City Manager (name given in meeting as "city manager") presented a budget preview for fiscal year 2025–26 and said the proposed tentative millage rate to be set at the July 16 meeting will be 3.65 mills, up from the current 3.40 mills.

The manager said counsel and finance staff plan to deliver a full proposed budget by July 11 and that the charter requires formal delivery no later than July 15. "We're recommending as a proposed rate of 3.65," the city manager said. He emphasized the July action sets a preliminary maximum rate and that the council may lower the rate during subsequent hearings.

Key cost drivers identified in the preview included an 8.1% increase in the sheriff's contract (an increase the manager quantified as $350,833) to maintain current law‑enforcement service levels; an anticipated roughly $300,000 increase for fire services as the city brings two full‑service stations online and continues labor negotiations; and a capital need for a future fire engine with a price estimate staff cited at about $1,213,000 (not included in the presented budget). The manager and council discussed national cost increases and recent construction‑cost indices when describing higher capital estimates.

Legal services were increased in the manager’s estimate by $400,000 to cover potential litigation, including a potential claim involving the Berry Plantation Community Association and the St. Johns River Water Management District and ongoing matters involving Volusia County Schools. The manager also described Alexander Island Park construction and operations needs: staff anticipates needing two additional Parks & Recreation employees to support heavy weekend use, a $50,000 maintenance garage request and equipment purchases for park operations.

Public works capital needs included a $600,000 road resurfacing allocation and replacement of aging vehicles and equipment (mowers, trucks and a modular employee building). Council members asked for further schedules and asset‑age data; staff agreed to provide a capital‑assets schedule and to compare the proposed 3% across‑the‑board wage increase with peer governments and the state's 2% increase.

The manager said the administration will present the full proposed budget for council review on July 11 and follow the budget workshop and two hearings schedule that leads to a final millage decision in September.