Fernandina Beach approves final $228 million budget, property tax rate 9.24% over rollback

FERNANDINA BEACH — City commissioners gave final approval Tuesday to a $228 million citywide budget and a property tax rate 9.24% above the rollback rate, keeping roughly $1.5 million in additional tax revenue available as a cushion after the city abandoned paid parking and as it faces uncertainty over future property tax collections.

The commission voted 4-1 to set the operating millage rate at 4.8530 mills, with Vice Mayor Darron Ayscue casting the dissenting vote. The city's rollback rate was 4.4425 mills. The rollback rate is the rate that would generate approximately the same property tax revenue as the previous year, excluding new construction.

The adopted rate is also 3.6% higher than the current 4.6849-mill rate. The city's budget documents project approximately $23.75 million in property tax collections at the new rate, after allowing for a 96% collection rate.

Tuesday's vote made final a tax rate that commissioners first selected in July as a financial fallback. City Manager Sarah Campbell initially built the 2026-27 budget around a lower 4.5444-mill rate. The 4.8530 rate produces about $1.5 million more than Campbell's original proposal.

At the time, Campbell told commissioners the $1.5 million figure was tied directly to the amount of paid-parking revenue that had been committed to the city's waterfront redevelopment project. Voters subsequently rejected paid parking, and commissioners ended the program.

At the commission's first budget hearing Sept. 3, Campbell said the additional property tax revenue had not been committed to new spending but instead was being placed in contingency, giving the city flexibility to deal with the loss of parking revenue and other financial risks. The Observer previously reported that those risks include a proposed statewide constitutional amendment on the Nov. 3 ballot that could significantly reduce the city's future property tax collections.

The final budget carries $2.04 million in General Fund contingency, up from $753,057 in the current budget.

The city's overall $228 million budget covers 30 separate funds and includes approximately $93 million in reserves, much of it associated with pension and fiduciary funds. Campbell told commissioners Tuesday that all 30 funds are balanced and that the city meets its requirement to maintain a 20% General Fund reserve.

General Fund departmental expenditures are budgeted at approximately $35.1 million, up 4.8% from $33.5 million. The budget also calls for $6.4 million in transfers from the General Fund, compared with $4.2 million this year.

One of the largest increases is the transfer for capital improvements, which rises from about $2.54 million to $5.27 million. The General Fund transfer to the marina increases from $654,589 to $832,405.

The marina funding became more significant after the end of paid parking. The Observer previously reported that the revised financing plan uses approximately $668,000 remaining from parking revenue along with the $832,000 General Fund transfer to help replace money that had been expected from the parking program.

Citywide personnel spending increases 6.1%, from $32.3 million to $34.3 million.

The City Manager's department budget increases 20.6%, from $752,047 to $906,784. Human Resources increases 22.1%, from $516,348 to $630,508, while the City Commission's departmental budget remains essentially flat at about $269,000.

The budget also reflects the city's move to direct operation of the marina. It includes $637,404 in marina personnel costs, including salaries, part-time and seasonal employees, benefits and other personnel expenses. At the same time, marina contractual expenses decline sharply.

Commissioners made one change Tuesday before final adoption, adding $25,000 for the Nassau County Council on Aging after discussing a reduction in the nonprofit organization's county funding.

The 4.8530-mill rate means a property owner will pay $4.853 in city property taxes for every $1,000 of taxable value. A property with $300,000 in taxable value, for example, would generate $1,455.90 in city property taxes before considering any changes in assessed value or exemptions. The calculation covers only the City of Fernandina Beach tax and does not include county, school district or other taxing authorities.

Ayscue also opposed the 4.8530 rate when commissioners tentatively adopted it in July and again when they approved it at the first budget hearing Sept. 3. Mayor James Antun and Commissioners Genece Minshew, Tim Poynter and Joyce Tuten supported the rate at those earlier votes.