Cocoa Beach presents $105 million proposed FY26 budget; reserves drop, CIP relies on grants

'The fiscal year 26 proposed annual budget is a 105,000,000 reducing the overall budget by almost 18,000,000,' the city's budget presenter said, summarizing the fiscal 2026 draft that staff presented to the City Commission.

Why it matters: the proposed budget reduces the city's total spending across all funds and draws down reserves. Staff and commissioners flagged several large capital projects and grant-dependent revenues that together increase financial risk if reimbursements are delayed and reduce the city’s rainy-day funds ahead of hurricane season.

Key figures and immediate decisions

- Proposed total: staff reported a roughly $105 million proposed annual budget for FY26, down from about $123 million in FY25. - Millage: the commission set a proposed millage rate of 6.00; staff said that figure is 0.65 of a mill above the rollback rate and "it will be advertised as a tax increase." - Reserves: total reserves across all funds were shown at about $16.2 million (roughly 2½ to 3 months of operating expenses); the finance presenter described the goal of rebuilding reserves toward a healthy balance over the coming years. - General fund: general fund reserves of about $11.3 million meet the city’s reserve ordinance minimum (ordinance 16-81), which the presenter said requires at least $10.2 million. - Personnel/services: budgeted personnel services across funds totaled about $26.6 million (about 51% of the operating budget). Staff noted a projected 4% cost-of-living-type adjustment that will affect both union and nonunion employees; union negotiations are pending and staff plans budget amendments if necessary.

Revenue details and grant timing

Staff called attention to several revenue changes: higher fee projections tied to short-term rental (STR) and business TR regulations and fee adjustments in charges for services. Fine-and-forfeiture revenues were discussed at length after a commissioner asked why that line item declined; staff said the prior year included a one-off forfeiture and cautioned that the fines account aggregates many types of citations and civil penalties and is budgeted conservatively.

Multiple commissioners and staff discussed a large change in intergovernmental revenue between years. Finance staff explained that timing and the accounting of federal, state and local grants — and cases where prior administrations had not recorded those proceeds in the same columns — were responsible for swings in the intergovernmental totals. The presenter said that some state revolving funds and grant reimbursements are recorded across funds and may not be received in the same fiscal year they are budgeted for.

Capital projects and fund issues

Staff reviewed the capital improvement program (CIP) and flagged several issues:

- Capital improvement fund (new City Hall/Centennial Park): the city’s capital fund shows a negative balance of about $6.8 million, the presenter said, largely because expected grant reimbursements and other revenue did not arrive in the same year as the construction expenditures. The presenter said staff will bring a resolution in a forthcoming meeting to close the fund and absorb the negative balance into the general fund, a process that will include internal transfers and bookkeeping adjustments.

- Project reliance on grants: commissioners pressed staff about projects that had previously been described as fully grant funded. Staff said some projects are partially grant funded and that prior descriptions of fully grant-funded projects (for example, a previously contemplated capping project) had proven inaccurate. For the Bicentennial Park scope staff said roughly 80% of the remaining work was expected to be grant-funded but the city’s share remains on the books.

- Fire apparatus: the fire department asked to move forward with a replacement engine. Staff said no contract had been signed and that a build-out typically takes multiple years; the commission was told a future contract award and specific appropriation would be required before the purchase is committed.

- Minute Man Causeway and shoreline work: an engineering estimate for shore protection and utility protection on Minute Man Causeway appeared in the CIP (about $787,000); commissioners asked staff to return with a project concept and cost breakdown so the public could see what construction would involve and how it would be funded.

- ADA oceanfront park (site from federal property transfer): commissioners and staff discussed a project to develop a strip of oceanfront property the city is set to receive from the federal inventory. The department said the National Park Service and GSA had engaged in the deed transfer process and recommended the city retain a $300,000 FY26 line item to advance the park’s design and meet obligations tied to the deeding process. Commissioners debated whether to delay design funding until FY27; staff noted that if the city does not demonstrate its plan to develop the property the federal transfer process could be jeopardized. "The National Park Service has already requested assignment through the GSA for this property, and they highly recommended that we retain the 300,000 within our f y 26 budget," a staff member advised.

- Holiday Lane boat ramp and Mercado development: staff budgeted funds in FY26 for the Holiday Lane boat ramp, but engineers warned that pending nearby redevelopment (the Mercado project) is raising ground elevations and could require additional ramp or approach work; staff suggested coordinated engineering with the developer could reduce overall costs but cautioned the developer’s timeline is uncertain.

Operational and maintenance notes

Commissioners raised recurring maintenance priorities: beautification and median work along State Road 520 and additional maintenance for public landscaping; the commission asked staff to develop concepts and rough order-of-magnitude costs. The parking garage also drew attention: staff flagged corroded electrical conduit and elevator issues and proposed a repair allowance; staff said some conduit replacement may be done in-house but the project will require additional scoping.

Other logistics and next steps

- Public hearings: staff confirmed two statutorily required public hearings: a tentative budget and millage hearing (first public hearing) and a final hearing. Staff has scheduled the tentative hearing for the early September regular meeting and the final hearing for the later September meeting. The presenter reminded commissioners that the hearings must be held at times advertised in the legal notices and that the procedural rules require the hearings be the first substantive item on the agenda as advertised.

- Debt and CIP totals: staff acknowledged a few spreadsheet total errors in the draft materials and said corrected figures would appear in the budget book delivered before the September hearing.

Quotes from the meeting included the budget presenter’s summary of the change in totals and the staff’s description of grant timing: "'25 annual budget, that budget totaled 123,000,000 across all funds. The fiscal year 26 proposed annual budget is a 105,000,000 reducing the overall budget by almost 18,000,000," the presenter said. In discussion of intergovernmental revenue staff summarized the variance as timing and accounting differences across grants: "Some of those revenues are related to grants, the timing that grants come in. Sometimes we could request reimbursement. It doesn't mean that it's gonna come in within that same fiscal year that it was budgeted," staff said.

What the commission directed

Commissioners prioritized two follow-up tasks: (1) staff will return with more detailed cost and scope information for Minute Man Causeway work and for Brevard Avenue/State Road 520 landscaping, including sustainment costs; and (2) staff plans to bring a resolution to address the capital improvement fund negative balance and to correct the CIP totals before the public hearings. Staff also kept all grant-dependent projects on the table but noted that if grants are not received some projects will be delayed or re-scoped.

Public comment at the meeting reiterated interest in maintaining public spaces and landscaping; speakers urged the commission to consider long-term maintenance costs when approving new capital beautification projects.