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City manager and finance director present $199.4M FY2026 budget, formally recognize reserves
Summary
City Manager Cowper and Finance Director Drury presented a $199.4 million proposed FY2026 budget that maintains the operating millage at 4.637 mills and formally budgets previously unrecorded fund balances as reserves; staff said the change improves transparency and funds targeted capital and staffing priorities.
City Manager Cowper and Finance Director Drury on July 10 presented the city manager's proposed fiscal year 2026 budget to the New Smyrna Beach City Commission, describing a $199.4 million total that staff said primarily reflects a change in how the city reports existing fund balances rather than new recurring taxes.
"Property values are projected to increase by 7.58% or approximately $532,000,000," Finance Director Drury said, and staff proposed holding the operating millage steady at 4.637 mills. Drury told the commission the proposed total rose from the May draft largely because the budget now includes a line for funds carried forward and an expense line for required reserves that had previously been left out of the published budget.
Cowper said budget choices are tied to the commission's strategic priorities and that the package is intended to be structurally balanced and sustainable. "We are budgeting permanent reserves," Cowper said, adding the change is intended to make financial resources more transparent to the public.
Why it matters: Staff said formally budgeting the reserves makes long‑term sustainability clearer to bond raters and the public, and provides a clearer picture of which resources are available for one‑time capital projects versus recurring operations. Drury noted the Government Finance Officers Association and the city's auditors recommend stronger reserve targets for a coastal community vulnerable to hurricane expenses.
Key numbers and drivers: Drury said the proposal shows $169.5 million in revenues, $29.9 million in interfund transfers and that the primary drivers of the increase versus the prior draft are: roughly $8.9 million in funds carried forward from the prior year, $1.4 million in additional grant revenue, a $480,000 increase in property tax receipts, and a $9.0 million increase in planned capital project funding. She said the largest single change in the year‑over‑year presentation is the inclusion of reserves and fund carryforwards previously omitted from the published budget.
What stays the same: The operating millage rate remains unchanged at 4.637 mills, and Drury said other revenues were conservatively estimated (other revenues projected +3%, interest income modeled lower). Personnel placeholders were included for a pending compensation study and ongoing police and fire contract negotiations.
What comes next: Commissioners asked staff to prepare clearer public materials explaining why the total budget number jumped and how much of the change represents one‑time items (reserves and capital) versus recurring expenses. Drury and Cowper said the presentation will be posted and staff will follow up with more granular, year‑over‑year comparisons and a communications plan for the public.
