City Commission Budget Workshop (2025-07-22)

7/22/2025 MEETING MINUTES SESSION OF THE CITY COMMISSION BUDGET WORKSHOP CITY OF KISSIMMEE CITY HALL, COMMISSION CHAMBERS 101 CHURCH STREET, KISSIMMEE, FLORIDA 34741-5054 TUESDAY, JULY 22, 2025 AT 9:00 AM 1. MEETING CALLED TO ORDER Members Present: Mayor Jackie Espinosa, Angela Eady, Carlos Alvarez, III, Janette Martinez Staff Present: City Manager Mike Steigerwald, City Attorney Olga Sanchez de Fuentes, Deputy City Manager Desiree Matthews, Deputy City Manager Austin Blake, City Clerk Tameara Crespo, Finance Director Tavia Ritchie Members Absent: Commissioner Noel Ortiz Mayor Espinosa called the meeting to order at 9:00 AM. 2. INTRODUCTION AND HIGHLIGHTS City Manager Steigerwald opened with an overview of the proposed budget, outlining key financial data and trends, and underscoring the challenges encountered in achieving a balanced budget this fiscal year. He addressed the city’s sustained millage rate, which has remained unchanged for seventeen consecutive years, and provided insight into the economic outlook, projected growth, staffing requests, infrastructure needs, and the five-year capital improvement plan, all while maintaining the current millage rate. Additionally, he reviewed the status of the general reserves budget. He reviewed enhancements to public safety services, proposed departmental changes, capital projects, and the planned expansion of the police headquarters, along with the construction of new fire stations. He concluded by outlining anticipated personnel additions over the next five years, primarily within public safety, and proposed a 4% salary increase for all non-union staff. 3. BUDGET OVERVIEW 3.A FY26 Proposed Annual Budget Finance Director Tavia Ritchie delivered a comprehensive overview of the Proposed FY 2026 Budget through a PowerPoint presentation (Exhibit “A”) and directed the Commission to the accompanying “Budget in Brief” document (Exhibit “B”), which provides a high-level, condensed summary of the full budget. Her presentation addressed several key areas, including Budget Fundamentals, FY26 Economic Assumptions, Millage Highlights (maintaining a rate of 4.6253 for the seventeenth consecutive year with a rollback rate of 4.3446), Ad Valorem Revenue Highlights, Total Budget Overview, General Fund Revenue and Allocation Summaries, Key Fund Highlights, and overviews of Capital Projects, Debt, Grants, Pensions, and Reserves. Director Ritchie also noted that the city continues to maintain its AA+ bond rating. The City Manager supplemented the presentation with a brief discussion on property taxes, a projected five-year decline in general fund revenues spending, and provided an explanation of the millage rate and its impact on the average property owner. 4. REVIEW OF DEPARTMENTS City Manager Steigerwald provided a summary of each department as outlined in the agenda. The Commission then held individual discussions with each department director, posing

7/22/2025 questions related to specific budget line items, departmental operations, staffing, services, and ongoing initiatives and projects. Each director responded with updates and clarifications. Additionally, City Manager Steigerwald and the Commission held a brief discussion regarding proposed salary adjustments for full-time, year-round part-time, and seasonal employees. The Commission also reviewed the potential acquisition of a portable stage. Following a staff analysis, it was determined that the investment would not yield sufficient returns, with concerns raised regarding associated insurance requirements and the staffing resources necessary to operate and manage the stage effectively. 5. GENERAL DISCUSSION Social Services Process Deputy City Manager Desiree Matthews led a discussion on this year’s social services funding allocation, reviewing the current process and requesting Commission feedback. The proposed bridge/emergency housing program was a central topic. Commissioners noted service overlaps among nonprofits and stressed the importance of diversifying funding, encouraging collaboration, and focusing on measurable outcomes. Given limited resources and overlapping county, state, and federal support, Deputy Manager Matthews suggested exploring a new oversight framework and will return with options at a future meeting. Mayor Espinosa proposed allocating $300,000 of the $450,000 budget directly to the Haven on Vine, with the remaining $150,000 distributed to the nonprofits and recommended reviewing the performance of agencies receiving funding. Deputy Manager Matthews proposed reevaluating the competitive funding process and reviewing the current provider list to better align with City priorities, focusing specifically on homelessness and housing stability rather than all social services. Additional Road Resurfacing Appropriation City Manager Steigerwald reported that proceeds from the charter school sale funded the resurfacing of 33 streets, with $5.5 million remaining to continue the paving program. Current funds will help the City catch up before resuming annual maintenance. The Commission also discussed the Columbia Avenue project and adding signage to restrict heavy trucks from using side streets, directing staff and the new City Engineer to review enforcement options. The Commission reached a consensus to proceed with the next phase of resurfacing. Commission Policies Update City Manager Steigerwald proposed amending the Commission travel policy and requested direction from the Commission. There was consensus to allow Commissioner Martinez to attend an event in Washington, D.C. with the Osceola Chamber, with formal approval to be considered on August 5th. Mayor Espinosa requested staff to draft a revised travel policy allowing exceptions for travel related to external board assignments or economic development, and to bring it back for Commission approval. Discussions were held regarding potential amendments to the City Charter. To place these changes on the 2026 General Election ballot in August, a timely process must be followed. Mayor Espinosa opened the conversation for the board to share their views on term limits and compensation. City staff will research current legislation and pending bills that may impose term limits on local governments and will provide recommendations at a future meeting. The Commission also discussed implementing criminal background checks for candidates, including drafting a policy to collect and publicly disclose results, with candidates waiving privacy rights. Regarding compensation, the current charter language was deemed vague,

7/22/2025 prompting the need for revision. The discussion included comparing population data from the U.S. Census versus the Bureau of Economic and Business Research (BEBR), as the state recognizes BEBR estimates between census years to determine appropriate compensation levels. It was also discussed to add language to the City’s event handbook informing vendors that political endorsements or advocacy are prohibited at City events. Commissioner Eady made a motion to adopt the proposed millage at 4.6253. Commissioner Martinez seconded the motion. Motion carried 4 - 0 Commissioner Eady made a motion to adopt the Public Hearing Schedule (September 2nd and September 16th). Commissioner Martinez seconded the motion. Motion carried 4 - 0 6. CONCLUSION There being no further business to come before the Commission, Mayor Espinosa adjourned the meeting at 1:43 PM. MAYOR-COMMISSIONER ATTEST: CITY CLERK

Budget Workshop F i s c a l Y e a r 2 0 2 6 E x h i b i t " A "

Budget Basics • The City has over 120 different funds • The General Fund is the primary operating fund to pay for basic City services, programs, and the daily operations of the City • There are separate funds for standalone businesses like solid waste, stormwater, airport • There are separate funds for special revenue like sales tax, gas tax and building

Financial resiliency: plan and act with a long-term perspective to ensure that fiscal policies and investments sustain public services and quality of life. Maintain flexibility in financial planning and management to adapt to unforeseen challenges, capitalize on new opportunities, and smooth out volatility.

FY26 Economic Assumptions • Inflation 2 % - 2.5 % • Ad valorem modest growth • Other Revenue flat growth • Investment income modest growth • External factors elevated risk • Benefit costs high growth

Millage Highlights • Recommended Operating millage 4.6253 • Rollback 4.3446, roughly $1.9M less • $355,132,128 in new taxable value • $763,783,065 in reassessments and new taxable value • Certified value of $7,089,214,444

Ad Valorem Highlights AD VALOREM MILLAGE RATE 4.6253 NO INCREASE PROPERTY VALUES INCREASED BY 12.1% CRA VALUES INCREASED BY 15.3% ONE MILL GENERATES $7.1M Average millage of cities in State of Florida is 4.8286 Average millage of cities with 25,000 to 99,999 residents is over 5 mills Average millage of cities with >100,000 residents is over 6 mills

ADJUSTED ACTUAL BUDGET ESTIMATE BUDGET FUND NAME FY 2024 FY 2025 FY 2025 FY 2026 General Fund $ 151,841,639 $ 148,344,699 $ 158,555,389 $ 160,775,994 Stormwater Utility 15,057,729 15,574,349 16,778,009 10,144,859 Solid Waste 10,152,028 10,502,579 11,770,346 10,264,795 Airport 1,856,985 3,762,043 3,609,139 2,380,630 Central Services 15,767,455 15,529,959 16,502,128 15,227,524 Local Option Sales Tax 31,674,241 33,357,361 31,833,284 21,222,357 Mobility Fee 14,276,308 9,349,338 14,869,259 10,784,449 Local Option Gas Tax 20,588,600 21,768,882 23,446,063 6,534,813 Paving Assessment 23,683 10,000 10,000 10,000 Building 12,800,667.00 7,180,630.00 7,471,920.00 5,973,441 Downtown Community Redevelopment 9,765,782.00 11,060,888.00 11,528,811.00 9,572,118 Vine Street Community Redevelopment 6,950,964.00 8,579,130.00 9,464,972.00 9,134,745 CDBG Entitlement Grants - - - 896,880 SHIP Grants - - - 628,202 HOME Grants - - - 325,641 Recreation Impact 4,780,285 3,096,933 4,121,311 2,195,605 Police 2nd Dollar Assessment 71,401 49,651 49,651 39,946 Victims of Crime Act Grant 437,426 388,436 340,296 340,296 State Law Enforcement Trust 464,726 391,999 449,213 427,913 Federal Law Enforcement Trust 62,741 53,770 62,741 63,241 School Crossing Guard Trust 46,034 3,650 37,856 3,650 Treasury Forfeiture 315,604 313,239 316,104 316,604 Charter School 16,592,260 - - 0 Utility Tax 8,611,640 8,758,100 8,875,676 8,845,676 Local Option Sales Tax Bonds 2,165,023 2,165,023 2,165,023 2,161,857 Local Option Gas Tax Notes 290,841 294,385 294,385 297,660 Community Redevelopment Notes 313,928 331,903 331,903 344,175 Series 2016/2022 Bonds 6,375,990 3,704,735 6,391,666 10,051,893 Liab/Workers Comp Self Insurance 5,696,183 5,024,174 5,702,285 5,397,750 Health Self Insurance 11,693,096 12,148,704 12,177,726 15,057,895 TOTAL BUDGET 348,673,259 321,744,560 347,155,156 309,420,609 ALL FUNDS TOTAL BUDGETS SUMMARY

General Fund Revenue Highlights • Total revenue for General Fund is projected to be $111,023,045 • Budgeted revenues increase of 13.8% • Largest sources of revenue: KUA, Ad valorem, State revenues, Utility taxes, TWA Revenues Increase Ad valorem KUA TWA

General Fund Allocations - 10,000,000 20,000,000 30,000,000 40,000,000 City Commission City Manager City Attorney Finance Facilities Maintenance Information Tech Development Services Police Fire Public Works Parks & Recreation Human Resources & Risk Management Transfers to Other Funds General Fund Allocations

Fund Highlights • Stormwater Utility, over $7.6M in revenues generated • $10.46 per month per ERU • One CRS coordinator and one stormwater specialist coordinator recommended • Solid Waste Utility, nearly $8M in revenues generated • $24.92 per month per residence • Adjusted for CPI and fuel costs • No new positions • Utilizing reserves • Airport Fund, over $2.1M in revenues generated • Leases reevaluated • Reserves • No new positions • Central Services Fund, nearly $15.2M in transfers • Elevated costs • No new positions

Other Major Fund Highlights • Local Option Sales Tax, over $12.3M in revenue generated • Local Option Gas Tax, $3.5M in revenue generated • Building Fund, $3.4M in revenue generated • CRAs, $7.7M in revenue generated • Liability/WC Fund • Health Insurance Fund

Capital Overview • Total Capital Expenditures FY 26 $24.7M - 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 Major Capital Expenditures by Fund

Debt Overview • Bond rating ‘AA+’ • Multiple borrowings retired, Series 2024 offset • Outstanding annual debt service payment per capita: $103.15 • Outstanding long-term debt per capita: $1,615.56 0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000 2026 2031 2036 2041 2046 2050 in thousands Fiscal Years TOTAL FUTURE DEBT SERVICE REQUIREMENTS FY 2025-2026 TO FY 2051-52

Grant Overview • Total Grant Revenue FY 24 $7M

Pension Overview Police/Fire/General Historical UAAL & Funded Ratio Valuation Date Police UAAL Police Funded % Fire UAAL Fire Funded % General UAAL (City employees only) General Funded % 2024 18,685,817 83.2 17,558,149 76.5 16,830,075 88.9 2023 15,635,843 84.6 14,443,046 78.5 15,895,791 78.6 2022 12,207,586 87.1 14,729,836 77.4 14,896,863 76.4 0 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 2022 2023 2024 2025 Annual Payroll Contribution Police Fire General

Reserve Overview • GFOA recommends a minimum of 17% reserves • 37% actual reserves at the end of FY 24 • 33% projected reserves at the end of FY 26 • 20% projected reserves at the end of FY 30 - 5,000 10,000 15,000 20,000 25,000 30,000 25-26 26-27 27-28 28-29 29-30 RESERVE LEVELS

Thanks! @ C i t y o f K i s s i m m e e

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