City manager proposes $2.78 billion FY26 budget; seeks new major-project fund, meals-tax and boat-fee changes

Kevin Chatelier, a city staff member presenting the city manager’s proposed FY26 operating budget and capital improvement program (CIP), told the City Council the proposed operating budget is just under $2.8 billion and would grow about 4.7% from FY25 to FY26.

Chatelier said the plan aims to “maintain promises made in the past, meet the current obligations while sustainably planning for the future” and preserves the proposed real-estate tax rate at $0.97 per $100 of assessed value. He said the proposed budget includes new spending for public safety, staffing and the CIP while trying to limit increases to property taxpayers.

The proposal would: redirect about $11.8 million from three longstanding dedications — the Open Space fund, the Town Center tax-increment finance (TIF) fund and the Agricultural Reserve Program (ARP) — into a newly proposed “major projects fund”; ask council to increase the meals tax from 5.5% to 6% (estimated to generate about $9.2 million annually); and create a new personal-property “pleasure craft” tax of $1.50 per $100 of assessed value on vessels longer than 18 feet, estimated to generate roughly $4.3 million per year and be dedicated to coastal projects.

Chatelier described a $1.3 billion funding gap across planned CIP projects driven by…