City Council - workshop

Thank you.

Thank you.

Okay, let's try it again. Welcome to the 2026 Orlando City Council budget workshop today as we begin our annual budget process, which is one of our most important responsibilities as a city government. Our budget is more than just a financial document. It's a statement of our values. It reflects the services we provide, the investments that we make, and the commitments we honor on behalf of the people who call Orlando home. Every dollar we allocate represents a choice about the kind of city we wanna be, the quality of life residents want, and the future that we wanna build together. Over the past year, our city has continued to grow and prosper. We have welcomed new residents and businesses, expanded economic opportunities, invested in public safety, improved infrastructure, and we've strengthened the amenities that make our city one of the most dynamic and desirable places in America to live, work and play. These accomplishments are the result of thoughtful planning, responsible financial stewardship, and a shared commitment to serving our residents. But as we begin this process, it is important that we speak honestly about the challenges that may lie ahead. For decades, Florida cities have operated under a partnership with the state that recognize the importance of the local government's play in the daily lives of residents. Cities are where people experience government most directly. We maintain roads and sidewalks. We provide police and fire protection. We operate parks and ball fields, community centers, and after school programs. We invest in housing, homeless initiatives, transportation, business development, and quality of life improvements that make our community stronger. Today, however, that partnership faces growing uncertainty. in tallahassee there's an increasing action to drastically change florida's property tax system with an amendment on the november ballot this change would dramatically reduce local government's most important important and most reliable general revenue source without providing a sustainable replacement it will have a real consequence for cities and residents that we serve property taxes are not an abstract funding source they pay for police officers who respond to the residents who call 911. They support firefighters and paramedics who arrive during emergencies. They maintain our parks, keep our neighborhoods clean, repair our infrastructure, and fund many of the services that residents rely on every single day. If substantial reductions in local revenues are enacted, cities like Orlando will be forced to make some difficult decisions. Current future city leaders will have fewer resources available to maintain existing service levels. Projects that improve our neighborhoods may be delayed or eliminated. investments in parks transportation housing public amenities could be reduced programs that residents value may be scaled back and that is not a prediction not a wild alarmism it is simply the reality of municipal finance no different than your household budget every dollar removed from local government revenue is a dollar that can no longer be invested in local priorities unless an alternative funding source is identified there's no way around this basic fact As mayor, I strongly believe in government efficiency and fiscal responsibility. Orlando has demonstrated both year after year. We have maintained strong reserves, earned high bond ratings, and managed tax dollars carefully. and we will continue to look for efficiencies and opportunities to do more with less. But efficiency alone cannot offset major structural reductions in local revenue. As we move through this budget process, we must prepare not only for the year ahead, but for the possibility of significant changes in the years to come. That means making prudent decisions today and protecting our financial security. Over the next few months, we must help all of our residents learn more about our budget and understand what is at stake. Our communications team is starting to plan educational opportunities for our community because everyone must recognize that decisions being made by the voters in Orlando and around the state will shape our operations as local governments for years to come. With that in mind, I would like to call on our CFO, Jose Fernandez, to start our budget presentation.

What's up?

Okay. Good morning. Thank you, mayor. Good morning, mayor. Good morning, commissioners. you guys had a great weekend thank you very much for the opportunity to present the proposed budget for fiscal year 2027. jason will be sharing the proposed budget with you in a few moments however before jason presents the budget i want to take a few minutes to provide a brief and quick update on property tax reform what i hope to do is i want to discuss what the legislation does i want to discuss the financial impact to the city what the Sorry about that. What I'm going to discuss is what the legislation does, what the financial impact is to the city, what the financial impact means, examples of what could be impacted if property tax reform gets approved by the voters, and then what we can do now to start preparing for it, and then what we can do moving forward. So last month when Kyle did his legislative update, he provided some information on property tax reform. Sure. sorry um well last month last month um when kyle did his presentation on proper on um legislative legislative update he provided information on property tax reform so i just want to take a quick moment and run through these quickly um if approved by the by the tax by the voters um what will happen is in 20 fiscal year 2028 the exemption will go from $50,000 to $150,000. In fiscal year 29, the exemption will go up to $250,000. I'll skip the third one for right now. It also reduces the non-homestead property assessment increase from 10% to 5% per year. And then it'll adjust the homestead exemption for inflation effective fiscal year 29. And then for non-permanent Florida residents who are not residents as of 12-31-2026, they'll have to wait five years to be able to get the full $250,000. For the first five years, they'll only receive $50,000. And then it requires 60% approval by the voters. I wanted to highlight the one that's bolded. That's the one that gives us heartburn or gives us concern because of how vague it is and the uncertainty with it. We know what's going to happen in 28. We know what's going to happen in 29. We don't know what's going to happen after that. We don't know if that's going to be done over one, two, three, or four, or five years. So that's one thing that if it does get voted and approved by the voters, we do want to keep an eye on that to figure out what the phase-in period is or the phase-out period, depending on how well you look at it, to make sure that the longer period we have to implement it, obviously, the more opportunity we have to respond. we respond to it better the shorter window that we have then the more impact it's going to have to us and the more difficult it would be for us to respond This is a graph that shows the city's composition or makeup of homesteaded properties versus non-homesteaded properties. And as you can see, about 19% of our property tax revenue comes from homesteaded properties and approximately 81% comes from non-homesteaded properties. Now, you know, it seems like a small number, but 20% of $360 million is a substantial amount of money. And then this is just a comparison of that same breakdown or composition of homesteaded properties versus non-homesteaded properties. And as you can see, Orlando fares very well. We're at the bottom compared to some of the other cities who are in the 40s and the 30s. So all things being constant, you want that portion of your property tax revenue related to homesteaded properties to be as small as possible. So how would the city's property tax revenue be impacted? Based on the estimates that we have in fiscal year 27, 28, we expect it to impact us by about 30 to $35 million of revenue loss. So for that first year, we would see a drop in revenue related to property tax of about 30 and 35 million. In fiscal year 2029, when the exemption goes up to 250, in that particular year, we expect cumulative, which means the same $30 to $35 million that we lost in 28 will carry over in 29 because we don't have anything to make that up. And then the additional that gets us to the $250 exemption takes us to a loss of about $40 to $45 million. Over the two-year period, it's between $75 and $85 million. So how are we preparing to start, hopefully, if we have to address this, how do we start doing it? Well, one of the things that we've done is we've been very, very, very restrictive with adding new positions to the budget. You know, our personnel costs, you know, are one of the highest costs that the city has as a city. And the issue with personnel costs is once you bring somebody on board, you know, it's a recurring cost, you know what I mean? A cost that goes up. So we worked with the departments to make sure that this year, the only staffing that we added was for public safety. Historically, we have been, you know, we've been adding more offices to address growth in the Southeast. Um, but on the proposed budget only is adding nine for OPD. This represents significantly less than requested by the police department of the nine officers. And I don't, I don't wanna go into great detail cause Jason will, but, um, of the nine officers, um, there's five police officers, two lieutenants and one sergeant and one communications division trainer. The sworn staff are to support growth and the communications division trainers to support the division with recruiting and retraining division. If you take out the 36 for OFD or for a new fire station and one is for EMS transport manager to help build the civilian paramedic program to make sure it's successful and we can train people and manage people and have that program be very successful. If you exclude the additions of the position for police and fire, there was actually a decrease overall in general fund position. So the only reason we're showing our growth is because of the additions that we have to police and fire. So to help us manage growth, we track and compare budgeted positions to population growth. More specifically, we track general fund positions per 1,000 residents. As you can see from this chart, for all general fund positions, while we may have fluctuated slightly, we have hovered on an average of around 8.2 to 8.3 employees per 1,000 residents. It peaks in FY 2025 and starts to flow back down to the normal average. When you start with FY 2027, which includes the proposed positions for fire and police, and consider not adding any new positions in future years, the ratio starts to quickly decrease. Not adding new positions to accommodate growth will probably result in service impacts. You know, so examples could be police response time. It could be operating hours at a park facilities. You know, if you just take a step back and look at the services we provide as a city, you know, and the magnitude of that, you know, when that ratio starts declining, that means services will be impacted. This chart looks at all general fund positions and includes all departments. So the decreases will have an impact on services across the city. And what isn't captured by the chart but it's worth noting is that one of the initiatives or one of the recommendations that we're going to make is that we have a hiring freeze. So this is based on budgeted positions, which means it assumes that positions will get filled. So if you factor in the fact that we're not going to add positions and we're not going to fill positions, then this would really taper down even quicker. So what does it mean to the city. What could be impacted. And this is a non exhaustive list and it's just example of potential areas of service. And I purposely presented them alphabetically. So you know if you see there's a project that's that's near and dear to your heart you know it's not something that we're considering impacting is just a list of projects. So you can see you know how vast and how broad you know and how it touches everything in the city. Here is just the same thing, the different things. And as you can see, they're from not funding capital requests to payment rehabilitation to recreation center, pool maintenance. It's just a variety of services that either the city provides, the city purchases. Or in some cases, their funding that the city provides to organizations that provide services to residents and businesses of Orlando. So how is the city preparing? on an annual basis as part of our budget process we evaluate the surplus from the general fund and make recommendations as to where to allocate surplus at the year at year end to assist in offsetting the impact of property tax reform if there is any surplus at the end of fiscal year 2025 we're recommending that we establish and fund a property tax reform stabilization fund The fund will be used to help fill the funding gap caused by the implementation of property tax reform. When the mayor earlier said that we have to make decisions now that affect us in the future, doing something like this aligns with that. We're setting aside, we're prioritizing impacts of property tax reform by establishing the fund and then having a forward looking perspective. Another decision that we can make today that will impact years is implementing a hiring freeze initiative during the current fiscal year. This initiative will require all vacancies to be evaluated, determine whether the position should be filled. It should be implemented immediately after the process is discussed between, you know, it will be a collaborative effort between the CAO's office, the mayor's office, human resource department. The initiative will not apply to enterprise funds. AND IT WOULD NOT APPLY TO ANY FUND THAT FUNDS ITSELF, FOR EXAMPLE, THE BUILDING DEPARTMENT. SO IT WILL BE JUST GENERAL FUND DEPARTMENTS. THE HIRING FEES WILL ASSIST IN PARTIALLY OFFSETTING THE IMPACTS OF PROPERTY TAX REFORM. To maximize the benefits of our hiring fees, it is something that we should implement this fiscal year. And while it's still a year away, as we look towards the end of FY2027, keeping in mind what we established or what we're recommending that we establish in fiscal year 26, which is the stabilization fund. KEEP IN MIND AT THE END OF FISCAL YEAR 2027, DO THE SAME EXERCISE ALL OVER AGAIN. EVALUATE WHAT SURPLUSES WE HAVE AND HOW MUCH OF THAT WE CAN COMMIT TO THAT STABILIZATION FUND. SO WHEN FISCAL YEAR 28 OR 29 COMES AROUND, WE'VE GOT SOME MONEY SET ASIDE SPECIFICALLY JUST TO ADDRESS THIS. THIS IS OUTSIDE OF THE RESERVES. THIS IS SOMETHING IN ADDITION TO THE RESERVES. um while they're there for a rainy day you know ideally we want to keep them there um we just went through a refunding of of a bond of two bond issues and one of the one of the the positives that came out from that was the fact that we've been able to you know to have to to to have a stable a stable constant growing very dynamic reserve that grows with with the budget and that was one of the positive reasons that we got the ratings that we got so we want to keep the reserves for that purpose and also for a rainy day and not use them to address property tax reform. Um, and then individually and collectively, these measures initiatives will help offset the impact. However, in spite of them, services will be impacted. Um, so next steps, um, if the voters approve the referendum, We will need to monitor the process established by the state legislature to implement the amendment. As I said earlier, having a longer window, longer period of time to be able to implement those changes helps rather than crunching it in three years. We'll have to take a close look at that to make sure that we're aware of what's going on. Continue with the hiring freeze, continue to monitor, track and forecast all the general funds revenues. Continue to work closely with department directors and fiscal managers to identify savings and ensure operating results are within budget and provide updates if significant. Otherwise, come back to City Council in April or May timeframe to provide an update. And I don't know. That's it. If there's any questions. Thank you, Jose.

Questions? Commissioner Chapin.

a lot about the fire department and the police department, which shows the general fund positions going down. I think it would be important to show that this is in preparation for that, right? That graph.

Yeah, that graph is based.

I think we should show what it would be without it, right? So instead of saying we're going to hire 37, what would we get hired? I think that's important. The alphabetical list, I didn't see public safety on there. Is that because it wouldn't be impacted or because we would prioritize it? When will we start to see a prioritized list of, like these are the most likely things to get cut?

If you take a look at the list, For the most part, we purposefully didn't put departments in there. I think the only thing that's related to a department is recreation and pool operations. Other than that, we purposely didn't put any impacts to any department there. Other than showing it in the graph that because if we go through the hiring freeze and we don't add people, by virtue of that, services are going to go down.

Okay, well clearly public safety is obviously our biggest budget item and probably one of the items that people are most concerned about, one of the most basic functions. So I think we should highlight the impact.

What about projects that are

In the future that we've allocated money for when do we start to think about our do we press the gas on those projects to we pump the brakes on those projects.

Well I can give you an example, but well that's one of the things that we would are monitor collectively with the other things that I said as far as monitoring revenues monitor, you know monitoring in the economy monitoring those things to determine whether or not we need to pivot. and go in another direction because you know, even if we did that project, you know, are we going to have funding to, you know, to staff it, that operate it. So those are the things that once, once we know if it gets approved by the voters, then once we know what the timeline is for implementation, And then we factor in everything else that I mentioned. That's when we start looking at those things to make those decisions.

All right. I think the more specificity we can put to it, people can say, wow, you know, I might have to cut the college park pool back to three days a week, you know, something, or we can't do the renovation or the expansion, or we're not going to, you know, some very specific things for voters to be able to see. And then was there something in the bill, Mayor, about... having to go back to the legislature essentially to ask about how we can operate as a city

What the proposal was, at least when DeSantis was talking about it, was they were going to do some grant funding and the cities would have to come and beg the legislature for whatever grant funding. But that actually doesn't appear on the constitutional amendment. That kind of went away. So right now, if you eliminate the property tax, there is no replacement source.

Okay, thank you.

Commissioner Rose.

Do we have so the last few years and a lot of annexation of property do we have any fiscal future revenue dollars of what we would anticipate so we talk about hiring freeze but there can't be a hiring freeze if we're annexing and so do we have. preliminary numbers on what all of the more massive annexations that we've done what those revenues so for example i was just over there the other day rose arts district will be the that community will be built and there's potential for revenue so are we calculating the future for developments that we approved that are already on the way to be able to budget because i know like commissioner shaping you brought up a good question but if we're anticipating revenue from New structures being bill are we kind of forecasting are we working with tax collector property appraiser to kind of forecast what that would look like based on where those houses are price and how we're developing in those communities.

In we have historically the don't done those things you know at a high level. You know the the only thing is with annexations are for those countries that you're mentioning is property tax reform sort of like eliminates a lot of those revenue streams that you're hoping to get because you know, single family homes, you know, that are homesteaded, you know, once you get to that one 50 or two 50, it eats into a big chunk of the assessed value of those homes. So yes, it's something that we've done is something that, that we, we, we can definitely do and we will continue to do, but we need to factor in that. It's not like it was before where, when, when a home, when a home is where, 500 homes are built and they're sold, they get their exemption, there's still a component associated with revenue that you get, the majority of the revenue from that home. But once the exemption keeps growing and growing and growing, it sort of like eats into that base where the revenue that you were expecting to get, it's a lot less now.

Okay, so I know that communications is working on communicating to the community. I think it's important, you know, Commissioner Chapin, I think it's important that we talk about those things in our communities. For example, as we start building out Sunbridge, there's going to be a park, there's going to be a recreation center, right? And if we're looking at potentially doing a hiring freeze, how will that impact the communities that exist? So I'm going to say this, and I'm not going to say it publicly. Minority communities always struggle the most, period, right? Because there aren't necessarily larger tax base in certain communities, high poverty, low income, right? So the communities struggle as is to be able to maintain. You can go to some communities and sidewalks in communities are pretty. You go to others and they struggle. So I think being able to really talk about how communities will be impacted and really being able to use the wording that we can to exercise and show, look at your dollars. So I do it in my district where when we put a new sidewalk, I'll talk about, look at your dollars at work. I think collectively each department needs to start doing that. Look at your dollars at work. Like OPD just had a press conference say, look at your dollars at work, this drone footage. I think collectively all of the departments, we really need to start honing in on that in the next couple of weeks. So as we do restaurant programs, this is your dollars at work for you. So people really understand, at least here in Orlando, I mean, there's a strong, one kind of party versus another, so we should be somewhat fine here, but it's explaining that, right? Because all people here is no taxation, less taxation. And so we've gotta say, like, here's where your dollars go to. And I think, like, Public Works does a great job with, from drain wells to, you know, making sure we clean up flooding, et cetera. Each department, and that's my request here for all of the departments, start talking about the programs that you all each do and can work with communications and say, this is your tax dollars at work, right? And start showing the work that we are because we've got to beat the negative news that says we are people's tax dollars are going to waste, right? And it's really not. We're really improving our communities the best we can from like, when I look at the ADA sidewalks, I got a resident who thanked me because her brother is blind and now he can walk the streets because we improved and put ADA. So I think collectively that needs to be what we really do. Every department needs to do it. From business development to public works to OPD to fire departments, start really saying like, these are your dollars at work. OFD has started doing a really good job, and I want to commend you guys publicly. They start talking about here's your dollars at work in a different aspect, the fires and stuff. So I think we've really got to start showing where the taxpayers' dollars are going so they really understand the impact, the negative impact that this could have.

You know, I reflected over the weekend. Let's say this carries out to its end that could come, which is homesteaded properties pay zero property tax, right? So all the land that we annexed that is in Commissioner Keene's district, why would we permit any single family homes out there? They're not going to pay their way or services, I mean, if you were doing the fiscally responsible thing, you would allow only multifamily to go in out there versus what we know the developers want to do, which is single family homes out there. But I bet that decision is going to be made in communities all over the state as to do we keep allowing single family houses to be built. Commissioner Teen.

So I don't know if this is an actual question for you, but maybe we can find out. I know with Save Our Homes, we're limited to 3%. So on page two, we say that the non-homestead property assessment increase will go from 10 down to 5. is how big of an impact is that has it been over 5 every year for the last 10 years or have we kept that is the property assessor kept that assessment down below that number no i mean in some cases it's been over five percent you know i mean in some cases it's maxed out at ten percent it's been it's been a variation of it

Yes, so if I mean. A non homesteaded property that might sell to somebody for you know $400,000 more than what it's listed at. It's going to get more than a 5% or 10% jump. Currently, so sometimes it is and sometimes it is a big jump, but they're making sure that it won't go more than that ever.

Shorties OK.

Thank you, Mayor. There's so many things to be discussed here. As I'm looking at page three, it shows that only 19% of the properties we have here are homesteaded. That means there's a lot of people living in rentals. And when this goes up, because I would imagine, I mean, when they also reduce the percentage of, say, of increasing taxes on the commercial side is gonna put a burden in our city. Now, what's the average surplus that we've been having for the past five years?

I would say it's been between 25 and 30 million dollars. And we've taken that money and just reinvested it back into, you know, PAYGO capital projects. We fund the different things. We've never used it to pay for recurring costs. It's always been for one-time costs.

The reason I ask is because some of this money is going to end up being shifted to those that we're losing right now, especially law enforcement and firefighters, right? So what are the alternatives that we have besides bringing down the amount of employees? What other alternatives do we have in order to recoup those monies that we're losing?

I mean and that's one of the reasons why I I I I thought we could come back in April or may and give you know everyone an update is because I want to look at this we want to get this holistically, you know take a look at all of our revenue streams, not just property tax revenue take a look at how they're trending take a look at you know, maybe there's ways we could do things more efficiently more more effectively so take a look at at everything you know revenues expenses everything and then understanding where we could possibly be start changing or shifting or pivoting to to address those things so there's less you know more opportunity or or we have additional resources to be able to fund these things you know that potentially could get unfunded or everybody's competing for the same dollars that are less than they were last year.

And that was pretty sad, because our revenue from the property taxes is about 48%, as we've stated before. But there are cities where their revenue is, the property tax revenue is almost 80%. And those are the ones. Smaller cities are going to be affected incredibly. On page seven, I noticed that you did the potential impact on responsiveness. And you made an average of positions per resident. And those are average for our government. Can we address, actually, law enforcement and firefighters? Because I know we had in the past an average of, I don't know, 2.7 police officers per 1,000 residents. how will this reflect now if we have to implement those changes? How much lower is going to, because I think this is something we have to tell the community. I did a study years ago in terms of police officers in New York, Boston, and Chicago, and they had like 4.1 to 4.2 police officers per 1,000 residents. And we have managed so efficiently our system that we can do with 2.7. But can we go any lower? I don't know. And this is incredibly important for us to convey to our communities how much this is going to affect our firefighters and police officers in terms of their services, how many officers and firefighters we have out there.

YES, WE HAVE THE INFORMATION AND WE COULD DEFINITELY, YOU KNOW, SHARE WITH EVERYONE. ALL RIGHT. I APPRECIATE IT.

BOTTOM LINE IS WE HAVE A BIG JOB OF EDUCATING, NOT ADVOCATING, ADVOCATE ON YOUR PRIVATE TIME, BUT EDUCATING PUBLIC AS TO WHAT THE AMENDMENT WOULD DO. HOW ABOUT WE SEGUE INTO THIS YEAR'S BUDGET?

OKAY. WELL, JASON WILL BE HERE NOW. HE'S HERE TO PRESENT THE BUDGET. AND IN HIS PRESENTATION, HE DOES ACTUALLY GO INTO first responders separate from the rest of the city.

Mayor, if I may, one more thing before we go, because as you very well said, it's very important for us to educate, not advocate, but educate our community out there. I want to make sure that as we speak to our community, it's not misconstrued that we're advocating for anything. We need to explain both sides of the coin here. And people need to understand that we're actually trying to explain how the system works. And I appreciate that comment, Mayor, because it's very important, especially now. The Florida League of Cities is doing the same. Well, they're actually advocating. But we as commissioners need to go out there and talk to our communities by all means. Thank you.

Mayor, I do have one more question. Do we know if anyone has filed an appeal to repeal it with the judge and where we are with it? Because I've heard that because the referendum currently has multiple items in it and by law it's only supposed to have one. Does anyone know where we are in that process?

There's a couple of lawsuits out there.

Okay.

Thank you, Mayor. Thank you, Commissioners.

Okay, Jason, you're up.

all right let me just get the presentation swapped out over i think you're about to get some help All righty. Good morning, Mayor and Commissioners. We'll go ahead and transition into talking about our budget proposal for next year, fiscal year 2027. So going into budget development, a couple of the underlying factors that we kept in mind were, first of all, just the continued economic uncertainty that we've been experiencing in the last year or two driven by a wide range of factors domestically and abroad. Interest rates and inflation that appear to be holding at what most would consider moderate levels. Continued a little bit of concern about the real estate market, both with pricing and affordability on the residential side, and then what the post-COVID environment looks like on the commercial side, particularly in our downtown area. And a little bit of a loose labor market continuing, which has kind of helped us with hiring and lowering our vacancies over the last year or two. With this in mind, going into the fiscal year 27 budget, three main considerations or priorities that we kept in mind were, first, continuing to prioritize our core city services, including public safety, funding key commitments, like our debt service in Sunrail, as well as maintaining our infrastructure, and as Jose began to allude to, beginning to prepare for the very real potential of property tax reform by minimizing growth in positions and other recurring costs. You'll see over the next set of slides that this budget largely focuses on public safety needs due to growth in the southeast, accounting for contract cost increases, and trying to maintain our infrastructure funding. Going into the new budget cycle, the city has also continued to maintain strong fund reserves coming out of the end of the prior year. We're just above our 25% target, which, as Jose mentioned, was recognized by the rating agencies during our recent bond issuances, and puts us in a good position going into any property tax reform that may happen. So today we come before you with a fiscal year 27 budget proposal that is tentatively balanced. As it stands, the general fund revenues and expenses grow approximately $40 million or five and a half percent and other funds are also up approximately $40 million or 3.8 million or approximately $40 million bringing us to a total proposed city budget of just shy of $1.9 billion. I'll go over a few key highlights that affect the budget overall, and then go into more detail about our general fund and other fund budgets, as well as our capital program for the upcoming year. So looking at citywide revenues or revenues overall, first and foremost, this proposal assumes that the city maintains the millage rate at 6.65 mills, which if approved would be the 13th year at that rate and thus the 12th cycle that we haven't raised it. Citywide property tax revenue at that millage is estimated to grow approximately 6%, and that's from a combination of new construction as well as modest increases in valuations. Other general fund revenue sources such as our OUC dividend and economically sensitive revenues like sales taxes are growing slightly slower than property taxes at around 5% combined. And overall, this is really the third year of slower, more moderate growth that we've seen down in the 5% to 6% range across all of our revenue sources. Touching on some of our other funds, you may recall that several of our enterprises have recently implemented rate adjustments. So you have parking, water rec, solid waste, and storm water. And those are all incorporated in next year's proposals for those respective funds as well. So shifting to look at personnel, this budget proposal picks up a few mid-year position changes and then incorporates the position changes that are outlined on the table to the right. The budget adds 37 new positions in fire and nine in police, totaling 46 positions across our public safety departments combined. Within that group are 30 firefighters and six paramedics for the soon to be completed fire station 18 in the southeast, as well as eight police officers to also support growth in the southeast. After we get past the public safety departments though, you'll notice that there's a net decrease of nine positions across the rest of the general fund departments. Some of the key highlights include deleting a number of unneeded vacant positions across the executive offices and families parks and rec in particular. Within executive offices, the winding down of the rise community employment program and transferring the seven remaining small business enterprise program positions from executive offices out to economic development as that re-envisioned program is becoming part of their business development team. Across the general fund, we've emphasized dropping or repurposing long vacant or unneeded positions to meet the city's latest needs while minimizing the additional budget needed. Probably the most notable example of where that played out was Families Parks and Recreation where after we did drop vacancies, we were able to add four new positions, three to improve staffing coverage at our rec centers and one for general maintenance. Moving outside the general fund towards the bottom of the chart, a number of other funds added positions if needed and supported by their revenues. The most notable of which was probably stormwater, where they added six positions to support teams that address drainage, water bodies, street sweeping, among other tasks. This budget also includes funding for a 4% pay increase for employees, which fulfills the second year of our collective bargaining union agreements. Outside of our benefited positions, the budget proposal also includes a significant increase in temporary seasonal staff funding, primarily to account for minimum wage increases that are affecting mostly families, parks and rec, both directly for positions that are at the minimum, as well as the compounding effect that raising those positions has across the team for their supervisors and up through the chain, as well as staffing for OPD's academy. Looking at operating and capital expenses, in this budget, we continue to see a significant increase in IT contract costs, really driven by those contracts related to OPD or security. That includes items like Axon body cameras, tasers and drone contracts, CAD communications tools, as well as the more traditional end-user software like Microsoft that you may use in your day-to-day operations. tasks on the computer. Utilities is also under pressure in this budget, really driven by data services and electric costs. Police retains a significant pool of leased vehicles. And while we have leveled out that quantity as we begin to pursue shifting back towards more city-owned vehicles, the costs continue to escalate in the interim. Additionally, we noted we're going to be including some additional sworn positions in this budget and you not only have to add the positions themselves, but you also have to equip those positions with protective gear in the case with police vehicles as well. And so those are some additional costs that come with each of the sworn officers. The city's share of sun rail costs continue to grow for next fiscal year. And all of that said, in this budget, we really tried to continue to emphasize the importance of maintaining our infrastructure. And so we maintained our general fund contribution to capital near the prior year level, just over $30 million. So these first few slides have really looked at the budget overall. So now we're gonna spend some time focusing on specific funds that make up the budget. We'll spend most of the time on the general fund today. And the thing I want you to keep in mind as we do that is the city budget collectively is actually nearly 100 individual fund budgets that have to be balanced individually. This graph just gives you a sense of the different types of funds that are included in the budget and what type of functions make up those. So the general fund is by far the largest, and that's where a lot of your core city services, such as public safety, are located. Enterprises are things like water recs all the way to stormwater parking and These are entities that charge fees for their services directly to the users and cover their own costs. Special revenue funds is where you see areas where they receive revenues restricted for a specific purpose or funds like our grant funds among others. So as the general fund is by far the largest fund in our budget, we'll go ahead and spend some time now specifically looking at the general fund, beginning with our revenues. So overall general fund revenues are estimated to increase roughly $40 million or 5.5% and the table below shows the major sources from the largest source to the smallest. You'll see that property taxes are roughly half of our total general fund revenues and they drop off quickly from there. Property taxes again are growing near 6% and collectively the average of the remaining revenues are growing roughly 5%. After stronger growth right before and after COVID, again, this is the third year that we're now seeing slower, more moderate revenue growth down in the 5% to 6% range. We're going to talk about the top four sources on the next few slides. But before we move off of this table, I just have two quick things to note. The transfers in line is almost entirely driven by revenues from our utility services taxes that are first recorded in a separate fund and then move back to the general fund. And then the other revenue line is reimbursement for extra duty policing services, where we send police officers, say to staff of publics for security, and then they pay us back, as well as interest earnings on our cash balances. So now going back to the top four revenue sources, we'll go ahead and highlight each of those with more specifics. Property taxes, again, are the largest at nearly half. For next fiscal year, we're proposing to leave the millage rate flat at 6.65, and at that millage rate, anticipate them growing roughly 6%. That growth comes from a combination of new construction and increases in existing values. And recently we've seen a little bit over a third of our property tax increases coming from the new construction side. So a little bit more than a third from new construction, a little bit less than Orlando in our services. The school board and the county also make up a significant portion. The second largest revenue grouping, intergovernmental revenues, includes a couple items like state and grant revenues, but by far the largest piece is our OUC dividend payment that we receive from the utility as the owner of OUC. At nearly $81 million, it makes up nearly 10% of general fund revenues. This is a resource that not all cities have, And while it's not gonna be something that grows dramatically, since it is based on the financial results of a utility, it is a solid and stable source of revenue for the city. Charges for services collectively are the third largest group of revenues, making up roughly 10% of the total. That said, unlike the previous two slides or the previous two revenue types, this grouping is made up of many different types of charges. In general, the orange and yellow segments are charges to customers for using specific city services, things like the school board reimbursing us for having SRO officers, businesses or individuals paying for fire inspections and permit fees, individuals paying fees for our parks, for entry or facility rentals, and that type of thing. EMS fees include payment for ambulance transport services. On the green side of the chart, these are charges that the general fund makes to other internal city customers or funds. Essentially, the general fund getting reimbursed by, say, our enterprise funds for services that we provide on their behalf that they would otherwise have to pay for themselves. Things like providing payroll processing, procurement, legal, budget services, for example. We're able to recoup some of those costs from our other funds. And then lastly, sales and use taxes are the fourth largest revenue grouping and really sales taxes are by far the main component of that. This graph shows sales tax budgets on the blue bars and actuals on the red line over the past several years. This revenue source is highly correlated with economic activity and you see that it grew dramatically coming out of the pandemic. We were very hesitant to raise the budget to match early on as the impact of and restrictions surrounding COVID kind of ebbed and flowed for a while, and you never quite knew if that was going to continue. That said, you'll see now we've fully trued up the budget to actuals, and the interesting thing to note here is that the actuals have really been flat for several years that we've done that. We appear to hit a plateau of sorts, which if you recall the earlier summary, you really see with slower growth across most of our revenues. More than the other three largest groups of revenues, it's also worth keeping in mind that this group is very sensitive to changes in inflation or economic conditions, and that could have a significant impact on economically sensitive type revenues such as this. So shifting over to the expense side of the general fund, overall general fund expenses are also proposed to increase roughly $40 million or 5.5%. And below we show those expenses and the change from the prior year broken out by department, organized by the dollar change amount versus the prior year. Just looking at the departments with major changes, largest increase in dollars is in police. There we're picking up nine new positions, including eight sworn officers, growth in the cost of vehicle leases, as well as vehicle operating costs like insurance and fuel, and one-time funding for some equipment, furniture, and other supply needs that they have. Fire's second largest dollar increase, and of course thinking back to the staffing summary earlier, in fire we're adding 37 new positions, including 30 sworn firefighters and six paramedics to staff the upcoming new fire station 18. In business and financial services, There is a near $8 million increase in IT contracts and data related utility costs. So for most of the city's IT and data related costs roll up under IT and finance. A little over 2 million of that was moved from the capital budget into this operating budget. But even after backing out that 2 million, it's still a significant increase in an area we're seeing a lot of cost pressure. In transportation, we pick up a nearly $2 million increase in the city's share of sun rail costs. Looking down at executive offices and economic development, you may recall from the staffing change slide that the small business enterprise program is moving from executive offices to economic development. And you see that reflected here with a decrease in executive offices and the increase in economic development. And then non-department, is down due to lower transfers out for desk service, internal loans, and support for other city's funds, as well as being able to include more costs directly in the department budgets. Shifting to looking at the previous breakdown visually, you can see that public safety accounts for well over half of our budget between police and fire. We wanted to show this in this manner to give you a little more context about the non-departmental department because it has a very descriptive name. Off to the right, you'll see that that is broken down by the components to give you a little more of a breakdown on that grouping. It's made up of the general fund contribution to capital projects, tax increment payments to our CRAs, debt service payments, and a contingency to grow the dollars we have in reserve proportionally with our budget side. Essentially, these are the general fund expenses that don't really relate to any specific department. Particularly with the discussion around property tax reform, it's important to note that our property taxes don't even cover the cost of public safety. That gap is also growing, going from $46 million in fiscal year 26 to now $58 million in fiscal year 27, meaning that public safety costs are growing faster than our property tax revenues. So now we shift to looking at the general fund expenses by type or use rather than what department they fall under. First, personnel costs make up the largest portion of the budget by far at roughly 62%. Coming up, we have a slide on each of the major categories in a moment. But while you see them all together, there's two places where we have significant transfers of cost between lines that I want to highlight while you can still see both lines at the same time. First is related to Sunrail, which is moving from the contractual line to other operating. At near $20 million, you can see that being added into the other operating line. However, while contractual is down, It's down nowhere near $20 million, which is due to other increases like IT contracts that are offsetting that. Additionally, in our public safety areas where we have outfitting, upfitting, and stock maintenance costs, we are shifting a lot of that from capital to supplies to better align with how expenses are actually recorded. So we're now going to look at a more detailed breakdown of each of these types of expenses. So beginning with personnel costs, you can see here core components are salaries are by far the largest followed by standard employee benefits as well as pension and post-employment benefits that our sworn officers receive. While they're small in dollar amount, you can also see that overtime and temporary seasonal staffing costs are highlighted here. now that i i've now overlaid the percentage change versus the prior year for each of the components to give you a little more perspective on what's driving the changes so first looking at salaries this is where we pick up the impact of adding a net of 40 additional general fund positions as well as the four percent pay increases for employees Benefit costs collectively are up only modestly. And after needing to realign our overtime budgets last cycle, increases have really moderated there as well. The biggest percentage increases actually in the smallest dollar amount, smallest section of the pie graph are temporary seasonal employee costs. And again, that's driven by minimum wage increases primarily affecting FPR as well as the OPE Academy staffing for trainees. I'll note that while benefit costs are up only modestly overall, healthcare costs are up just under 5% from a budget to budget comparison. While we're still on personnel costs, and Jose talked about this a little bit earlier, one way that we evaluate the efficiency and the effectiveness of government is comparing the number of employees versus residents. Naturally, as the population grows, so does the need for increased staff to provide necessary public services. And looking at staffing in this manner, rather than just by position count, help gives you a better perspective on how the two compare. You can see that the rate of staffing growth slowed during COVID, but the city population continued to steadily increase. With the positions included for fiscal year 27, the general fund and overall city staffing ratios still declined slightly. Although personnel costs and positions are going up, the population continues to grow faster. Over the last decade, the city has demonstrated efficient delivery of services with a general fund staffing ratio that has hovered just over eight employees per thousand residents. Jose's comments, there was discussion about looking at public safety specifically. And so here you can see within the general fund what the staffing ratio looks like when you only include our public safety first responders and police and fire. You can see that as the city's population has grown, we have prioritized growing our first responder staffing to accommodate that. And that continues for fiscal year 27. If you think back to the staffing slide, recall that the only departments where we truly added net new additional positions to overall were the two public safety departments collectively. And then If we were to not add any additional positions for the next several years, you can imagine that both ratios would begin to decline in a similar slope to what we saw with the general city employees in Jose's presentation.

There's my answer.

Sorry, that 2.6% as of expectancy for 2027 doesn't include the officers. I mean, it includes the officers who have the airport, right?

so we wanted to so this this graph here only looks at the general fund that the the core city officer pulls everything so it does not include the separate go fund it's the general fund only no okay but that pays that paid for all the officers because the go fund pays for those officers at the airport for all of them Yeah, so essentially we segregate the officers that are assigned to go into a separate GOA fund, and then they reimburse us for most of those costs. So it still comes from the general fund. Then we get reimbursed. We charge those to a separate fund, so we've kept them isolated from the general fund. If they do not reimburse us for all the costs at the end of the year, we could hypothetically have to cover that difference, but we have completely separated them. So you see them in a separate GOA fund as opposed to the general fund.

So we're looking at this from the perspective of budget, not from physical count of officers?

It does represent the physical count of officers that are on the general fund. So essentially, all of our officers except for the ones that are at GOA. I got it. Thank you. Appreciate it. I'm sorry about that. And I will say at different times, we've shown all city versus the general fund. But this particular graph looks at only the general fund officers. So shifting to contractual services, you'll see that IT contracts make up the largest part of contractual costs, and those are heavily focused around OPD and security needs. Our collective contract with Axon for body cameras, tasers, drones, and their associated software and storage are almost $8 million per year, for example. All other, the all other category contains a wide range of contracts across most of the departments, everything from radio services to employee medical screening to FPR program. Additionally, here you'll see that police lease vehicles are a significant component of contractual costs as well as building and ground maintenance throughout the city and right of way lake and path maintenance. Remember also, As we move on to overlay the changes on the next slide, the contractual is down only because SunRail's moved out of here to other operating. So as we overlay the change versus the prior year, the all other section, again, that's down because SunRail's coming out of there. Looking at the other major changes, IT contracts are up roughly $6.5 million. A little bit over $2 million was us taking some Axon costs that were previously in the capital budget and consolidating them here in the operating budget in the same place with all the other Axon body camera costs, which also went up $1.5 million. So there you have two and one and a half, or three and a half. The remaining three million comes from a range of other IT contracts, including CAD communications tools, going up one and a half million, proof point security going up roughly 600,000, and Microsoft's overall suite of products going up roughly 400,000. And those are really the ones that stand out. Many of our IT contracts go up at least a few percent a year with inflation. Police retains a significant pool of leased vehicles. And you can see here that despite us leveling out the quantity, those costs continue to escalate just under $2 million or near 24%. Right-of-way lake and path maintenance costs have also grown over time with the expansion of the city to the southeast and the growth of our road network. Though again, I'll note that the stormwater fund covers roughly half of those costs. Looking at now supplies, given the wide range of items that fall under supplies, we show these by department, and you can see that public safety departments make up the bulk of it. Supplies are where the cost of outfitting new sworn police and fire positions fall, as well as maintaining the stock of frequently used items like guns and ammo, medical supplies, and so on. For OBFS, the cost there is actually our workday financial system subscription based on how it's recorded. So as we overlay the changes from versus the prior year, you can see Biggest increase in OPD, we have an increase of a little bit over $4 million. That's essentially half outfitting the new positions and the stock of supplies that moved over from capital. And the other half is at roughly $2 million is various one time equipment and furniture needs and upgrades that the department has prioritized. For OFD, the increase is primarily tied to outfitting those 36 new positions for the upcoming Fire Station 18, 30 firefighters and six paramedics. Families Parks and Rec utilizes a fair amount of materials for the upkeep of their sites. For example, mulch was a major need this cycle. And again, for business and financial services, that's driven by a software subscription cost. Moving to utilities, this category contains your traditional utilities like electric and water at city sites and facilities, as well as street lighting throughout the city limits and data services such as internet phones and public safety specific connectivity. Additionally, as a non-Advalorum assessment, our parcels are not exempt from our own stormwater fees either. As far as changes from the prior year, we've seen a significant increase in data service costs, particularly for public safety in recent years. Recent stormwater rate adjustments also needed to be fully accounted for in the budget. Street lighting is growing a little more than traditional utilities, as we've included subscribing it to OUC's community solar program, the cycle in pursuit of meeting a greater portion of the city's electric needs from sustainable sources. Here we look at fleet facilities by department. Each department has a little bit of different mix between the two. Police is more fleet heavy with their vehicles. FPR is more facility heavy. And fire has kind of an even mix of both. This cycle, most of the increase from the prior year is on the fleet side, and you see that reflected in the departments that have higher percentage increases, namely police and fire. Depending on the situation, it's a combination of increased maintenance, insurance, replacement, and fuel costs. And many of our other funds, our enterprises, are seeing similar pressures. Moving to other operating, this grouping contains a fairly wide range of expenses, such as our tax increment payments to several CRAs, now SunRail, which recently was added into this category, our debt service, and a reserve contingency to grow our reserve dollars in proportion to our budget size, as well as community organization contributions. Looking at the changes versus the prior year, Sunro moved into this category from contractual, so it's here for the first time, but note the cost did go up $1.9 million in the process. Our contingency for reserves is up to add dollars to our reserve proportionally to our budget's growth. CRA tax payments are down slightly in line with slightly lower property values in the downtown area. Community organization funding declined within FPR only because certain programming payments were shifted to contractual services. And so that's just a relocation of those dollars, not a reduction in the overall funding for that program. And debt service was down a little as we were able to allocate part of the repayment of our recently issued general fund covenant bond to other funding sources, which we, just to be safe, didn't initially assume that we could. And then to cover the last few remaining lines, we have them grouped together here. Training is primarily up due to funding a new $600,000 civilian paramedic training program within HR. to hopefully help address the vacancies and recruiting challenges that we've had with those positions. Capital is lower because a lot of the OPD stock costs have shifted to supplies. And compared to the prior year, we needed fewer additional vehicles with a little bit lower number of additional police officers compared to the prior cycle. And transfers out are down a little bit as some of those acts on contract costs that used to be in our capital program where we had to send the funds out to the capital fund are now being kept in the operating budget. And so you have to transfer less dollars out. So we'll go ahead and move out of the general fund here and just touch on a few of the other key operating funds. And most of these are independent enterprise funds that have to charge for their services and ultimately cover their own costs. So going down the list, looking at water reclamation, solid waste, stormwater in the parking system, note that they all recently implemented rate adjustments. The CRA's operating fund is down significantly as only the funds left over after debt service become available for operations. As you may recall, they recently issued that they have to begin paying back. So that debt issuance helps them fund some of the major upcoming projects like Lake Eola, but it does mean that there's less funding left over after making the desk service payments to send to the rest of their operations here. Key and Camping World continue to do well, and particularly Camping World has seen a strong uptick in recent years, which they've been gradually recognizing in their budget. My understanding is a lot of it is the festivals that you've seen around there recently. And I'll note that our federal and state housing grant programs were up both very modestly this cycle. So the next few slides just give you a little bit more detailed breakdown of each of these funds, looking at personnel versus operating and capital. The thing to highlight here is, A, unlike the general fund, most of these funds have their dollars going towards operating and capital costs. rather than personnel like the general fund has. And B, their personnel costs are fairly stable. Most of the swing you see from any increase or decrease in their revenue is really impacting the operating and capital side. So water rec, you have a lot of heavy duty facilities that have chemical supply and utility costs and they regularly need capital equipment. Solid waste is a little more personal heavy than the others, but tipping in landfill costs and vehicle costs really drive their budgets. Stormwater, the past few years of rate adjustments have helped them begin to fund a PAYGO capital program, which they really couldn't afford after their day-to-day operating costs previously, and so hopefully over time that'll begin to translate into being able to complete beneficial projects in that area. The downtown CRA, the operating fund again is down significantly as only funds left over after debt service become available for operations, but they do have the proceeds from that recent debt issuance to fund major downtown projects. Continue to see strong performance in the venues, particularly in Camping World, Parking operations, of course, require not only regular staffing for payment collections and enforcement, but they also have many physical garages that need maintenance over time. And then again, we're fortunate this cycle for our housing grant funds to continue to receive at least a modest increase in those grant programs. So again, that's just a snippet of some of the largest funds. In approximately two weeks, we'll have a more detailed publication for you that'll have more detail, particularly on the other funds, as well as the capital program, which I'm gonna highlight a few key things here, but more details will be forthcoming. So first, if we look at our capital program at a whole, across all funds, we have approximately $108 million capital program proposed for next fiscal year. That is down around $19 million from the prior year. That said, the general fund's contribution towards capital remains fairly stable. The reason it's down is both the CRA and Water Reclamation recently issued bonds, which now have to be paid back. And picking up that debt service does noticeably reduce how much PAYGO funding they have for projects. But again, they issued bonds that give them resources for the most pressing needs that they have. Today, we'll just highlight a couple of specific projects that we have through the wide range of printing sources. Before I leave this slide though, I do want to point out though, Earlier on when we looked at the general fund breakdown, you saw a lot of focus on the public safety departments for operating costs and personnel. When you look at capital, it's really our infrastructure heavy areas like public works, transportation, and economic development because of the CRAs included there that have the largest components of our capital program. They have a lot of heavy duty facilities, vehicles, and equipment. So just touching on a couple of the components of our capital program. by facility or area business. We continue to invest in our neighborhood centers, beginning efforts towards an office build out at Lake Lorna Dune, minor neighborhood center renovations, investments in our pools at our neighborhood centers. We continue to set aside funding to renovate major parks and playgrounds. This cycle, There's funds set aside for the Ivy Lane playground and the Rosemount playground, and we continue to invest in our maintaining our boat docks, piers, and boardwalks with the dock boardwalk renovations at Langford Park included this cycle, as well as continuing to maintain our athletic fields. In this budget, as in prior years, we continue to fund a planned maintenance and renovation effort for our own city buildings ensuring that over time we proactively identify areas where the building envelope you know facades and roofs are at risk and replace those before any major repairs are needed likewise with HVAC systems again our facilities team works hard to look at where repairs may be needed, and try to get ahead of any major issues. We also invest in emergency power systems at our major facilities so that during hurricanes or other outages that electric can be maintained in them. On the vehicle and driver side, We've begun to fund preliminary design efforts on a potential driver training facility to help not only our public safety areas, but many of our enterprises where they have commercial drivers that operate heavy vehicles to hopefully be able to look at putting together a facility for them to practice and train. We fund the continual repair and remediation of our sidewalks and paths, as well as the streets, where this cycle at a total of $8 million collectively between all the projects, it is again the most we've ever allocated for pavement rehabilitation.

Our transportation- Quick question on that, I'm sorry, Mayor, is that okay? The pavement rehab. I'm going to get back to this on my questions. $8 million. What do you think we need?

Just an example of something I'm going to bring up later. So I would say that Our requests from public works far exceed that. The exact number escapes me, but it's close to double.

And my point is that as well as stormwater, as well as Sidewalks as well as tree trimming as well as park benches and I'll get back to it on my questions because I've got a few Commissioner rose you want in right?

Yes. I wanted to stay right here. So what I don't see on here are We added a massive amount of red light cameras. Um, I don't see that anywhere highlighted here and where those projects are going because a majority of them did end up in district 5 and so as we talk about like rehab and at this that's going to be a key component that I didn't see highlighted here the additional cameras that we've added across the city I didn't see that highlighted anywhere at all in this this presentation because that was one of the key components when I asked a question when we approved it last year was that I was told the dollars would stay within that community so obviously some of the ones that colonial commissioner Chapin and I share but there were a mass amount that were going into district five

So you are correct, I don't have that particular project highlighted here. But both the red light cameras fund and any surplus funding going to the transportation safety projects are something that's included in this budget proposal. And it'll be listed in the commissioner notebook that you receive later on. So again, we continue to invest in our sidewalk paths and streets, with this being the largest pavement rehab investment that we've had in recent history. Though, as Commissioner Chapin alluded to, that perhaps does not quite meet the ideal need in that area. Our transportation impact fee funds continue to contribute towards impact of growth on our roadway network we continue to invest on city-wide signal reconstruction and just general intersection safety improvements overall our water reclamation system our sewer system like i said recently issued bonds but also continues to have a strong pago capital program investing in our major plants as well as system-wide maintenance and our stormwater enterprise has nearly $17 million in PAYGO projects to help address needs for our lakes and then drainage in general. While it's not the largest piece of our capital program, we do have several significant projects funded for the public safety areas, the regular replacement and maintenance of the radios for both departments within police, communication system upgrades, emergency dispatch, center renovations, facility improvements, and equipment replacement for the protective wearable equipment that our officers have to wear out in the field each day. In fire, have wearable protective equipment that we always ensure that we keep replacing as needed to maintain the latest standards. And then we also have funded capital improvements for equipment or their facilities. The CRA, while also recently issuing bonds, does also have some operating funding available, and some of that can go back towards PAYGO projects. And so you can see the key focus areas highlighted there. And then just to touch on the last few, we continue to fund both the replacement of equipment as it wears out and looking towards future enhancements or savings and information technology. The parking system continues to invest in the maintenance of their garages, and we continue to set aside funding towards affordable housing. Again, particularly for the other funds in the capital section, this is something where in the weeks that come, more information will be provided in the more detailed commissioner notebook. So, returning to the start of today's presentation, at this point we have a tentatively balanced budget proposal. There can and likely will be minor changes over the next few weeks as we refine our estimates, get additional information. But we come in today's workshop with a balancing solution for each of our funds. Looking forward, shortly later today, this workshop presentation will be posted to the city's website. This afternoon, you'll consider agenda items to approve the tentative millage rates for the city, downtown development board, and down south neighborhood improvement district that ultimately support the budgets that were proposed today. Commissioners, in two weeks we will provide you with a much more detailed commissioner budget notebook that goes through this proposal in depth and then subsequently posted on the city website. That will be followed up with us working with your offices to schedule commissioner budget briefings in August before we finalize the proposal for our two budget hearings in September. So with that, Mayor and Commissioners, thank you for your continued support and leadership. Many of the approaches we've taken over the past few years, such as careful budgeting and building a reserve, will prove crucial, particularly if property tax reform passes. I'd also like to take a moment to thank our department directors and their fiscal teams for their contributions to the budget. And of course, the budget division itself for all of the checking and compiling of information together that has to go into getting ready for this presentation today. So with that I can take any questions.

Okay, thank you questions comments. Let's start with Mister Burns.

All right. Thank you mayor and thank you for that presentation and kudos to our to the team because this is a very dynamic budget process. So so thank you all for that. I did have a question there was a mention of costs associated with overtime. I think about 18.3 million. Do we know what departments or areas are really driving that overtime. And the reason why I ask that, because we have reduction in personnel, but I'm interested to see what will that further reduction increase more of the overtime.

So our overtime budget is essentially split between police and fire, and both were up a modestly similar amount in that 6% range this cycle. I mean, it is certainly a possibility if you have more demands for service and you don't add positions, that could result in additional overtime. But of course the other side of that is do you have the resources to pay for that overtime, or would you just have reduced service?

Yeah, because I think that's something we have we have to look at because we do show you know a reduction increases in some areas, but if in on the back and we're now paying you know how overtime we may have to kind of just that thinking so thank you for that.

But I'll just add, Commissioner Bursa, what you have to think about is, and I'll give an example. If there's a 911 call, a police officer and a firefighter can't leave the scene. So overtime is a must. Then if officers or firefighters get hurt, then somebody has to pick up their time. So it's better to have the money in the budget and let's monitor filling the positions because the more positions we can get filled, which I think collectively we all need to be working on making sure we're encouraging our communities to become police officer and firefighters, the more we can fill our positions and not have vacant positions, the less opportunities for overtime. But you can't leave a 911 call. A dispatcher can't leave a 911 call if they're in the middle of a call and someone's, you know, they're walking a person through until a first responder gets there. So I think it's better to have the dollars there. But I think collectively we've got to work on that.

I wasn't saying that we shouldn't have it. I was just... Wanting us to really look at the impact of having not having been fully staffed and the impact on because I know we have to have you know the overtime, but I wanted to make sure that we're not not filling positions within is driving a higher overtime than would have been budgeted if we had we were staffed correctly.

Commissioner Chaput.

Slide number 11, which shows despite that we haven't increased millage, obviously the value of the property has gone up. And I think this is the slide that has given the proponents of property tax reform the most ammunition. And math is not my strong suit, so the fact that The taxes is at 100% increase in the last 10 years, and inflation is more like 35% over the same period. And the mayor pointed out, and we point out all the time, that our general revenue doesn't even cover public safety, which is a good zinger. I feel like we need to come up with a better way to explain this slide. And I was getting to it a little bit with my question earlier. And it's going to come to that educational thing we talked about. We need to be talking about all the things that are on the list that stormwater, baffle boxes, roads, sidewalks, because we don't have enough revenue to do all those things, even though revenue has increased at a pace that outpaces inflation and probably outpaces folks' general household income.

But also, I think that's an impact reflective of the growth of the city. you know so it's so it's not like you know because that military has stayed the same but think those increases are really driven by how will the city is doing so. We want to show that we're doing well, but also I agree we want to make sure that people recognize that that increases not because we've raised taxes.

It's just and that it's not it's based on the value, but we've had we've been fortunate that that are we have a growing community and the value of one home last year's a 100,000 of the Valley if it sells a value goes up we enjoy that or 500 new houses are built.

The construction which you said this year was about a 3rd of the growth is that average.

It averages near a third. This cycle is actually a little bit above a third.

But a third is in general, correct?

Correct.

So police officers, I mean, public safety. I mean, we've hired way more than the, that's not been an average 2, 3%. We've gone way up and above on, well.

So I think, so I guess the two comments I would add is one, When we look at the property tax revenue growth percentage, if you look at it just compared to inflation, I don't know the number offhand, but I suspect it grows faster than the inflation number. However, if you compare both inflation and our population growth to our property tax growth, it's much more similar. And on the public safety staffing, We have added a lot of positions, but compared to our population, the ratio has really stayed flat over the last several years.

Well, those are the type of things I'm looking for to help explain that argument that I think the property tax proponents are using, that our revenues, despite having not raised taxes, are growing at a much faster rate than everything else. CRA sun setting. What happens when that happens? Does it go away?

It goes away. The money does not go away, but the money will go directly into the general fund of the county and the city.

And it won't grow anymore, the incremental?

The CRA won't, but the TIF will continue, hopefully.

I'm sorry.

18 years from now, no 13, right?

2042.

David's shaking his head. It's 13 years, I think.

Yeah, it's January 1st, 2042.

I'm sorry, I thought it was closer than that, but. OK, I also think that. creating a wish list, a waiting list, a priority list of things that we still can't even touch with our budget. I mean, the massive stormwater needs that we have, the massive repavement things that we need. I mean, again, if people are complaining that, you know, our budget is growing at a faster rate or there's a need for property tax, I think we need to be able to inform them of the calls we all get every day about things that we really don't have the money to address. So just just a thought. Thank you.

Which commissioner there are simple things back in 0809. We had this similar situation caused by the economy, not by Tallahassee, but simple things like cutting the grass in our parks and on the sides of roads. And resurfacing roads and sidewalks and things of that nature. Okay, Commissioner Keene.

Just a quick question. So on capital improvement program by department, that's a mix of general fund as well as other funds, right?

That's correct. That's the entire capital program across all funds.

Well, and just going back to some earlier comments here, I think it's kind of important to highlight where that money comes from. Because as we heard, we don't have enough money to pave the streets. or repave the streets, right? And that is coming from general fund, right?

Correct.

As opposed to sanitary sewers, which is coming from the enterprise fund.

Correct.

So breaking them out, I mean, we could easily say that we're, you know, $30 million a year in repaving and we're underwater every year and we're not getting any better. The backlog continues to grow. And that's out of the general fund.

Correct. So the general fund is the largest source for pavement funding, correct? Correct. WE DO GET A CONTRIBUTION FROM THE GAS TAX AS WELL, BUT THAT HAS BEEN FLAT FOR SOME TIME.

OKAY. ANYBODY ELSE?

I JUST WANT TO SAY THANK YOU TO THE ENTIRE FINANCE TEAM. SO WE WERE ASKING SOME HARD QUESTIONS, BUT THANK YOU ALL FROM THE ENTIRE BUSINESSES FINANCE OFFICE FOR ALL THE HARD WORK YOU DO. THANK YOU ALL FOR ALL THE HARD WORK THAT YOU DO KEEPING US IN LINE. SO I WANTED TO SAY THAT PUBLICLY.

COMMISSIONER OTIS?

Thank you, Mayor. I can't say enough about you guys. Every year you guys do it better and better and better, so I appreciate that. It was really detailed. We got into particulars. When we're talking about the enterprise funds, I know that that's where we're also talking about intergovernmental revenues. I know we get the ones from OUC. but I was looking for the rest of the money as you guys show on the table. Is that coming from the enterprise funds? Some of that money is coming from the enterprise funds to pay for the administrative side of it?

Intergovernmental is our OUC dividend, some state revenue sharing and a couple other smaller sources. The funding that the general fund charges or recoups from our enterprise funds falls under charges for services. If you may recall on slide 14, You have the orange and yellow parts of the graph and then the green part of the graph. So the two green sections of the bar chart represent our cost allocation, which is where the general fund allocates shared service costs like finance, legal HR, out to the enterprise funds for their use of that service. Additionally, our core enterprises, water rec, solid waste, storm water, and parking, pay an enterprise dividend. to the general fund in addition. And so those two collectively are where the general fund's recouping either current costs or previous investments in those that are effectively for those enterprises.

Okay, one more question. Non-departmental expenses. Page 17. What are those?

So if you go to the immediate next slide where you have the pie chart breakout, You see, that gives a little more detail. So non-departmental, you have the general fund contribution to our capital program is probably the biggest piece. The share of our own property tax revenues that we have to pay to the CRA, so our CRA tax increment payments are included there. Our debt service payments are included there, as well as the reserve contingency where we essentially budget to not use a certain amount of dollars so that we can grow our reserve proportionally with our our budget to try to keep that reserve ratio reserve percent we ever get any rebates from the CRA anymore. So we don't for the downtown CRA because any funds that the downtown CRA doesn't use for debt service go towards their operations. So from anywhere else? When we had the Conroy Road and Republic Drive CRAs, we did get a rebate from those because they were only able to use our increment on debt service, and so any remaining balance was sent back to us. However, as of the fiscal year 27 budget, both of those will be sunsetted. And the county gets her. So the county gets to keep their portion and then we also get to keep our portion.

OK, I appreciate it. Great presentation. Thank you.

Okay, I will take note, Commissioner Chapin, and I don't want to give any meaningful substance or validity to the Doge efforts or the CFO's efforts, but they did make note that the city of Orlando, if you were using the formula of inflation and population growth, was the closest local government to being exactly on track with that. So we were the best of the worst, according to them. So you can take that for what it's worth. So Jason, Jose, the entire finance team, thank you for the great work that you've done in putting together this. Commissioners, thank you for your thoughtful comments. You'll have an opportunity to work on the budget more closely over the course of the next month or so, and then we'll have our public meetings in September. Remember those will be 501 meetings. But how about if all our finance staff would stand up and let us give you guys some love. Okay, Jason, anything else?

No, Mayor, that's it. Like I mentioned, in approximately two weeks, we will have the more detailed commissioner notebook available for all of you, and we will also post it on the web at that time.

Okay. Thank you. We'll stand adjourned.