“Not out of the ordinary at all”: Gainesville City Commission faces $5.3 million gap in first look at FY2026 budget

BY JENNIFER CABRERA

GAINESVILLE, Fla. – At their March 27 Special Meeting, the Gainesville City Commission took a first look at their FY2026 budget and learned that there is currently a $5.3 million gap between expenses and projected revenues.

Revenue projected to increase by $1.4 million

Executive Chief of Staff Cintya Ramos said the estimated General Fund revenue for FY2026 is $156.7 million, which is $1.4 million or 0.9% higher than the FY2025 adopted revenue budget. This revenue assumes the same millage rate as FY2025 (6.4297). The estimate includes an additional $4.1 million in property taxes, a growth of 5% in fees collected, a $245,000 reduction in right-of-way fees, a $222,000 reduction in revenue from Ironwood Golf Course concessions (offset by some costs), a $206,000 reduction in legal services fees for a dedicated GRU attorney, a $1.1 million reduction in County streetlight expenses charged to the City by GRU, and a placeholder reduction of $250,000 for legal fees charged to the City by GRU.

The FY2025 adopted General Fund revenue was $155,368,126, but it was amended to $158,536,642 after about $3 million was transferred from the fund balance (reserves).

Ramos said the Government Services Contribution (GSC) from GRU is expected to be $7.2 million in FY2026, down from $8.5 million in the FY2025 adopted budget, $15.3 million in the FY2024 budget, and $34.3 million in the FY2023 budget.

Expenses projected to increase by $6.6 million

The FY2026 General Fund expenditures are estimated at $162.0 million, which is $6.6 million or 4.2% higher than the FY2025 adopted budget. Ramos said that would include reinstating funding for 20 police officers (positions frozen in the FY2025 budget) and a grant specialist, reinstating fleet fixed expenses to support vehicle replacement, maintaining the same number of employees as the FY2025 adopted budget, and 3% annual merit increases for City employees. 

Ramos said $3.1 million of the increase is from reinstating the 20 frozen positions plus $1.6 million for putting the GRACE Marketplace contract back into the General Fund (it was funded out of ARPA funds in FY2025).

Ramos said that leaves the City with a preliminary gap of $5.3 million, but staff is still “working through refining expenditure projections and revenue projections.”

Mayor Ward: “If you’re watching at home, this is not an ‘Oh my God’ situation. This is normal.”

Mayor Harvey Ward said, “I want to make sure that everyone hears that these are all estimates… and remind everyone that we almost always come in with a gap at this point in this year… If you’re watching at home, this is not an ‘Oh my God’ situation. This is normal… All those things come together in various ways over the next several months; this is not out of the ordinary at all.”

Ramos said the “levers” available are the millage rate, expense reductions or efficiencies, and the fire assessment fee. She said the City also currently has an excess of $18 million in the unassigned fund balance over the minimum required balance. She added that those funds could be used for capital expenses since “the City has not set aside dedicated funds for renewal/replacement of capital projects, and we’re currently evaluating funding needs for new capital projects that we’re considering.” She said the immediate capital needs come to $12.4 million, with another $14.6 million needed over the next five years for preservation needs, on top of new projects like 8th & Waldo, a new park in southwest Gainesville, equipment for fire trucks, and more. 

Infrastructure sales surtax is raising more than expected

Special Advisor to the City Manager Phil Mann said the infrastructure sales surtax is coming in ahead of expectations: the City had expected $8.7 million each for Streets, Stations, and Strong Foundations (infrastructure) and Wild Spaces Public Places, but revenue came in at $10.6 million for both programs (the two programs each receive half of the penny sales surtax). 

After the presentation, Commission Bryan Eastman said, “That [$5.3 million gap] feels like a large gap, walking into all of this.” Ward responded, “I’m telling you, historically, don’t be worried by it.”

City Manager Cynthia Curry said, “I’ve been doing it for a long time, and we always balance, and so in the end, we will balance.” She said public safety is “really driving the increases.” Eastman pointed out that unless the revenue comes in higher, there will “have to be $5.3 million in cuts in some capacity,” and Curry said, “Yes, sir.”

Curry also added that the transfer from GRU is still “a question mark.”

Comments about the fire assessment fee

Commissioner Casey Willits reiterated his long-standing opposition to the methodology used for fire assessment fees, saying it is “unfair to people who live in larger apartment complexes, larger buildings, since it’s really about the square footage under one roof.”

Commissioner James Ingle favored taking a look at the exemptions for the fire assessment fee, which include governmental entities, charitable and religious organizations, and a hardship exemption, because they’re based on “the actual usage of the fire department, to be able to provide the services that are needed for it. I think that’s a little bit more fair.”

Ward: Fund balance surplus should be used on “one-time capital things”

Ward said the City’s policy of keeping a fund balance of at least 25% of the General Fund budget is “conservative,… which I know the popular imagination does not want to associate with the City of Gainesville, but it is true that we are a very conservatively managed financial organization… We want to be careful… not to use that [$18 million surplus] for recurring expenses but for one-time capital things. And Lord knows we have capital needs out there. This building [City Hall] is one of them, and there are others. So that gives us the opportunity to take care of the people’s property in good stewardship ways.”

First motion

Commissioner Ed Book made a motion to “direct staff to bring back options for use of the General Fund balance over the ordinance requirements, focusing on capital needs and sustainable projects,… things like 8th & Waldo, a new park in southwest Gainesville, and several others.” Commissioner Cynthia Chestnut seconded the motion. 

Curry said her staff would meet with individual Commissioners and would come back to the Commission within the next month with specific recommendations for using that surplus, which could include not only capital projects but IT upgrade expenses and vehicle replacement.

The motion passed unanimously.

Second motion

Eastman made a motion to approve recouping 53% of the assessable fire budget in FY2026, compared to 51.68% of the assessable fire budget in FY2025. Chestnut seconded the motion.

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

Before the vote, Ingle asked whether they could add a request to the motion to review the fire assessment fee exemptions, and Eastman said that could be done without putting it in the motion. Ward said, “The exemptions that we have discretion over, fairly specifically, are nonprofits, and that includes churches. That is what you’re putting on the table. That’ll be an interesting conversation.”