Gainesville City Commission signals 7.8% property tax rate increase, $3.6 million in budget cuts to close $9.8 million budget gap

The Gainesville City Commission held a Special Meeting on June 12

BY JENNIFER CABRERA

GAINESVILLE, Fla. – At a June 12 Special Meeting, the Gainesville City Commission held its third budget discussion for the 2026 Fiscal Year and directed the City Manager to build the budget around raising property taxes by 0.5 mills (7.8%) and making about $3.6 million in budget cuts.

Click here for our article on the first budget workshop.

Click here for our article on the second budget workshop.

Budgets for remaining departments

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Executive Chief of Staff Cintya Ramos gave a presentation about the budgets for the departments that had not yet been presented; the presentation can be seen here.

Gainesville Community Reinvestment Area 

Gainesville Community Reinvestment Area (GCRA), which does not get any money from the City’s General Fund, proposed a $65k increase in salaries and benefits over the FY25 adopted budget, with no change in the number of positions. The budget proposes a $64k decrease in operating expenses, a Capital Outlay increase of $450k, a reduction of $572k in aid to private organizations, and a $298k reduction in “Transfer,” for an overall decrease of about $422k, or 6% less than the FY25 adopted budget. 

Upcoming GCRA projects include Cornerstone/GTEC ($25.9 million), 8th Avenue & Waldo Road ($13.7 million), Downtown ($12 million), Heartwood ($5.7 million), and the FAPS Heritage Trail ($2.3 million). In FY26, Block by Block Ambassadors will provide downtown cleaning and safety services, and the GCRA would like to expand those services to cover all of downtown.

Housing and Community Development

The Department of Housing and Community Development only takes about $560k per year from the General Fund; most of its funding comes from grants. The proposed budget recommends a $70k increase in salaries and benefits and no change in operating expenses, for an overall increase of 14.3% from the FY25 adopted General Fund budget. The department has two vacant positions.

Ramos noted that if grant funding is reduced by the federal government, services could be impacted.

Sustainable Development

The Department of Sustainable Development, which administers the City’s Comprehensive Plan and codes, proposed an increase of about $67k in salaries and benefits, a reduction of about $9k in operating expenses, and a reduction of $1,836 in Aid to Private Organizations, for an overall 1.8% increase from the adopted FY25 budget. The number of positions will remain the same; there are currently 4.5 vacant positions.

Transportation 

The Transportation Department’s General Fund budget is only projected to be $1.4 million for FY25 because most of its funding comes from grants. The proposed changes to the General Fund budget include a $34k increase in salaries and benefits and a $12k increase in operating expenses, for an overall 3.4% increase from the adopted FY25 budget. 

The budget includes additional funding of $75k (for a total of $190k) for free bus fares for riders 18 and under and 65 and over, leveraging a federal grant (along with $190k from Alachua County); funding is also maintained for free bus passes for City employees. A new service contract with UF significantly impacted both revenues and expenditures, with the expenditures from other funds decreasing by $3 million from the FY25 adopted budget and by $12 million from the FY25 amended budget. 

RTS revenue from UF decreased by $2.9 million, and revenue from federal grants decreased by $4.5 million; the City hopes to raise $300k in the next fiscal year from shelter/bench advertising. The City also hopes to rent out buses that are not actively in service and rent empty office space in the RTS Administration Building. 

Staff recommends moving ADA service from MV Transportation to RTS

Staff recommended moving the ADA service in-house (currently provided by MV Transportation), freezing 10 positions, and reducing overtime expenses for RTS Clerks on Saturdays, along with the bus service reductions that were previously announced

In response to a question from Commissioner Casey Willits, Transportation Director Jesus Gomez said that moving the ADA service in-house would have “an impact on services for people to get used to the new system,” but the service area would be the same. 

In response to a question from Commissioner Bryan Eastman about the 20% cut in overall service hours for RTS buses, Gomez said there will only be one bus per route on Routes 5, 8, 15, and 43, so “usually you have a route to have 45-minute frequency, would be 90-minute frequency.” Eastman said decreasing the frequency will make it “disproportionately harder” to use a bus, particularly when trying to make transfers. Gomez estimated that the bus system will lose a million passengers a year as a result of the cuts.

Non-departmental

Non-departmental “is the department that covers expenditures that are governed by many different departments,” according to Ramos. The General Fund budget increases salaries and benefits from $185k to $3 million, increases operating expenses by $856k, increases aid to private organizations by $200k, decreases debt service by $1.3 million, and increases transfers by $740k, for an overall increase of $3.5 million, or 12.1% of the adopted FY25 General Fund non-departmental budget, along with $154 million from other funds.

The budget maintains GRACE Marketplace funding at $2,050,000, with $1.7 million of that from the General Fund and $350k from GCRA funds. It maintains funding for all outside agency grants, increases funding for the Combined Communications Center by $382k, increases funding for the Annual Required Contribution for Pension Plans, and includes $130k in funding for the Hoggetowne Medieval Faire, $40k for the Workplace Stewardship Committee, and $35k for the Holiday Parade.

Wild Spaces Public Places Department

The Wild Spaces Public Places Department only uses $11k from the General Fund budget; its budget also includes $10 million in expenses, including five positions, from other funds. The department is currently managing 40 active projects.

Revenue estimates

Ramos said the overall General Fund revenue estimates for FY26 are about $1.3 million more than FY25, a 0.9% increase. Expenditure estimates are about $11 million higher than FY25, an increase of 7.2%; that leaves a gap of about $9.8 million.

General Fund FY2026 summary

The City also has an excess of about $17 million in its General Fund Unassigned Fund Balance (reserves). About $9 million of that is available after funding critical life/safety projects, Workday Procurement Modules, the new Technology Department, and radio replacements for the police and fire departments, all recommended by staff.

Ramos said the General Fund Transfer (GFT) from GRU is set again this year at $8.5 million, but the City only expects to receive about $7.2 million after GRU subtracts the County streetlights and litigation expenses. She said that amount is “the lowest in recent history”: the GFT was $38.3 million in FY19, FY20, and FY21.

Mayor Harvey Ward said the City Commission adopted a formula that set the GFT at $15.3 million in FY24, “the biggest drop in the Government Services Contribution in history” at the time, but the current amount is “a fairly random number.”

Government Services Contribution (General Fund Transfer) history

“Structural revenue deficit” caused by GFT reductions

Ramos said the General Fund has a structural revenue deficit created by GFT reductions. In FY24, the City increased its property tax millage rate by 0.9297 mills (16.9%) and reduced operating expenditures to balance the budget, and she said they would be able to close the gap in this year’s budget if GRU paid the amount calculated by the City Commission’s formula for FY25 and FY26.

Structural revenue deficit

Four scenarios proposed by staff

Ramos offered the City Commission four scenarios to close the budget gap and said Scenario 3 is the staff’s recommendation:

  • Scenario 1: increase millage by 0.8722 mills, which may be limited by the maximum millage determined by the Florida Department of Revenue on July 1;
  • Scenario 2: increase millage by 0.4361 mills and use $4.9 million from reserves;
  • Scenario 3: reduce fleet fixed payments by $2.9 million, reduce police and fire overtime expenses by $722k, use $551k in reserves, and increase millage by 0.5 mills
  • Scenario 4: reduce fleet fixed payment by $2.9 million, reduce outside agency funding by 50%, find $3 million in cuts City-wide, and use $2.9 million from reserves.

Eastman: Commission could “bring these taxes right back down” if City regains control of GRU

Eastman said he would love to “bring these taxes right back down” if the City regains control of GRU and gets “back to some kind of a standard, regular transfer amount that is based on actual property taxes and franchise fees.” He said he would “reluctantly” support Scenario 2 or 3. 

Commissioner James Ingle was “concerned about increasing the police budget by $4 million – that’s a big chunk of money.” He recommended putting the hiring of new officers “on hold.. until we’ve got some actionable money coming in, either by getting GRU back under control, or, you know, whatever happens next as we budget.”

Ingle: Religious organizations and nonprofits should pay the Fire Assessment Fee

Ingle also favored levying the Fire Assessment Fee against religious organizations and charities, which are currently exempted, because the fee is based on square footage, so churches with a lot of buildings get larger exemptions. As one example, he said, “In Gainesville, we’ve got an organization called the Pregnancy Crisis Center. It is basically anti-abortion activists masquerading as a health clinic. We give a subsidy to them through this fund; we give a 50% larger subsidy than we do to Planned Parenthood because they have a larger building.”

Ingle also called out a “private religious school” that has a $7,000 exemption and LifeSouth, which he said has “a pile of money, but we’re giving them $10,000 because they’re an organization that qualifies under charities for this fire assessment.” He said the exemption for Shands is $50,000 and described that as “cutting a $50,000 check to Shands.” He said there are “better ways to dole that money out to the people that need it, to where we do the most good” than with a Fire Assessment Fee exemption.

Ward: Not interested in a City-wide reduction of $3 million because it would reduce services

Ward said he was a “Scenario 3 guy” because “if we spent down a lot of excess fund balance, [recurring expenses] would be waiting for us next year.” He said he doesn’t like higher property taxes any more than anyone else, but “a thing I’m not interested in doing is Scenario 4, where we talk about expenditure reduction City-wide of $3 million – what that is, is a reduction in City services.” 

Ward said overtime costs will increase if they don’t fund positions for officers.

Willits: Would prefer to give the amount of current Fire Assessment Fee exemptions “in one check to GRACE Marketplace”

Willits agreed that the Fire Assessment Fee for nonprofits is “nonsensical” because it’s based on “nothing but real estate… I would love to get more money in GRACE Marketplace, in almost every church in Gainesville, probably 95% of them, if they say, ‘We believe at our core in serving the homeless or the poor.'” He said he would rather “hand it in one check to GRACE Marketplace, rather than subsidizing it and then hoping it comes back to do the work.” He thanked Ingle for being “brave enough to really kick the wheels on it.”

Ward said he didn’t support removing the exemption “because I think it does open us up to Establishment Clause issues.” He said doing that would require “about a year and a half of conversation.” 

Eastman agreed that it may not be possible to remove the exemption in this year’s budget cycle, but he wanted to “at least begin a conversation” in the next 60 to 90 days: “I think everything sounds good in theory, but in practice, it’s like the government has to fund itself, right?… Especially for the City of Gainesville, we have cut and we have cut and we have cut, and we’re now running on fumes.” 

Public comment

During public comment on the budget, Randy Frantz from MV Transportation  said the service’s on-time performance is at 98%, their accident rate is 45% less than average, they’ve received “rave reviews and the highest ratings on our most recent client survey,” and the employees have “extremely high job satisfaction.” He said when other cities have brought ADA transportation in-house, it “is always much more expensive and brings substantial lower quality because ADA service is the most operationally intensive business there is.” He said those higher costs “dwarf the imaginary $500,000 savings suggested in this proposal.” He added that since RTS is 77% of the company’s business volume in Gainesville, the company would not be able to remain operationally efficient, “stranding 15,000 trips a year” that are currently available to clients outside of Gainesville.

Spencer Morton, who uses MV Transportation, said a decision to bring ADA transportation in-house would affect not only city residents but also those in outlying areas, a situation he said could be “life-changing” and “devastating for a lot of people and jeopardize a lot of citizens in Alachua County with disabilities who rely on this service.”

Another speaker who lives in Alachua and works at the Alachua County Sheriff’s Office said, “Were this to go away, I very simply would not have transportation to get to work.”

ADA service change “because of the dramatic increase” in costs for FY26

After public comment, Commissioner Ed Book said the City decided to evaluate the service “because of the dramatic increase in monies that has been requested to go from Fiscal Year 2025 to Fiscal Year 2026… [It] came out of the cost increase by your company.” Book said he was not in favor of increasing the property tax millage, especially since maintaining the current rate would be an increase because of increasing property values.  He favored looking at removing the nonprofit exemption for the Fire Assessment Fee in future budget years and freezing salaries for non-bargaining unit employees in the “top percentage of our salaries… It’s our charters, and it’s probably our top administrators.” He also suggested “changing our benefit package at the City Commission,” even if it has a small impact on the budget, “because we need to role-model some things.” He favored Scenario 4 and concluded, “This is a rough one tonight.”

Eastman: “The problem was not created by us.”

Agreeing it was “a rough one tonight,” Eastman said the City is in this position “not by our own volition” and referred again to the GFT being below the amount set by the City Commission’s formula. He continued, “What we’re doing is simply taking the pain that has been imposed upon us and finding a way to solve the problem, right? And the problem was not created by us… When you take something off of the tax roll, that has an impact, and that pain is being felt by the people of the community.” He said he still had a number of questions that he would like answered before the final budget is passed.

Ward said Commissioners have several weeks between each meeting to meet individually with Charter Officers to ask any questions they may have.

Commissioner Cynthia Chestnut said she didn’t have any problem with freezing the salaries of Commissioners, Charter Officers, or top administrators.

Ward said he was “not going to vote for salary freezes.”

First motion

Willits made a motion to direct the City Manager to bring back a budget under Scenario 3, with a maximum millage of 6.9297 mills. Ingle seconded the motion, and it passed by a vote of 6-1, with Book in dissent.

Second motion

Book made a motion to direct staff to provide an analysis to the City Commission of cost savings of salary freezes to three categories – the top 25%, top 15%, and top 10% of City employees – and any salary schedule ramifications or consequences, for employees who are not in a bargaining unit.

City Manager Cynthia Curry said, “This is not new to us; we have already been talking about it. We did not bring it as a recommendation because we would not recommend it. However, we’re not Commissioners. We’re prepared to provide the analysis.” 

Book adjusted his motion to include City Commissioners and “any potential ramifications for benefits or pensions,” and Curry responded, “You want to cut to the bone.” Willits seconded the motion.

Ingle said he supported the motion, but “I don’t see salary freezes as getting us out of this hole.”

The motion passed 6-1, with Ward in dissent.

Third motion

Eastman made a motion to direct staff to review the impact of continuing to freeze some police officer positions and eliminating vacant positions under the Charter Officers, and Chestnut seconded the motion. 

Ward said he didn’t support that motion, either, because “we’re looking at very small numbers here to make points, and they’re not going to make the impacts we think they’re going to make.”

Willits said he disagreed because if the impacts of Book’s and Eastman’s motions are added, they “start to get to at least protecting something that we have previously cut.”

The motion passed 5-2, with Ward and Willits in dissent.

Book encouraged MV Transportation to talk further with City staff to see if they could make a different offer that would change the decision to bring those services in-house. 

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