Dunedin commission adopts tentative millage and tentative FY2026 budget; staff re-times large capital projects

The Dunedin City Commission on Wednesday adopted a tentative millage rate of 4.1345 mills and approved a tentative operating and capital budget for fiscal year 2026 after the first public hearing on the proposed figures. The votes on Resolution 25-22 (millage) and Resolution 25-23 (tentative budget) were unanimous.

City Manager Jennifer opened the hearing by calling it the first public hearing and a predicate to adoption of the FY2026 budget, which runs from Oct. 1, 2025 through Sept. 30, 2026. Finance Director Les Tyler read the required TRIM and statutory disclosures and said the millage of 4.1345 mills is 5.43% above the 2025 rollback rate and would generate roughly $17.85 million in ad valorem revenue for the general fund at a 95% collection rate. "At our 4.1345 mills, the tax revenues are projected to generate $17,850,000 in the general fund in 2026," Les said during his presentation.

Why it matters: the tentative documents set the tax rate and spending priorities for the coming year and schedule a second and final public hearing for Sept. 23, 2025. The adoption at first reading does not finalize the budget; commissioners and staff said they will continue work to close projected outer-year shortfalls.

Major adjustments and highlights

- Highlander Aquatic Complex: Staff moved the bulk of the Highlander Aquatic Complex costs out of FY2026 and into FY2027 to better match expected cash flows. Les said about 25% of the project is budgeted in 2026, with the remainder shifted to 2027, creating an apparent improvement in FY2026 reserves while leaving the multi-year total unchanged.

- Stormwater and operating reclassifications: An approximately $1.9 million stormwater project was reclassified from operating to capital, producing an operating decrease of approximately $1.5 million. Staff said subscription-based software costs (NeoGov, ClearPoint, ClearGov and a newly approved public works package) were moved from operating to debt service to follow GASB 96 guidance.

- Weybridge Woods bridge: A recent structural inspection led staff to conclude repairs (decking and stringer reconstruction) are feasible rather than full replacement. Design costs of $150,000 were added to FY2026 with about $1 million of construction scheduled for 2027; the Enterprise Fund will contribute $65,000 and the remainder will come from the general fund.

- Dunedin Boat Club and selling center: Staff rebudgeted approximately $63,400 (from ARPA and general fund) plus $47,740 in insurance proceeds into FY2026 for the boat club and selling center; an additional $29,248 in insurance proceeds may be available if the city rebuilds the facility. Commissioners noted multiple sources make the project roughly $240,000 "to the good" at present.

- VOD employees and FTE accounting: An HR audit of hours for variable-on-demand (VOD) employees — primarily in Parks & Recreation — produced a recalculation that increases the city's FTE count on paper by 14. Staff emphasized this was an accounting correction rather than new hires: "We were not calculating it right and we corrected it," Les said, adding that the departments had already budgeted for the hours. Teresa Smalls, director of HR and risk management, explained the shift reflects assigning fractional hours to produce more accurate FTE equivalents.

Commissioners and next steps

Several commissioners praised staff for clarity and careful presentation of operating versus capital impacts. Vice Mayor Gao, the motion maker on the millage, and others commended staff for maintaining stability while noting the city still faces an average annual projected shortfall in outer years (Les presented an updated average shortfall near $5.525 million across the long-range forecast). Commissioners asked staff to pursue operating efficiencies, fee adjustments and other multiyear strategies; staff said a mix of measures, including possible consideration of tax options, will be part of a multiyear plan.

Public comment

No members of the public spoke during either the millage or the operating/capital budget public hearings.

Votes at a glance

- Resolution 25-22 (tentative millage 4.1345 mills): motion by Vice Mayor Gao; seconded on the record; roll call: Commissioners Sandbergen (Aye), Walker (Aye), Dugard (Aye), Vice Mayor Gao (Aye), Mayor Franey (Aye). Outcome: adopted unanimously.

- Resolution 25-23 (tentative operating and capital budget): motion by Commissioner Sandbergen; seconded by Vice Mayor Gao; roll call: Dugard (Aye), Walker (Aye), Vice Mayor Gao (Aye), Sandbergen (Aye), Mayor Franey (Aye). Outcome: adopted unanimously.

What happens next

Staff will publish required TRIM advertisements within 15 days of the tentative hearing and return to the City Commission for the final public hearing and adoption of the millage and budget on Sept. 23, 2025 at 6 p.m. in the City Hall Commission Chambers.