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Paid parking is gone. Fernandina Beach turns to property taxes to shore up budget
FERNANDINA BEACH - City commissioners voted 4-1 Thursday to tentatively raise the city’s property tax rate 9.24% above the rolled-back rate, a move designed to help make up for the loss of paid-parking revenue and protect city finances against a potentially steep drop in property tax revenue if voters approve a statewide measure Nov. 3.
The commission approved a tentative operating millage rate of 4.8530 mills for the 2026-27 fiscal year. Vice Mayor Darron Ayscue cast the lone dissenting vote. The rolled-back rate, which would generate roughly the same property tax revenue as the current year after accounting for new construction, is 4.4425 mills.
The higher rate would generate about $1.5 million more than the budget City Manager Sarah Campbell initially proposed. Commissioners directed that money be set aside rather than spent, giving the city a financial cushion while it waits for the Nov. 3 vote.
The city is confronting the two revenue threats at the same time.
The commission terminated its controversial paid-parking program after 75% of voters rejected it in the Aug. 18 referendum. The city had planned to use $1.5 million in paid-parking revenue for marina and waterfront capital improvements. The revised budget replaces that money with $668,000 remaining in the paid-parking fund and an $832,000 transfer from the general fund.
The November property tax measure presents a potentially much larger problem. Commissioner Genece Minshew said during Thursday’s hearing that the measure could cost the city $4 million or more in property tax revenue if approved.
“This is not about finding another $1.5 million to spend,” Minshew said. “This is about whether this commission is willing to look beyond the next 12 months and prepare for what might be coming.”
Minshew said ending paid parking did not eliminate the infrastructure expenses the parking revenue was intended to pay.
“The waterfront still needs to be completed,” she said. “Our infrastructure still needs attention. Our facilities still need investment.”
The city also faces debt service on a $7.7 million line of credit for waterfront-related work.
“These obligations did not disappear on election night,” Minshew said.
The commission also unanimously approved a tentative $228 million citywide budget. The general fund, which pays for most basic city services, totals $50 million. Property taxes provide 47% of general fund revenue. The higher millage rate is not final. Commissioners can lower it when they hold the final budget and tax-rate hearing Sept. 15 at 5:05 p.m.
City Manager Sarah Campbell said the additional $1.5 million generated by the higher millage has been placed in the budget’s contingency account. The proposed contingency had been $500,000. It is now $2 million.
Campbell said the $1.5 million can be classified as restricted cash, meaning commissioners would have to authorize its eventual use.
“So it's in a holding spot,” Campbell said. “We could hold the $1.5 million as restricted cash, and then only the commission could ultimately decide where to expend that.”
Ayscue argued the city should take the opposite approach. He said commissioners should reduce the millage rate now and give taxpayers relief rather than collect additional money in anticipation of a constitutional amendment that has not yet passed.
“Let's roll this back,” Ayscue said. “Let's give back some money. Let's give you some relief, and then we'll revisit next year what we may or may not need if Amendment 3 passes.”
Ayscue said he views support for the proposed amendment as another message from voters demanding lower local government spending, similar to the rejection of paid parking.
“That's no different than what happened with paid parking when they said, ‘Quit. Don't do paid parking,’” Ayscue said.
Campbell warned that lowering the millage now could limit the city's ability to increase it later if the November measure passes.
“If you lower the millage rate today, you need to cap yourself next year about how much you could or could not raise the millage,” Campbell said. “And if Amendment 3 passes, you will need that money, and you will not be able to get it.”
Keeping the higher rate and reserving the additional revenue gives commissioners the flexibility to lower the rate later if the measure fails, Campbell said.
Commissioner Tim Poynter agreed, pointing to the loss of parking revenue and expenses the city has already incurred.
“If we lower it and it passes, we're really in the hole,” Poynter said.
“We've eliminated a revenue stream that could have gone on for the next 30 years,” he said. “We have these expenses that we're looking at right now.”
Poynter said the additional tax revenue should not be used to expand city government but to pay for infrastructure and existing obligations.
The loss of paid parking has already forced changes in the proposed budget.
The paid-parking fund has been reduced to $849,000, consisting largely of money carried over from this fiscal year and projected revenue during the first six weeks of the new fiscal year.
Campbell said finance staff also revised seven general fund revenue estimates upward by a combined $912,000, including cash carried forward, tourist development tax revenue, gas taxes and franchise fees. That allowed the city to make the $832,000 general fund transfer to the marina.
The tentative budget maintains the city's required 20% general fund reserve. It includes $16 million in capital spending and $5.2 million in general fund support for capital projects. Wastewater improvements account for $11 million in expenditures. The budget also expands the stormwater program, including four additional full-time positions. Commissioner Tuten sought to put additional money into the city's conservation land acquisition fund. The fund contains $279,000, but $240,000 is being spent on a recently approved land purchase, leaving approximately $39,000.
“The next time an opportunity presents itself, if money's not sitting there, we can't jump in the game and play,” Tuten said. Minshew opposed committing the additional millage revenue to other purposes before Nov. 3.
“The only thing I would want to do with this current budget between now and November 3rd is cut things out of it, not move or add things around,” she said.
Minshew said the commission should wait until after the election before considering spending changes, new revenue options, staffing levels and other potential reductions.
The tentative budget covers 30 city funds, including $50 million in the general fund, $12 million in special revenue funds, $32 million in capital funds, $56 million in enterprise funds and $69 million in pension and other fiduciary funds. All 30 funds are balanced.
The commission will make its final decision on both the millage rate and the 2026-27 budget Sept. 15.
Comments
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RobertR
I'd love to "jump in the game and play" but at this point a conservative financial stance given business times is where I'm at. May I suggest the Commission stop with the word salad and only spend that which you have. Me, I'd love to ask my customers for a 9.24% price increase but that's no longer how this works. It's called a budget.
Friday, September 4 Report this
Mark Tomes
Many citizens have a short memory. They got all worked up over and got rid of a good revenue stream that had hardly any effect on them, and now will complain about higher property taxes, and yet still complain about the waterfront not getting completed, roads needing repair, etc. The perfect setup for the tax measure to pass in November so the multimillionaires and billionaires can get their own tax breaks on their second and third homes. Sheesh, same old story. No sense of the big picture, just react, and just what the power elites want.
Friday, September 4 Report this
DouglasM
Millionaire tax breaks on 2nd and 3rd homes? I assume you are talking about the "cap" on rises for non-homesteaded properties. That will be reduced from 10% to 5% max per year. But I'm not sure that really does much.
The key to the November vote is the increase in the homestead exemption ceiling. That will make housing more affordable to those who need it most!! That's important, right? I plan to vote YES for that reason. People shouldn't be taxed out of their homes.
As for the budget....this Commission was always going to go as high as they could get away with. They want a new building....Tuten wants land conservation.......4.8530 was always going to stick regardless of the vote on Paid Parking 2 weeks ago and the upcoming vote on property tax exemption.......so I'll vote for what I think is right without regards to their budget. The budget is up to them. My vote is up to me.
Friday, September 4 Report this
FrankQ
It needs to be said that the commission, like it or not must focus on core public service mandates. These are Public Safety: Operating local police, emergency medical services, and fire departments. Infrastructure & Utilities: Providing clean water, sanitation, sewer management, trash pickup, and maintaining local roads. Land. Regulation: Creating blueprints for community growth via zoning laws and safety building codes. Public Welfare: Managing or funding public libraries, and public parks. All else are amenities. Scope creep.
It has always baffled me how the FB council has perpetually incapable of discerning the difference between essential services and nice-to-have amenities. A Former City Manager consistently touted surveys of citizens showing high satisfaction with village services. Yet he persisted in asking for bigger budgets needed to improve services. Both cannot be true. Few of our elected officials have questioned this sort of thinking, which remains pervasive. I actually had a prominent former council member tell me “I have no idea what is in the budget”. Now, we have city department managers …
Friday, September 4 Report this
GDecker
I'm not worried about the millionaires and billionaires--I'm worried about me!
In 20 years, my city property taxes have increased 166% while the city population has grown by 18%.
No infrastructure has been constructed to serve this population, roads exceed state requirements, needed repairs have been done--so where has the money gone? Answer: massive staff increases, excessive management, bad/costly policies, unneeded purchasing, pandering to activists, on and on.
With common sense, voters will approve a halt to this run-away train--one that is really eating into my hard earned money.
Friday, September 4 Report this
MikeFBCity
We don’t have to wait until Election Day to look at cutting any and all potential expense and capital expense items. That exercise should be part of every budget review. With capital improvement plans, every project should justify itself. With new capital will maintenance costs go down, or increase. If they increase after new capital spending, was the project properly structured? Just like a company looks at projected cost savings when building a new factory, or in our case spending millions to then have to hire four new employees, we need more thorough financial analysis throughout the city’s financial budget and capital improvement plan development. And I bet we can do it without more hiring. What about a qualified, voluntary citizen Financial Planning and Analysis Board?
Mike Harbison
Friday, September 4 Report this
FrankQ
My previous post was somehow truncared:
Now, we have city department managers asking for all forms of capital spending.
Fernandina Beach needs to BENCHMARK its government spending. How does it measure up against similar small coastal towns (with tourist impacts) regarding staff headcount, overall government spending, public safety, capital maintenance and all key drivers? Benchmarks are but a tool, but at least a starting point to make decisions. And to communicate internally and externally. The National League of Cities (NLC), International City/County Management Association (ICMA), and Florida League of Cities are all available resources. Without this sort of data the commissioners are simply flying blind. Good governing requires discipline. Can’t do it on emotion, pet projects and whim.
Friday, September 4 Report this
Editor
FrankQ - Reader comments are limited to 200 characters and to one comment per article per day, per individual (see Reader Comment Policy); we'll let this one go through. Anything longer - we suggest submitting a letter to the editor.
Friday, September 4 Report this
AcurtNA63
Here we go again! How about cutting spending, consolidating jobs, and stretching out projects. that way we can live within our budget. What a novel idea!
Friday, September 4 Report this