The Oviedo City Council adopted a tentative fiscal year 2025–26 budget of $104,551,863 (net of interfund transfers) and set a tentative operating millage rate at 5.861 mills with a separate 0.114-mill general-obligation bond levy, council members confirmed after a 4–1 vote Sept. 8. The adopted operating rate is 4.32% above the rolled-back rate of 5.6184 mills; combined with the debt levy, the overall tentative rate is 5.975 mills.

The vote followed a staff presentation of the proposed budget, which had initially included a 5.961-operating millage. City staff said the tentative budget preserves current service levels, funds a 4% across-the-board salary increase for general government employees and negotiated raises for police and fire under collective bargaining agreements, and adds or reclassifies several positions including a 0.25 full-time-equivalent police records specialist and a new facilities maintenance technician.

“Since July, we received the communications services tax estimate from the state, which is just over $114,000,” said Ms. Jones, a finance staff member who reviewed the options. Jones told the council staff removed a second-floor City Hall bathroom renovation from the budget and reallocated those funds, together with the communications-tax increase, toward vehicle replacements and, in an alternate scenario, toward debt paydown.

Staff presented two main options for council: (1) lower the millage 0.100 mill and offset most of that reduction using the new communications-tax receipts and a limited use of fund balance, or (2) keep the 5.961 millage and apply one-time resources toward paying a portion of two outstanding notes. Staff estimated a 0.100-mill cut would reduce general-fund revenue by $419,464. The operating millage set at 5.961 mills had been projected to produce $25,004,263 in ad valorem revenue (plus $10,000 for delinquent collections, for a total of $25,014,263), an increase of $1,879,591 over the prior year’s adopted general fund.

On the debt question, staff identified two short-term notes (referred to in the staff presentation as the 2012 and 2013 issues) with a combined outstanding payoff of just over $1.6 million. Staff showed a scenario in which the city could pay off the older 2012 note (approximately $700,000 outstanding) in the coming year by applying the communications-tax increase plus a draw on fund balance; staff cautioned that policy limits restrict using fund balance to balance the budget to no more than 3% of revenues at adoption.

City staff also warned the council against reducing the operating millage too far because keeping the millage at the budgeted level improves flexibility for next year’s planned public-safety capital financing. “Maintaining the current millage rate provides us a better position to be in as we go into the next fiscal year,” said Brian Cobb, a city staff member. Cobb and Ms. Jones told the council that preserving the millage would help the city pursue a 20-year bank note instead of a 30-year bond for the planned police facility, a change staff said could save roughly $50,000–$150,000 in issuance costs.

Council members debated the trade-offs. Mayor Megan Sladek said she preferred that staff and council look for program reductions before relying on fund balance. “I’d like to see us over the next couple of weeks before we do the final adoption of the budget, rather than dipping into fund balance to balance the budget, I’d like to see us pick some things to trim down,” Sladek said.

Council member comments ranged from support for staff’s recommendation to keep the higher millage to preserve options for capital financing to willingness to lower the millage by 0.100 mill and revisit the decision next year. Council member Jeff Boniford voted against the motion to set the reduced 5.861 operating millage; the roll call on the motion to set 5.861 mills was Mayor Megan Sladek — Aye; Council member Alan Ott — Aye; Deputy Mayor Natalie Tucart — Aye; Council member Keith Britton — Aye; Council member Jeff Boniford — No. The motion carried 4–1.

The council also adopted the tentative annual operating budget by motion and roll call; the tentative budget covers the fiscal year beginning Oct. 1, 2025, and ending Sept. 30, 2026. Staff said the tentative budget follows the city’s budget and financial policy, which targets a minimum 15% reserve and cites the Government Finance Officers Association best practice of a 16.67% target reserve.

Staff highlighted other line items and pressures: projected increases in pension contributions related to updated mortality tables and market assumptions, a small mowing-contract increase of $9,950, continued funding for the vehicle replacement plan, and minor capital items. Staff also noted the city’s audited fund balance is about $20 million and that the current investment yield on that balance is roughly 4.44%, which some council members said affects the calculus of whether to pay debt early.

The council scheduled the second public hearing and final adoption for Monday, Sept. 15, 2025, at 6:30 p.m. at Oviedo City Hall.

Ending: The council action Sept. 8 set a tentative property-tax levy and budget that preserves service levels while leaving council options on one-time allocations and debt strategy; council members instructed staff to deliver additional detail and return before final adoption to allow trimming or reallocation as requested.