R7A - Adopt 5.8702 Mills, 6.5% Over Rollback

Resolutions - R7 A

R7 A A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, ADOPTING: 1) THE FINAL AD VALOREM MILLAGE OF 5.8702 MILLS FOR FISCAL YEAR 2026 FOR GENERAL OPERATING PURPOSES, WHICH IS SIX AND FIVE TENTHS PERCENT (6.5%) MORE THAN THE "ROLLED- BACK" RATE OF 5.5114 MILLS; AND 2) THE DEBT SERVICE MILLAGE RATE OF 0.2779 MILLS. Applicable Area:

COMMISSION MEMORANDUM

DATE:

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) The Final Adopted Millage Rates for Fiscal Year (FY) 2026:

The first public hearing on the FY 2026 tentative millage rates and budgets was held on September 17, 2025. The millage rates reflected herein are those which were tentatively adopted by the Mayor and City Commission at the first public hearing.

BACKGROUND/HISTORY

Florida Statutes, Section 200.065, requires that at the second public hearing to adopt the final tax rate and budget, the Mayor and City Commission proceed in the following specific manner:

1.

Adopt a final ad valorem millage rate for FY 2026 general operating purposes. This is accomplished by adopting a Resolution which includes the percentage increase or decrease over the "rolled-back" rate and the required FY 2026 debt service millage rate.

State statute requires that only the title be read aloud.

2.

Adopt a final general operating budget for FY 2026, which includes the budgets for the General, Enterprise, Internal Service, Special Revenue, and General Obligation (G.O.) Bond Debt Service Funds, as well as the City’s Tax Increment Financing (TIF) portion of the City Center Redevelopment Area and North Beach Community Redevelopment Area. This is accomplished by adopting a companion Resolution (see accompanying City Budget Agenda Item).

ANALYSIS

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

MILLAGE RATES

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 an 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 FY 2026 General millage rate 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.

Unfunded Capital Needs

As presented by the Administration at the Finance and Economic Resiliency Committee (FERC) Budget Briefings on June 13, 2025 and July 11, 2025, and the first public hearing on September 17, 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 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.

The Administration recommended that the available funding be appropriated in FY 2026, which would further increase the reduction in the FY 2026 Voted Debt Service millage rate by 0.0066 mills, from 0.0114 mills to 0.0180 mills, and realign the additional decrease in the Voted Debt Service millage to the City’s dedicated PayGo millage rate. This resulted in an estimated additional increase in dedicated PayGo funding of approximately $0.3 million.

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 0.2779 mills for FY 2026, which is 0.0180 mills less than the adopted FY 2025 Voted Debt Service millage rate of 0.2959 mills.

The final Total Combined millage rate for FY 2026, if adopted, would remain flat at 6.1481 mills, as summarized in the table below.

FY 2025 Adopted FY 2026 Proposed Increase/ (Decrease)

Millage Rates

These recommendations, along with others to allocate additional funding for capital in the FY 2026 budget that were approved by the FERC at the July 11, 2025 Budget Briefing and the Mayor and City Commission at the first public hearing on September 17, 2025, 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 $19.8 million, or 4.1%, of the FY 2026 General Fund budget. With these additional capital dollars, the Administration recommended funding the most critical unfunded capital project needs that were also approved by the FERC at the July 11, 2025 Budget Briefing and the Mayor and City Commission at the first public hearing on September 17, 2025.

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 taxable value of a homesteaded 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.

In addition, on November 5, 2024, voters approved an amendment (Amendment 5), modifying the Florida constitution to adjust one of the two $25,000 homestead property tax exemptions annually for inflation, starting in 2025. This means the exemption amount will increase each year based on the Consumer Price Index (CPI).

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 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 FY 2026 Total Combined millage rate of 6.1481 mills would result in an increase of approximately $51 for a median homesteaded property, while the impact for an 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

$1,701

$1,787

General

Voted Debt

FY 2025

FY 2026

City of Miami Beach:

General

Voted Debt

Total Miami Beach

$ Changes in Taxes:

Total Miami Beach

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

Non-Homesteaded Properties

The annual increase in the assessed taxable value of a non-homesteaded property is capped at 10% (excluding the School Board portion). While the average citywide increase in property values is 6.9%, the value of some individual properties may increase up to, but not more than 10% (excluding the School Board portion of the property tax bill). However, an individual property owner may see an increase of more than 10% if there is a change in ownership of a capped property resulting in a reset of the cap. Another factor, if applicable, would be the value of new construction that can also contribute to a property value increase of more than 10%.

OVERLAPPING MILLAGE RATES

Property owners in the City of Miami Beach also pay property taxes that are levied by Miami- Dade County, the Miami-Dade County School Board, the Children’s Trust, the South Florida Water Management District, Okeechobee Basin, Everglades Project, and the Florida Inland Navigational District (FIND). For FY 2026, these taxing authorities represent 67.3% of a Miami Beach property owner’s ad valorem tax bill.

The current FY 2026 countywide and library millage rates for Miami-Dade County remained flat at 4.5740 mills and 0.2812 mills, respectively, while the debt service millage rate for Miami-Dade County decreased by 0.0100 mills from 0.4271 to 0.4171 mills. The millage rate for the Miami- Dade School Board increased by 0.0310 mills from 6.6020 to 6.6330 mills. The Children’s Trust millage rate decreased by 0.0362 mills from 0.5000 to 0.4638 mills. The millage rates for the South Florida Water Management District, Okeechobee Basin, Everglades Project, and Florida Inland Navigational District, combined, remained flat at 0.2589 mills.

The City of Miami Beach portion of the ad valorem tax bill represents 32.7% of the total ad valorem tax bill for FY 2026. It is important to note that Miami-Dade County’s current FY 2026 Total Combined millage rate of 5.2723 mills is 1.1137 mills, or 17.4%, less than Miami-Dade County’s total FY 2007 millage rate of 6.3860 mills, and the School Board’s FY 2026 millage rate of 6.6330 mills is 1.4720 mills, or 18.2%, less than the FY 2007 School Board millage of 8.1050 mills.

By comparison, the City’s FY 2026 total combined millage rate of 6.1481 mills is 1.5249 mills, or 19.9%, less than the City’s total FY 2007 millage rate of 7.6730 mills. These differences are a direct result of the City’s continuing effort to keep millage rates as low as possible.

A summary of the millage rate changes by taxing authority is provided in the table below.

% of FY 2007 Total

FY 2007

FY 2025

Proposed FY 2026

OVERLAPPING TAX MILLAGE

City of Miami Beach

General Millage

Voted Debt Service

Subtotal

Miami Dade County

Debt Service

Subtotal

Total

IMPACT OF COMBINED TAX RATES ON HOMESTEADED PROPERTIES

Based on last year’s values from the Miami-Dade County Property Appraiser as of July 1, 2024, the median homesteaded property value in the City of Miami Beach was $290,600 while the average homesteaded property value was $837,571. Applying the current FY 2026 millage rates for all taxing authorities to the median and average homesteaded values for an existing homesteaded property in the City of Miami Beach that was not sold and/or did not have any improvements or additions completed in the last year results in a combined property tax increase of approximately $152 for the median and $443 for the average homesteaded property in the City of Miami Beach.

A median value homesteaded property would pay approximately $5,614 for all taxing authorities combined, while an average value homesteaded property would pay approximately $16,183 combined. Of all the taxing authorities, the highest component is the Miami-Dade School Board at $1,983 for a median value homesteaded property and $5,717 for an average value homesteaded property in the City of Miami Beach, which represents approximately 35.3% of the total combined tax bill.

The following table provides a summary of changes in the property taxes levied for an existing homesteaded property that has not been sold and/or had any improvements or additions completed in the last year using the current FY 2026 millage rates by taxing authority.

Impact on Homesteaded Properties

FY 2025

FY 2026

$149

$42

$120

City of Miami Beach:

General

Voted Debt

Total Miami Beach

Other

Total Combined

$ Changes in Taxes:

City of Miami Beach

Total Miami Beach

Miami-Dade County

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

As with the City of Miami Beach millage rates, the impacts of the combined millage rates of other taxing authorities on non-homesteaded properties are based on individual property values.

Historical Perspective

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

Millage Rate History

6.6000

6.4539

6.3477

6.4000

0.2884

0.2568 6.1163

6.2000

6.0237

0.1083

0.1083

5.9123 5.8888 5.8888 5.8888

6.0000

0.2529

0.2295

0.2031 0.1796 0.1664 0.1600 0.1519 0.1519 0.1886 0.2066 0.0235 0.0235 0.0990 0.0990 0.0990 0.0990 0.1083

0.2031 0.1796 0.1664 0.1600 0.1519 0.1519 0.1886 0.2066 0.0235 0.0235 0.0990 0.0990 0.0990 0.0990 0.1083 0.1083 5.8000

0.1083

5.6000

6.0572

5.9826

5.4000

5.7551

5.6857 5.6989 5.6298 5.6298 5.6298 5.6636 5.6636 5.6636 5.6636 5.6636

5.6859

5.6009

5.2000

5.0000

FY 2016

FY 2017

FY 2012

FY 2013

FY 2014

FY 2015

FY 2018

Operating Millage

Capital Millage (PayGo & CRR)

*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

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 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

After setting the proposed millage rates, the Mayor and City Commission may, at any time prior to final adoption, lower the proposed millage rates. However, increasing the proposed millage rates may only be accomplished by completing an expensive mailing and advertising process to every property owner in the City of Miami Beach. The City’s proposed millage rates, as well as those of other taxing authorities, will be included in the Truth-in-Millage (TRIM) notice sent to each property owner in the City of Miami Beach by the Miami Dade County Property Appraiser by August 24, 2025.

For FY 2026, the Total General millage rate is 5.8702 mills. Based on the 2025 Certified Taxable Values received from the Miami-Dade County Property Appraiser as of July 1, 2025, the levy proposed, which includes the recommended realignment of the reduction in the Voted Debt Service millage to the City’s dedicated CRR and PayGo millage rates, 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 (this excludes the City Center Redevelopment Area and North Beach Community Redevelopment Area).

6.1481 6.1481 6.1481

6.0221 6.0515 6.0515 6.0515

0.3326 0.2959 0.2779

0.2889 0.2360 0.2933 0.3227

FY 2019

FY 2020*

FY 2021

FY 2022

FY FY FY 2023 2024** 2025

FY 2026

Voted Debt Service (G.O. Bonds)

Adoption of the FY 2026 Total General Operating millage rate of 5.8702 mills, 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.

FISCAL IMPACT STATEMENT

See the information provided 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 the information provided above.

CONCLUSION

The Administration recommends that the Mayor and City Commission adopt the attached Resolution, which sets the final Total General and Voted Debt Service millage rates at 5.8702 mills and 0.2779 mills, respectively, for FY 2026.

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

5:01 p.m. 2nd Rdg, Adopt Final Ad Valorem Millage for Gen. Operating Purposes. OMB

Previous Action (For City Clerk Use Only)

First Reading Public Hearing on 9/17/2025 - R7 C