Lynn Haven commission approves $3 million midyear budget amendment; finance director reports $22,000 fraud

Lynn Haven’s City Commission voted unanimously March 10 to adopt a midyear budget amendment that increases the city’s FY2025‑26 budget by about 4%, or roughly $3 million, to reflect prior‑year carryovers, grant awards and targeted capital and operating changes.

Finance staff presented a line‑by‑line update before the vote. The package includes roughly $1.5 million in spending carried forward from the previous year; $745,000 added to utility impact‑fee reserves; $285,000 in a stormwater grant; $180,000 in additional police funding; $75,000 for design work on Bailey Bridge improvements; $83,000 to remodel the animal shelter; and $300,000 for paving 18th Street. “This is our best guess to get us to Sept. 30, 2026,” finance staff member Kiki Roman said, describing statistical forecasts and vacancy savings used to balance the request.

Roman told the commission the city remains in deficit on a 2019 bond payment (about $2.7 million) but said the midyear amendment does not change the authorized position counts; instead, managers are retaining vacancies as a cost‑saving measure. Commissioners pressed for quantification of staffing and other drivers; Roman answered that the city is short roughly nine police officers and “six or eight” other staff positions remain unfilled.

In a disclosure that drew attention from commissioners and the public, Roman said the city suffered a $22,000 loss after fraudulent emails redirected a vendor payment to a fraudulent account. She described a business‑email‑compromise in which attackers used falsified vendor messages and slightly altered email addresses to trick staff into changing banking instructions. “We discovered this approximately a week later,” Roman said, adding that the police department, the FBI and Homeland Security are involved and subpoenas have been issued to banks. The city has filed an insurance claim and Roman said she is “confident” the claim will be paid but could not predict timing.

Mayor Dave Lowry called the presentation “a good overview,” and the commission approved the resolution 5‑0. The resolution number recorded was 2026‑03‑524 and staff said the vote will take effect according to the resolution’s terms.

What happens next: staff will implement the line‑item changes, continue recovery efforts related to the fraud investigation, and bring any proposed policy or operational changes (for example, more stringent vendor‑verification procedures) back to the commission. Roman said she will present revised finance policies informed by Department of Commerce monitoring recommendations and that the city already requires multiple staff verifications for bank‑account changes.

The commission’s action preserves current vacancy limits while realigning spending and reserves; it does not change the city’s staffing authorizations without further commission approval.