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City of Stuart finance staff flags $3.9M shortfall; commissioners schedule budget workshop and keep not-to-exceed millage at 5
Summary
Finance staff presented a preliminary 2026 budget showing a roughly $3.9 million gap driven by pension (FRS) and health insurance cost increases. The commission agreed to a budget workshop and to publish a not-to-exceed millage of 5 mills while exploring cuts and revenue options.
City of Stuart Finance Director Jolie and City Manager Mortel on July 14 presented a preliminary 2026 budget framework that showed roughly $3.9 million in currently unfunded department requests and cost increases.
Why it matters: the shortfall follows modest taxable-value growth, higher pension (FRS) contribution rates for some employee classes, and a large health‑insurance renewal estimate. Staff said some of those expense changes are outside local control and stressed the need to prioritize spending, identify one-time funding sources and consider a commission policy on the millage to guide budget workshops.
Numbers and drivers: city staff reported the 2025 tax roll yields about $18 million in ad valorem revenue before the CRA share is deducted; after the CRA increment (about $3 million) the General Fund ad valorem available was roughly $15 million. Finance Director Jolie told commissioners that state pension contribution (FRS) rates shifted—public safety rates rose by about 7 percentage points—and that the city had received an early indicator of a roughly 22 percent increase in health insurance costs.
“Our rates do go into effect July 1, so we have to retroactively apply them to the payroll that was missed,” Jolie said, adding that the city will apply the new rates once final numbers are received.
Commission discussion and direction: commissioners discussed options including spending reductions, using one-time revenues and the political and practical consequences of changing the millage. Vice Mayor Collins said she would like to see a long-term push to reduce spending and move toward a lower millage band; other commissioners expressed caution and asked staff to identify firm cuts and impacts before adopting a directional millage. After discussion the board agreed to schedule a budget workshop starting the afternoon of the August 11 meeting and to file a not-to-exceed millage of 5 mills with the property appraiser (a procedural step required under state Trim law). Commissioners and staff emphasized that adopting a not-to-exceed figure does not lock the commission into a final rate and that final millage will be set after the public hearings in September.
Options staff will bring back: finance and the city manager said they will continue to pursue a mix of approaches at the workshop, including 1) identifying recurring savings and lower-priority staffing/capital requests, 2) assessing one-time revenue and transfers (for example, leased-property fund transfers and property sales), and 3) seeking grant matches or other external funds for capital needs such as stormwater projects. The manager also noted the city’s long-run structural constraint that ad valorem is the only material revenue the commission completely controls and urged commissioners to weigh services versus tax rate decisions.
Next steps: staff will present detailed department-by-department options at the August 11 workshop, bring final FRS and health-insurance figures as soon as they are available and return with a prioritized list of proposed cuts and one-time financing choices ahead of the statutory Trim hearings in September.
