Budget Crash Course: FY 2027

City of Pensacola Strategic Communications Officer Shannon Nickinson and Mayor D.C. Reeves discuss the fiscal year 2027 budget. Everything from "what's the general fund" to operations and common misconceptions. This is how the City of Pensacola budget works in a nutshell.

To see previously approved City of Pensacola budgets, visit our Financial Services Department webpage.

Transcript

SPEAKER_00 0:01

Welcome to The Longview with your host, Pensacola Mayor DC Reeves. This is where we expand on news, views, what-ifs, and what Pensacola could be for future generations. Take a seat and enjoy the Longview. Hi, I'm Shannon Nickinson, and welcome to The Longview with Mayor DC Reeves.

SPEAKER_01 0:20

Hey, glad to be here. Hey, nice. Exciting first day. I know. First day on the gig here.

SPEAKER_00 0:25

It's our debut episode. Let's uh let's hope the gods are kind, huh?

SPEAKER_01 0:29

We'll find out.

SPEAKER_00 0:30

Uh, we just wanted to take this time to um help you guys kind of step outside of the fray of um the your social media feed and the news of the day, which can be pretty frantic from time to time.

SPEAKER_01 0:43

For sure.

SPEAKER_00 0:44

We want this space to be where we give you the context of what's happening and a little bit of why, so that maybe we understand um you know a little bit more about what's going on and and how we can make sense of it. So thanks.

SPEAKER_01 0:57

Well, I'm glad to do it. And I think um there's this stat that always rattles my head when we talk about um issues at the city or in government in general, is um that stat floating out there that the average citizen spends like 21 seconds thinking about you know political things, uh whether that's local or state or federal. And so sometimes, you know, when you're in it uh and you do press conferences and social media and all those things, uh, you know, we we kind of feel like that we get the word out there, you know, pretty intensely or pretty repetitively. But people are busy with lives and kids and uh maybe they can listen to a podcast on the run and learn more about the budget or you know what whatever other items are out there. So uh looking forward to being able to do this and and to give it that type of avenue to say if maybe you want to learn a little bit more than you can and a 30-second clip on TV or you know a press conference that we can we can try to deliver that to you.

SPEAKER_00 1:52

Yeah, and we're happy to do it. And we do have a big Brussels sprout, but we're gonna put a lot of cheese on it today, and it's gonna be really good for you. And it is an important thing. This is your upcoming budget, uh 20 fiscal 27 coming right at you before you know it. Um so give us a little bit of an overview. I know in general, um, we're looking, we're kind of flat, right?

SPEAKER_01 2:14

Yeah, absolutely. And and why now? This is when uh if you haven't paid attention to the uh city budget before, this is uh when we do it. It's an October 1 to September uh 30 budget. So um that so we do all the work during the summer, and then of course the city council ultimately approves the budget. So that's how the balance of power works in the city of Pensacola is uh the the my office is over city operations and in some certain aspects, and the city council is over two main things ordinances, which is the rules of the city, and the budget. And and so whether that's the annual budget, which is what we're gonna talk about uh today, uh it's either that or it could be changes to the budget, as you can imagine, through a whole year. Uh there are many things, if you ever heard the term supplemental budget requests. I don't expect you uh to have that one memorized out there. There will be a quiz later. Exactly. So uh an SBR would be if we're changing midstream, if there's some type of significant budget change where money has to go from one sector to another. Um think, for example, a snowstorm hits uh and and we need to move money and we can't wait till the end of the next year. So um so what we're talking a lot about today, I know, is is your routine, this is your annual budget. So uh so our team, the city administration, city finance department, shout out to Amy Lavoie and Mindy and the whole squad for uh helping get this put together. Ultimately, the administration puts forward a budget to the council for them to approve, ask questions, uh, all of that. And and yes, to your question, this is a uh a flat budget. In fact, if you look at the general fund, which the short way to describe the general fund is it's the most flexible dollars we have. Right. Uh mean we you might hear that our budget is $340 million. Of that $340 million, uh a very small portion of that fractionally is the general fund, which can be spent on anything. Mostly what it's spent on is police and fire. Uh but uh that that is right around $80 million uh out of a $340 million budget. Um so when you just look at that main general fund, uh that is uh uh again right in that $80 million frame, and it's about $300,000 less year over year than it was a year ago. So lots of talk about millage, and we can I know we can get into that and try to myth bust a little bit. Yeah, but ultimately what you're looking at is our general fund is flat at best, really a slight decrease from the year before, uh, because there's a lot of conversation out there right now about what could happen with property taxes, which is the number one funder of the general fund uh and and many other unknowns. So we're really having to be um uh very uh very careful and very meticulous about uh how we move forward because there are some potential consequences out there with future decisions uh that could really uh uh hamper our ability to provide service. And uh so in in some ways, I guess the overall spirit of this budget is that we're kind of bracing for impact of flat sales tax, generally flat property tax increase, and um lots of unknowns coming here in the next few months.

SPEAKER_00 5:14

And while incoming might be a little flat, um some of our obligations to departments like public safety are not flat.

SPEAKER_01 5:24

Right. Yeah, that's a good way to put it. Yeah. Um and and you know, that yes, that gets forgotten. Yeah, um, for example, in the property tax discussion, that that comes up a lot to say, hey, you know, property taxes have been increased this amount. Um so does labor, so does so does uh paying a livable wage for a police and firefighter. Um affordability is our number one issue. I think all of us can agree in this country right now is how do we put food on the table? Uh how do we pay our utility bills? And the reality is uh that at the city government level, we don't get to control the price of eggs or the price of bread. We don't necessarily get to control uh uh certain utility bills and things like that that can affect affordability. Um so uh what does that mean? Is that for us to stay competitive and to make sure police are on the beat and fire is on the beat, then we have to stay competitive within the marketplace. Um right now, you after lots of work uh to get pay reform done over three years in this administration, just to give perspective, uh we pay at the 50th percentile right now of cities across the country, and we've had that comparison, which which was quite a battle to get there. We were actually paying in the 20th percentile, that four out of five cities were paying uh its city staff better than we were. And why does that affect the citizen? Well, because when you can't fill jobs, when when we're missing eight landscapers because we don't have no, they're not willing to take that low a pay, when we have less police on the street, then that tends to have a negative impact on services. So uh I I came in with a business background and we tried to look at it that way to say, hey, sometimes we got to focus on quality more than quantity. So uh I I'm really proud of the fact that right now we have not seen a total job count increase uh over now several years of time, meaning we don't have more city employees. Uh we're we're paying a little more competitively, uh, and and with that comes a cost. And and so uh but but we're right about the same staffing amount we've been at for the last six, seven years. Um, and and because we keep an eye on that. We make sure that we focus more on quality uh than on quantity. So uh expenses absolutely go up. The price of lumber goes up when it's time for a project, the price of landscaping goes up when you outsource that from contractors, for example, to cut the grass at the parks. Um so so no different than the affordability crisis happening. I always remind folks, cities and counties are not immune to sometimes we forget, we think it's like, well, that's the that's the big old government. They they don't have to worry about cost increases. I could actually make cases in many, and I won't uh bore you with every example I could come up with, but uh but I can come up with many examples where I can prove that that city and county governments, local governments, are actually the opposite. We we are more susceptible to significant increases than maybe even an average private business or a private citizen in terms of percentage, uh just because of procurement, because of transparency, because of all the rules that rightfully are in place uh to to to uh make sure that all governments are working uh uh uh above board, transparently and honestly. So great rules to have, but those rules also have the negative consequence of uh potentially having significant uh uh expense impacts to us that that a private business otherwise wouldn't. So um so lots of uh factors that that uh converge uh when it comes to to trying to get a budget across the finish line and to be able to do so responsibly.

SPEAKER_00 8:41

And we you know we want to um be as competitive an employer, right, as we possibly can because there's a cost to turnover. There's a uh cost to retention that I know that you understand from your background um in the business world, and that certainly applies to the municipal government level as well. So when uh when could the public expect some of that conversation between uh staff and council to start?

SPEAKER_01 9:08

Yeah, so I I would say uh that this usually starts right at the end of the July or first part of August. Um again, you get a it needs to go into effect October 1st, and uh typically hit what you'll see is there's a budget workshop uh where our city staff will uh come up kind of department by department and and answer questions from council. The idea being that that you're not wanting that that could be a real long conversation if you were just bringing it for a vote. Right. So this gives the council an opportunity to to ask specific questions about the the budget that's uh proposed to them uh and and gather their thoughts. And then of course eventually there'll be a vote that would take place where the the budget um or really two uh the where the budget gets adopted. So um so from a citizen standpoint, there's kind of three public opportunities to to hear questions and hear what the budget uh what what we as an administration are proposing for council's approval uh and also that document in July. So here, you know, in the coming days, maybe by the time you're even listening to this, uh, we should have a budget uh published again, department by department, line item by line item, uh for you to look through and see, hey, where is your taxpayer money going?

SPEAKER_00 10:16

So um can you give us a little sneaky peek of what um some of the some of the highlights from the budget might be first for for employees, because um that's one audience, right? There's some there's some things in place for um for our employees to know what that's gonna happen to them, and then for um the citizens at large. So two kind of two kind of previews.

SPEAKER_01 10:40

Exactly, yeah. So uh first of all, uh I mentioned earlier, you know, we're we're kind of bracing for impact on two fronts. Uh one is the obvious property tax amendment that's uh being discussed that could be a potential 23 percent uh hit to our budget in year two. Um and that is uh a significant that will absolutely hurt services one way or another when we have to make some real difficult decisions if that were to pass. Um outside of that, we already were looking at and projecting flat sales tax. Uh you know, we've had a few years of really good year-over-year sales tax growth since uh really post-COVID. Uh, we've seen that in the state of Florida. And in generally, our our county, our city follows the same trend. I mean, we're not we're not some wild outlier because of a tourism season or something. For the most part, we follow the state sales tax trends, and and that holds true again. Uh but but relatively flat. Uh, and then also property tax has flattened compared to year-over year of uh and and I remind folks uh the millage has stayed the same, I think, since like 1994, if I remember correct. Um so a lot of times there talks about what is an increase and what is not. The the millage for city uh property tax has stayed the same for many, many years. Um it and but obviously there is an increase that's being discussed as property values increase. So so outside of the the referendum, outside of the amendment to the constitution uh that is being proposed in November, uh there we already were seeing trends that were going to really require us to uh make sure that we take a a step back and that uh again we kind of brace for uh what could be some flat growth. So what does that mean?

SPEAKER_00 12:16

That would be because it wouldn't be responsible for us to just for for the city to just sort of blunder forward as if it nothing potentially big was on the horizon. You wanted to be responsible and fiscally responsible ahead of these trends that you're talking about. Well, and it because it's separate entirely from what voters may or may not do.

SPEAKER_01 12:36

And and again, bringing kind of the the the private business mindset of if you anticipate uh any type of bump in the road or anything on the horizon, it you don't want to be turn a blind eye to that and then just say, oh, well, it's not this year, it's gonna be next year. With the property tax amendment, we could certainly take that position and say, hey, you know, let's expand and grow and grow as much as we can, or let's let's figure out how to maximize every uh you know dollar of revenue that can be generated and and then deal with that when we get there. Uh, you know, we're really you know bracing for some impact. Uh we're instituting a hiring freeze, um, which will require additional approvals for uh departments to be able to make hires. Uh we have geared down the what we call the cola, which is a cost of living adjustment, cost of living increase. Um and so that that we um uh staggered from low income to high income, so uh a lower overall percentage impact to our lowest uh paid employees, but nonetheless averages out to about a two percent cola, uh which is what Scambe County did. We normally have been at a three percent. So we're we're bracing there uh as well. And uh, you know, again, that those are not easy or uh you know fun decisions to make when affordability is a number one issue. Uh but uh the the fact remains we went to our departments and said it's it's ultimately dollar in, dollar out. Um so if if there's a $50,000 uh new vehicle you need, well then we got to figure out where you're gonna get that $50,000 from the year previous, um, that there was not gonna really be additional dollars uh coming along. And what gets lost in this pro last thing, what gets lost in this property tax discussion many times is that that when people are really um huge proponents for it, they leave out the part where there's major capital renovations that there is no budget for. And we we only focus on annual recurring items and saying, well, the annual recurring budget goes up. But yes, when but when you built something for $20 million, you know, what let's say it's a baseball stadium, let's say it's uh a community center. Yeah, though these things that cost that to renovate or fix would cost eight, 10, 11, 12 million dollars. There isn't an eight, 10, 11, 12 million dollar fund that sits over, rightfully so. Those are your taxpayer dollars. You want those reinvested. Absolutely. Um and so what that allows you to do is for as those increases go up, is you have major capital assets that need to be maintained that aren't going to just show up in a flat year-over-year budget. And so uh those are all things you have to consider when you're dealing with something this complex and you have 18 city departments. Um, but uh overall, that is what our employees are gonna see and what our residents are gonna see is is is kind of bracing for uh you know what could change not only with an amendment, but also with just the economic climate of the state right now.

SPEAKER_00 15:20

We do want to say that we're prioritizing those core services that have always been at the center of what we do, um services to the citizen, especially public safety and um and certainly maintaining maintaining what we have is important. Facility maintenance. We cannot pretend that new things don't cost money to maintain and old things don't cost money to fix. Um so I share a little bit about how that's a balance, as you've talked about before. How just where do you work to try to find that equilibrium to keep um all those considerations? It's a lot of balls in the air.

SPEAKER_01 16:00

Yeah.

SPEAKER_00 16:00

I mean what do you look for when you're trying to balance the scales? What moves you about that?

SPEAKER_01 16:05

Yeah, well again, first and foremost, what I said when I started was public safety is always gonna be number one. And I I just feel like if you don't have a safe community, you you really don't have much. It's hard to brag about uh uh uh whether it's American Magic or Hollis C. Williams or New Fricker Center and all that. I mean, those those are always gonna be those are good positive steps for our city. But if you're saying that under the umbrella of feeling unsafe in a city, then then it really hinders the value and assets of of anything that you do. So uh we're always gonna be hyper-focused uh on public safety. And public safety is not only police and fire, it's public works. And uh I always I I say at rotary clubs and town halls all the time, public works, everybody like has heard that term, but I don't know that people really understand what that means. That's cleaning out your stormwater ponds, saying if there's a tropical storm coming. That's sweeping the streets at at one in the morning while you're sleeping. That's uh that that's debris removal if we were to, God forbid, have a storm. Uh that is upkeeping all of the hundreds and hundreds of miles of roads that we have. Um, sidewalks, all that. Fixing sidewalks, replacing them, renovating them, um, all of those things. And so uh I I consider that maybe not in the traditional way we think of public safety, which is you know the first responders that show up at your house if something were to happen. Uh but but those are the to me, I think it's those safety investments, those infrastructure investments that get probably most overlooked. We think the sidewalks fix itself sometimes, or we just forget, right? We're streetlight burnt out, you know, whatever. You're getting food on the table, you're picking up your kids from school, you know, your job your job isn't to think about uh the condition of the sidewalk and who came and you know made it level again. Um but those are those real factors that cost real money uh um uh that that your technical if they weren't being done. Exactly. Exactly eventually you will notice that. And and uh unfortunately, because of a lot of deferred maintenance, uh I would say in this administration, and uh that's for uh another podcast uh of talking just specifically in parks and rec, I can give I can regale you with examples of where when you don't plan for those things and you and you look for new things and maybe not taking care of what you have, uh then you run into a lot of trouble. And and unfortunately for us, we've uh we've been handed you know right at a lot of different things that got built 30, 40, 35 years ago, uh that that uh whether it's City Hall, Bay Bloss Park, uh you name it, I can I can name a lot of those things that that got built right around that time. And when you don't plan uh the the way a business does, when you don't plan to say that we need to upkeep these things, then then negative consequences happen. And and obviously we've been the bearer of bad news on some of those things, but uh but that is why public works matters. That's why uh the all these in the primary and secondary safety investments matter uh first and foremost. But um after that, I I think that's where difficult decisions begin, and and it's ones that the council has to make too, right? Ultimately, this is their budget to say is this thing more important or is that thing more important? Um and uh that's what this whole process is about.

SPEAKER_00 19:09

Yeah. Um so just one final reminder. I think we're unless we're missing something that you want to make sure that we touch on, I think we want to remind folks of their opportunities to come comment.

SPEAKER_01 19:21

Yes, absolutely. So again, there'll be a budget workshop, don't have the exact day yet. The council sets that workshop, but that'll be on the second floor typically at Hagler Basin uh at City Hall. And and it's all day. It's actually um uh you know nine to four or something like that because you got 18 departments at all. Right, it's all come up and pack a lunch. Right, exactly. Um so and you'll look at that, the list will come out of when which departments go in, and uh so yeah, if you have any interest there, uh then of course you've got uh the again, the two budget votes that will happen in consecutive meetings where that's where they will uh you know the council will take a vote and there's an opp opportunity for you know public hearing and public comment. But um after this being now my fourth time going through this process, my suggestion if you're really interested in the budget, one is is to read through it. I mean, again, it'll be publicly available. And second is to come to that workshop. I think there that's really where you can gather lots of facts and or or listen to it or listen back to it in a shorter amount of time. You know, you can kind of skip to the parts that you're the most interested in and follow along in the budget. Uh and um so yes, you've got absolute opportunity to do that. Uh and you have opportunity to reach out to me as always, DC Reeves at CityPensacola.com if you have any questions or concerns about uh anything that you see, uh I'm put in this office to uh to represent your taxpayer dollar in the best way possible and always open to that feedback as well.

SPEAKER_00 20:42

Well, I I know you are, and we always appreciate that. I I would make a quick pitch for um in informed consent, if you will, um on the part of the citizen. We will work hard to make sure that you have all of the notice that you possibly could want about when your city council meetings are, when the budget hearings are. That's typically August-ish and then drifts a little into September. But as you mentioned, the budget will be put on the website. People can go through it at your leisure. You you there will not be a quiz. I was only kidding. But but if there are parts that you're interested in, I just you know take take a little time. Um, that's that's important. We as citizens, we we get the government that that we choose. And in order to make a good choice, we should know what's going on.

SPEAKER_01 21:30

Yeah, I think the best way to put it is um I heard a uh previous mayor say this when they say, you know, what's one thing you want from the citizen? And I always say, listen, engaged citizens are the best. And that meaning that that is not mean you have to agree with everything that the mayor thinks or a council member thinks. It's really more of, hey, the more engaged you are, uh, because I would say 95% of the disdain I see out there, and let's just use the budget in particular, isn't subjective. It's not you pick A or B, I think B, and the council thinks A or the Mayor thinks A. Uh really more of it is just the fundamental misunderstanding because it's a it is complicated. A $340 million budget, very few of those dollars are um uh can be spent on anything anywhere at any time. Very few of those dollars. And uh when someone reads a headline that says this project's $10 million or this project's $15 million, it could be grant funded, it could be used only with dollars.

SPEAKER_00 22:26

But it's not monopoly.

SPEAKER_01 22:27

Exactly. Oh the vast majority, I can you can almost guarantee if there is a capital project, meaning a multi-million dollar project that's happening in the city of Pensacola, I I can't I'm trying to even think of one since I've been mayor where that you fund that didn't have dollars that were either grant funded, earmarked for that specific location, earmarked for that specific use. Think about a stormwater project, a road project, that where those dollars have to be used in that way. They cannot be moved to another initiative to to aid homelessness or childcare or it it it can't just be used in those ways. And so um so just using that as an example of man, the more engaged you are about um where dollars can be spent and all that only fuels just more educated dialogue about and and recommendations, concerns to the to the mayor and to the council on uh where dollars can go. So um, and the only way to really get that is to to follow along with some of these things. I I certainly understand it's not the world's most exciting uh topic to talk about a big city budget uh, you know, with uh with citizens, but uh but I I certainly uh would absolutely recommend uh that that's the best way to get engaged is to really understand how these parts of your government work. Uh and so you can give good constructive feedback or or critique on on where you'd like to see your taxpayer dollars go. We welcome that. Uh in agreement or disagreement, we welcome that. And um and the more and more opportunities that we have for that educated dialogue, the better.

SPEAKER_00 23:57

Absolutely. Um I that's that's our job as grown-ups is to sometimes do the grown-up stuff. And um, you know, you can tell a government's priorities by where it puts its dollars. Right. And this is your chance, dear citizen, to find out where we want to put our dollars.

SPEAKER_01 24:13

That's right. That's right. Well, yeah. Well, it looking forward to the process. And again, DC Reeves at City of Pensacola.com. You can email me about this or anything you want, but uh any budget questions, happy to help get them answered.

SPEAKER_00 24:25

Awesome. Well, thank you so much for taking some time. We appreciate you today. Um, we hope you enjoyed your time on the long view, and um, we'll catch you again next episode.