R7F - Set Millage Rates, Public Hearing Date

Resolutions - R7 F

COMMISSION MEMORANDUM

RECOMMENDATION

The Administration recommends that the Mayor and City Commission adopt the attached Resolution, which authorizes the City Manager to transmit the following information to the Miami- Dade County Property Appraiser:

1) Proposed Millage Rates for Fiscal Year (FY) 2026:

Operating Millage Capital Renewal & Replacement Millage Pay-As-You-Go (PayGo) Millage Total General Millage Voted Debt Service Millage Total Combined Millage

5.6636 mills 0.0912 mills 0.1154 mills 5.8702 mills 0.2779 mills 6.1481 mills (same as last year)

2) “Rolled-Back” Rate (Truth-in-Millage) 5.5114 mills

3) The first public hearing to consider the millage rates and budgets proposed for FY 2026 shall be held on Wednesday, September 17, 2025, at 5:01 p.m., in the City Commission Chambers at 1700 Convention Center Drive, 3 rd Floor, Miami Beach, Florida 33139.

BACKGROUND/HISTORY

See analysis below.

ANALYSIS

PROPERTY VALUES

On July 1, 2025, the City received the 2025 Certified Taxable Values from the Miami-Dade County Property Appraiser. As summarized below, the City’s overall taxable property values increased approximately $3.9 billion, or 6.9%, from the 2024 Certified Taxable Values of $56.4 billion to the 2025 Certified Taxable Values of $60.3 billion, which included a $2.9 billion, or 5.1%, increase in the City’s existing values and a $1.0 billion increase in new construction values. Within the overall

increase, however, property values within the City Center Redevelopment Area and the North Beach Community Redevelopment Area increased by 2.7% and 3.7%, respectively, compared to the previous year.

July 2024 Certified

Property Values:

$56,396,947,099

Existing Values

New Construction

$56,396,947,099

Total Citywide

City Center Redevelopment Area

$6,709,447,439

North Beach Community Redevelopment Area

1,844,424,002

Total Citywide – Net of RDA & CRA

$47,843,075,658

VALUE OF ONE MILL OF TAXABLE VALUE

The first building block in developing a municipal budget is the establishment of the value of one mill of taxation, where a mill is defined as $1.00 of ad valorem tax for every $1,000 of taxable property value. For the City of Miami Beach, the value of each mill for the FY 2026 budget is determined by the 2025 Certified Taxable Values that is set at approximately $60.3 million per mill levied. Per Section 200.065, Florida Statutes, a discount of up to 5% may be applied to account for early payment discounts, delinquencies, etc. Therefore, the value of one mill citywide at 95% is approximately $57.3 million.

MILLAGE RATES PROPOSED

There are two (2) main components to the City’s Total Combined millage rate, which are the General millage rate and the Voted Debt Service millage rate. The General millage rate, which is comprised of a General Operating, Capital Renewal and Replacement (CRR), and Capital Pay- As-You-Go (PayGo) millage, funds General Fund operating and capital expenditures, while the Voted Debt Service millage rate funds the annual debt service for outstanding General Obligation (G.O.) bonds.

The General millage rate proposed for FY 2026 of 5.8702 mills provides funding to offset increases in personnel costs, such as the City’s annual required pension contributions, a five (5) and four (4) percent (%) step increase (where applicable) for all Fraternal Order of Police (FOP) and International Association of Fire Fighters (IAFF) positions and a 0-3% performance-based merit increase for all other positions, an increase in the City’s health insurance premiums for active employees and retirees, as well as increases in other General Fund operating expenditures and dedicated funding for General Fund capital projects.

The Voted Debt Service millage rate provides funding for the annual debt service of the first tranche (Series 2019) of the G.O. Bond that was approved by the voters on November 6, 2018 and the annual debt service for the first tranche (Series 2023 A&B) of the Arts and Culture G.O. Bond that was approved by the voters on November 8, 2022.

Based on the 2025 Certified Taxable Values, the debt service payments totaling approximately $16.3 million in FY 2026 require the levy of a voted debt service millage rate of 0.2845 mills for FY 2026, which is 0.0114 mills less than the adopted FY 2025 Voted Debt Service millage rate of 0.2959 mills.

July 2025 Certified $ Change % Change

$59,251,456,909 $2,854,509,810 5.1%

- 1,048,123,655 1,048,123,655 100.0%

$60,299,580,564 $3,902,633,465 6.9%

$6,893,643,464 $184,196,025 2.7%

1,913,319,827 68,895,825 3.7%

$51,492,617,273 $3,649,541,615 7.6%

Unfunded Capital Needs

As presented at the Finance and Economic Resiliency Committee (FERC) Budget Briefings on June 13, 2025 and July 11, 2025, the City’s FY 2026-2030 Capital Improvement Plan (CIP) reflected over $1.2 billion of unfunded capital project needs over the next five (5) years.

In an effort to meet the City Commission’s goal of funding 5% of the annual General Fund operating budget for capital needs in accordance with Resolution No. 2006-26341, the Administration at the July 11, 2025 FERC Budget Briefing recommended realigning the reduction in the required Voted Debt Service millage rate of 0.0114 mills to the City’s dedicated CRR and PayGo millage rates. This adjustment resulted in an estimated additional $0.6 million allocated to dedicated CRR and PayGo in FY 2026.

In addition, based on the finalization of the City’s Annual Comprehensive Financial Report (ACFR) for the fiscal year ending September 30, 2024 (FY 2024), approximately $0.3 million in prior year fund balance in the General Obligation (G.O.) Debt Service Fund is available for appropriation. At the July 11, 2025 FERC Budget Briefing, the Administration recommended that the available funding be appropriated in FY 2026 that would further increase the reduction in the Voted Debt Service millage rate for FY 2026 by 0.0066 mills, from 0.0114 mills to 0.0180 mills, and realign the additional reduction in the Voted Debt Service millage to the City’s dedicated PayGo millage. This resulted in an estimated additional increase in dedicated PayGo funding of approximately $0.3 million.

The Total Combined millage rate proposed for FY 2026 would remain flat at 6.1481 mills, as summarized in the table below, if the recommendations above are approved.

These recommendations, which were approved by the FERC at the July 11, 2025 Budget Briefing, would move the budget closer to the City Commission’s goal of funding 5% of the annual General Fund operating budget for capital needs, from approximately $15.0 million, or 3.3%, in FY 2025 to $19.4 million, or 4.0%, of the FY 2026 General Fund budget. With these additional capital dollars, the Administration recommends funding the most critical unfunded capital project needs.

General Operating

Capital Renewal & Replacement (CRR)

Capital Pay-As-You-Go (PayGo)

Total General Millage

Voted Debt Service

Total Combined Millage

IMPACT OF PROPOSED MILLAGE LEVY IMPACT ON PROPERTY OWNERS

Homesteaded Properties

In 1992, voters approved an amendment to the Florida Constitution known as Amendment 10, also known as Save Our Homes (SOH). SOH is an assessment limitation, or “cap,” on increases in the assessed value of a homestead residence. Those increases are limited to 3.0%, or the percent change in the CPI (Consumer Price Index), whichever is less. The “cap” goes into effect beginning the year after a homestead exemption is granted.

Based on last year’s taxable property values from the Miami-Dade County Property Appraiser as of July 1, 2024, the median homesteaded property value in the City was $290,600 while the

FY 2025 Adopted FY 2026 Proposed Increase/ (Decrease)

5.6636 5.6636 0.0000

0.0866 0.0912 0.0046

0.1020 0.1154 0.0134

5.8522 5.8702 0.0180

0.2959 0.2779 (0.0180)

6.1481 6.1481 0.0000

average homesteaded property value was $837,571. For an existing homesteaded property in the City that was not sold and/or did not have any improvements or additions completed in the last year, the impact of the City’s Total Combined millage rate of 6.1481 mills proposed for FY 2026 would be an increase of approximately $51 for the median homesteaded property, while the impact for the average homesteaded property would be $149 pursuant to the SOH cap that is 2.9% for the current year.

Homesteaded Properties

Median**

Preliminary Taxable Value**

$290,600

City of Miami Beach:

$1,701

Operating

Voted Debt

$1,787

Total Miami Beach

$ Change in Taxes:

Operating

Voted Debt

Total Miami Beach

**Source: Miami-Dade County Property Appraiser's – 2024 average-median-homestead-residential- values files

Historical Perspective

The table below outlines the City’s historical millage rate trend. For FY 2026, the City’s Total Combined millage rate is proposed to remain flat at 6.1481 mills, which is the same rate that was adopted for FY 2025.

Millage Rate History

*Increase in FY 2020 millage attributed to issuance of Tranche 1 (Series 2019) of General Obligation (G.O.) Bonds approved by the voters on November 6, 2018

**Increase in FY 2024 millage attributed to issuance of Tranche 1 (Series 2023A&B) of Arts and Culture (G.O.) Bonds approved by the voters on November 8, 2022

FY 2025

FY 2026

Average** Median Average

$837,571 $299,027 $861,861

$4,902 $1,755 $5,059

$5,150 $1,838 $5,299

$54

$157

(3)

(8)

$51

$149

TRUTH-IN-MILLAGE PROCESS

Florida Statute 200.065, entitled "Method of Fixing Millage," establishes specific guidelines that must be used by all local government entities in setting millage its millage (property tax) rates. Under the Statute, the City is required, within 35 days of receipt of the "Certification of Taxable Value" (received July 1, 2025), to advise the Miami-Dade County Property Appraiser of the Total General millage rate proposed, the calculated “rolled-back” rate, and the date, time, and place of the first public hearing to consider the proposed millage rates and budgets for FY 2026. The required Voted Debt Service millage rate must also be set at the same time as the Total General millage rate.

Maximum Millage Determination

The FY 2026 Total General millage rate is proposed at 5.8702 mills. Based on the 2025 Certified Taxable Values that were received from the Miami-Dade County Property Appraiser on July 1, 2025, the proposed levy of 5.8702 mills, which includes the recommended realignment of the reduction in the Voted Debt Service millage to the City’s dedicated CRR and PayGo millage rates for FY 2026, would generate approximately $299.6 million in General Fund property tax revenues, which is an increase of approximately $21.4 million over the budgeted FY 2025 General Fund property tax revenues of $278.2 million (excludes the City Center Redevelopment Area and North Beach Community Redevelopment Area).

Adoption of the Total General millage rate of 5.8702 mills proposed for FY 2026, therefore, requires a two-thirds approval (5 of 7 votes) by the Mayor and City Commission per the State of Florida’s Truth-in-Millage (TRIM) requirements.

By August 4, 2025, taxing authorities are required to certify the proposed millage rates to the Miami-Dade County Property Appraiser. The millage rates proposed will be included in the TRIM notices that will be mailed by the Property Appraiser by August 24, 2025. The purpose of the TRIM notice is to notify property owners of how much their property taxes could potentially increase or decrease, and which governmental entity is responsible for the taxes levied.

After setting the proposed millage rates for FY 2026, the Mayor and City Commission may, at any time prior to final adoption, lower the proposed millage rates throughout the remainder of the budget development process until the final millage rates are adopted by the Mayor and City Commission at the second public hearing scheduled to be held on Tuesday, September 30, 2025, at 5:01 p.m.

First Public Hearing

The first public hearing on the proposed operating millage rate and budget for FY 2026 must be held no later than 80 days, or earlier than 65 days, from the start of the TRIM calendar (July 1 st ). Other requirements are:

1. The public hearing cannot be scheduled on a Sunday or on those days utilized by Miami- Dade County or the Miami-Dade County School Board for their public hearings 2. The public hearing must be held after 5:00 P.M., if on a day other than Saturday 3. The principal taxing authority (City of Miami Beach) must adopt its tentative millage rate prior to adopting its tentative annual budget

Based on these requirements, the first public hearing must be held between September 3, 2025 and September 18, 2025. The following dates are unavailable for the following reasons:

September 4 th September 7 th and 14 th September 10 th

Miami-Dade County 1 st Public Hearing Sundays Miami-Dade County School Board 2 nd Public Hearing

September 18 th Miami-Dade County 2 nd Public Hearing Of the remaining days available, it is recommended that the first public hearing be held on Wednesday, September 17, 2025, at 5:01 P.M., in the City Commission Chambers at 1700 Convention Center Drive, 3 rd Floor, Miami Beach, Florida 33139.

Second Public Hearing

The second public hearing to adopt the final millage rate and budget for FY 2026 must be held no later than 100 days, or earlier than 97 days, from the start of the TRIM calendar (July 1 st ). In addition, it must be advertised no later than 15 days after the first public hearing and must be held two (2) to five (5) days after the advertisement appears in the newspaper.

For this reason, the second public hearing is recommended to be held on Tuesday, September 30, 2025, at 5:01 p.m., in the City Commission Chambers at 1700 Convention Center Drive, 3 rd Floor, Miami Beach, Florida 33139.

FISCAL IMPACT STATEMENT

See analysis above.

Does this Ordinance require a Business Impact Estimate? (FOR ORDINANCES ONLY)

If applicable, the Business Impact Estimate (BIE) was published on: See BIE at: https://www.miamibeachfl.gov/city-hall/city-clerk/meeting-notices/

FINANCIAL INFORMATION

See analysis above.

CONCLUSION

The Administration recommends that the Mayor and City Commission adopt the attached Resolution authorizing the City Manager to transmit the proposed operating millage rate, the required debt service millage, the calculated “rolled-back” rate, and the date, time, and place of the first public hearing to consider the proposed millage rates and budgets for FY 2026 to the Miami-Dade County Property Appraiser.

EC/JDG/TOS/RA

Applicable Area

Citywide

Was this Agenda Item initially requested by a lobbyist which, as defined in Code Sec. 2-481, includes a principal engaged in lobbying? No

If so, specify the name of lobbyist(s) and principal(s):

Department

Management and Budget

Sponsor(s)

Co-sponsor(s)

Condensed Title

Set Proposed FY 2026 Millage Rate/Debt Service Rate and Rolled Back Rate. OMB

Previous Action (For City Clerk Use Only)