West Palm Beach staff presents balanced FY22 general fund budget after stronger-than-expected revenue

City Administrator Faye Johnson and Budget Manager Linda McDermott presented a proposed FY22 general fund budget that staff described as balanced at about $204.1 million, up from the FY21 adopted general fund of roughly $193.45 million.

Johnson told the commission she had expected FY22 to be as challenging as FY21 but said the local economy rebounded better than anticipated. “I am fortunate that I was wrong,” she said. Johnson identified three reasons the city’s FY22 outlook improved: a stronger local economy and property-value environment, reductions in several operating expenditures following FY21 actions, and removal of a previously used $4.1 million vacancy allowance that staff characterized as a recurring budgeting risk.

McDermott summarized revenue and expenditure changes that underpin the proposed budget. She reported property-tax revenue rising by about $5.3 million, other intergovernmental receipts and state-shared revenues increasing, and sales- and franchise-tax receipts exceeding earlier conservative estimates. McDermott said the proposed budget assumes approximately $11.7 million in net operating revenue available to cover operating increases, which staff counted at about $7.7 million this year, leaving roughly $4.0 million of incremental capacity compared with the prior outlook.

Key elements in the proposed FY22 budget include: - Market and compensation adjustments for public safety: staff said a total market adjustment for police and fire of about $6.4 million is reflected in the budget; staff plan to offset most of the adjustment using departmental overtime budgets, leaving a net operating increase that Johnson described at the summary level. - Restoring previously proposed 5% department-wide reductions: because of improved revenues, department budgets, the mayor’s office budget and internal auditor’s budget were restored in the proposed document. - Vehicle replacement and contingency: McDermott said the proposed budget includes $1.3 million for vehicle replacement pre-funding and a $1.0 million reserve for contingency.

Labor negotiations remained unresolved for some groups. The city reported a tentative agreement with PMSA (mid-management) for a 5% cost-of-living adjustment for FY22–FY23, but SEIU did not accept the proposed 5% and the police captains had recently selected FOP as representative and were not yet at the bargaining table. Johnson said staff do not currently propose retroactive pay for SEIU for FY22 and that any future adjustments for non‑represented confidential employees would be evaluated cautiously.

Commissioners praised staff for the budget work but asked follow-up questions about overtime levels in police and fire, a higher workers’-compensation projection and whether certain positions (an accounting supervisor and a senior budget analyst) would be funded from the general fund or from anticipated American Rescue Plan or other grant-related funding. Staff said those positions were included in the general fund proposed budget to ensure reporting and grant-administration capacity existed even if ARP decisions shift funding later.

Why it matters: the proposed FY22 budget restores programs and personnel cut during the pandemic-era budgeting cycle while embedding market adjustments for public safety; adoption phases begin with a preliminary presentation and public hearings in September.

Next steps: staff will present the preliminary budget on Aug. 23 and the commission will hold public hearings on Sept. 8 (tentative adoption of a millage rate and tentative budget) and Sept. 23 (final adoption).