Ready to roll? Yeah. All right. Got the thumbs up. All right. We're going to call this budget workshop to order. Today is July 24. July 14th, 2025. And we are going to start with the pledge
and get right into the workshop here. Oh man. Here. Why won't I just do it? All right. I pledge allegiance to the flag of the United States of America and to the republic for which it stands, one nation under God, indivisible, with
liberty and justice for all. All right. And seeing no one from the public, I'm assuming there's hundreds online, uh, we will move right into the workshop. So, uh, Mrs. City Manager Prom, uh, good evening, mayor and council
members. Um, city manager Larry had to be out of town today and tomorrow. Uh, so I'm just sitting in to, uh, get this budget workshop off to a start. Uh, if you don't mind, I'm going to come around front and put my finance director hat on
and we will walk through the budget. All right. So, this evening you have in your packet we have a short little synopsis of the 20206 proposed budget. I'd like to uh just as we uh get started walking through this. Um there are going
to be two uh primary interesting things that I'd like to direct your attention to. Number one, yes, we will be dipping into the total city fund balance next year. Uh most of that is capital project money that we have saved up to accomplish certain capital projects. So,
we'll get to those specifics uh shortly. And second, I'd like to revisit u an idea that we proposed at the first budget workshop, which is for the city to be moving from the current thrift plan into the F FRS system for a
different type of retirement system that we feel will uh help longevity um and uh be beneficial for the future of our city and and the staff that we have. So with that, let's get right on into uh the the slide presentation that we have
here. Um, yep. Go ahead. And Andy is at the controls for me. Uh, so the proposed budget, the all-in total proposed budget for FY2026 is $50.3 million. And here you can see
how it breaks out between capital outlays 46% and uh other operating expenditures. On the next page, we have some of the 2026 highlights. Uh the first thing we'd like to point out is that the advalorum
taxable values rose 5% um from last year. uh taxes and benefits as I mentioned at the last at the previous budget workshop. um the retirement and payments to the the IRS in terms of FICA
uh which is social security and Medicare uh that is expected to increase 19% that's a worst case scenario if we move from our current thrift plan into the FRS um in order to u support obtaining that goal of of the change in retirement
system directors have decreased their operating expenses the current calculation is they've decreased 4% from the 2025 adopted budget. Uh the capital improvement program is overall decreasing 45% if you're looking
year-over-year from 25 to 26. Most of that is because we've either fully encumbered or have mostly complete the uh the phase one of undergrounding. And we anticipate having uh large chunks of the cross town connector, namely the storm water uh portion of the cross town
connector under contract before FY2026 begins. Um all of the capital projects that you're going to see this evening that we're proposing uh to round out the whole budget are either grant-f funded or there's another
contractual obligation. if they are grant funded, they might have match component um or there's a resolution in place or a council motion in place uh that says how much we're supposed to put uh towards a certain thing. So um those
are some of the highlights. Let's go on to the next page. This is where you see the comparison year-over-year of the uh 2026 budget versus the 2025 adopted budget. um at the at the far end of the graph, you'll see the two tallest um
pillars in there, that's the capital projects. So, you see that dropping pretty significantly from 25 down to 26 levels. Um and you can see from the other um major categories, those pillars are staying pretty even. Um even though
there's, you know, 3% decrease here, 4% decrease there, 19% increase there, but the dollars in total aren't that much. So they the other pillars look pretty pretty calm, pretty straight. Uh the next page is another view of the 2026
proposed budget. Uh this is the funding. Uh where is the funding going to come from? Uh 37% or $18 million will be coming from taxes. Now not all of that is the advalorum. The advalorum portion that we're collecting from Destin residents comes to uh just about $13
million. But there are other things classified as taxes, gas tax one, gas tax 2, um and other sources of taxes that come into the city that are not levied by the city. Uh the most important part to to watch
on this page is that fund balance 15% or $7.3 million uh will be helping us uh pay for the the total budget. Uh so now let's go on to the next page and just have a little look at what is that taking from the
total city fund balance of $7 million. What is Oh, am I uh looks like this page didn't get updated the last minute. Um, so the 2026 proposed net change, I'm not sure um if your page
didn't get updated as well. Yeah, this this page it's actually 7.3 million um but you'll have that in your packet. you have some details um that show you the the fund balances
in total and then general fund and then it'll show you the fund balances for all of the other capital project and other funds. So this this page in the slide presentation didn't get updated. Uh but the point of this slide and the yellow highlighting at the bottom is just to
show that our total fund balance year-over-year is still staying very strong. Um this year at the end of 2025, we're anticipating um an unspent especially from the capital project funds of $11 million. So basically,
we're rolling that $11 million forward to expend it on those capital projects next year. On the next page, we have another 2026 budget highlights. Um, so here's where the proposing to use that $7.3 million
of fund balance to balance the 2026 budget. 2.1 million of that is coming from our general fund. And that is right in alignment with our renewal and replacement policy that we um that we signed as a resolution two years ago for
2026. We're actually taking $2.5 million, putting that in our renewal and replacement fund. uh the renewal and replacement fund this year, 2025, uh we've been working very hard to get caught up on replacing items that were supposed to be renewed or replaced more
than 25 years ago. In 2026, we're focused on things that were supposed to be renewed or replaced more than 15 years ago. So, we're we're on that five-year catch-up plan that we uh resol did by resolution two years ago. Let's see what else do we have here. So again,
the capital improvement program is focused on things that council's made a motion to do. Uh resolutions that uh council has passed, grant matching funds, andor using restricted use funds. Uh let's go to the next page.
So here's where you see um the funding sources for most of those capital projects. uh expending out the last of the 2024 uh bond uh capital construction loan that we borrowed. Uh we have a lot in the capital grant fund. So $9.9
million um in capital grants coming into the city. Uh some electric franchise fee money, gas tax too, um and so on and so forth. So, as you can see, most of these are are restricted funds
um that'll be going to pay for the capital portion of the the budget next year. On the next couple pages, we have a summary of the capital projects that we're proposing to do. Um yep, thank you, Andy. Uh at the top of
the list, you can see we're going to continue with the uh the cross town connector. We anticipate this fall um after we sign this agreement with uh trip and um D with FDOT uh that we'll get the construction portion of the cross town
connector roadway going. Uh right now we're just focused on the storm water component. Uh we have in the capital uh grant fund there's the four-prong lake storm water. Uh D has given us some pickle ball money. Uh the Crystal Beach
and the Tarpon Beach uh park constructions are well underway. Uh Matty Kelly pier outfall. We were given a a state appropriation that'll be coming um to council soon.
Let's see. And then the next page, we have some more capital projects going on here. You see what we're putting um $898,000 of general fund money towards a few projects. the hurricane response is just in case it's kind of an emergency
placeholder so that we're able to uh pay the people to do debris cleanup immediately after a storm. Uh anything after that or above that we would definitely come to council um and get council approval before we did any further repairs. Um
collection development budget. This is something this is a a match. There's a match from the county as long as from the county library co-op. Uh so we try to maintain a changing of the collections of um sorry of the library
collection annually. We invest about $65,000 a year. Uh we have the Nora Point uh Dune crossover that we're anticipating will be ready for payment probably by October. So that'll be right at the beginning of the new fiscal year.
And then here's some money for uh to complete our pickle ball courts to make that those other grants. um come to fruition. We um Morgan's batting cage we're putting in here just in case we don't get to that September 30th. We have a
bid opening tomorrow and we're hoping that negotiations go smoothly, but just in case we're not able to encumber the funds for the batting cage before September 30th. We're putting that into next year's budget, we will remove it if we are able to encumber something before then. a library expansion. We have some
library impact fees. As you know, library impact fees are supposed to be sent within six years of receiving them. Uh the librarian dire library director feels it's time to look at expansion. And so we're putting these funds aside to hire an architect um to make some
renderings uh to see what an expansion would look like. We have uh proposed using some more Okaloosa half penny money. Uh we've dropped the Okaloosa half penny dedication to the Matty Kelly Pier from
1.2 million down to only $200,000 thanks to the state appropriation uh that we were told was awarded. Uh we have some funding in here to help round out accomplishment of the four-prong lake storm water issues. Uh and as you know, the council made a
motion to give $100,000 to the public works pedestrian safety committee. Um, so we'll we're planning on doing that again next year. Uh, renewal and replacement. Um, that's $6 million of this year's of the 2026 proposed budget.
And that's exactly in accordance and alignment with the uh the resolution that we signed a couple years ago. And then we have the transportation impact fees for the cross town connector. Um, here we have a graphic of the
destined taxable property values. so that you can see that they're still on the rise. The dotted line is the trend line. It's a it's a linear trend line. So, if we were sticking with the the trend uh FY25, we'd be closer to the $7 million value mark. So, we'll we're
keeping our eye on that um just to make sure we don't have another little bubble like we had back in 2007 with that drop in 2013. So, we're just keeping a close eye on on where the trend line is going. uh the next page.
Um so this is what we're looking at. If we keep this millage rate, and this is the decision that you have to vote on next Monday. Um if we keep the millage rate at 1.615, that means the average homesteaded property will pay to the city $545 next
year. Um and you can see some of the other calculations. So, in total, the levy would be $14 million. Uh, we always plan for a 1% delinquency rate. So, that would be 13.9 million. Uh, the general fund would be receiving 12.6 million of
that. And the two CRAAS received the balance. So, here we are. Yes. Go ahead. Yes. No, go ahead. So, we're at a really good pause place right here because we've gone through the the capital projects. So, you're welcome to ask any questions and I'm going to grab my pencil because
I forgot to bring that with me. Um, and then um and then we'll circle back to what we went on uh talked about the thrift plan versus FRS at the NF. Oh, thank you. I guess my question is about the CRA fund button.
the CRA funds. Does this do the does a CRA actually get that? Are those still encumbered by the the payoff that we're doing? Uh yes and yes. So these are by by statute by ordinance dedicated only to the CRA
can only expend them upon CRA expenditures which happens to be for the harbor the harbor CRA. Yeah. All of this is going to debt service. The town center CRA has some some wiggle room. Um, which brings us back to this
um this summary in your packet by fund. Uh you're going to see both of the CRAAS in here and you can see their fund balances and where we're headed. I did a a projection now to uh 2027 in here.
That's in your packet now. Well, we only have one. You pull it up on your computer. Oh, it's in the computer. Okay. Because I was going to say I I don't have all those pages in my in my little paper packet. Okay. Oh, dear. Looks like you just have the
agenda cover page and just the um the slide presentation, but in the in the packet on what we published. Uh you'll have this as well. What page is that? Um one of what or what of eight? This one is three of eight. Three of eight. Thank you. Three of eight has the two CRAAS. Uh so you'll see the
uh the Harbor CRA we're looking by 2027 to have a fund balance of $39,000 and that's because of the the purchase of the their dedication to the undergrounding and the purchase of One Harbor Boulevard. So all that their the full
amount going into the Harbor CRA is dedicated to debt service. The the town center CRA however um is on the other side of the spectrum. you know, they they borrowed a lot of money back in 1998 999. They did a lot of capital projects. Their values didn't come up. They weren't able to make their debt
service. Well, now the tides have turned. The property values in the town center have come around, rebounded uh tremendously, and uh they're looking at a fund balance ending next year at uh $2.8 million or in 2027. So, they've really come back. They've they've very
much rebounded. Um the main capital project in the town center that's been on their horizon is the linear trail, the multi-use trail going along the easement lines and they're nearly complete. We're still working on the easement portion of it.
Um I have a feeling we're going to need a lot of grant funding to help accomplish that program. Uh but hopefully we'll we'll get some grants and things to to supplement uh what the town center has and maybe that's something that we could reasonably accomplish that's in their
master plan, but it's not in there for right now. Uh or we put it in 2027 just because we're waiting to see. We need some more grant funding to go there. So, um Councilman Traml, does that answer your your questions here? Okay.
Yeah. Yep. Harbor Harbor CRA's uh tapped out for at least 5 years. Is that and that's because of the undergrounding mainly the the Harbor Boulevard, right? Okay. Yeah. Okay.
I understand that. I just Well, but if the state comes back and reimbures us for Harbor One, then Well, we I think if that happens, there's a question about whether the council whether the council has to allocate those funds back to the harbor CRA
because when the state reimburses us it's not reimbursing the CRA it's reimbursing the city of Destin so there have to be a vote is what I'm saying is that right yes okay good council Braden that's what I thank you mayor uh this is probably a
question for some of the council members to knows fourprongong lake that's destiny right yeah it's across the street from But yes, why do why do we have to pay for their storm water in it being a gated community? Put our storm water in their lake. The
state puts their storm Same reason I'm sorry. Same reason the state's putting a million dollars in and the countyy's going to put probably a million 800,000 in because everybody dumps their storm water in there and that's not a retention pond. That was actually before
in the before the 1930s before they put the road out there. They believe that it was actually a coastal dune lake. I was going to say it was a dune lake. Yeah. And so when we when the state blocked it off and then if you go out there and look at the way the drainage
is when I'm not saying the city allowed Jay to move the road, but when that road was moved, all that drainage comes off that road and goes right into that lake. And so instead of the city keeping its
water on its property, it sends it into that lake. So that's and that's that's basically a match uh that we're because the state's given us a million dollars to fix that. Is that just at least a million? Is that just on we have to maintain our
portion like the road and stuff or is that that's not all the neighborhoods and stuff is it? Are we responsible for all that stuff? drainage area. Now, since FDA FDOT changed the drainage area when they went from four to six lanes, it used to the easiest way to explain it
was everything north of 98 drained through Riata Bay into the bay and everything south of 98 drained through that coastal Dune Lake in. when they changed the road, they expanded the area
south of 98 to drain into. So, it's a huge area now. And I can have Curtis come show you the map, but it also changed the flow from north of 98 through that coastal dune lake. So, it doesn't go to the bay anymore. It comes
straight into that lake. And so that's that's why the states already ponyed up a million dollars and they may pony up some more. But that's and the county is that do we have to take care of all the storm water that Destiny East and
Destiny West or whatever or is it just on the north and south end? Well, we're not f the fix to the storm water issue. It's a little bit like when they did Indian Bayou, you remember a few years ago when y'all redid all the pipes? I got you. It's it's a little bit like
that. We're not going to go in there and take our water and put it back on our rideway and the state's going to take we're just going to say we're going to build a weir. The engineering design is to build a weir at whatever elevation the state uh and they should have the
permit. I emailed them today. They should have the permit from the Army Corps of Engineers, but that we will be at whatever height they tell us it's got to be at. And then once the water in that lake gets higher than that, it will go through that we wear out the pipe
back into the Gulf just like it were a coastal going back to the original coastal dune lake. They did this on a lake down in Panama City Beach and it's worked fabulously. So it basically just reestablishes what was there 100 years
ago. That's great because I had no knowledge of that whatsoever and people's asking why are we spending taxpayers money in a gated community that we can't go in or whatever and we're paying approximately what percentage? Well, the homeowners have already
ponyied up somewhere between 300 and 500 uh,000. The state's putting in a million dollars. The county is going to put in somewhere around uh six to a million 600,000 to a million. And we're putting in and it's out of our Oakloo aa half
penny if I'm correct Crystal allocation. We're putting in 600,000 for that. So our of a $3 million project we're putting in 20%. Thanks, Mayor. That's all I've got. Cool. Yeah, great question. Yeah.
That and what, two years ago when the state appropriation came around, the HOA showed up with about 50 people and uh so yeah, they got their appropriation then. Yeah. And that's and I I couldn't go because I was precluded from lobbying the state, but Carol Maccgyver Curtis
showed out in SP and that you know if you want to get money for a project in this community from the state Yeah. where then we can figure out the granted matching funds. That's what you have to do. You have to show up in Tallahassee during session and have 30 people go in
their office and go, you really need to get this in the budget. And I give Senator Trumbull and Representative Manny all the credit, you know, because they those people went in there and said, "This is what we want." And we came all the way over here to
Tallahassee today just to tell you that. And those two guys made it happen. All right. More of a need than a Yeah. Well, they've had one guy's house. It's been flooded three times because it's
just kind of full of tears. All right. Any other questions before we move on? Um, Michael, if you don't have it off the top of your head, I can get with you after. Do we know like what roads we're we're looking at for the next one? That was just gets too off topic. We have
it's it's a very long list. Okay. Yeah. Okay. But we can send that to you. Yeah, we have the list. Yep. All right. Can you send it to us, please? Yeah. All right. And have they has that list gone before the public works public safety committee and been
vetted and they've blessed it? No. Okay. But it but they it will before it gets to you for final count. That that's why I just because I know they go out in their little areas every month and inspect roads and sidewalks and lights that are out and
all this other stuff. Cool. All right. Seeing nothing else, let's move on to retirement. Yeah. So, um, if, uh, council members don't have any more comments about the capital improvement program, uh, one other one last comment I'd like to make is, you know, that we recently hired
Perez Consulting to do our parks master plan update. Uh, so we'll be looking to their results to plan out capital improvements to our recreation and, uh, park areas. That'll be coming up. So, um, yeah, the last I just wanted to give everybody one
more chance to, uh, ask any questions about F FRS versus our current thrift plan and, um, just wanted to get some some feedback from council members on what you think about this this change.
I like it. I really like the, uh, the 2.1 million grant fund and it's 2 million to RNR. We need some money for rest and relaxation. Yeah, no kidding. Any any uh questions or comments about the F FRS versus thrift plan that we're
proposing for our staff? Yes, but it might be one-on-one because I'm not quite sure exactly what to ask you. Um, now finally having insurance and using it and seeing the actual cost of what they bill us versus uh what we pay, which everyone I've talked to says,
"Oh my god, that's like tremendous plan." I mean, I have nurses I talked to in the run club and they're like, "What's your deductible? That's insane." Um, but with that I the question of is there a cap before it starts turning out of pocket? Okay, so that's that's an insurance
question which is different. Sorry, this is retirement. Sorry. Um, and I know that Jamie's been working with our our brokers about updating our plan, uh, finding a way to, uh, get a less expensive plan for us, and she will have updates for a council meeting coming
soon. Awesome. All right. My bad for putting both of those in the same boat. I do have a question there, please, sir. To get ourselves back into FRS, there's an upfront cost or No, sir. There's no upfront cost. The
main difference is just now the employer and the employee will both need to pay the 6% into social security as well as the obligations to FRS which on the employee side is 3%. And the employer side it depends on the level but for the
most most of our staff it's just over 13%. Okay. And that is going to be a yeartoyear thing. It's not an upfront and then it goes down. Right. Correct. It's it's a every pay period thing. It's not an upfront cost. Yes. And so these these numbers here uh so you can
see the um the thrift plan cost if we stay with it where uh we think that that would be $10.6 million. If we move to the the the F FRS plan that would be about 11.3 million. So the difference is 710. So this 710 as you can see the bulk
of it nearly 500,000 of that is just uh the employer contribution to social security. That's where the big difference comes between the two plans. My question is since this is a reoccurring amount every year, where is the reoccurring revenue that we're going
to rely on to up this to pay this every year? Well, this is also um so it's a it would make our personnel costs about 7% higher year-over-year over year. It it would Yes. Um so to combat this year that's
why the count uh our directors really looked hard at their budgets and tried to reduce their operating costs as as much as possible. Uh this is also a very worst case scenario. We do not anticipate that all of our staff are going to move from the current thrift
plan into S FRS but we wanted to make sure that we had the full picture um here for you just as a very worst case scenario and and I understand that. My question of course is you can't rely on reducing your staff every year for the next 25
years because we're going to be paying it and it will go up, right? And our actual cost for our staff is going to go up. So do we have any idea or dedicated revenue source that we think is going to offset this rather
than trying to reduce personnel every year? Yeah. So um so that that's that's the question and the and the payoff because the the base operating personnel costs mostly come from the advalorum and the shared taxes that we receive right um
and the issue we've been battling for the last five years probably longer has been retaining qualified staff. So, we've consistently been finding ourselves in a bind, short staffed, and staff that are not qualified, that
don't have municipal government experience. So, it's that that's what we're trying to balance. Do we make this investment and we know it's going to cost us seven more% per year and continue to struggle with keeping especially at the higher level keeping
qualified staff with the right background and experience who will stay for the long term. So it it's that that's the that's the balance that we're trying to find. And I was hoping you were going to tell me we had an idea where we were going to have a dedicated fund because let's see our
increase of advalorum value was 5% which equates to how much more in the budget every year? So so you this year it's over $500,000 more. So if it increases every year 5% we're still 200,000 short every year. We need
to we've been proposing other fees as well. I I understand and those those are the ones I want to hear about. Otherwise, this is not a good recipe for someone who wants to remain in the black, but I would like to hear what the other fees are and how we're going to collect them
because just say we're going to spend 700 and if we get an average of 5% or increase every year, we're still $200,000 behind. Not a good plan in the long run. So, we'll address that as we go through. Thank you, sir. Council McGow, if we were going to pay that, would that
paid be paid out of the general fund? Yes, sir. Huh. How much do you think we've given up to these deviants, STR deviants this past year out of the general fund? Would that have covered that, do you think? That would have covered this transition
for a year. Yes. Wow. Thank you. Well, and of course, we didn't vote to do that. So, in the future, we'll have to if we want to make up the money on a number of areas. And that's just what I'm asking if we have a road map. You know, we still have out there um we
we've discussed a registration fee for short-term rentals for all the condos. Uh we estimate that there are over 4,000 of them. Um so, that I I'm not sure that council's really put that one to bed
yet. Um, but I'm sure that we'll be resurrecting that question again soon. Yeah. And I think those funds would be restricted to transportation. But of course, it's all a a shell game anyway. If we don't take that general general revenue out and pay it for that because we can pay for it with the
transportation fees, then the money is still in the general revenue. So that is a fund source. That makes me feel a little better. Yes, you're correct. So we have both the mobility plan. So that'll take some of the pressure off the general fund for paying transportation related issues. And the short-term rental registration
is another uh we were hoping that that would help take off some of the pressure of the huge law enforcement bill that we have to pay every year. Yes. And and there may be some ways to work on that also. And and so how much is the uh the transportation fee? We think a year and
I'm sorry, the short-term the the short-term rental registration fee. We were looking at um after we well we were also looking at options on on who would uh do the billing and collecting for us. Uh but we were looking to net over um over a million a
year. Okay. Well, there's some money right there. That's just on the condo additions. That's not on what we're already seeing. Yeah. And and while I greatly appreciate Mr. Den's point,
one thing to consider is the rate of increase for either one of these plans would still be the same. Yes. So because it's based on what we're paying our employees. So if we give them a 5% raise, then we're going to pay 5% more costs in both social security and
thrift plan. So, uh, but no, I I think the short-term rental condo revenue is a good cover for that. All right, Councilman G. So, we could also look at raising the short-term Oh, bless you, sir.
We could also look at raising the short-term rental registration fees annually as well, right? We're allowed to increase them what, 5% annually. That That's true. Um, so right now we have 1,200 single family residences in that program. If we're to add the the
condos, which uh in some people's opinion are part of the reason we end up uh with answering 60,000 uh you know, law our sheriff department ends up answering over 60,000 calls a year. U that would be adding another four to
5,000 um units to the program. So, that's where the big uh the big change would come from. But yes, you're correct. We we could um in theory increase the short-term rental registration fee on the the 1,200 single family residences that are currently in the program.
Thank you. Any else? Yeah. Yep. Where are we with that short-term rental registration fee? Because I thought we had a lot of movement going. Well, it brings me back to the issue of all of the turnover that we've had and the fact that we haven't
had a consistent champion to um to help get this fee through. So, you talking about on the council? Uh no, from the the staff side, a champion from staff, right? We need a primary person on the staff side to work with the council, a
legislative uh support person to to move it through the Didn't we like approve it? branch for first reading or something. Um maybe. But now we have a new community development director. We've got a new um code compliance
director. You know, all everything's changed uh multiple times over the last back to us because I thought it was coming at a reading or something. So, I believe it was approved by council in concept. Uh, but the next step was to
get the actual fee and uh that' be cool if we could figure that out because everybody's looking for revenue and that's one of the items I thought we all agreed on but we can always change our minds every other meeting. So, who knows? Um, but
you know, we we push some things really quickly like the SWAT team on the beaches for ice cream. So, maybe we can get this one to start bringing in revenue to help the SWAT team that's going after the ice cream vendors. That'd be perfect. So maybe Larry can look into that when he gets back.
And I think we did actually discuss the fee amount. And I'm not sure how it just fell apart. I wouldn't say it's from lack of staff lobbying. It just we got new people that have not run with the ball, which we all thought we were
about to do. Yep. So I would suggest they run with the ball and don't worry about the lobbying part. Well, I I can give you a little update. It it's a collection. It uh we thought we could work with the clerk to get the
colle get them to help us with the collections and Kim and I ran into a uh at first they said yes and then they said maybe and then they said no. Uh, and so now, uh, doing some research, I
found a different Florida statute that I can't remember the number on right off the top of my head, but it's, u statute 213.0535 that through our local business tax, our BTR, uh, we may be able to get that
information from do. And I've got scheduled a call with do tomorrow to see because part of it is there is a database. There's a universe out there that has the name, the address of every rental property in this county. And the
clerk knows that because the clerk collects the TDT. But the clerk says no, that's business information, which is not, I can tell you. But that's okay. There's another way to collect this. uh h having been on the other side of the
TDT collection issue. So now we're going to go and if we have to go to the do to get that information, it makes it real easy for our staff where we don't have to pay anybody and we don't have to go out and hunt who's actually renting because they have to pay the do or the
clerk and the clerk has to report that information up to the the department of revenue at the state level. And we don't want we don't care how much they pay in TDT or how much they collect or remmit. All we care about is their name and
their address and that they're doing short-term rentals because then we send them a letter and say you're you're collecting TDT and you owe us money as of this date. And so we're that that's where I don't I'm not going to say that's the whole issue because I
know there has been some turnover in staff and Larry was trying to you know get people ramped up on the their different issues but I know from the collection side that is the issue that we have faced right
all right uh let's yeah's elections election which is just got elected by himself. It's not the No, I'm just messing with you. Relying on the advice of his guy in the office there.
No, but I like your approach where if we can shave off a middleman that's wants 10 15% and we can do it internally, that's great. I would suggest at the next meeting a motion be made to direct the city manager to make that a staff priority. Okay.
It's a workshop. Yeah, it's it's a workshop. So, we'll uh Yes, we'll we'll bring that. Yes. And the acting city manager is making All right, back to the workshop. Yes. So, um the last few slides are just
uh just to remind you. So, here we have the 2026 operating budget. So, you can see again the numbers year-over-year. Uh and then we get to the next steps. And then there are a few slides after the next step. So bottom line is next Monday
council will uh make a motion to adopt the tenative millage rate. Um and that's the deadline so that I can get that number and they you will also make a motion for the first uh public hearing for a budget. Uh we're proposing
September 3rd at 5:30m. Um so those two items will be on the agenda for this coming Monday. Uh I haven't heard any indicators to make any changes to the military up or down either way. Uh so we're uh we're
proposing the 1.615 again. This will be the ninth year in a row. Um then we have a few extra little slide pages in the back here. These are just moreformational, not nothing that I really wanted to go over in the um in here, but these these are just some uh
some commonly asked questions. So, we have um you can see how what the 50 million budget looks like uh by governmental activity. You see a large portion going towards transportation thanks to our renewal replacement program, culture,
recreation. Uh the general government, 10.7 million. Uh 5.6 million of that is for debt service. Uh the next page is just a reminder of our proposed FTEEs. One FTE is it's the
labor hours in a year divided by 2080 equals 1 FTE. So here you see what we're proposing versus what we budgeted for 2025. Uh the next page is also from workshop number one. Uh we're actually requesting
to add one position, but overall those labor hours that we're planning to pay out next year are less. Our new software has given us the ability to better plan labor hours in the year. Um then we have a page that shows you the projected tax
uh tax revenues. So you can see where that $18.3 million comes from. Uh so you can see the the tiff that comes from the the county uh BTRs gas tax one and two and then the state communication services tax. These are
all considered taxes. Uh so you can see the whole picture there. Uh the next page shows median taxable values of uh homesteaded other residential and non-residential properties within the city of Dest. Uh
so we took we categorized the the parcels according to a description used description provided by the property appraiser and using the taxable values provided by the property appraiser. That's how we we came up with these these numbers. Um look at that
homesteaded tax property homesteaded taxable value. The median is $236,000. How about that? I think that's exactly what I paid for my house. Uh the next page uh it's a commonly requested one is like well what would the how much millillage would we bring
in if we raised it from 1.615 to 1.715 or um how much more we would we collect. So a property a homesteaded property would pay $22 more and that would result in $862,000 more. And so those those are just moreformational.
Um as I mentioned also in your packet you you have all of the fund balances so that you can see the effect uh if we adopt this budget as it is. Um you also have the capital projects. These are the ones
that are not just renewal and replacement. These are like special capital improvement projects. We've got the summary page on the front. Um, and then each one it has um it has a cover page so you can see what year when we're planning on expending it
in the next five years, how we're breaking it out, what are the funding sources. Sometimes there's a little picture if it's going to have an impact on operating. And then there's a second page with each one this year um that shows the the milestones, some of the major milestones and dates.
So that our staff has target dates on when to let an RFP or to complete the design or to start construction and so forth. So where those those are known, they're in here. Um the last thing that you have in your
packet this evening is the data from the uh so this is the the trim data the truth and millage rate data. So you can see what the property appraiser certified as our uh taxable values for the property and you can see how much is
going to each of our um our CRAAS and so forth. So, uh, if you want the the guts to see how the sausage is made and, uh, how those numbers are calculated, you have these in there. Um, and with that, uh, I'm just going to open it up to your your comments
and, um, I'll take any feedback that you have. And don't forget, we've got Monday evening to discuss where you can actually make motions. And then we'll have two public hearings where you can continue to uh, discuss, make any adjustments, and make any other motions.
So, it looks like Kevin might have a a thought or a comment. All right. Go ahead. Yeah, sure. Thanks, Crystal, for um doing all this with you and your staff and all the other directors. It's always very uh I
always enjoy it. I would uh feedback next year, I would cancel the first one we had and just do this one cuz or combine them or something. I think we were only here for like 20 something minutes at the last one. So, yeah. So, the the um the reason we don't
hold the allencompassing one until after July 1st is because that's the official date that the property appraiser um publishes certifies the taxable values. But if next year you'd like to wait until July 1 to start, we can do that. So,
uh, have we ever considered or do you have anything on available that would show if we did not keep the roll back rate but instead uh dropped it to where people would not have any
increase in their property tax they paid to us? Um, I can calculate that for you if you're curious. Uh, the roll back rate, I forgot to put that on this slide. It was um 53. It was actually very close. It was like 1.53 because just so I
understand, we don't increase the rate. We use a roll back rate, but as property values increase, we get more money. Well, that's the thing about the roll back rate. I mean, there is a little inflationary factor put in by the state of Florida, but otherwise it is
technically no no tax increase. But but people pay more because the property value increased, right? No. Uh it's the idea that it's taking it back if your property hadn't increased in value. But if your property increases in value,
you have to pay more than the previous year, right? Well, that's what that's percent. That's the idea of the roll back rate is that I paid $495 last year. Okay. If uh if we adopted the roll back rate
instead of the 1.615 615 1.615 takes into account that your change in property value, but the roll back rate wouldn't. It would put you back at that $495 contribution like you paid last year. Okay. So, we approve a roll back rate
and I paid $4.95 last year, but my property value went up by 10% or whatever. I still pay 4.95 this year. Oh, okay. Yeah. And the only thing just to keep in mind with that, we can go down as much as we want. And then there are some state statutes about going back
up. So if we were to go negative in the property valuation, it's harder to bring that back. Not that that would stop us from one way or the other, but there's a little bit of a a variance of going up, but we can go back as much as we want. Sure. So on the uh capital improvements uh
page 11, what what makes up the 900,000 of recreation facility renewals? Uh there there's a lot of there was another 20 pages of details uh behind the renewal and replacements. It's funny
because I I printed out the re the the renewals for recreation um right before I came in here and I I didn't bring it with me. Could you send that over email electronically at some point all of us? I guess maybe all of us because there was also a request about the roadways. I am going to send to the
council members the renewal and replacement details for FY26. And then on the uh these pages that each from my understanding in the budget book each each capital project will have a sheet the cyber zery says fiscal year 27
just like another one. It is it just information only then it's just like hey we're possibly going to do this in 27. That's correct. So the the delay has been we've had the undergrounding equipment there. So yeah, we're we pushed it out another year waiting giving them time to to get the outcl
Okay. Fiveyear. Um so the uh capital improvement capital projects we don't have anything like new that
we're working on that I guess you would say correct because uh we're trying to finish stuff that we have right and and dipping $7.3 million into the the total fund balance that's kind of a a scary prospect. So yeah, we're trying to keep it as minimal and accomplish the
projects that we have already underway. Okay. And then you mentioned the uh master plan for the parks and recreation. Are you saying all that what you said earlier because we're going to have that to be able to implement in this budget?
Um or you just reminding us that there's nothing in here for the parks and recreation's just to remind us for next year that we'll be doing it. There are some replacements Uh the most important replacement for parks and recreation is at the community center. We're still working on the water
intrusion, right? Uh so that's still in the budget because we haven't encumbered those funds yet. The other one that we have for next year is, you know, over the last two years between Destin Water users and the city of Dest. We've been replacing a lot of the sod at Morgans's. Uh so there's one
more Assad program scheduled for Morgans's just to keep all of that uh in alignment, but other than that, no there's nothing new. We're waiting for the master plan to really So for next year's budget, yeah, estimate the amounts, set the time
dates, you know, set the priorities on on, you know, found the deadline for this year's budget. We don't have any data. Okay. So we can't come up with our own plan to It's not too late. You can you can bring things to any any council meeting and
make a motion to add them. Appreciate it. And thank you again for uh presentation. Kevin, I think to your point, we can earmark a certain whatever number we want that they can stockpile
in light of we know the master plan is coming and we'll want to start it. Do we want to wait a full year to start it or do we want to put some money in a fund right now so that we have that allocated to begin something? Yeah, I agree. Um, and then the only other kind of on that train of thought
of nothing new coming up, uh, the only pot of money that I was looking at that would be restricted that we're not really tapping into, uh, would be our parking fees. Um, and I think there could be creative ways to to do things like, um, with that fee to help other areas of town. And I think we've all
have agreed that places over at the harbor don't seem to have the political will to do anything over there. Uh but I think there's plenty of spots over in Crystal Beach and even at Morgans's perhaps where parking would fall under that um handcuffed funding source. So
looking for some ideas here in the future on that. Is there any other I guess handcuffed funds outside parking that we haven't flipped that rock over yet? Yeah. So, um, this this summary by fund.
Yeah, just go. We've got the total of all the funds up at the top. Then we have the general fund. Any other fund that's not the general fund is because there's an ordinance or a law that says we need to have another fund. Um, so all these other funds, they
have special little restrictions on them one way or another. Um, some of which council has done by motion. um others that have been done by the states, some that council's done by either ordinance or by um resolution as well.
All right. Thank you. Anyone else? Yeah. Yeah. Just in case I just had a couple questions. Renewal and replacement. Do we have a criteria for that? I mean, it covers buildings, HVAC, roads, cars. Is there a criteria that says okay at
this point we replace this and is it hard and fast? How are those decisions being made? So it it depends on um the the capital asset that we're looking at. Uh we've categorized major components of the facilities like the the heat pumps and
the air handlers. Uh the roofs uh the um and then the roadways. It's based on when was the last restriping and is it a collector or an arterial and uh what are the number of years that the um that the
surface needs to be mil or um or replaced at. U there is a rule of thumb that Michael Burgess can can tell you about. You know if you if you start deteriorating down to the uh the underllayment uh then it costs about
seven times more to to fix the roadway. So he's he's keeping his eye on all that. So for each component, there are different different rules of thumb. Uh each vehicle, each gator, each major piece of equipment that parks and wreck
uses. Um pro uh field pros, uh sprayers, uh all these different things. There are different criteria that they're looking at. Um it includes the age and the condition and with vehicles, number of miles and so forth. I'd be interested in seeing those criteria. Those are set not by
resolution, are they? They were part of the packet. When we set the resolution, we had all of the the criteria and all of the numbers in the in the packet. Fairly easily than if it's already there. Yes, it's it's all done. It's readily available. I'd like to look at that a little more detail. Tell me about fund balance. It
looks like fund balance is going to go down substantially. That's correct. For the for the next five years, what are we doing? The happen. uh that that's because we chose a 15 year 15-year amortization schedule instead of a 20-year amortization schedule on the debt. So,
yes, for the next five years under this current debt service payment, our fund balance is going to go down and then we'll see what happens on year five when we pay that balloon payment and and refinance. Yeah. So, the object is to re to pay it off quicker and pay less interest. Is
that that's correct. And at what point how how much farther is it going to go down? Of course fund balance is reserves. What do we what do we categorize fund balances? Right. So um our our fund balance policy
we have committed right now it's hovering around $13 million as our emergency reserve. Right? That is equivalent to one year of debt service plus 6 months of operations plus an equivalent to 6 months of operations
which is the emergency um operating reserve. So technically we have in the bank with um with Raymond James right now just over $13 million uh for that reserve. uh the fund balance that you're going to see the lowest point that we get over the next five
years from our uh in our general fund is going to dip down to 24 million and so which is still above the the $13 million emergency reserve level between 25 and 26 is going to be what
because I think it was going down I can tell you so here we have um oh I only showed out to 2027 here, but uh by 2029, we get down to $24 million, and that's when we need to
refinance that that debt. Uh we might want to lengthen the time frame to make the the debt service payments a little more easy and palpable um over time. So, we'll we'll look at that again in four years. Okay. So the difference is between this
year and next year the fund balance goes up down. Uh the total the total fund balance of all funds is actually starts increasing again next year. It's the general fund that concerns me. That one's going to continue going down. That concerns me too, which is really
where I'm trying to get with this line of questioning. Um we are we're going down substantially, right? and with talk from the federal government about scaling back or getting rid of FEMA. Uh I've been through Opal and a couple of the others and that's
that's not a good thing if we get hit. It's a very bad thing. So what is the answer to that other than just put ourselves at risk? Well, um, a lot of the other capital funds are are monies that we could do, we could use instead,
we could use for repairs and maintenance related to, you know, if we had a FEMA disaster and we had infrastructure and other things. So, this uh, for example, this total fund balance up here that in 2027 is showing about 40 48.9 million.
by 2030. It's because of all those capital improvement funds, the electric franchise fee and other things that you know you you did a motion to restrict it in a certain way. You can do a motion to restrict it in a different way. Exactly. Um so the the total overall city fund
balance will be increasing up to 55 million by 203 uh 2029. Well, that that sounds more reassuring. However, what I know it's for for me it's about the general fund balance, but I understand your your point of view. the general fund balance is what kind of concerns me
because if it gets down low enough, well, that's the reason we need to dramatically increase taxes. And so something we need to watch and not put ourselves in a position where it looks like that's the only choice we have.
All right, Councilman Bagby, you think? Uh, well, I want to answer a couple of questions first before I get into all my little issues. That that is correct. we do go down to 24 million. I think the resolution is a year of debt, six months
of operating and six months of personnel costs. But it's it's it's worded six months emergency operations which is equivalent to six months of operations which the operations includes the personnel. Okay. the uh so that we know because as
you know having been through storms, cash is king and we're going to pay our people and we're going to tell the cleanup guys, you know, we can cut you a check tomorrow. You can go over to Fort Walton Beach and they'll get you'll get reimbured when FEMA reimbures them a year from now. So you you make up your
mind where you want to put your trucks. Uh, the other thing about the way we set it up is we, and you can correct me if I'm wrong, but I'm pretty sure we don't have to wait for the five years. Remember when we amized it? If the
interest rates go down because the discussion we had at the time was, yeah, they're high, uh, but they're going to go down. And when they do go down, uh, it may be two years from now, but when they go down to a certain point, it
makes sense for us to refinance, refinance and say, "Okay." And we might amaturize it again over 15 years as opposed to whatever the remaining amount of time is. So I I agree 100% with what you're saying,
but I think we put some safeguards in there to protect oursel. And like Crystal said, we can, you know, we passed the direction to renewal replacement fund and this fund and that
fund and we can come in here next Monday and say, "Yeah, we're going to not do the renewal and replacement fund." Although I I think we did the right thing because, as you know, in the old days, we we did try to maintain
everything. the um and then best practice and I wrote the note because I think it was one of your issues, but it may have been one of Kevin's issues. I I don't have a problem with the if we have an idea,
you know, saying, well, we want to put a little money aside for something in parks and Rex. But in the Kevin asked what the parks and Rex things were. Well, when I go through the sheets or when I went through the sheets this weekend, we've got the Dune crossover at
234,000 that we voted to add out on Nora Point. So, that cost is on us. It's not on anybody else. We've got the uh pickle ball courts. Now, the total cost is 725, but that's not all on us. So, that's
not, you know, because you would say, "Well, that's already over the 900,000 or whatever." Uh we've got the batting cages at 98,000. You know that that's on we voted to do that. We're replacing the grass. So I think there are some things that we're
doing. And I'm not saying we don't do additional things. I'm just saying we we need to in a budget we need to know where it's coming from and what it's for and what it's going to produce. the uh as opposed to just saying we're going to set aside a bunch of money that we may
or may not use when we have money. Particularly from my perspective, dipping into the general, you know, the funding mechanism is I don't like doing that. I understand why we're doing it this year, but I just don't like depleting our reserves, for lack of a
better term. The uh the first thing I want to do is I want to thank you for pairing this uh presentation down much cleaner, much better uh than in previous years. It's like here's what you need to know,
here's what you're going to need to make a decision on going forward as opposed to just going through spreadsheets and everybody, you know, glazing over after about 15 minutes. A much better presentation. Thank you so much. Uh as a legislative sponsor, I'd like for you to
when you bring this to us on Monday, two motions. the motion to set the millillage at the current rate. I understand the roll back rate but the roll back rate would be 1.53 something and it's you know then we got to go through a whole different exercise
of well how are we going to pay people and how are we going to do these extra things that we want to do the uh and then a motion to uh allow our staff the opportunity
to individually select to move to FRS and Social Security and and while I appreciate your numbers and I agree 110% with what Mr. Den said during his time, I don't think everybody's going to pick it. So, I don't think it's going to be
an additional 200,000. Probably going to be 150 or so. I mean, it's not going to be zero. I I feel confident, but just the fact that we're going to give them the opportunity, I think that helps us in retention going forward because I think, you know, if I were working in
Fort Walton Beach or Niceville or Walton County or Bay County and you offered me a job and then I found out, wait, you're going to pull me out of the F FRS retirement system and you're going to pay Yeah. It it just makes it harder to
get quality people. Uh, so if you'll put those two motions and I may think of a third one, uh, which I'll I'll contact you with. Um, but yeah, I think two things I'll say in closing. The fact
that nobody is here means the citizens trust us in the process because if they were unhappy with the way we're spending their money, they would be here with their pitchforks in their hands letting us know that they were unhappy and
they're not. and they weren't at the first, you know, there were a few people at the first one, but uh the the trust that the citizens have uh and the work that all of y'all have done and you Crystal and Larry and Jamie uh particularly on this retirement stuff,
you know, Michael, uh is going to be good. The the best practices thing, you ask a question about um how we got those numbers. it we my and Michael will correct me if I'm wrong. It we took the best practices of
a roadway lasts this long and after this if you replace it after this i.e. before it gets to the substrat. uh it'll cost this to replace at once after that then it's going to cost seven times I don't remember the exact amount
more uh but the average lifespan of a you know air handling unit or a heating unit heat pump or whatever is this and so we put it we did it just like a reserve study just like you you know I'm going to replace my roof in 30 years and I'm going to repaint the house in 10
years and I'm going to do redo the landscape and so that was the process that we went through and I know we have those numbers and I know Michael can, you know, pull them up and send them to you just like that. So that to give y'all confidence that the process that
we went through our our problem is catching up because we didn't do it for a while and now we got to take care of the old stuff, even when we were doing it, we weren't doing it 100% because there were roads that, well, we can just restripe this one or sidewalks. Well, we
don't really need to put a sidewalk there yet, you know. Now we're we're trying to do the whole thing. But thank you, Crystal. Great job. Council G. Thanks, Crystal. I have one just crazy question because I can't see it in here. Um, and I want to make sure that I'm
right, that I'm accurate on this. So, the uh parking passes for Henderson State Park, that comes out of the parks and recck fund, too, right? Yes, that's correct. So, people pay uh it depends on if they're a senior citizen or just a regular person. Um
let's see. That should be in in the um it's tucked away and hidden within the general fund. Um I have another report I can do pretty easily by department instead of by fund. Uh but we have a lot
more departments than we have funds. Um they're all mixed up. But in generally generally speaking, people pay between$25 and $30 a year for those Henderson passes. And I'd say the revenue received year-over-year just about matches what Henderson charges us.
Um Henderson, for those who don't know, they they charge us a per car fee every month. We we pay those invoices monthly and they they about match. All right. Thank you. All right. Yes, C. Braden. Thank you, Mayor. Thank you, Crystal. Thank you for you and your staff and all
the department heads. Great job. Thank you. All right. Anyone else? Yep. One other quick question. Something that would help me is if you can come up with a list of our anticipated revenue increases such as the short-term, such
as the mobility fees. That way we can say, okay, this we're going to have this much more money this year and over here is our priority for where we want to spend it. and maybe we need to get a increase those a little bit more to address this. That's always a, you know,
a breath of fresh air and I'm sure everybody would like to see that so we know exactly how much increased revenue we're going to get and where we can direct it. Thanks. Thanks for the job. All right. Uh, Mr. Emily, anything? I was just going to say thank you. Oh, right.
This wasn't like Sorry. I'll try to be quick because I do have to pick up my kid up at football, but couple quick things I forgot. Um, one, does the budget hearing have to be September 3rd on a Wednesday instead of the Monday? It cannot by uh by state statute, it
cannot be before September 3rd. Okay. That's the earliest day that we're allowed. Sure. Just curious. Um, I'm not sure if it's a town center item, capital item, whatever, but we've also uh mentioned in the past, I know I've
had discussions with Larry as well about median project improvements, uh, you know, and between airport road, I think that's part of its town center, right? Main
Street. You look at your Town Center CRA fund. Yeah, it's all Airport Road. I lost my page. Oh, yeah. So, it's going up from, you know, it's going to be 2.4 and then 2.8. You know, it'd be
interesting to see what a median improvement project to tear out all of the horrible bushes and things like that. They're just dying and replace it. You know, I think at one point we talked about, oh, it's going to cost like $150,000. I'm sure, but if you budget it and you
get the quote and whatever, we take care of it. We should be able to do that, especially in the town center CRA fund. Why not, right? Uh, just an idea. Um and then to Jim to your point about some of the things that we voted on um you are right the Dune crossover it was kind of
like state was here in front of us and said you better do this or we're not you know we all voted on and we did it and it's going to be nice to have the crossover. Um the stuff that we've spent in the past year at parks and recreation I think nearly $2 million has been emergency
spending lights and a playground over there at that park. Those were emergency items that we basically just pulled out the general fund and made it happen. Um, no. Well, maybe not general fund, but it was
it was not a budgeted really item. Yeah, we we adopted those as part of the 2025 budget. Okay. So, we did both, but but to your point, last in 2025, last summer when we were looking at which projects should we do first, um we were definitely looking at safety
concerns. So, to your point, yeah, I got you. Well, yeah. Yeah. I think so, like Councilwoman Traml, you know, I think the idea and Jim, you said you somewhat agree with it. We just need to know what it's for, which I do agree with you. Um I think for nearly two years we've had on our council objectives to have a plan for mar for
for Morgans's and for um other recreational facilities in the city. That plan was supposed to be created um not was not supposed to be the master parks plan. So all we are trying to say is we're
trying to we should I believe and Miss Traml might agree is have a plan for doing things for our recreational parks as well because we don't really have that. There's sod coming that you said. Um and so I spoke with Larry and I spoke
with Lisa some time ago and we were supposed to have a plan for that this year. I don't know where that is but I'll be following up with them and finding that out. to to your point, uh the parks department, they did submit about $5.2 million in requests. Um a lot
of them were very heavily related to the Morgan Center, putting up sun shades, uh swapping out the uh the dugouts and everything else, but um as we're dipping so so deeply into the fund balance. So then who gets to make the decision not to include a single one of those
things in this presentation? Yeah. uh we didn't have enough, you know, Lisa was out of town and so in time in preparation for this workshop, we didn't have all of the backup details. So, we weren't able to um when Larry looked at them last week, he just
didn't feel comfortable going deeper than $7.3 million into the, you know, a fund balance deficit. Uh but we still but we still have those and we're still gathering all the information and they're we're working on a prioritization plan of
of in what priority and what timing do we address all of those issues. But uh parks and recck they did put all of that data together. But just I don't want to put words in your mouth, but Larry said that we weren't prepared enough to have the information in his he did not feel that the packets that he
had on each of those projects uh because of vacations and other timing, he did not feel comfortable that all the data and all the dates uh and everything was there and ready to go. So, uh, he said to take those when all
of that data comes together, then we'll present to to council, uh, with a sense of timing and urgency appropriate. Uh, but he did not feel comfortable including it in this, uh, this budget workshop packet for this evening. Okay. And just on that, uh the it's very
smaller peanuts compared to everything, but the uh the state's FURD app, which is the recreation, opens up uh September to October, and that's a matching grant if we want to get up into the quarter million. Anything else? Final words? Anything else? Everyone's shaking. Good job.
All right. Thanks everyone for being here. Thank you staff. And with that, the workshop is adjourned.