Oakland commission approves 6.7 millage and tentative FY2026 budgets; staff warned to limit reserve use

The Town Commission of Oakland on Sept. 8 approved a tentative millage rate of 6.7 and unanimously approved tentative budgets for fiscal year 2026, including the general fund, the enterprise (water) fund, transportation impact fees and the Oakland Charter School budget. The commission also set a final public hearing for Sept. 23 at 6 p.m.

Why it matters: The tentative general fund budget relies on a $500,000 draw from town reserves to balance projected operating revenues against growing costs, including an unanticipated increase in the bill from Orange County Fire Rescue. Commissioners cautioned that repeated reserve use is not sustainable, and asked staff to identify revenue or expense adjustments before the final hearing.

Finance Director Gabby Leon presented the draft numbers and the rationale behind them. "The purpose of tonight's meeting is to present to the public the proposed millage and the tentative budgets," Leon said at the start of her presentation. She reported the general fund total as $11,020,949, composed of about $10,500,000 in operating revenue and a $500,000 draw from reserves. "We used the 6.7 millage to balance the budget," she said.

Leon told commissioners the town used a 6.7 millage and noted property values rose about 9.39 percent this year, which affected revenue estimates. She also disclosed a separate shortfall tied to the town's fire rescue billing: the town had not fully paid a previous year’s amount and is still short roughly $200,000. "I thought we did. I was under the impression that we did," Leon said, apologizing and adding, "I'll pay it. It'll be the first thing I do October 1. I'll pay it." Leon said the town has not yet received an invoice for the outstanding $200,000 and did not know how Orange County will present that charge.

Major budget items and changes: The tentative FY2026 general fund budget includes a 3 percent cost-of-living adjustment (COLA) for town employees, a 2 percentage-point increase in retirement contributions for sworn officers (to an 18 percent contribution), and 100 percent coverage of employee health insurance with additional plan options after a reported 9 percent insurance premium increase. Leon said the budget also accounts for off-duty policing pay that generates revenue: "We've normally never accounted for that... this year we broke over $100,000 in revenue," she said, explaining that offsetting revenue and expenditure entries were added so police compensation lines reflect the work without appearing overspent.

The enterprise (water) fund is budgeted at $7.5 million, including approximately $4.3 million in grants and loans and $3.2 million in operating revenue; staff projected a $145,000 remaining balance in the utility fund. The transportation impact fee fund is listed at just over $5 million, with approximately $3.2 million programmed for projects and $1.8 million left in reserves. The Oakland Charter School tentative budget is roughly $6.3 million with projected reserves of about $25,000.

Commissioners pressed for caution. "We're having to pull $500,000 from our reserves to make the budget work. That's not a place I think we want to be on a regular basis," Commissioner Keller said, urging more disciplined spending and advance identification of funding sources for items brought to the commission. Commissioner McMillan and Commissioner Ramos emphasized the need to grow nonresidential tax base and secure external grant funding to avoid recurring reserve draws and to help cover services and special events.

On the impact of fire fees, Mayor Shane Taylor said the commission is meeting Orange County fire officials the day after the hearing to seek clarification and to press for a fair methodology. He described the fire assessment as rising with property valuations and said the town will try to negotiate or seek revised assessments: "We're strategizing, trying to figure out the best way to do that," Taylor said.

Public comment reflected concern about services and tax burdens. Resident Brandon, who said he lives in a new development, asked why high-value new homes in town have not translated into more services such as paved roads and libraries. He told the commission his household tax bill was roughly $14,000 annually and asked why his family must "compete" for charter school seats. Mayor Taylor and other commissioners responded with context about the town's small tax base, past infrastructure gaps, and the charter school's enrollment policies.

Formal actions: The commission made three motions: to approve the tentative millage rate at 6.7, to approve the tentative budgets for FY2026, and to set the final budget hearing for Sept. 23, 2025, at 6 p.m. Each motion was seconded and approved by voice vote.

What’s next: Staff will update final revenue and expenditure figures before the Sept. 23 hearing; Leon said some numbers remain subject to change as additional receipts arrive. Commissioners asked staff to return with clearer sources of proposed expenditures and with options to reduce reliance on reserves. The mayor said the town will report back after the county fire meeting.