Gainesville City Commission approves tentative property tax millage and budget, allocates an additional $100k to GRACE Marketplace

BY JENNIFER CABRERA

GAINESVILLE, Fla. – During a Special Budget Meeting on September 12, the Gainesville City Commission adopted fire assessment fees and a commercial solid waste franchise fee and approved the first readings of a tentative millage rate and budget; while adopting the tentative budget, they allocated an additional $100,000 to GRACE Marketplace on top of the $100,000 added the previous week.

In her budget presentation, Executive Chief of Staff Cintya Ramos said the City is using the same methodology for the Fire Assessment Fee that was adopted in Fiscal Year 2024; it funds 51.68% of Gainesville Fire Rescue’s budget and is estimated to generate the same amount of revenue in FY2025 as it did in FY2024. 

The taxable assessed values of property in the city increased by 9.1% this year, down from last year’s 14% but the 12th year in a row that property values have increased. The City Manager’s office recommended holding the property tax rate at 6.4297 mills, 6.37% higher than the rolled-back rate of 6.0444 mills but the same as last year’s rate.

Ramos said the Government Services Contribution (also known as the GFT or General Fund Transfer) from Gainesville Regional Utilities (GRU) is only $8.5 million for FY2025, a 77.8% reduction from FY2019, which was the beginning of three years of the highest transfer in GRU’s history at $38.3 million each year. The GSC then dropped to $36.3 million in FY22 and $34.3 million in FY23 before the City Commission set it at $15.3 million for FY24 (a 60% reduction from FY2019). The GRU Authority now sets the transfer, and that board set the amount at $8.5 million for next year. Ramos said the GSC used to be the second largest revenue source for the City but is now the sixth largest revenue source.

The FY2025 General Fund budget is $155.4 million, $1.1 million (0.7%) lower than the FY2024 budget. The all-funds budget is 0.8% higher than FY2024. Ramos said, “This is the first time in the last 25 years where we’ve had a lower General Fund budget than the prior fiscal year.”

Ramos said the FY2025 budget eliminates 36 positions across all funds, compared to the FY2024 amended budget, with an additional 23 positions frozen and unbudgeted. 

Ramos presented the General Fund as a dollar bill:

Fire assessment fees

Commissioner Bryan Eastman made a motion to approve the fire assessment rates, and it passed 6-1, with Commissioner Casey Willits in dissent. Willits has repeatedly voiced his objection to the methodology adopted last year, saying it disproportionately affects multi-family residential buildings.

Commercial solid waste franchise fee

Commissioner Cynthia Chestnut made a motion to adopt new commercial solid waste franchise fees that will increase by 10-15% and will cost franchised solid waste haulers an additional $744,500. The Business Impact Estimate states that “all businesses serviced by franchised haulers may be impacted by up to a 5% increase.” The motion passed unanimously.

Tentative property tax millage

During a discussion about setting the property tax millage, Commissioner Ed Book said, “I feel like we’ve done extraordinary things with the budget.” He praised the first budget cut in 25 years and said, “I think that’s exactly where we should be going.” He suggested dipping into the fund balance (which is above the minimum required by City policy) and using the money to reduce property taxes: “I wondered if there would be any interest in taking a small percentage of this over-the-max General Fund fund balance and applying that to reduce our millage rate by point one or point two [mills].”

Eastman cautioned that the GRU Authority has “decided that agreements don’t matter… They randomly cut $6.8 million, based on a number that has been disproven time and time again… We’re dealing with partners that are very chaotic, and… I am concerned about what happens within the next year… I’m hopeful that next year we can do it because I don’t really feel comfortable with our millage being where it is, but… I think that is a discussion for when we’re in a place of stability – which we are very much not in.”

Willits said he would be comfortable dipping into the fund balance for one-time expenses like setting up an in-house IT department.

Curry responded that the money to set up the in-house IT department is not currently in the budget, so if they decided to do that, the money would come from the fund balance.

Chestnut said she was “not inclined to make any changes in this budget as it’s presented… And quite frankly, we can’t depend on what will happen with GRU at this time… [The fund transfer] may change tomorrow; it may change in February… We have to be prepared if that occurs again… I don’t want to touch fund balance.”

Mayor Harvey Ward said, “I hear where you’re coming from, Commissioner Book, I absolutely do, and I’m anxious to cut taxes… but that fund balance… includes some money that’s spoken for…,” and Curry said some of the money is for WorkDay. Ward also said there is no contingency built into the budget, and Curry confirmed that.

Ward said, “A lot of our buildings really are aging,… including this building, and we are going to have to, in the not distant future,… find capital funds to work on the people’s buildings and to bring them up to the standard that the people expect – you know, the Thomas Center, this building (City Hall), the Old Library building – many of our buildings are in need of renovations and updates, and this fund is where we’re going to look to do much of that in the coming years. So I absolutely hear you. I hope that’s something we can do next year. I can’t support it this year.”

Eastman made a motion to approve the property tax rate of 6.4297 mills; the motion passed unanimously.

Tentative budget

During a discussion about adopting the budget, Ward said, “I recall last week, when we appropriated ARPA (American Rescue Plan Act) funds, we had a discussion about where the additional $100,000 to make GRACE Marketplace’s request whole might come from, and this is where we punted to. So we should have a conversation about that.”

Commissioner Reina Saco said the cleanest way to do it would be to take the funds from $1.5 million for affordable housing in the General Fund: “We have many plans… available, but no plan to be used right now, necessarily… I think, given the very real reality surrounding the couple blocks around us and where folks are really ending up now, that GRACE’s services are paramount at this moment… You know that I love housing. I live for housing – but I think we have other opportunities when it comes to housing. There are other grants and opportunities that I know our staff are looking into,… and I think GRACE will make very good use of every dollar we put in their hands and magnify it ten-fold.”

Chestnut said she didn’t want the cut in affordable housing funding to affect the proposed cottages on East University Avenue and recommended “that we look to trying to make that project whole.”

Eastman said he supported amending the budget to give GRACE an additional $100,000 to get to its requested $2,050,000 from the City. After public comment, he made a motion to approve the proposed tentative budget with $100,000 moved from the $1.5 million for affordable housing to GRACE Marketplace.

Discussion about specifying a recipient for some of the affordable housing funds

Chestnut said she would rather have a motion to adopt the budget as presented and then a second motion to move the $100,000 to GRACE and ask the City Manager to come back with a proposal for how to allocate the affordable housing money, “to include [the] cottages on East University.”

Saco said she did not want to dictate which projects would get the affordable housing money that evening “because I want staff to come back and give us a full presentation on the opportunities for that $1.4 [million].”

Ward suggested language like, “Bring back a plan for the 1.4, to include the 100 for GRACE and an unspecified amount to include the Cottages.” Saco said she didn’t want to come back for a second vote to “figure out the GRACE situation,” and Ward clarified that the second vote would be right after the vote to adopt the proposed budget.

Saco said she didn’t want to tell staff “that some of the money has to go to this one project.” She said staff would have to come back anyway to discuss how to use the $1.4 million, and she wanted to see all the options before making a decision on how to allocate the money.

Willits said he wanted the full GRACE allocation in the budget, not in an amendment, and he didn’t think the two-motion proposal was “very elegant.”

Curry pointed out that the allocation for GRACE comes from two funding sources: the Commission decided on September 5 to allocate $1.5 million in ARPA funds to GRACE and $1.5 million from the General Fund to affordable housing, and then they allocated another $100,000 to GRACE last week from ARPA funds. She said that if the Commission decided to add $100,000 for GRACE from the General Fund, that would be a total of $1.7 million, and the other $350,000 would come from GCRA funds for a total of $2,050,000.

The motion to adopt the tentative budget with $100,000 moved from affordable housing to GRACE was approved unanimously.

Decision on East University Cottages postponed

Chestnut asked how best to make her motion about making sure the East University Cottages got affordable housing funds, and Curry said she was concerned about doing that because now that the money was coming from the General Fund instead of ARPA, there were different rules for awarding it, and “it gets to be a procurement issue.” She said staff would come back with a recommended procurement process “that meets the letter of the law” and some recommendations for allocating the money.

Chestnut said, “I want to stay legal at all times… I think the cleanest thing to do is to leave it as is. You know my sentiments.”

In closing, Ward thanked the staff for the “very fiscally conservative budget.”

The final budget will be adopted on September 26.