Tallahassee officials accept first-quarter budget update, approve amendments and commission fire-fee study

Tallahassee commissioners on Feb. 12 accepted a first-quarter budget update, approved several budget amendments totaling about $6.6 million and directed staff to commission a study of the city’s fire services assessment and fees to ensure the fire protection fund is fully funded.

The action came during a single-topic budget workshop where City Manager Goh and budget staff presented early fiscal-year 2025 results, assumptions for fiscal 2026 and capital plans through 2030. City staff highlighted a projected general-fund shortfall of roughly $3 million to $5 million under current assumptions and recommended steps including a revised fire assessment, modest workforce cost assumptions and continued reliance on enterprise transfers and grants.

City Manager Goh said the quarterly review lets officials “lay out the assumptions” and spot trends as they develop. Robert Wigan, a member of the budget team, summarized the recommended immediate budget amendments and the proposed next steps for fiscal 2026 assumptions, including a millage-rate assumption at 4.42 mills and a 4% pay raise for general government employees as part of the expenditure assumptions.

Why it matters: city officials said the fire services fund needs attention because recent collective bargaining agreements, inflation-driven construction and design changes for Fire Station 17 and the planned expansion of Station 15 have increased costs. The city also reported reduced annual revenue due to nonpayment for services by Leon County Schools, a matter staff said may require revisiting the schools’ discount arrangement.

What commissioners approved and directed - The commission voted to approve the presentation and accept the first-quarter budget update as presented. (Voice vote; motion passed unanimously.) - The commission approved four budget amendments listed by staff: a $3,697 appropriation for SHIP funding; a $4.2 million capital amendment for the North Apron improvement and development project; a $1.9 million amendment for underground utilities and intersection improvements including signal upgrades; and a $500,000 amendment to the aviation fund for the international passenger processing facility construction contingency. The commission dispensed with separate roll-call votes and approved the amendments by voice vote.

Fire-fees study and early estimates Staff told commissioners they had checked with Leon County and the city’s consultant (now Accenture, formerly Government Services Group) and concluded a study is necessary to confirm whether current assessments and rates cover fire-protection costs. Early, high-level estimates presented by staff indicate a 20–25% increase in the assessment could be needed; staff said that would translate to roughly $5–$6 per month for a typical residential property under one scenario. Robert Wigan described those figures as preliminary and said the study will refine the numbers.

Officials stressed drivers for the review: collective bargaining costs tied to agreements with the International Association of Fire Fighters, higher-than-expected station design and construction costs, inflation, and an identified revenue shortfall tied to Leon County Schools’ nonpayment for services. On the schools’ arrangement, staff said the schools receive a discount on electric service conditioned on their agreement to pay the fire-service fee. That discount is “in the neighborhood of $300,000 a year,” staff said; city attorneys and staff are reviewing the agreement and options, which could include stopping the discount and pursuing liquidated damages if warranted.

Budget assumptions, risks and context Staff identified key fiscal-2026 assumptions: a 4.42-mill property-tax rate, implementation of a revised fire assessment on Oct. 1, 2025, CPI-based growth for enterprise funds, and a 4% citywide raise for nonbargaining employees alongside the costs embedded in bargaining-unit contracts. The city reported its fiscal-year-25 budget totals about $1.2 billion across operating and capital funds.

Wigan and other staff also highlighted longer-term and programmatic investments the budget supports: more than $600 million committed to South Side infrastructure projects, $180 million listed in capital projects labeled as infrastructure improvements, continued CHSP-backed human-services funding that carries into FY26, a plan to increase Tallahassee Police Department sworn officers by roughly 5% per year (about 20 officers annually) with a goal of 100 additional officers over five years, and continued efforts to ensure 100% of residents live within a 10-minute walk of a park.

Staff noted grants have been a major revenue source: roughly $354 million in grants over the past five years, an amount staff said is nearly comparable to property-tax revenue collected in that span. Staff also said FEMA public assistance programs are important for reimbursing the city after storms and other disasters.

Deficiencies fund and reserves Commissioners discussed the deficiencies fund (a reserve used during downturns). Staff said the fund’s balance is about $28.8 million, roughly 82% of the stated target; earlier in the discussion staff noted the fund had grown from about $20 million in prior years and that officials expect to fully replenish the target within several years, depending on surpluses and asset sales.

Public-safety rating and other service metrics City staff reiterated a strategic priority to improve the Tallahassee Fire Department’s Insurance Services Office (ISO) rating to Class 2, which staff said should lower insurance costs for city residents and businesses. Staff said achieving that target would require investments in personnel, equipment and training.

Next steps and schedule Staff said numbers remain preliminary; the city expects more refined property-valuation and revenue figures in June–July, final health-care costs in August, and initial results from the fire-services review in April and June. Commissioners set a schedule of follow-up budget workshops in April and June and two public hearings on the FY26 budget in September.

Quotes “I feel good about where we are,” City Manager Goh said of the first-quarter financial picture, while acknowledging the figures will change as new data arrives. Robert Wigan said early estimates for a fire-fee adjustment “are showing 20 to 25, increase would accommodate that … about 5 to $6 per month, for a residential property.”

The meeting concluded with the commission approving the presentation and the listed amendments by voice vote. The commission adjourned the budget workshop to reconvene for the regular City Commission meeting at 3 p.m.