Fernandina Beach property owners face a tax increase of $41.05 per $100,000 of taxable value under a tentative rate the City Commission approved Sept. 3.

The commission voted 4-1 to set the operating millage at 4.8530 mills for fiscal year 2026-27, a 9.24% increase above the rolled-back rate of 4.4425 mills. Mayor James Antun and Commissioners Tim Poynter, Genece Minshew and Joyce Tuten voted in favor. Vice Mayor Darron Ayscue cast the lone dissenting vote.

The commission also unanimously approved a tentative $228 million citywide budget. The general fund totals $50 million, with property taxes providing 47% of that revenue.

City Faces Two Revenue Threats: Lost Parking Fees and a Statewide Amendment

The higher rate generates about $1.5 million more than the budget City Manager Sarah Campbell initially proposed. Commissioners directed that money into a contingency account as restricted cash, raising the contingency from $500,000 to $2 million. Only the commission can authorize spending it.

The city needs the cushion for two reasons.

First, voters killed the paid-parking program in the Aug. 18 referendum, with 75% voting to end it. The city had counted on $1.5 million in parking revenue for marina and waterfront capital improvements. The revised budget replaces that with $668,000 remaining in the paid-parking fund and an $832,000 transfer from the general fund.

Second, Florida Amendment 3 on the Nov. 3 ballot could slash the city's tax base. The statewide measure, which requires 60% voter approval to pass, would raise the non-school homestead exemption to $150,000 in 2027 and $250,000 in 2028. Commissioner Minshew said during the Sept. 3 hearing that the amendment could cost the city $4 million or more. Florida League of Cities data estimate a $250,000 exemption would strip roughly $741.4 million from Fernandina Beach's taxable property value, a 15.6% reduction.

"This is not about finding another $1.5 million to spend," Minshew said. "This is about whether this commission is willing to look beyond the next 12 months and prepare for what might be coming."

Ayscue Pushes Back, Favoring Lower Rate

Ayscue argued the commission should lower the rate and give taxpayers relief rather than collect extra money against an amendment that has not yet passed. He compared the situation to the paid-parking backlash.

Campbell warned that state law would cap how much the commission could raise the rate the following year if it lowers the millage now. If Amendment 3 passes, she said, the city would not be able to recover the lost revenue.

Poynter sided with the majority. "If we lower it and it passes, we're really in the hole," he said.

The city also carries a $7.7 million line of credit for waterfront work, according to budget documents presented at the hearing.

Budget Includes $16 Million in Capital Spending, New Stormwater Positions

Finance staff revised seven general fund revenue estimates upward by a combined $912,000, including cash carried forward, tourist development tax revenue, gas taxes and franchise fees. That freed up the $832,000 general fund transfer to the marina.

The tentative budget includes $16 million in capital spending, with $11 million for wastewater improvements. It also expands the stormwater program with four new full-time positions and maintains the required 20% general fund reserve.

Final Budget Hearing Set for Sept. 15

The 4.8530-mill rate is not final. Commissioners can lower it but cannot raise it at the final budget hearing on Sept. 15 at 5:05 p.m. The Fernandina Observer first reported the vote details.