. Sorry. Now we can talk about the wording since we're here instead of delaying it.

I know that this might be a little bit of work, but this might help. And I'm just throwing this out there because I'm thinking of it. You know how we had a tab before that explained the solid waste issue when we were going through this initially? If we created even a temporary tab. Or a temporary website, you know, because we could do website names. We couldn't create a temporary website name. Waste Pro credit. W W Waste Pro credit city of PSL that's in there and they can go to that website to kind of see the credit to see what's coming. Because I'm afraid if we say not included. That word not included means it's not coming to somebody.

In the flyer, there is a link to www.cityofpsl.com slash credit. So that's on the flyer. On the trim notice, though, we were so limited, I think there's a phone number. We're going to try to get it.

No, I have the information here. Sorry.

Put those glasses on, Steven.

It says waste pro lawsuit, one-time credit, not shown, and it gives a phone number to call.

Not shown. Okay. Thank you. That's a much better term than included.

You guys did great. Yes.

Perfect.

Okay. Great. Thank you for looking that up, Steve. Thank you. For providing that clarification. OK, we're going to move on to action 6 stormwater rate increase of $6 for new annual rate of 195 for improved lots and 147 75 for vacant lots. Sir motion.

I have a motion in a second in discussion, so I just wanted to say on this in the past I have been a vote against this. However, and the reason I was was because we were one of the rates in the state and you know I just I wanted to make sure that we weren't just continually increasing the rate now as I've seen the latest rate studies it looks like there have been enormous increases across the state and we're no longer near the top and we have real needs and so I would be supporting it this year and I just wanted Because it's going to be inconsistent. You're going to look back last year, but no. But this year, I think the $6 increase is reasonable and prudent, so I'll be supporting it. I want to get that on the record. Thank you.

Thank you. All those in favor? Aye. Any opposed? Motion carries. Okay. Action 7. Well, street lighting, there's no increase, so do we need to take an action? Or just do we have to say no increase?

You're taking an action to authorize the preparation and advertising of it. So, yes, please.

Motion to approve.

Second.

Okay. Motion and a second. All those in favor? Aye. Any opposed? Motion carries. All right. Is that all we have?

Yes, Madam Mayor.

I think we covered all of our action items. All right. And our budget is online for anyone to see at cityofpsl.com forward slash budget. Okay. What'd you say? Oh, okay. All right. Ending comments.

Madam Mayor, just one other note. I know yesterday we went through some of the half-cent sales tax projects. I think formally I think we need to bring those half-cent sales tax projects probably on Monday's meeting. So we'll be having that discussion. I know you also want to know the estimated cost of those projects, so we'll include that part of that through a presentation at the end of the meeting on that. I just want to take the opportunity, really, to thank staff for all their hard work and everything that they've done to put this together. It was a very difficult budget, but at the end of the day, we got it done, and we're moving forward. Thank you.

Thank you.

Council, comments? I agree with you, Mr. Mario. I want to thank the staff for all their hard work. I know this is months in planning, so today is a culmination of everything that you've done, and I, for one, truly appreciate it. Thank you very much.

Just to thank all of the sacrificial ties and the scissors. And I have to say, everybody looks more relaxed. You still look professional with not having anything around your neck. But I appreciate you all. This is my last hurrah before I'm not going to cry. Before I ride off into the sunset.

So before you ride off into the sunset, Christina, can you get something for us?

And if everyone remembers, this was the representation of her during our strategic meeting because Stephanie wasn't able to join us for a portion of it, and so we all signed it. I wanted to give it to her in recognition of everything that you've done for the city. We love you. Thank you so much for everything. Hope you find this amusing because we had so much fun with you.

You better make sure Dave finds a good space for that to hang it up.

Yes, I will.

Awesome.

And anybody who took pictures, please send them to me so I can print them out and put them on display.

Thank you so much, Steph.

Thank you.

We love you, and we'll miss you. But you're not going anywhere yet.

No, not yet. We've got time, people. 16 days.

We've got time. What is it? Oh. THAT'S RIGHT. WE FORGET YOU'RE ON THE COUNTDOWN. ANY OTHER COMMENTS? ANTHONY?

WELL, THIS IS MY LAST WORKSHOP, TOO, AND, YOU KNOW, I REALLY APPRECIATE THE WORK THAT'S GONE INTO THIS. YOU KNOW, I CAME TO THE CITY ABOUT FOUR YEARS AGO. I WAS A SINGLE MAN. I GOT ENGAGED, MARRIED, AND HAVE FOUR CHILDREN. SO, YOU KNOW, LOTS CHANGED IN THOSE FOUR YEARS. This city is run incredibly well. It's run with heart. It's incredibly efficient. It's a model for the state.

And I'll take the nation too.

Yeah, it's a model for the nation too. And I couldn't be prouder of the city of Port St. Lucie. I couldn't be prouder of the work that you all do each and every day. And I just want to thank you. I've enjoyed getting to know all of you. And I know the work is going to continue well because you all are this organization. Thanks.

I've spoken enough. What?

Wait a minute.

Hold on.

Hold on. I've spoken enough. Can I report back? Yes, you can. Please do. Holy moly. I know I've spoken enough. Listen, I truly appreciate everyone just embracing that and understanding that everyone has their own way of doing things up here. But I'm going to keep this short and sweet. I don't have to tell you how much I love you. You know how much I care about you, Anthony. I don't even want to say how incredibly amazed of the things that you're doing. And I just know you're on to bigger and better things. And I'm going to always be there to support you. And to my bookend, there's only one way to end it. Ditto, ditto, ditto.

Thank you. So I want to thank everyone. I know that we're facing some challenges. I know how hard everyone works. And it's not just about the people in this room. It's about the other 1,450 employees that we have that work hard every day. And it is never, ever lost on me that The five of us council members can sit up here and talk all we want and say what we want and provide the policy and direction. But it is our hardworking staff that is out in the field, out in the trenches, out doing the job every day that implements all of our goals, our objectives, and our priorities for our residents. And it is also not lost on me that Our employees are our residents too. And when we're talking about it with heart, it's because our employees are our residents and they truly, truly care. All of you truly, truly care about what happens in this city. You're all part of building it, you're all part of creating it, and you're all part of making it happen every single day. I can't thank you all enough for that. There's no words that can ever thank you all for that. And it is my hope that our residents also recognize that We're not, you're not just a bunch of employees. We're not just a bunch of employees. We're people that genuinely love and care about the city. We care what happens to it and we care about its legacy and its future as well. So, but like anything else, we've had many challenges over the years and what's most important is that we face them together and we work together to work through them and figure out what's best and continue to move our city forward. So, again, thank you all very much, and we are adjourned.