Proposed tax increase, slowing growth, and major projects to dominate Apopka budget workshop

In Summary:

The Apopka City Commission will review a preliminary FY2027 budget that reflects slowing growth, rising operating costs, and significant capital needs. Staff is proposing a millage rate increase to help offset declining building permit, impact fee, and plan review revenues while funding public safety, infrastructure, and personnel requests. The workshop marks the first major public discussion of the city's spending priorities before adoption of the final budget.

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For years, Apopka's budget discussions were shaped by one question: how to keep pace with explosive growth. This year, commissioners will begin wrestling with a different challenge — how to sustain the city's ambitions as one of its biggest revenue engines begins to slow.

Related: Analysis: Apopka's new commission is redefining growth — and testing the limits of Florida law.

Unlike recent years, when explosive growth generated significant permitting and impact fee revenue, this year's budget proposal acknowledges that development is beginning to cool while demand for City services continues to grow.

Finance Director Blanche Sherman will present the preliminary budget during the workshop after department directors spent weeks refining their requests through two rounds of budget reviews with the mayor, city administrator, and finance staff. According to the staff report, the second review was necessary after officials reassessed the City's financial position and identified additional reductions and necessary increases.

The workshop is expected to center on four major themes:

A proposed property tax increase

Perhaps the most consequential discussion will involve the City's proposed millage rate.

The presentation compares maintaining the current tax rate of 4.4376 mills with several higher options. Staff highlights a 1-mill increase to 5.4376 mills, which would generate an estimated $9.08 million in additional revenue due to both the higher tax rate and a larger taxable property base.

The City's taxable value has grown from approximately $8.22 billion to $9.55 billion, an increase of about 16.2% over the previous year. Even without raising the millage rate, that growth would generate roughly $5.9 million more in property tax revenue than last year.

Staff notes that the projected increase in ad valorem tax revenue shown elsewhere in the presentation includes revenue from the proposed millage increase.

Development revenues are slowing

One of the workshop's most notable takeaways is the extent to which the city expects development-related revenue to decline.

Budget projections estimate:

• Building permit revenue is falling by $4.1 million (48.5%).
• Plan review fees are declining by $2.59 million (55.5%).
• Utility impact fee revenue is dropping by $12.3 million, or nearly 61%.

Those decreases are partially offset by continued growth in property tax collections, utility taxes, franchise fees, and sales tax revenue.

The presentation also attributes higher utility revenues to previously planned rate increases while acknowledging that slowing growth is affecting collections. Utility operations revenue is projected to increase by about 10.2%, while sanitation revenue is projected to increase by approximately 7.8% under a planned rate adjustment. Stormwater assessments would increase roughly 20% under the proposal.

Major capital projects remain on the table

The proposed budget includes several significant capital investments, although many remain contingent on outside funding or future borrowing.

Among the largest General Fund requests are:

• $40 million for the replacement of Fire Station No. 1.
• $10 million for Fire Station No. 7.
• More than $3.6 million for new positions.
• About $3.8 million for tentative salary adjustments and union negotiations.
• Nearly $1 million for a new staircase at the Fire Training Center.
• $975,000 for improvements at the Northwest Recreation Complex.
• $700,000 for new restrooms at the Northwest Recreation Complex.
• $373,505 for Phase II of the city's ERP financial software system.
• $350,000 to renovate the old fire station.
• $200,000 for a mobile police command center.

Utility projects also represent a substantial portion of proposed spending, including:

• $10 million to replace the membrane at the Golden Gem large pond.
• $4 million for improvements to a 30-inch water main between Rodgers Road and Ponkan Road.
• More than $2.2 million for utility vehicles and equipment.

Other notable projects include the $15 million Golden Gem Road reconstruction and widening project, which is dependent on grant funding.

Personnel and operating costs continue to rise

The budget also reflects growing personnel costs across the city government.

In addition to funding new positions, the proposal includes nearly $3.8 million for anticipated salary adjustments and labor negotiations. Combined, those items represent some of the largest ongoing operating increases in the General Fund.

The preliminary budget also incorporates changes to utility transfers between funds, while staff continues to develop a process to better track actual utility expenses over the coming year.

What to watch

Wednesday's workshop is not a vote on the final budget, but it will provide the clearest indication yet of the commission's priorities heading into the formal budget adoption process later this summer.

Commissioners are expected to discuss whether the proposed tax increase is necessary, which capital projects should remain priorities, whether staffing requests should be modified, and how the City should respond to a noticeable slowdown in development-driven revenue while continuing to fund infrastructure and public safety needs.

The workshop will also give residents their first opportunity to hear the administration's rationale for proposing a higher millage rate and to weigh in during public comment before the budget advances through the remainder of the annual budget process.

Key Points:

• Commissioners will review the City's preliminary FY2027 budget during a July 8 workshop.
• Staff is proposing an increase in the millage rate to support the General Fund.
• Development-related revenues, including building permits and impact fees, are projected to decline significantly.
• The budget includes major capital projects, including new fire stations, utility improvements, and transportation projects.
• The workshop begins the public budget discussion before formal hearings later this year.