Commission to set preliminary property tax ceiling as budget process moves forward

In Summary:

The Apopka City Commission is scheduled to establish a proposed millage rate of 5.1876 mills for fiscal year 2026-27, reflecting a 0.75-mill increase discussed during last week's budget workshop. City leaders say the proposal balances growing infrastructure needs with taxpayer concerns while preserving flexibility to reduce the rate before final adoption in September. The agenda documents also provide the clearest financial picture yet of the city's preliminary budget, reserve spending, and projected property tax revenue.

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One week after reframing Apopka's budget debate around a smaller property tax increase, the City Commission will take its first formal vote Wednesday night by setting the maximum millage rate that can be considered during this year's budget process.

Related: Nesta resets Apopka's budget debate.

The special meeting, scheduled for 5:15 pm July 15, contains a single agenda item: establishing the proposed fiscal year 2026-27 millage rate required under Florida's Truth in Millage (TRIM) law. While the vote will not finalize property taxes, it establishes the highest rate the commission can later adopt after two public budget hearings. Commissioners may reduce the rate later, but cannot increase it without restarting the statutory notice process.

City staff is recommending that commissioners set the proposed operating millage at 5.1876 mills, a 0.75-mill increase over the current rate of 4.4376 mills. The recommendation follows last week's budget workshop, where commissioners moved away from an initially proposed 1-mill increase and instead reached consensus around the smaller increase while continuing to search for additional savings.

The proposal represents a 22.03% increase over the city's rolled-back rate of 4.2510 mills, the tax rate that would generate roughly the same property tax revenue as the previous year, excluding new construction. Staff is also asking the commission to schedule its first public budget hearing for September 3 at 5:15 pm in City Hall.

Although the vote is procedural, it follows what became one of the most consequential policy discussions since the new commission took office.

During last week's budget workshop, Mayor Nick Nesta shifted attention away from the headline-grabbing 1-mill proposal and toward what he described as a longer-term challenge: balancing taxpayer concerns with years of deferred infrastructure investments. Rather than defending the larger increase, Nesta proposed setting a higher ceiling to preserve flexibility under state law while expressing his personal goal of ultimately reducing the increase to about one-half mill before the budget is finalized.

That distinction matters because Wednesday's vote establishes only the maximum rate. Between now and September, staff will continue refining revenue projections, reviewing expenditures and identifying potential reductions before commissioners adopt a final budget.

According to the agenda documents, a 5.1876-mill rate would generate approximately $45.7 million in property tax revenue for the General Fund, about $6.6 million more than maintaining the current rate and roughly $11.1 million more than the amount budgeted for FY2026.

The city's certified taxable value increased from approximately $8.22 billion to $9.28 billion, a gain of about 12.8%, providing additional revenue even without a tax rate increase. Staff estimates maintaining the current millage would produce about $39.1 million in budgeted property tax revenue, while the proposed 0.75-mill increase would raise that figure to approximately $45.7 million. A one-quarter-mill increase would generate about $2.2 million in additional revenue, while a full 1-mill increase would generate approximately $8.8 million in additional revenue over the current rate.

The budget documents also provide a broader look at the city's financial picture.

The preliminary General Fund budget projects approximately $104.5 million in revenues, but planned operating and capital expenditures total roughly $121.1 million. The difference would be covered by using about $16.7 million in assigned operating and capital reserves, which the city says were intentionally set aside during prior budget years to support future needs. Staff also notes that state revenue estimates remain preliminary and both revenue projections and expenditure requests will continue to be refined before the September hearings.

That financial reality mirrors the themes commissioners repeatedly returned to during last week's workshop.

Rather than debating whether infrastructure projects should proceed, commissioners largely agreed that years of postponing road, utility and public safety improvements have contributed to today's budget pressures. They also acknowledged that development-related revenues, including permit fees and impact fees, are slowing after years of rapid growth.

The discussion suggested that Apopka's budget debate has evolved beyond a single tax increase.

Commissioners spent much of the workshop discussing accountability, project prioritization and how to better communicate the status of capital improvements to residents. Mayor Nesta committed to providing regular updates on major capital projects, while Vice Mayor Diane Velazquez requested explanations for why projects have stalled. Commissioner Nadia Anderson emphasized ensuring every dollar reflects the city's highest priorities, and Commissioner Sam Ruth argued that years of keeping taxes artificially low had delayed infrastructure investments that can no longer wait.

Wednesday's vote will not answer those broader policy questions.

Instead, it begins the formal TRIM process that gives commissioners time to continue refining the budget while preserving flexibility before final adoption in September. If staff identifies additional savings over the coming weeks, the commission may lower the proposed rate during either of its public hearings. It simply cannot raise it above the ceiling established on Wednesday without beginning the process again.