Indian Harbour Beach council begins FY27 budget talks, eyes Plan B if state tax reforms pass

Indian Harbour Beach — At a Feb. 24 budget workshop, City Manager Coffee told the Indian Harbour Beach City Council that the city is starting public review of its fiscal year 2027 budget and that revenue growth is likely to slow, prompting discussion of a contingency “Plan B” if state-level property-tax reforms reduce local revenues.

“At this point I am not recommending an increase for fiscal year 27,” City Manager Coffee said, noting the city must notify Brevard County by March 1 if it plans to raise the stormwater assessment. Coffee told council members he estimates property-value growth around 3% for the coming year, down from roughly 4% the prior year, and warned the city faces long‑term expenditure needs that outstrip current revenue streams.

Why it matters: Council members said a successful state measure that reduces homestead property-tax revenue could leave the city with a major budget shortfall. Coffee estimated (pending written confirmation from the property appraiser) that homestead‑exempt properties account for roughly half to two‑thirds of the city’s property‑tax base and called the possible loss of that revenue “catastrophic.” Council members agreed they must prepare options that preserve essential services while identifying projects that could be paused.

What the council prioritized: Members repeatedly named work on the Indian River Lagoon — including the muck‑removal effort — as a top priority, along with continuing the fire station annex (including saving for a ladder truck) and park projects such as the Alangquin Sports Complex. Council member Neil Yorio said investing in stormwater infrastructure is an important long‑term strategy to reduce pollutants entering the lagoon.

Grants and capital notes: Staff reported that a consultant‑led grant effort won a municipal water‑quality grant that will largely offset the baffle‑box project and that other grants have returned partial reimbursements (a tree assessment cost $42,000 with about 50% reimbursed). Coffee estimated the list of planned capital projects adds up to roughly $6 million and said, without additional offsets, the city faces about a $2.5 million shortfall for next year; if the county fully funded muck removal the deficit could fall near $1 million.

Plan B choices: Coffee outlined options for a contingency strategy, including using fund balance to smooth a shortfall and bring budgets back into balance over a multi‑year period, or taking immediate reductions that could include staff reductions. He noted FY26 recurring revenues of about $12 million, with $7.5 million tied to personnel costs, meaning rapid adjustments would likely affect staffing or be achieved over time by attrition.

Communication and timing: Council members discussed the narrow timetable: March 1 is the notice deadline for stormwater rate changes under the interlocal agreement with Brevard County, and ballot language for any state measure could appear this summer. Several council members urged early, factual resident outreach (for example in Harbor Highlights or town‑hall formats) to explain the range of possible impacts while avoiding advocacy once ballot language is public.

Outcome: No formal budget votes were held. After public‑forum time produced no speakers, Deputy Mayor Adam Dyer moved to adjourn; Council member David Net seconded and the motion carried 5–0.

Next steps: Staff will return with the proposed five‑year financial model and capital improvement plan at the April 28 workshop, and council members said they expect to develop prioritized Plan‑B scenarios before then if legislative action proceeds.