Budget Overview

The City's FY26 operating budget is $924 million for operating expenses and $268 million for capital investment. 

The City of Tallahassee’s FY26 Budget aligns with the Commission-approved 2025–2029 Strategic Plan, advancing a balanced and sustainable financial framework that supports the community’s long-term goals. Guided by eight strategic priorities—Economic Development, Impact on Poverty, Organizational Effectiveness, Public Infrastructure, Public Safety, Public Trust, Quality of Life, and the Southside Action Plan, the budget focuses on strengthening public safety, expanding affordable housing, investing in infrastructure, and supporting the workforce.

FY26 Budget Key Elements
The FY26 balanced budget allocates resources to priorities at the direction of the City Commission, enabling the City to continue as a national leader in public service delivery to accomplish the goals and initiatives outlined in the Five-Year Strategic Plan and to deliver results in public safety, affordable housing, infrastructure enhancement, and exceptional customer service. Key elements of the FY26 Operating and Capital Budgets include: 

1. The FY26 proposed budget was developed at a millage rate of 4.4200 mills, consistent with the FY25 budget. The final FY26 budget was adopted at 4.4072 mills. No other significant changes occurred between the proposed and adopted budgets.
2. Investing in public safety with highly skilled staff. The FY26 budget includes 20 additional Police Officers in alignment with our strategic plan priority target of increasing the number of sworn officers per capita by 5%. In addition to that, the budget includes 14 additional Fire Services staff.
3. Maintaining service quality by approving fee adjustments. Solid Waste fees increased by $1.07 per month for residential customers due to higher Leon County tipping fees, and Growth Management fees were revised to cap Environmental Management Permit and Landscaping fees at $139,500, while removing outdated permit references.
4. Reducing costs while elevating the quality of services delivered to citizens through strong operational management and identification of efficiencies, including technology enhancements.
5. Continuing as a leader in the delivery of public service by recognizing the efforts of the City’s workforce, including compensation sufficient to retain, attract, develop, and support skilled talent.
6. Replenishing the Special Insurance Reserve Fund and general and enterprise fund reserves used for storm preparation, response, and restoration.
7. Significant investments in infrastructure to ensure the continuity and resilience of essential services such as utilities, sidewalks, roads, and transportation. This includes capital improvement projects like the second Senior Center, the Southside Transit Center, and the Public Safety Complex.

To achieve the City Commission’s priorities, the FY26 budget continues efforts to streamline operations, consolidate work groups, and utilize cutting-edge technology to improve efficiency and effectiveness. At the June workshop, staff presented a proposed budget that included expense reductions. These reductions included process and technology improvements, as well as real estate lease management. All of these efforts to reduce expenses have been made to maintain current output and service levels and have resulted in an FY26 balanced budget.

Short-Term Factors
For the FY26 Budget, significant factors in the short term that impact services and address issues facing the City in developing the budget include:

Public Safety
Public safety is a top priority in the FY26 budget. Resources are allocated to enhance the Tallahassee Police Department’s capacity, including the recruitment of 20 new officers to meet the demands of a growing population. In addition, the FY26 budget includes 14 additional firefighter positions. To fully fund the Fire Department’s operational needs and priorities, the Fire Department budget has been revised, and rates for City customers have been adjusted to ensure high-quality fire and rescue services are maintained. The budget includes a 9.98% rate increase for most City residents to support critical operations and staffing necessary to meet National Fire Protection Association standards in the Fire Department.

The FY26 budget also continues with the implementation of the school zone speed enforcement program started in FY25. The law targets violations of more than ten miles per hour over the speed limit in school zones when children are going to or from school and during the entirety of the school day. Violations will result in a fine of $100 being mailed to the registered owner of the vehicle. Studies have shown that implementing school zone speed enforcement programs effectively results in less than 10% recidivism after one citation.

 

1. Objective 5.1 - Implement Proactive Community-Based Solutions to Enhance Public Safety
2. Objective 5.2 – Prevent Crime Through Effective Policing and Public Awareness Campaigns
3. Objective 5.3 – Enhance Training and Readiness of Public Safety Employees   
4. Target 5.3.1 – Increase the number of sworn officers per capita
5. Target 5.5.5 – Reduce Structure Fires and Suppression Calls
6. Target 5.5.6 – Invest in Fire Protection and Preparedness to Help Lower Insurance Costs for Homes and Business by Achieving an Insurance Services Office (ISO) rating of 80.99 or higher (Class 2)
   

Affordable Housing
Investing in affordable housing is investing in a healthier community and a more robust economic future. Due to the City's strategic policymaking, land use flexibilities, innovative programming, and leveraging unprecedented commitments of more than $18 million in federal, state, and local dollars, approximately 3,000 certified affordable housing units were recently constructed or are in the development pipeline locally. Three thousand units is more than the number of affordable units built in the last 25 years combined. New, affordable homes are just one piece of the puzzle. The City's affordable housing programs have also helped keep nearly 3,600 people in their homes over the past five years through programs like down payment assistance, façade repairs, home rehabilitation, and homelessness prevention. This work represents just a portion of the $50 million invested in affordable housing efforts over the past five years.

1. Objective 2.2 – Increase Housing Affordability by Facilitating New Construction and Rehabilitating Existing Homes

Public Infrastructure
The total capital budget for FY26 is $268 million, which funds critical investments in the City's infrastructure. Public infrastructure and transportation networks connect our community, goods, and services through roadways, walkways, and public transit facilities.  The City's 650 miles of roads are in good condition, and the current level of maintenance is adequate to maintain the standard conditions. The network of sidewalks continues to grow in line with the City's strategic priority of adding ten new sidewalk projects each year. Local neighborhoods are on track to be more walkable than ever through the combined results of the City, Blueprint Intergovernmental Agency, and Community Redevelopment Agency projects. 

Also included in the $268 million investment are capital improvements to our utility systems, contributing to their service and safety reliability. Overall, capital investments are directed by the Strategic Plan and support its objectives:

1. Objective 4.1 – Be a leader in utility service delivery
2. Objective 4.2 – Be a leader in environmental stewardship
3. Objective 4.3 - Ensure safe and clean drinking water
4. Objective 4.4 – Enhance the City's network of roads, bike lanes, and sidewalks
5. Objective 4.5 – Ensure public transit is accessible, efficient, and equitable

Employer of Choice
Our priority to be the industry leader in public services requires recruiting, hiring, and retaining the best employees. In FY26, to ensure we are the employer of choice in a competitive labor market, employees received a 4.0% across-the-board increase for general employees and a competitive package for our Police collective bargaining units. Competitive pay supports the City's other strategies for the workforce:

1. Target 3.1.1 – Rate of total employee turnover
2. Target 3.1.2i – Improve recruitment processes to accelerate the hiring timeline
3. Target 3.1.3i – Have a City workforce that is reflective of community’s demographics
4. Target 3.1.4i – Modernize the City’s processional development program to align with the City’s business needs
5. Target 3.1.5i – Provide for a healthy and engaged workforce

 

Tallahassee is a dynamic and attractive destination for businesses and individuals seeking opportunities in a competitive, innovative, and sustainable environment. The City’s significant investments in infrastructure, including technology, utilities, and transportation, are paying off. Efforts have stimulated business activities, which have led to economic growth and new employment opportunities for our community.

Measures for economic vitality in Tallahassee regularly outpace both State and US performance. In 2024, Tallahassee’s Cost of Living Index was the lowest of nine peer capital cities in the southeast and Midwest.

Cost of Living Index

Median family income in Tallahassee MSA decreased in 2024, from $91,700 to $88,700 year-over-year

Median Family Income

The average unemployment rates for the Tallahassee metro area generally fell from 2011 to 2019. In 2024, the average unemployment rate for the Tallahassee Metro Area was 3.5%, up from 3.1% in 2022 and 2023. The median annual average unemployment rate in the Tallahassee metro area over the past 35 yeas is 3.9%. For the State of Florida, the average unemployment rate in 2024 was 3.4%, up from 2.9% in 2023 and 3.0% in 2022.

Unemployment Rate

 

The City's priorities, as presented in the Strategic Plan, are shown below, and direct links to the Strategic Plan document are provided for more detail.

• Economic Development
• Impact on Poverty
• Organizational Effectiveness
• Public Infrastructure
• Public Safety
• Public Trust
• Quality of Life
• Southside Action Plan

These principles guide budgetary planning. The City will continue prioritizing investment in targeted areas highlighted by the strategic plan and the City Commission

 

General Fund

This fund supports many core city services, including police, parks and recreation, road maintenance, housing initiatives, economic development, land use, environmental regulation, and animal services. The general government also provides an operating subsidy to Star Metro, the City's transit system.

Fund Type
Government

Surplus
Per City Commission policy 224.5 (II)F, year-end surpluses, to the extent available and appropriable, will first be used to fund the Deficiencies Reserve until its target level is achieved. Surpluses above this level may be allocated to support the subsequent year’s operating budget, up to a maximum of five percent of general government expenditures, and to buy down debt-financed capital improvement projects.

General Fund Transfer
$7.2 million in new funding is budgeted to support projects in FY26.

Operating Reserve
The FY26 revenue budget does not include transfers from General Fund Operating Reserves.

Other
Deficiencies Reserve: If the subsequent fiscal year ends with an operating deficit due to unforeseen circumstances, up to 5% of FY25 year-end surpluses will be available from the Deficiencies reserve as needed.
Fleet Reserve: The FY26 contribution is $2.9 million
RR&I: Undesignated balance set at a maximum of 3% of general government capital projects.

 

The Growth Management Department is responsible for enforcing the City’s building codes through the review of building plans, permitting, and the inspection process. Specific actions include ensuring that planned construction complies with applicable codes, authorizing utility connections and issuing certificates of occupancy, providing centralized intake and coordination of all permit applications, administering contractor licensing regulations, and enforcing the rooming house ordinance.

Fund Type
Enterprise

Surplus
To the extent available and appropriable, all year-end surpluses will be retained within the fund and made available for operating expenses and capital projects.

Operating Reserve
The FY26 revenue budget does not include transfers from operating reserves.

Other
Not applicable.

 

Established in 1902, the Tallahassee Fire Department (TFD) is a municipal fire department that provides fire suppression and emergency medical services in the City and the unincorporated areas of Leon County, Florida. The department protects lives, property, and the environment from hazardous conditions threatening our community. This mission is accomplished by providing prevention and protective services specific to the incident need.

Fund Type
Enterprise

Surplus
Retained for fire operating and capital costs.

General Fund Transfer
No transfer.

Operating Reserve
No reserve.

Other
Not applicable.

 

The Electric Utility serves over 128,000 customers in a 221-square-mile service territory. It is the fourth-largest municipal electric utility in Florida and the 27th-largest of over 2,000 municipal systems in the United States. The utility comprises six significant divisions: Finance and Administration, Power Delivery, Energy Supply, System Operations, System Compliance, and System Integrated Planning. The Electric Utility develops a 10-year sales forecast annually to use in the annual budget process.

Fund Type
Enterprise

Surplus
Operating fund balance after General Fund transfer minus bond reserves used to fully fund the operating reserve, with the balance designated for electric system capital projects.

General Fund Transfer
The transfer is based on CPI. The transfer for FY26 is $39.1 million.

Operating Reserve
The operating reserve comprises four subcomponents, with the primary purpose of providing working capital. The working capital component is targeted to having a balance of 60 to 90 days of operating expenses. The other three components are fuel risk management, emergency reserve, and rate stabilization.

Other
RR&I: Transfer budgeted at a level equivalent to depreciation expense as provided in the Comprehensive Annual Financial Report (CAFR).

 

The City of Tallahassee's Natural Gas Utility has provided clean, safe, economical, and reliable natural gas to residents and businesses in a growing service area for over 60 years. The utility safely provides natural gas energy through 965 of miles of underground gas mains, which serve over 34,000 customers in the Leon, Gadsden, and Wakulla areas. The highly trained staff works to ensure the distribution system's integrity and dependability and assist customers with energy conservation and cost savings through natural gas use.

Fund Type
Enterprise

Surplus
Designated to fund the operating reserve fully and, after that, to fund gas system capital projects

General Fund Transfer
The transfer is based on CPI. The transfer for FY26 is $3.8 million.

Operating Reserve
Funded at 25% of the previous year’s General Fund transfer and used to meet General Fund transfer, if required.

Other
RR&I: Transfer budgeted at a level equivalent to depreciation expense as provided in the applicable rate study.

 

Approximately 88,000 service points are connected to the City’s water distribution network, which provides potable water to essentially all developed areas in the City and certain contiguous county areas. More than 9 billion gallons are produced annually by an around-the-clock operation that utilizes 27 water production facilities, eight elevated storage tanks, 7,545 fire hydrants, and 1,252 miles of water distribution pipes.

Fund Type
Enterprise

Surplus
Designated to fund the operating reserve fully and, after that, to fund water system capital projects.

General Fund Transfer
The transfer is based on CPI. The transfer for FY26 is $4.5 million.

Operating Reserve
Funded at 25% of the previous year’s General Fund transfer and used to meet General Fund transfer, if required.

Other
RR&I: Transfer budgeted at a level equivalent to depreciation expense as provided in the Comprehensive Annual Financial Report (CAFR).

 

The City’s Wastewater Utility is responsible for collecting, treating, and recycling wastewater and for treating commercially pumped sewage. As part of the City’s commitment to protecting the environment, treatment processes utilized at the Thomas P. Smith (TPS) Advanced Water Reclamation Facility result in effluent that meets and exceeds regulatory requirements. On average, the wastewater system collects and treats more than 18.2 million gallons per day.

Fund Type
Enterprise

Surplus
Designated to fund the operating reserve fully and, after that, to fund sewer system capital projects.

General Fund Transfer
The transfer is based on CPI. The transfer for FY26 is $6.3 million.

Operating Reserve
Funded at 25% of the previous year’s General Fund transfer and used to meet General Fund transfer, if required.

Other
RR&I: Transfer budgeted at a level equivalent to depreciation expense as provided in the Comprehensive Annual Financial Report (CAFR).

 

The Aviation Fund supports all six Aviation Department divisions and services that support the Airport and its operations. The Airport Fund is self-supporting and requires no support from the general government.

Revenue sources for the Airport include airline charges, airport parking, rental car concessions, retail and dining concessions, and the rental of leased property. The key drivers are enplanements, deplanements, and aircraft operations. Total revenues have increased over the past four years. The increase is primarily due to a return to pre-pandemic airport traffic, including increases in Rental Car and Parking Lot Revenues. Several capital projects are ongoing at the airport, including the International Processing Facility, Parking Lot Lighting Improvements, Runway 9-27 Rehabilitation, Main Terminal Central Chiller Replacement, and Taxiway Bravo Rehabilitation.

Fund Type
Enterprise

Surplus
Retained within the fund and allocated according to the airline use agreement.

General Fund Transfer
No transfer to General Fund. Full recovery of cost.

Operating Reserve
A minimum of 1/12th of the Airport's operating and maintenance budget is designated for unanticipated non-recurring expenditures.

Other
RR&I: Not applicable.

 

StarMetro, the public transit service for the City of Tallahassee, operates fourteen weekday cross-town routes, including university service for Florida State University (FSU) and student ridership programs for Florida Agricultural & Mechanical University (FAMU), Tallahassee Community College (TCC) and K-12 students in Leon County.

The Fixed Route and Para-transit department provides accessible, equitable, and efficient transit services to visitors and citizens of Leon County and Tallahassee. Transit services are provided 363 days a year and assist in emergencies as needed.

Fund Type
Enterprise

Surplus
Retained within the fund for operating expenses and capital projects.

General Fund Transfer
Transfers in from the General Fund support StarMetro operational deficits, when necessary.

Operating Reserve
No Reserve.

Other
RR&I: Not applicable.

 

The Solid Waste Fund provides garbage, recyclable materials, bulk, and yard waste collection for all residential customers citywide, and garbage and recyclable materials collections for commercial customers. Currently, the City provides garbage collection, bulk/yard debris, and recycling services to over 74,000 service points, including residential and commercial. Services include:

1. residential bi-weekly curbside collection of bulky items, yard waste, electronics, and white goods,
2. dumpster services for commercial customers collected by front-end loading trucks at night, up to six times per week,
3. commercial container service with roll-off or hook trucks up to six times per week,
4. commercial recycling up to five days per week, as well as other enhanced services, and,
5. dead animal removal.

Fund Type
Enterprise

Surplus
Retained for rate stabilization reserve.

General Fund Transfer
Each year the transfer is increased by CPI. The transfer for FY26 is $2.5 million.

Operating Reserve
No Reserve.

Other
RR&I: Not applicable.

 

The Stormwater Fund manages and develops infrastructure for drainage, flood prevention, and retention of stormwater run-off to prevent pollutants from entering the aquifer. Work includes capital project oversight, maintenance of drainage infrastructure such as retention ponds and drainage outfalls, monitoring of lakes and groundwater, and raising public awareness of the environmental impacts of pollution, such as the Think About Personal Pollution (TAPP) program. The Stormwater Utility serves 90,0000 residential customers and 7,000 non-residential customers through operational activities and the design and construction of drainage facilities infrastructure. This includes the maintenance of drainage facilities and ponds throughout the City.

Fund Type
Enterprise

Surplus
Retained for stormwater system capital projects.

General Fund Transfer
The transfer to the General Fund represents administrative cost sharing only.

Operating Reserve
No Reserve.

Other
RR&I: Maximum of 5% of capital projects funding sources, with a minimum level of 3%..

 

The Golf Fund supports Hilaman Golf Course, which offers a community-wide golf experience through daily rounds, driving range use, charity events, tournaments, and more. Hilaman also has a Pro Shop, restaurant, and outdoor deck area that provide a well-rounded experience. The course is open daily from sunrise until dark, and course operations are led by a General Manager and three additional full-time staff members. In addition, Hilaman has over two dozen part-time employees who help with various day-to-day operations.

Fund Type
Enterprise

Surplus
Retained for Golf operating and capital costs.

General Fund Transfer
No transfer.

Operating Reserve
No reserve.

Other
Not applicable.

 

The City Commission adopted an ordinance on September 10, 1986, establishing the Cemetery Perpetual Care Trust Fund (PCTF) to maintain and operate the City cemeteries. Proceeds from this trust are transferred annually to support operations within the Cemetery Division. The City of Tallahassee owns and maintains five cemeteries totaling 133 acres. The City also provides maintenance services for the historic Plantation Cemetery.

Fund Type
Trust

Surplus
Retained for cemetery operating and capital costs.

General Fund Transfer
No transfer.

Operating Reserve
No reserve.

Other
Not applicable.

 

Florida Statutes, Chapter 166 – This statute authorizes municipalities to levy taxes, issue licenses, and set user fees to raise money necessary to conduct municipal government activities. This chapter also requires that local governments adopt a balanced budget. The tentative balanced budget must be posted on the municipality’s official website at least 2 days before the budget hearing, held pursuant to s. 200.065 or other law, to consider such budget. The final adopted balanced budget must be posted on the municipality’s official website within 30 days after adoption.

 

 

Comprehensive Plan – The Tallahassee-Leon County 2010 Comprehensive Plan was originally adopted by ordinance in FY 1990 and is updated with biannual amendment cycles. The Plan includes capital improvements, transportation, historic preservation, utilities, recreation, and other elements which provide a framework for allocating budget resources. The Capital Projects Summary consists of a listing of capital projects that address Comprehensive Plan initiatives by eliminating deficit levels of services or by maintaining existing levels of service.

Financing Policy, No. 224 Commission Policies – The financing policy establishes guidelines for the distribution of year-end surpluses, transfers from the utilities to the General Fund, types and amounts of operating reserves, and funding for capital projects from undesignated fund balance year-end revenues. The policy also provides for full recovery of cost for enterprise funds, limits non-utility fee increases to a maximum of 20% per year unless otherwise approved by the City Commission, and allows discount fees for recreational programs for youth, seniors, and disabled citizens. The “Finance Policy Summary” chart shows the policy's requirements as applied to each fund.

Risk Management Policy/Self-Insurance, No. 214 Commission Policies – This policy creates an internal service fund for payment of anticipated claims and judgments for coverage areas defined in the policy. In addition, a special Insurance Reserve Fund is established and funded to meet unanticipated losses from catastrophic events or claims in excess of the Risk Management Fund. This reserve is set at 150% of the average claims for the past five years or $3,000,000, whichever is greater.

Capital Project Management, No. 218 Commission Policies – This policy provides for the preparation of an annual capital budget and a five-year capital improvement plan. The policy also defines the roles and responsibilities of city departments and management regarding contracts, supplemental appropriations, expenditures, and project administration. The use of capital project overhead charges as an operating budget funding source also is established by this policy.

Local Option Sales Tax Management, No. 232 Commission Policies – This policy establishes the authority to provide advance funding for local Florida Department of Transportation (FDOT) projects for any project or project phase included in the FDOT five-year work plan. It allows for advance funding without an agreement for repayment after conducting a public hearing. The policy also authorizes using short-term debt to cover cash flow shortages that may result from this practice.

Debt Management Policy, No. 238 Commission Policies – The debt management policy, along with an analysis of the city’s compliance with the policy, is included in the capital budget summary and the capital improvement plan. Section 104 of the City Charter also specifies that general obligation debt will not exceed 20% of the assessed taxable valuation. Florida Statutes require that general obligation bonds be approved by referendum. The city currently does not have any general obligation bonds.

Vehicle Replacement Reserves – Funding for vehicle replacement is included annually in the capital budget. Vehicle replacement charges for a proportionate share of these costs are allocated based on equipment usage.

 

Bond Covenants – Before 1998, provisions of Bond Resolutions required that a minimum of 5% of prior year gross revenues be budgeted annually for Renewals, Replacements, and Improvements (RR&I) for system improvements in the utility systems. Covenants for the Energy System (electric and gas) bonds issued after 1998 do not specify an explicit amount or methodology but require a transfer to an RR&I fund.

Union Agreements – Currently, unions represent 634 authorized positions. A total of 356 positions are subject to terms and conditions of the collective bargaining agreement with the Big Bend Chapter of the Florida Police Benevolent Association, Inc. (PBA), and 278 positions are subject to terms and conditions of the collective bargaining agreement with the International Association of Firefighters (IAFF). Union agreements are generally negotiated every three years. FY23 is the last year of the current contract for all bargaining units.

Utility Rate Studies – Rate studies are prepared for each utility enterprise operation (electric and underground utilities) every three to five years on a rotating basis. Revenue projections are prepared using historical weather patterns and other growth factors.

Assessment and Fee Reviews – Fees and assessments are periodically reviewed to ensure recovery of costs to provide certain services. Rates for electricity, underground utilities, and solid waste are set by ordinances that provide for annual increases based on the CPI.

 

The City holds several budget workshops throughout the year. These serve the dual purpose of updating for the current fiscal year and the next budget cycle. Workshops are less formal city commission meetings that do not include a litany of items for the commissioners to address. Instead, the workshop allows for a focused discussion on the topic.

At the first quarter workshop, Resource Management reports on the early status of its funds to the Commission for the current budget cycle. It also presents some initial assumptions to work toward for the next one. This includes proposing an initial millage rate and employee raises, benefits, and other items.

At the second quarter workshop, assumptions are reaffirmed, and priorities are addressed. Issues with the current year’s funding can be addressed while taking a stronger look at the upcoming year.

Resource Management presents a proposed budget for the following fiscal year at the third quarter workshop. These include most of the capital projects, priorities, and changes. Any significant issues for the current budget year are also addressed at this workshop.

 

The City maintains a “hold the line” philosophy when budgeting for departments’ operating costs. Budgets for things such as office supplies or contracts are not increased every year. Without automatic increases in budgets, staff innovate for cost savings annually. Departments evaluate procedures to be more efficient.

Hold the Line counters a classic budgeting issue known as “use it or lose it.” In older budgeting techniques, departments are incentivized to spend their budget entirely and use their resource depletion to justify maintaining their budget levels. Sometimes the spending would persuade for even higher budgets the following year. With Hold the Line, Resource Management assures departments that their budget levels are safe. This approach leads to less spending overall as departments do not spend money merely to defend their allocations.

 

At the 1st quarter budget workshop, staff presents initial assumptions to the City Commission for the next budget year. These include two major items: millage rate and staff pay raises.

For the City to be a leader in public service, it must recruit, train, and retain the best people. The City has a history of regular increases for staff ranging from two to four percent. This accommodates the cost-of-living increases, but the commitment can attract the best employees to the organization.

 

 

The public is encouraged to provide input anytime. City Commission meetings, budget workshops, and commissioner or leadership meetings are all available to citizens. Two statutorily required public hearings on the budget are also held in September each year to solicit public input. Building upon the goal of increased transparency, the City’s OpenGov platform allows citizen review of budget information down to the account level and actual expenditures and transactions throughout the year.

 

Departments are responsible for developing their respective budget requests with support from Resource Management. City Commission budget workshops are held throughout the year to discuss policy issues and the long-term ramifications of budgetary decisions. The City Commission adopts a tentative millage rate for assessing ad valorem taxes in early June, as state statutes require. The final budget and the millage rate are adopted by resolution during the month of September, following two statutorily required public hearings.

The City’s budget is appropriated at the fund level. Revenues are budgeted at the fund level only, while Department expense budgets are contained within one or more cost centers. There are currently over two hundred cost centers across all departments.

 

Budgetary control is maintained at the department level, with Resource Management providing support. In accordance with the city’s budget transfer policy, departments can amend budgets in various ways depending on the type of transfer being considered.

Any budgetary amendment within the department’s appropriated budget and within the same fund can be authorized by the City Manager. Transfers between departments that cross funds or increase appropriations are made at the request of the City Manager and must be approved by the City Commission.

Budgetary amendments between divisions and within the same fund may be initiated at the department head's discretion, except for transfers affecting specific categories such as personnel. Requests for amendments to the line item exceptions are reviewed by Financial Management and approved by the City Manager or respective appointed official for transfers affecting the offices of the City Attorney, Inspector General, or City Treasurer-Clerk.

Since implementing the PeopleSoft financial system, budgetary control has moved from the line-item level to the major budget category. In classic line-item budgeting, departments cannot spend more than a certain amount on very specific categories. This tended to limit flexibility, and governments could not adapt to problems that arose throughout the year. Now, departments may over-expend line items provided balances are available in the respective major budget category. This allows for greater managerial flexibility. Department heads can respond to citizens’ needs without dense bureaucratic processes.

 

General Fund
The General Fund ends FY25 with revenues and expenditures in balance at $211.7 million.

The General Fund includes 23 service departments. The two largest are the Tallahassee Police Department ($81.9 million) and Parks and Recreation ($32.8 million). These two departments comprise 54% of the General Fund. Other services in the General Fund include public infrastructure planning and engineering, community beautification and right-of-way maintenance, growth management, comprehensive planning, housing, community resilience, and others that support the community and the organization. The General Fund also transfers funding for operating projects, capital improvement, consolidated dispatch, StarMetro, debt service, and the community redevelopment funds, a total of $46.5 million, 22% of total expenditures.  At the end of FY25, the transfer required to balance StarMetro increased by $435,556, leaving the General Fund balanced at $211.7 million.

StarMetro
The City has operated StarMetro, a public transit system, since December 1973. StarMetro provides fixed routes and special transportation services under the Americans with Disabilities Act (ADA) provisions and serves as the Community Transportation Coordinator (CTC) for Leon County. Its services include 14 crosstown routes, eight university routes for FSU, student ridership programs for FAMU, TSC, and K-12 Leon County students, and paratransit.  Daily routes include regular stops to over 25 health care centers.

The StarMetro Fund for FY25 ended the year with a deficit of $435,554, which was offset by an additional transfer from the General Fund.  Total expenditures for FY25 are $19.7 million. 

Building Inspection
The Building Inspection Fund ended FY25 at $6.026 million. Pre-closeout, revenues exceeded expenses by $997,118, which increases the Building Inspection Reserve Fund per State Law.

The City's Growth Management Department enforces building codes by reviewing building plans, issuing permits, and overseeing the inspection process. Specific actions include ensuring that planned construction complies with applicable codes, authorizing utility connections and issuing certificates of occupancy, providing centralized intake and coordination of all permit applications, administering contractor licensing regulations, and enforcing the rooming house ordinance.

As a self-balancing fund, reserves are maintained in the Building Inspection Fund to provide for the variability of building activity. In FY23, permit and review fees increased per Resolution 22-R-25 to ensure full recovery of costs as budgeted, with fees increasing annually by CPI starting in FY24. As building permitting is variable due to economic impacts over time and legislative changes, the Building Fund will continue to balance recovery of costs and building fund reserves to deliver services.

Fire
The Tallahassee Fire Department (TFD) provides the City of Tallahassee and Leon County with quality fire suppression, specialized hazardous material response, emergency management, facilities security, focused urban search and rescue, dedicated technical rescue, superior vehicle extrication, high-quality emergency medical care, fire safety code compliance review and enforcement, and varied public education services. Beyond Leon County, the department also provides emergency response via mutual aid to communities in the surrounding area. Within TFD, Emergency Medical Technicians (EMTs) receive Basic Life Support (BLS) training for trauma care, cardiac and stroke care, CPR, advanced first aid, childbirth, and basic medication administration. TFD's paramedics are ALS-certified and responsible for managing the emergency medical scene according to protocol.

The Fire Operating Fund ended FY25 with a deficit of $6.1 million. The deficit is the result of several factors, including the recognition of uncollectible outstanding debt from Leon County Schools, additional salaries and wages per the most recent union agreement, and the accelerated hiring of firefighters to meet National Fire Protection Association (NFPA) standards. The fund is balanced with a transfer from the Fire Operating Reserve, which has a balance of $2.1 million following the transfer. New rates for City residents were approved for FY26, ensuring the fund remains balanced over the next three years. However, Leon County’s refusal to adopt rates to cover its share of the approximate 10% rate increase will result in City residents subsidizing Leon County residential and commercial customers for the remainder of the contract. 

At its September 17, 2025 meeting, the City Commission directed that the Fire Service Agreement not be renewed at the conclusion of its current term on September 30, 2028. With the conclusion of the Agreement, TFD’s service footprint will shift to focus exclusively on the incorporated City limits. The City will retain all existing personnel and strategically increase staffing levels at City stations to improve service delivery, enhance response times, and strengthen firefighter safety. City residents and businesses will experience an enhanced service and an increase in firefighter safety. This strategy is in line with TFD’s current efforts to increase the number of assigned personnel per fire engine at the City’s busiest stations. 

With the increased staffing resulting from the expiration of the Agreement, firefighters will be able to concentrate on defined roles and functions during response operations rather than having to divide responsibilities among fewer personnel. Under current operations, TFD is able to staff emergency incidents at approximately 71% of the single-family residence staffing level recommended by the National Fire Protection Association (NFPA) for safe and effective incident response. With the expiration of the Agreement and the refocusing of operations within the City limits, TFD staffing will be brought up to 100% of this NFPA standard, providing a safer and more efficient operational environment. Increased personnel on scene will improve incident effectiveness, reduce risk to firefighters, and enhance the City’s ability to protect structures from fires. This transition represents the highest operational priority of the Tallahassee Fire Department and marks the most significant enhancement to fire service delivery for Tallahassee’s residents in decades.  

 

Electric & Gas Utility

Electric
The Electric Utility serves over 120,000 customers in a 221-square-mile service territory. It is the fourth-largest municipal electric utility in Florida and the 28th-largest of over 2,000 municipal systems in the United States. The utility comprises six major divisions: Financial and Administrative Services, Power Delivery, Energy Supply, System Operations, System Compliance, and System Integrated Planning. The Electric Utility develops a 10-year sales forecast annually to use in the annual budget process. Various inputs, such as heating and cooling days and economic and population growth, are used to develop the sales forecast. The weather is the most variable driver. As the year progresses, actual sales guide the utility's operational decisions.

The Electric Fund ended FY25 at $377.6 million.  Warm weather, especially during the summer, increased demand above forecast levels; additionally, the City experienced a January 2025 snowstorm, resulting in increased heating demand for the community.  At year-end, revenues exceeded expenditures, with an excess of $3.4 million retained in the operating reserve fund for future investments in Electric infrastructure, as per Financing the Government Policy 224.

Gas
Since 1956, the City of Tallahassee's Gas Utility has provided clean, safe, economical, and reliable natural gas to residents and businesses in our growing service area. The Gas Utility supplies natural gas through 965 miles of underground gas mains, which serve over 34,000 service points in Leon, Gadsden, and Wakulla counties.

The Gas utility continues to receive high ratings from customers in satisfaction surveys. The Commission passed a new gas-hit-line fine in FY23 to fund community education programs and outreach, which prevents future line damage, reducing costs and incidents involving the Utility’s infrastructure. The Utility was awarded a Natural Gas Distribution Infrastructure Safety and Modernization (NGDISM) grant for the replacement of natural gas distribution infrastructure and the purchase of equipment for inspecting systems and mitigating emissions.

The Gas Fund ended FY25 at $37.9 million.  Cold weather during FY25 impacted sales, leading to higher-than-projected consumption. At year-end, revenues exceeded expenditures, with an excess of $6 million retained in the Gas operating reserve fund and in the RR&I Fund for future investments in Gas infrastructure, as per Financing the Government Policy 224.

 

Underground Utilities

Water Fund
The City's water system currently services over 88,000 connections and consumes approximately 9 billion gallons of water annually. This around-the-clock operation employs 27 water wells and treatment facilities, eight elevated storage tanks, 7,545 fire hydrants, and 1,252 miles of water distribution pipes.

As shown in the table above, the FY25 Water Operating Fund is balanced at $53.9 million. The requested action allocates the $1.1 million surplus by transferring $11,852 to the Water Operating Reserve, with the remaining amount to the RR&I per Financing the Government Policy 224. Operating reserves are maintained to manage variability in expenses and revenues, ensuring the utility consistently meets its contribution to the General Fund. This approach aligns with the FY24 rate study, which projected budget assumptions to balance revenue needs, rebuild reserves, and remain consistent with long-term financial parameters.

Sewer Fund
The City’s Wastewater Utility is responsible for collecting, treating, and recycling wastewater and treating commercially pumped sewage. As part of the City’s commitment to protecting the environment, treatment processes utilized at the Thomas P. Smith (TPS) Advanced Water Reclamation Facility result in effluent that meets and exceeds regulatory requirements. On average, the sewer system collects and treats more than 18.2 million gallons daily.
As shown in the table above, the FY25 Sewer Operating Fund is balanced at $93.2 million. The requested action allocates the $315,900 surplus by transferring $85,021 to the Sewer Operating Reserve, with the remaining balance deposited into the Sewer RR&I Fund. Operating reserves are maintained to manage variability in expenses and revenues, ensuring the utility consistently meets its contribution to the General Fund. This approach aligns with the FY24 rate study, which projected budget assumptions to balance revenue needs, rebuild reserves, and remain consistent with long-term financial parameters.

Stormwater
The Stormwater Utility serves approximately 90,000 residential and 7,000 non-residential customers through operational activities and the design and construction of drainage facilities infrastructure. The fund includes capital project oversight, maintenance of drainage infrastructure such as retention ponds and drainage outfalls, monitoring of lakes and groundwater, and raising public awareness of the environmental impacts of pollution, such as the Think About Personal Pollution (TAPP) program.

The table above shows the Stormwater Fund ended FY25 balanced at $20.6 million.  RR&I transfers in FY25 were reduced by $1.8 million to offset the impact of a prior year revenue allocation adjustment.  Funding remaining in RR&I will be sufficient to fund planned capital projects.

Aviation
The Aviation Fund supports all six Aviation Department divisions and services that support the Airport and its operations. The Airport Fund is self-supporting and requires no support from the general government. Revenue sources for the Airport include airline charges, airport parking, rental car concessions, retail and dining concessions, and the rental of leased property. The key drivers are enplanements, deplanements, and aircraft operations. Several capital projects are ongoing at the airport, including the International Processing Facility, Parking Lot Lighting Improvements, Runway 9-27 Rehabilitation, Main Terminal Central Chiller Replacement, and Taxiway Bravo Rehabilitation.

The Aviation Fund ended FY25 balanced at $21.2 million. Surplus revenue funds were transferred to the Airport RR&I fund and Airline Revenue Sharing in accordance with the Airline Use and Lease Agreements implemented in FY23.

Solid Waste Fund
The Solid Waste Fund provides garbage, recyclable materials, bulk, and yard waste collection for all residential customers citywide, as well as garbage and recyclable materials collections for commercial customers. Currently, the City serves over 74,000 service points, which include both residential and commercial solid waste and recycling.

The closeout summary below shows that the Solid Waste Fund ended FY25 balanced at $39.8 million, including a $1.1 million transfer to the Solid Waste Operating Reserve per Financing the Government Policy 224.

Golf
The Golf Fund supports Hilaman Golf Course, which provides a community-wide golf experience through daily rounds, driving range use, charity events, tournaments, and more. Hilaman also features a fully stocked Pro Shop, restaurant, and event space, offering a comprehensive experience. Rounds played and membership fees remain the primary sources of revenue for the Fund, with driving range usage and outside events serving as additional income streams. FY25 continued the trend from previous years, with revenue from rounds played steadily increasing, and continued usage of the driving range.

The Golf Fund ended FY25 balanced at $1.5 million, including a transfer of $168,066 to RR&I as per policy.

Cemetery
The Cemetery Fund ended FY25 balanced at $516,942, which includes a transfer from the Cemetery Perpetual Care Fund of $356,777. Staff continues to monitor the Perpetual Care Trust Fund (PCTF) drawdown by tracking maintenance costs, evaluating the current inventory of burial spaces, and engaging in a burial plot buyback program to provide additional spaces.

 

See additional views of FY26 budget in OpenGov

See the line item view of the Five-Year Fund Pro Forma.

Estimated revenues and expenditures for FY26-FY30 reflect revenue projections and current expenditure levels. The latter years of the pro forma indicate how expected trends, as applied to current estimates, will shape future budget planning.

Budget Highlights

FY26
The FY26 balanced budget allocates resources to priorities at the direction of the City Commission, enabling the City to continue as a national leader in public service delivery to accomplish the goals and initiatives outlined in the Five-Year Strategic Plan and to deliver results in public safety, affordable housing, infrastructure enhancement, and exceptional customer service. Key elements of the FY26 General Fund Budget are:

• Investing in public safety with highly skilled staff and technological advances. The Strategic Plan sets a goal to increase the number of sworn officers per capita, and as a result, 20 additional officers are programmed in the FY26 budget.
• Investing in community resilience programs that address youth engagement, job training, and leadership opportunities, and enhancement of law enforcement strategies with wrap-around services that respond to other components of violent crime, such as mental health.
• Investing in infrastructure projects that drive economic growth and enhance the quality of life for residents.  By prioritizing these key projects, Tallahassee is laying the groundwork for long-term prosperity and ensuring our infrastructure meets the evolving needs of our community.
• Increasing housing availability and affordability through new developments and renovations, particularly in areas like the Southside. Funding will support homebuyer assistance programs, which have helped more than 500 households annually in recent years. These initiatives aim to reduce barriers to housing and support neighborhood preservation while addressing the demand for affordable housing in our growing City.
• Maintaining a balanced General Fund is essential for the City’s financial stability. The FY26 budget ensures that core services are responsibly funded, reserves are maintained, and investments align with long-term stability.
• Active community engagement is essential to our City’s success.  Residents can easily access information, stay informed, and provide feedback on projects and services using a variety of methods.
• Offering a favorable environment for businesses, with some of the lowest municipal service costs in the region.
• Reducing costs while elevating the quality of services delivered to citizens through strong operational management and identification of efficiencies, including technology enhancements.
• With the framework of the Strategic Plan and these essential elements, the City will continue as a national leader in the delivery of public services.

FY26-30 Assumptions

• Future revenue projections indicate lower governmental revenues related to state sales tax revenue sharing in the first years of the five-year planning period.  Estimates for other revenues are conservative, based on prior-year trends. 
• Personnel costs for future years reflect a 3% growth through FY30. However, the estimated increase would be adjusted if inflation and tight labor market conditions extend beyond FY26.
• Operating costs, including internal services and utilities, from FY26 to FY30 are escalated by 2.5% overall.
• Transfer estimates include debt service, insurance reserve reimbursement, operating project transfers, and the annual transfer for capital projects. Debt Service transfers from FY26 through FY30 average $16 million a year, with payments rising and falling as existing debt is paid off and new debt incurred.  Estimates will evolve as plans for the timing of future borrowing are refined.
• Estimates for FY27-FY30 do not include estimated increases in the number of positions in the fund—departments review service needs and staff levels during the annual budget development process.
• The General Fund for FY26 totals $226 million and includes the Tallahassee Police Department, Parks & Recreation, Public Infrastructure (roads and street construction and maintenance), Community Housing and Human Services, and other non-utility services. The fund also contributes to StarMetro and the Consolidated Dispatch Agency, transfers the ad valorem share due to the community redevelopment agencies, and transfers funding for capital projects and debt service.

Strategic Plan
The General Fund covers a variety of core government services and therefore many of the strategic plan objectives align with the long-range financial plans related to the general fund. Some of the strategic plan objectives that align with this fund are:

• Objective 3.1 – Attract, Develop, and Support the Best Talent
• Objective 3.2 – Leverage Technology and Process Improvements to Deliver Faster, More Convenient Services
• Objective 3.3 – Maintain the City’s Strong Financial Standing and Fiscal Stewardship Practices
• Objective 4.4 – Enhance the City’s Network of Roads, Bike Lanes, and Sidewalks
• Objective 5.1 – Implement Proactive Community-Based Solutions to Enhance Public Safety

 

See additional views of FY26 budget in OpenGov

See the line item view of the Five-Year Fund Pro Forma.

Estimated revenues and expenditures for FY26-FY30 generally reflect revenue projections and current expenditure levels escalated by a CPI factor and indicate how expected trends applied to current estimates will shape future budget planning.

Budget Highlights
FY26

• Building Inspection will continue to provide services at the level that demand requires and ensure full-cost recovery of costs. Building Inspection fees will increase in FY26 at rates adopted by the City Commission in September 2025, and subsequent years will increase by the Consumer Price Index (CPI).

FY27-30 Assumptions
Highly trained staff who are qualified and hold the necessary certifications are vital to providing a high level of service. Strategies for the future include maintaining excellence through training and credentialing of staff and managing staff levels to meet changing demands for services. The demand for and efficiency of online access to permitting services and information will necessitate additional investment in new technology, including the potential implementation of services that can expedite the permit review and approval process.

Strategic Plan
Some of the strategic plan targets that align with the long-range plans for this fund are:

• Target 1.2.4 - Square feet of new commercial space permitted
• Target 1.2.5 - Increase the number of new commercial permits issued in the Southside
• Target 1.4.1 - Average time to process a permit for new home construction
• Target 2.2.5 - Streamline permitting processes and zoning regulations to incentivize and expedite the development of new single-family and multi-family housing development

 

See additional views of FY26 budget in OpenGov

See the line item view of the Five-Year Fund Pro Forma.

Estimated revenues and expenditures for FY26-FY30 generally reflect revenue projections and current expenditure levels escalated by a CPI factor and indicate how expected trends applied to current estimates will shape future budget planning.

Budget Highlights
FY26

• The Tallahassee Fire Department added 26 positions to meet National Fire Protection Association (NFPA) standards. The positions will be assigned to the five busiest stations in the City.
• A revised schedule of rates was approved to support fire wages and new personnel and will result in a 9.98% rate change; a $2.01 monthly impact for most residential customers.

FY27-30 Assumptions

• The current three-year collective bargaining agreement between the City and the International Association of Fire Fighters will expire at the end of FY27, and a new contract will be negotiated for FY28.
• With the conclusion of the Interlocal Agreement between the City and County at the end of FY28, TFD’s service footprint will shift to focus exclusively on the incorporated City limits.
• The City will retain all existing personnel and strategically increase staffing levels at City stations to improve service delivery, enhance response times, and strengthen firefighter safety. City residents and businesses will experience an enhanced service and an increase in firefighter safety. This strategy is in line with TFD’s current efforts to increase the number of assigned personnel per fire engine at the City’s busiest stations.
• Construction of Fire Station 17 is on hold as it will need to be resized and reprogrammed to support a City-only service model rather than a dual-jurisdiction operation. A redesign should ensure that the facility is right-sized for the call volume and coverage needs within City limits. 

The Tallahassee Fire Department (TFD) provides the City of Tallahassee and Leon County with quality fire suppression; specialized hazardous material response; emergency management; facilities security; focused urban search and rescue; dedicated technical rescue; superior vehicle extrication; high-quality emergency medical care; fire safety code compliance review and enforcement; and varied public education services. Beyond Leon County, the department also provides emergency response via mutual aid to communities in the surrounding area. Within TFD, Emergency Medical Technicians (EMTs) are trained in Basic Life Support (BLS) measures for trauma care, cardiac and stroke care, CPR, advanced first aid, childbirth, and basic medication administration. TFD's paramedics are ALS certified and responsible for managing the emergency medical scene according to protocol and directing operations inside the medical transport unit as it travels to the hospital.

Strategic Plan Target
Some of the strategic plan targets that align with the long-range plans for this fund are:

• Target 5.1.3 - Expand public education activities to improve community safety 
• Target 5.3.3 - Number of emergency preparedness training hours
• Target 5.5.4 - Facilitate preparedness exercises for response and recovery partners and stakeholders
• Target 5.5.5 - Reduce structure fires and suppression calls 
• Target 5.5.6 - Invest in fire protection and preparedness to help lower insurance costs for homes and businesses by achieving an ISO (Insurance Services Office) rating of 80.99 or higher (Class 2)

 

See additional views of FY26 budget in OpenGov

See the line item view of the Five-Year Fund Pro Forma.

Estimated revenues and expenditures for FY26-FY30 generally reflect revenue projections and current expenditure levels escalated by a CPI factor and indicate how expected trends applied to current estimates will shape future budget planning.

Budget Highlights
FY26

• The department will continue to explore expanding its solar generation capacity.
• The Electric Utility uses a 4-year rate study to guide the budgeting process.

FY27-30 Assumptions

• The Electric Utility continues to invest in the current electric grid by enhancing funding in tree trimming, systemwide switch inspection, and replacement.
• There is also a focus on enhancing transmission reliability and import capability through additional bulk power system interconnections.
• The department continues to look to the future and implement the City’s Clean Energy Plan.
• Continued funding of the pilot EV charging stations program and installation of new stations at key locations throughout the City.

The Electric Utility serves over 120,000 customers in a 221-square-mile service territory. It is the fourth-largest municipal electric utility in Florida and the 28th-largest of over 2,000 municipal systems in the United States. The utility is comprised of six major divisions: Finance and Administration, Power Delivery, Energy Supply, System Operations, System Compliance, and System Integrated Planning. The Electric Utility develops a 10-year sales forecast annually to use in the annual budget process. This sales forecast is based on a variety of inputs, such as heating and cooling degree days, economic and population growth, with the weather being the most variable driver. As the year progresses, actual sales are used to guide the operational decisions of the utility.

Strategic Plan Target
Some of the strategic plan targets that align with the long-range plans for this fund are:

• Target 4.1.1 - Provide electric and gas utility bills at or below the statewide average
• Target 4.1.5 - Average customer outage response time for electric outages
• Target 4.1.8 - Expand the City's power generating capacity to enable clean energy goals
• Target 4.2.1 - Increase the amount of renewable energy on the City's system
• Target 4.2.3 - Enable the reduction of energy consumption community-wide

 

See additional views of FY26 budget in OpenGov

See the line item view of the Five-Year Fund Pro Forma.

Estimated revenues and expenditures for FY29-FY30 generally reflect revenue projections and current expenditure levels escalated by a CPI factor and indicate how expected trends applied to current estimates will shape future budget planning.

Budget Highlights
FY26

• The Gas utility continues to receive a high grade from its customers in satisfaction surveys. The Utility was awarded a Natural Gas Distribution Infrastructure Safety and Modernization (NGDISM) grant for the replacement of natural gas distribution infrastructure and the purchase of equipment for inspecting systems and mitigating emissions.    

FY27-30 Assumptions

• The department continues to implement the City’s Clean Energy Plan.
• Further implementation of the Utility’s Methane Reduction Program.

The City of Tallahassee's Natural Gas Utility has provided clean, safe, economical, and reliable natural gas to residents and businesses in a growing service area since 1956. The utility safely provides natural gas energy through 965 miles of underground gas mains that serve over 34,000 customers in the Leon, Gadsden, and Wakulla County areas. The highly trained staff works to ensure the integrity and dependability of the distribution system and to assist customers with energy conservation and cost savings through the use of natural gas.

Strategic Plan Target
A strategic plan target that aligns with the long-range plans for this fund:

• Target 4.1.6 - Average customer outage response time for gas problems

 

See additional views of FY26 budget in OpenGov

See the line item view of the Five-Year Fund Pro Forma.

Estimated revenues and expenditures for FY26-FY30 generally reflect revenue projections and current expenditure levels escalated by a CPI factor and indicate how expected trends applied to current estimates will shape future budget planning.

Budget Highlights
FY26

• Per City Ordinance, and consistent with the parameters of the most recent rate study, water rates were increased by a CPI factor of 2.4% on October 1, 2025. The total impact on the average residential utility bill (6,000 gallons) equates to $0.61 per month.   
• In FY26, operating expenditures were analyzed and redistributed based on a historical five-year average to reflect anticipated costs accurately and incorporated budget assumptions based on the 2024 rate study, resulting in an overall 14.9% decrease. Efficiencies in operating expenditures were moved to Transfers to accommodate increased debt service resulting from accelerated financing, which took advantage of favorable market conditions. 
• The Renewal, Replacement, and Improvement (RR&I) transfer for the capital improvements of Water infrastructure increased to $9.7 million, up from $9.1 million in FY25. 

FY27-30 

• Assumptions for rate revenues include modest customer growth of 1%, and CPI set at 2.4% for FY26 and 2.5% from FY27 through FY30.  
• Operating expenses are estimated to increase by 2.5% through FY30. 

Commitment to capital investments includes the proceeds from the 2025 Consolidated Utilities System (CUS) bond sale and a 3% average increase per year in the RR&I transfer through FY30.

Strategic Plan Target
Some of the strategic plan targets that align with the long-range plans for this fund are:

• Target 4.1.9 - Provide water and sewer service to unserved properties within the Southside Triangle Project area
• Target 4.3.1 - Dollars invested in the enhancement and maintenance of the potable water system
• Target 4.3.2 - Maintain best in class drinking water quality

 

See additional views of FY26 budget in OpenGov

See the line item view of the Five-Year Fund Pro Forma.

Estimated revenues and expenditures for FY26-FY30 generally reflect revenue projections and current expenditure levels escalated by a CPI factor and indicate how expected trends applied to current estimates will shape future budget planning.

Budget Highlights
FY26

• Per City Ordinance, and consistent with the most recent rate study parameters, sewer rates were increased by a CPI factor of 2.4% on October 1, 2025. The total impact on the average residential utility bill (5,000 gallons) equates to $1.54 per month.   
• In FY25, operating expenditures were analyzed and redistributed based on a historical five-year average to reflect anticipated costs accurately and incorporated budget assumptions based on the 2024 rate study, resulting in an overall 15.6% decrease. Efficiencies in operating expenditures were moved to Transfers to accommodate increased debt service resulting from accelerated financing, which took advantage of favorable market conditions. 
• The Renewal, Replacement, and Improvement (RR&I) transfer for the capital improvements of wastewater infrastructure increased to $16.9 million, up from $16.3 million in FY25. 

FY27-30 

• Assumptions for rate revenues include modest customer growth of 1% and CPI set at 2.4% for FY26 and 2.5% from FY27 through FY30.  
• Operating expenses are estimated to increase by 2.5% through FY30. 

Commitment to capital investments includes the proceeds from the 2025 Consolidated Utilities System (CUS) bond sale and a 4% average increase per year in the RR&I transfer through FY30.

Strategic Plan Target
Some of the strategic plan targets that align with the long-range plans for this fund are:

• Target 4.1.3 - Dollars invested in sewer collection system enhancements and maintenance
• Target 4.1.9 - Provide water and sewer service to unserved properties within the Southside Triangle Project area

 

Bond Proceeds are funds received through bond revenue to pay for water, wastewater, electric, gas, and general government capital infrastructure projects. Bond proceeds in this year’s capital improvement plan include:

• Future Capital Bond Series 
• Future Sales Tax Bond 
• Internal Loan Fund
• Sewer CUS Future Bonds 
• Water CUS Future Bonds 
• Capital Series Bond, 2024

General Government is funding received from the general fund, sales tax, gas tax, and intergovernmental funding from Leon County. These sources fund general government capital improvements, including public infrastructure, public safety, technology advancements, and traffic infrastructure. General Government funding sources used in this year’s capital improvement plan include:

• Blueprint Annual Allocation - Sidewalks 
• Blueprint IA
• Concurrency - District 2 SE - Road
• Gas Tax
• General Government Capital Project Account (GGCPA)
• Intergovernmental 
• Sales Tax 2020

Special Funds derive from various sources, including internal service capital funds, charges for services dedicated to capital improvements, proceeds from sales, accounts receivable funds, and reserves. Special funds used in this year’s capital improvement plan include:

• 800 MHz (Communication)
• Aviation - Customer Facility Charge
• Aviation - Passenger Facility Charge
• Blueprint Annual Allocation - Aviation
• Blueprint Annual Allocation - Water Quality
• Electric A/R 
• Fleet Reserve Fund
• Gas A/R
• Sewer System Charge 
• Sewer A/R Fund
• Traffic A/R Fund
• Water System Charge 

Renewal, Replacement, & Improvement (RR&I) funding is cash received from each department’s operating budget dedicated to capital improvements. Undesignated balances are accumulated through balances in closed projects, unprogrammed RR&I funding, and interest earnings. Those RR&I funding sources used in this year’s budget include RR&I funding originating from a variety of operating funds:

• Airport RR&I
• Electric RR&I
• Environmental Services & Facilities Management RR&I
• Fire Construction Fund
• Gas RR&I
• Sewer RR&I
• Stormwater RR&I
• Technology RR&I
• Water RR&I

State Funds include grant funding from State organizations that provide additional support to community initiatives. The following funding sources are dedicated to projects in this year’s capital improvement plan:

• Aviation - Florida Department of Transportation
• State Law Enforcement Forfeiture

Federal Funds include grant funding from Federal organizations that provide additional support to community initiatives.

• Federal Aviation Administration

• Maintain sufficiently high bond ratings to assure access to affordable credit and low-borrowing costs
• Ensure intergenerational equity by amortizing debt within the expected useful life of a project or asset
• Coordinate the City’s capital improvement program with its debt management policy to develop a coherent, long-term financing plan for the City’s capital funding needs
• Maintain flexibility for the future financial needs of the City

The City will monitor and report debt ratios annually and at the time of each debt issuance, and strive to structure debt to meet the following targets:

Targets for liquidity, operating margins and debt burden

General Fund
Liquidity: Spendable General Fund Balance of 15% of General Fund expenditures.
Debt Service as a % of Expenditures/Coverage Ratio: Net Debt Service to be less than 10% of General Fund Expenditures
Debt Burden: Debt as a % of Full Market Value in less than 2%

Consolidated Utility System
Liquidity: 150 days cash on hand
Debt Service as a % of Expenditures/Coverage Ratio: Debt Service Coverage of 1.50x or higher
Debt Burden: Debt as a % of Capital Assets less than 50%

Energy System
Liquidity: 210 days cash on hand
Debt Service as a % of Expenditures/Coverage Ratio: Debt Service Coverage of 2.0x or higher
Debt Burden: Debt as a % of Capital Assets less than 60%
Targets for the structure of the City’s debt portfolio at the time of issuance

General Fund
Average Life (Range): 10 - 15 years
Viable Rate (VR): 20%*
Rolling Medium Term Notes (RMTN): 20%*
Combined (VR/RMTN): 30%*

Consolidated Utility System
Average Life (Range): 15 - 20 years
Viable Rate (VR): 25%
Rolling Medium Term Notes (RMTN): 30%cccc
Combined (VR/RMTN): 40%

Energy System
Average Life (Range): 15 - 20 years
Viable Rate (VR): 25%
Rolling Medium Term Notes (RMTN): 30%
Combined (VR/RMTN): 40%

*The City shall not exceed the greater of these percentages or $50 million individually for Viable Rate and Rolling Medium Term notes and $90 million combined for Viable Rate and Medium Term Notes at the time of issuance.

Renewal, Replacement, & Improvement (RR&I) funding is cash received from each department’s operating budget that is dedicated for capital improvements. Undesignated balances are accumulated through balances in closed projects, unprogrammed RR&I funding and interest earnings. Those RR&I funding sources used in this year’s budget include RR&I funding originating from a variety of operating funds:

• Airport
• Electric
• Fire
• Internal Service Funds
• Gas
• Sewer
• Stormwater
• Water

The FY26 proposed budget includes a workforce of 3,044.75 full-time equivalent (FTE) employees. This is an increase of 47.00 FTEs from FY25. In the Fire Department, 14.00 new FTEs are requested.

An increase of 12.00 FTEs for Parks, Recreation & Neighborhood Affairs was requested, with 6.00 FTEs to staff the new Senior Center. The additional 6.00 FTE’s will be used to continue upkeep of Tallahassee’s parks. Police has also received 20.00 new FTEs as laid out in the strategic plan to hire 20 new officers yearly a part of the City’s commitment to Public Safety.  Additionally, Aviation has requested to convert 1.00 OPS to FTE.