City Leaders Clash as Taxpayer Protection Measure Draws New Criticism
In Brief:
Who: Fort Walton Beach City Council, City Manager Jason Davis, and city staff
What: A contentious presentation on the impacts of the voter-approved 3% operating budget cap
When: Tuesday night, after six months under the cap
Where: Fort Walton Beach City Council chambers
Why: City leaders argue the cap is increasing costs, cutting services, and driving employee losses—while critics say revisiting it overturns voter will
FORT WALTON BEACH — What sounded like a simple promise to protect taxpayers is now being described by city leadership as a financial disaster waiting to happen, but not everyone agrees.
A presentation to the Fort Walton Beach City Council on Tuesday by staff shows the voter-approved 3% cap on city operations is not saving money — instead, the same officials say it is driving up costs, shrinking services, and pushing experienced employees out the door.
City Manager Jason Davis outlined the findings after six months of operating under the cap, calling the results “counterintuitive” and warning that the policy is creating an inefficient, reactive form of government.
Councilmembers’ responses to the presentation were mixed.
Councilmember David Schmidt said the council’s thoughts on the 3% cap didn’t really matter, because it was going to go in front of the voters soon anyway.
The minority view, presented by firebrand Councilmember T. Payne Walker, was consistent: he believes the council’s decision to put this cap back up for a vote was an attempt to “overturn the will of the people.”
“Use It or Lose It” Spending
Under the cap, departments must now spend every dollar in their annual budgets or risk losing future funding, says the report. Staff believes that saving money today can actually hurt a department tomorrow.
“If a department comes in under budget, their operating ceiling drops the next year,” city staff explained. “That forces unnecessary spending just to maintain service levels.”
Meanwhile, city staff says real-world costs — including insurance, fuel, utilities, tariffs, and payroll — continue rising faster than 3%.
Losing Talent Comes at a Price
According to city staff, since the city began to use the spending cap, 12 employees have left, with city officials linking those departures directly to pay and staffing pressures caused by the cap.
City staff explain replacing the departures costs taxpayers at least $120,000 in overtime and recruitment expenses, as well as the loss of experience and institutional knowledge.
In one example, city staff labeled “special interest group math,” a position paying under $100,000 was eliminated to stay under the cap, only to be replaced by a $200,000 private contract not subject to the limit.
Services Are Being Cut — Or Frozen
The staff argued that residents are already seeing impacts.
The Fire Outreach Program, a fire safety education effort, has been canceled.
Senior, youth, and community programs cannot expand, and the decision has allegedly forced the city to turn away some children from youth sports leagues.
The city’s golf course has cancelled vendor events that normally generate revenue and expects to run out of range balls months early.
Officials say these are not policy choices — they’re forced reactions to the cap.
Lost Revenue and Delayed Repairs
City staff identified $170,000 in potential revenue that cannot be pursued because contracting the service would exceed the cap.
Vehicle repairs, damaged property, and tree mitigation projects are also being delayed — not due to safety concerns, but to avoid busting the spending limit before year-end, they say.
Quality of Life Concerns
City officials say the city’s own 2020 Quality of Life Study adds context:
- 62% of residents cited poor leadership
- 61% cited a lack of good-paying jobs
- 82% want vibrant parks and services
At the same time, voters expressed strong confidence in police and fire leadership — and a desire for tax dollars to be managed effectively.
Council Members: “Handcuffs on the City”
Councilmember Bryce Jeter compared the policy to “death by a thousand cuts,” arguing that the cap penalizes responsible budgeting.
“If you don’t spend it, you’ll lose it,” Jeter said. “So we could continue to go down, down, down every year, and we look up five or 10 years from now and not have a city.”
Jeter also tied the cap debate to voter frustration over the now-expired fire assessment, cautioning that long-term damage could follow short-term political promises.
Several council members echoed staff concerns, warning that the cap’s structure creates a downward spiral that could fundamentally weaken city operations over time.
Councilmember Ben Merrill took direct aim at the claim that the cap protects taxpayers, saying real-world outcomes show the opposite.
“To put some blanket cap under the guise that it’s going to save taxpayers money — when you look at real-world situations that have happened, a $70,000 salary replaced by a $200,000 contract — if you can’t defend that, I’d love to see someone try,” Merrill said.
He also rejected arguments that maintaining the cap is about fiscal responsibility, saying motivations vary widely.
“Anybody who wants this cap is either looking to shrink government, remain willfully ignorant, or get revenge over the fire assessment,” Merrill said. “I can’t sit back and let that shrink this city into consolidation with the county.”
Councilman David Schmidt emphasized that the council lacks the authority to repeal the cap unilaterally.
“It’s up to the electorate,” Schmidt said. “That’s our chain of command.”
He clarified that capital improvement projects are exempt, but operating decisions are not.
“Staff has to execute the budget we approve,” he said, adding that tradeoffs within the operating budget are already affecting discretionary programs.
Schmidt closed by encouraging continued civic engagement ahead of the March 10 vote.
“We’re going to be a great city regardless,” he said. “I enjoy the spirited conversations and the concerns people have.”
Councilman Payne Walker expressed skepticism about the presentation’s details and timing. “You know, I was a little surprised that we’ve not had a special meeting called on it, that the timing of your white paper coincides with the upcoming election related to overturning the will of over 6,000 people and the system that it came out of.”
The councilman argued City Manager Jason Davis is the CEO of the city – and should have made his team work within their means. “I’ve known a lot of great CEOs in my life, and… the difference between a great one and a poor one is…they’re great problem solvers,” Walker said.
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