Proposed budget positions Fernandina Beach for uncertain future as tax, paid parking decisions loom

FERNANDINA BEACH — City Manager Sarah Campbell on Tuesday presented a proposed $226 million budget designed to protect the city against a series of financial uncertainties, including next month's paid parking referendum, rising inflation, expanding infrastructure needs and the possibility of future reductions in property tax revenue.

Rather than proposing sweeping new programs, Campbell described a spending plan built around financial stability, maintaining reserves while shifting several long-subsidized operations onto self-supporting financial footing.

"I think the headlines of this year's budget process are really about two of our key enterprise funds," Campbell told the City Commission. "The Golf and Marina are self-supporting this year. They do not require any contributions from the general fund for personnel, operations or capital."

If adopted in September, the budget would increase the city's operating millage rate from 4.6849 to 4.8530 mills, producing approximately $24.7 million in property tax revenue.

The proposal follows last week's commission decision to advertise the highest allowable tentative millage rate, leaving commissioners flexibility to lower the final tax rate during September budget hearings.

Much of Tuesday's discussion centered not on spending increases but on preparing for events outside the city's control.

The largest immediate question is the Aug. 18 referendum that could eliminate the city's downtown paid parking program. Should voters approve the measure and it ultimately affect paid parking revenue, Campbell said the city has already positioned itself financially.

"When we increased that millage, we needed a place to put that $1.5 million," Campbell said. "So this is here in the Marina fund where you'll see that money coming in specifically for the redevelopment project."

That reserve is intended to protect the city's ongoing waterfront redevelopment, including demolition of Brett's Waterway Cafe, construction of a new bulkhead and marina reconfiguration.

The budget also anticipates another financial challenge just over the horizon: the proposed statewide constitutional amendment expanding Florida's homestead exemption, which city officials have estimated could significantly reduce future property tax revenues.

Mayor James Antun praised the fact that the municipal golf course and marina no longer require General Fund subsidies.

"We've been able to put $1.5-ish million back into the general fund that's not being subsidized," Antun said. "That's wonderful."

The budget adds six full-time positions, all in self-supporting enterprise funds, while General Fund staffing declines through elimination of vacant positions.

Stormwater spending would grow from just over $1 million to approximately $6 million while capital spending climbs to approximately $16 million.

Commissioner Joyce Tuten urged commissioners to dedicate additional tax revenue toward land conservation.

"My grandmother would say, 'I'd like to put this bee in your bonnet,' that when we choose a rate in September, that we choose to put some money into land conservation," Tuten said.

Commissioner Genece Minshew responded that she supports additional conservation funding only after the city develops a detailed acquisition strategy.

"When I see a list of proposed properties and their value and why we would want to buy them, I would consider it. But to just blindly put money aside without having a clear plan, to me, it just doesn't make sense," she said.

Vice Mayor Darron Ayscue suggested following Nassau County's CLAM model by asking voters to approve a dedicated conservation referendum.

"The citizens are more than likely going to do it for us if you come to them with a plan," Ayscue said.

Commissioners also questioned rising contractual costs within the city's independently managed pension funds, with Campbell agreeing additional oversight is needed.

Commissioners agreed no additional budget workshops are necessary before public hearings Sept. 3 and Sept. 15, when the final millage rate and Fiscal Year 2026-27 budget will be adopted.