Spring Hill council votes to exceed revenue-neutral rate, budget approval set for Sept. 11

Spring Hill took a step toward its 2026 spending plan Thursday, approving a resolution to levy property taxes above the state efined revenue-neutral rate while leaving final budget adoption to a Sept. 11 meeting. Finance Director Mrs. Dunn opened the combined public hearing on the 2026 budget and the revenue-neutral rate and said, "I want to remind everybody we are not approving a budget tonight. This is a step in the process."

The proposed 2026 budget projects roughly $1.1 million more revenue than the 2025 budget, with a $308,000 increase attributed to property-tax receipts arising from higher assessed valuations and the city —uilding more taxable property. Mrs. Dunn told the council she increased fees revenue in the draft budget after the city exceeded permit-fee projections in 2024 and again in 2025, and that interest income assumptions had been tempered to reflect market uncertainty. On the expense side she described personnel-related increases and new positions as the principal drivers of higher spending.

Why it matters: adopting a mill levy above the revenue-neutral rate requires an extra public step under state rules and can affect households differently depending on each property

ssessment. Mrs. Dunn said the city

ttempted to lower its mill levy from 22.97 to a proposed 22.69 but remains above the revenue-neutral rate of 20.747; she called the resolution a "security blanket" to avoid potential refunds if the city later collected more than allowed under revenue-neutral calculations.

Public comment underscored the point that residents and some council members want clearer, line-item detail before final adoption. Resident Rodolfo Arvallo pressed the council on the overall size of next year —xpenditures, saying his calculations showed the draft spending rising from about $10.1 million this year to $13.6 million in 2026, "That's a 34% increase in expenditures," he said, and urged deeper review of departmental increases and unspent reserves. Resident Dan Broyles said the proposed levy was roughly 10% above revenue neutral and encouraged the council to limit annual increases where possible.

Council discussion focused on balancing tax relief with infrastructure and service needs. Several council members asked staff to break the numbers down "per $100,000" of assessed value and to show the impact on existing residents apart from revenue from new construction. Mrs. Dunn said she would provide per-$100,000 figures and household examples ahead of the Sept. 11 budget vote.

Formal action: the council adopted Resolution No. 2025-R-18 authorizing the city to levy a property tax rate exceeding the revenue-neutral rate. Deputy clerk roll-call recorded affirmative votes by Mr. Peel, Mr. Young, Mr. Grant, Mr. Throm, Miss Vibach and the Mayor; outcome: approved. The resolution authorizes the city to proceed with the option of setting a mill levy higher than the revenue-neutral calculation; the final levy and budget remain pending formal adoption at the Sept. 11 meeting.

Discussion vs. decision: the council —xplicitly differentiated the revenue-neutral resolution (a procedural step) from final budget adoption. Mrs. Dunn repeatedly noted that the hearing and the resolution do not constitute final approval of the 2026 budget; that decision is scheduled for Sept. 11.

What—omes next: staff will provide clearer, per-$100,000 impact figures and a department-level breakdown (including the staff

ssumptions for insurance, benefits and new positions) before the council considers budget adoption on Sept. 11. Several council members signaled willingness to consider drawing modestly on reserves to reduce the mill levy impact on existing residents while guarding the city's bond rating.