Lynn Haven faces multimillion‑dollar shortfall; commissioners weigh millage hikes and cuts

City staff told the Lynn Haven City Commission at a workshop that the preliminary fiscal year 2027 general‑fund budget shows a large shortfall — roughly $6.7 million in the model presented — driven in part by an almost $2.8 million debt‑service payment on a disaster bond.

Staff walked commissioners through the elements that had been built into the draft budget: a proposed $1 million investment in multi‑use fields at the sports complex, four new fire positions, an in‑house attorney, and a budget manager. They said some items could be removed from the draft model to reduce the gap but cautioned that replacing an in‑house attorney with contracted legal services will still require added funds.

Finance staff emphasized that the figures remain preliminary: state revenue numbers for the coming fiscal year and final medical‑benefit costs were not available, and staff used last year’s state revenue numbers for modeling. A compensation study by Evergreen was included as a placeholder (about $500,000 smoothed across departments) for planning purposes, not as a finalized pay increase.

Staff ran several millage scenarios to show the scale of options. With the current millage set at 4.05 mills and the draft wish list included, the model produced the $6.7 million shortfall. Removing the high‑cost wish‑list items reduced the deficit substantially but did not eliminate it. Staff presented three broad courses of action for commissioners to consider: keep the millage at status quo and pursue steeper cuts; a modest millage increase to reduce cuts; or a larger millage increase to narrow the gap further. Staff noted that, even after removing the multi‑use fields, proposed firefighters and in‑house attorney, a significant shortfall would remain unless additional revenues are found or staff/headcount reductions are enacted.

On debt management, staff described 'refunding' the disaster bond as an option to lower near‑term debt service but said doing so carries several‑hundred‑thousand‑dollars in transaction costs and increases total interest paid over the life of the debt; staff recommended exhausting other options first.

Commissioners asked for more detailed line‑item spreadsheets and for alternatives that show the tradeoffs between capital deferrals, fee increases, and personnel reductions. Staff said state revenue estimates will arrive in late summer; those figures, plus a formal rate study for water and sewer, will determine the timing and scale of any proposed utility rate changes.

The commission did not take any votes at the workshop. Staff will return with a document showing the starting numbers used tonight, refined COAs (courses of action), and supporting line‑item detail for follow‑up workshop discussion.