Layoffs, service cuts, higher fees? Fernandina Beach faces $7 million Amendment 3 fallout

FERNANDINA BEACH — City employees could face layoffs, salary cuts and furloughs, while residents could see reduced services and higher fees as Fernandina Beach prepares for a projected $7 million decline in annual property tax revenue following last week's voter approval of Amendment 3.

According to the city's projections, annual property tax revenue supporting the general fund could fall from approximately $22 million to $15 million by the 2031-32 fiscal year, a decline of nearly 32%.

"For the next 5 years, conservatively — now, depending on how values grow — at least for the first year, I think we need to plan for a negative 5% on the budget," Campbell told commissioners.

The document specifically lists salary reductions, furloughs, a hiring freeze, departmental reorganizations, elimination of positions through attrition and reductions in force. Employee insurance benefits and pension changes are also identified as possible areas for savings.

The roadmap does not specify how many positions might be eliminated, which departments could be affected or how much money the personnel changes would save.

"I'm also planning a staff update meeting just to reassure them that, while we don't have all the answers yet, we will be working toward some solutions," she said.

The city will review its major vendors and operating expenses to identify potential savings while ensuring it continues to meet legal requirements.

City staff will examine the five-year capital improvement plan, consider a spending freeze and establish priorities for future projects.

That could mean postponing some new construction and improvements while the city concentrates its resources on maintaining existing infrastructure.

Campbell's roadmap identifies several potential revenue sources, including higher municipal fees, changes to the property tax millage rate and increased franchise fees.

The roadmap also calls for reviewing the city's financial reserves, including existing minimum reserve requirements and funds restricted to particular purposes.

The city's financial challenge follows overwhelming voter approval of Amendment 3, which received approximately 62% support statewide and 74% in Nassau County.

The expanded exemption will reduce the taxable value of qualifying homesteaded properties, cutting revenue available to cities and counties.

Campbell's plan calls for regular reports to commissioners, either monthly or quarterly, as city departments identify potential savings and revenue adjustments.

The administration plans to incorporate selected proposals into the city's 2027-28 budget, with the roadmap setting Oct. 1, 2027, as the target for implementing the first year's adjustments.

Campbell acknowledged that the administration has not yet determined which measures will be necessary.

She compared the challenge to the financial pressures local governments experienced during the 2008 economic downturn and the COVID-19 pandemic in 2020.

"But we navigated those. Government looked different coming out of both of those, and I feel confident that we will come out of this as well. And it may look a little different, but we will get through it."