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Council hears draft 2026 budget; finance director warns of reserve shortfall and lower capital transfers
Summary
Staff presented a draft fiscal 2026 budget that keeps the millage near current levels but forecasts lower transfers for capital projects and warns reserves could fall to levels that limit discretionary spending.
Town staff presented a draft fiscal‑year 2026 budget on Aug. 5 and warned the Town Council that revenue growth and one‑time sources that boosted prior years are not expected to continue, leaving less money for capital projects.
The presentation outlined projected revenues of approximately $4.3 million and proposed expenditures by fund, with staff estimating a shortfall in non‑property revenues and transfers that would reduce the general fund's available money for capital to an estimated $88,000 after maintaining a 25% operating reserve target.
Staff said the town faces the end of some temporary funding sources and a slowdown in assessed‑value increases that had previously expanded the town's budget. The presenter said the town must protect essential operations and reserves: “Maintaining 25% reserves is something you said, and trust me the finance committee ... agrees,” the staff member said, adding reserves are important for hurricane response and other emergencies.
The draft includes a proposed increase to the road and drainage assessment from $200 to $300 per computed unit; staff said the road and drainage fund is close to reserve depletion and the assessment increase is designed to move the fund toward self‑sufficiency. Staff presented an estimate that keeping the current $200 assessment would leave a multi‑hundred‑thousand‑dollar shortfall for transportation and drainage needs.
Council members asked staff to return detailed breakdowns before the next public hearing: requests included reconciled historical revenue and expenditure baselines (what the town's recurring revenue covered in 2020 versus now), a clearer accounting of transfers between funds and the prospective effect of the proposed road and drainage rate change. Several council members said they wanted monthly or quarterly legal and department spending reports so the council could monitor the budget performance if they try the in‑house attorney model.
Public commenters urged fiscal caution. Several speakers recommended that the council hold to a frugal, small‑government approach and to avoid adding new ongoing staff and benefits unless tied to clear performance measures.
Why it matters: the town faces a budget with fewer discretionary funds for capital projects; the draft proposes higher assessments for road maintenance and asks the council to weigh service expectations against available reserves.
