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BOARD OF COUNTY COMMISSIONERS tkrr 110 * tlittp.._ July 2,2025 Board of County Commissioners Indian River County 1801 27th Street Vero Beach, FL 32960 Honorable Members of the Board of County Commissioners, It is my privilege to present the recommended FY 2025/2026 Budget,which continues our tradition of fiscal prudence for Indian River County. I am recommending a FY 2025/2026 budget of$597,623,132,compared to the FY 2024/2025 budget of$670,928,243(as of March 31,2025)this is an overall decrease of$73,305,111 or 10.9%. The development of this budget reflects the Board of County Commissioners'consistentfiscally conservative approach to budgeting,holding the General Fund and the unincorporated Municipal Service Taxing Unit(MSTU)millage rates constant for the sixth consecutive year and the Emergency Services District millage rate constant for the fifth consecutive year;. The County's strong financial foundation was established over many previous budget cycles with budget discipline,sound financial planning, and commitment to providing necessary local government services responsive to the residents and • businesses of Indian River County. I would like to thank our department directors and the Office of Management and Budget for their diligence and commitment to developing a budget that is fiscally responsible. Economic and Fiscal Landscape As we prepared this recommended budget,we were cautious in our approach in large measure,due to an awareness of our state and community's current,and more so future,fiscal landscape.The County's real estate market is experiencing a softening that could impact future revenues.Sellers see houses listed on the market for longer periods of time and many are reducing asking prices.This is supported by an analysis by ResiClub where Indian River County ranked 5th among 384 metropolitan areas with the steepest year-over-year price decreases in 2024. Recent trends suggest a decline, or more of a leveling, in home starts and this is evidenced in Indian River County by a reduction in both building permit and impact fee revenues.The Florida Economic Estimating Conference's most recent quarterly update(February2025)indicates a fluctuation in private single-family home starts that will ultimately level until 2027-2028 when they project a moderate increase.Greatervolatility is expected in the short term for multi-family housing starts,with an increase projected for 2027-2028. See below Florida TaxWatch's 1st Quarter 2025 Economic Forecast infographic. The proverbial sky is not falling, but TaxWatch forecasts 2027 as the year in which the state may be most susceptible to experiencing less than favorable economic conditions.The above forecasts are echoed by many economists,whether the year is 2027 or 2028. Many of these forecasts were made prior to the recent legislative session and the significant attention surrounding local government taxes(local option sales taxes and property taxes). • 5