R7B - Adopt Final Budgets for Fy2026 Funds

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A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, ADOPTING THE FINAL BUDGETS FOR THE GENERAL, G.O. DEBT SERVICE, CITY CENTER RDA AD VALOREM TAXES, NORTH BEACH CRA AD VALOREM TAXES, ENTERPRISE, INTERNAL SERVICE, AND SPECIAL REVENUE FUNDS FOR FISCAL YEAR 2026.

September 30, 2025

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Resolutions - R7 B

R7 B A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, ADOPTING THE FINAL BUDGETS FOR THE GENERAL, G.O. DEBT SERVICE, CITY CENTER RDA AD VALOREM TAXES, NORTH BEACH CRA AD VALOREM TAXES, ENTERPRISE, INTERNAL SERVICE, AND SPECIAL REVENUE FUNDS FOR FISCAL YEAR 2026. Applicable Area:

TO:

Honorable Mayor and Members of the City Commission

FROM:

Eric Carpenter, City Manager

DATE:

September 30, 2025

TITLE:

RECOMMENDATION

The Administration recommends that the Mayor and City Commission adopt the attached Resolution which sets the final budgets for the General, General Obligation (G.O.) Debt Service, City Center Redevelopment Agency (RDA) Ad Valorem Taxes, North Beach Community Redevelopment Agency (CRA) Ad Valorem Taxes, Enterprise, Internal Service, and Special Revenue Funds for Fiscal Year (FY) 2026.

As summarized below, the City’s total final operating budget for FY 2026, net of interfund transfers, is $911.7 million which includes the General, G.O. Debt Service, Enterprise, and Special Revenue Funds budgets, as well as the City’s contributions to the City Center Redevelopment and North Beach Community Redevelopment Areas. Overall, this represents an increase of $39.3 million, or 4.5%, over the City’s total operating budget of $872.4 million that was adopted for FY 2025.

FY 2025 Adopted

General Fund G.O. Debt Service City Center RDA Ad Valorem Taxes North Beach CRA Ad Valorem Taxes Enterprise Funds Special Revenue Funds Total All Funds Less Transfers Grand Total All Funds Millage
$456,164,000 16,298,000 33,909,000 1,396,000 299,757,000 146,792,000 $954,316,000 (81,938,000) $872,378,000 mills

Internal Service Funds*

$136,208,000

*Presented for informational purposes only; costs allocated within the General, Special Revenue, and Enterprise Funds, etc.

BACKGROUND/HISTORY

As outlined in the companion General Operating Millage Agenda Item, Section 200.065, Florida Statutes, specifies the manner in which the City’s budgets must be adopted. First, the final millage rate for both general operating and debt service is adopted, then immediately thereafter, the final budgets by fund are adopted.

The Resolution adopting the final budgets for the General, G.O. Debt Service, City Center RDA Ad Valorem Taxes, North Beach CRA Ad Valorem Taxes, Enterprise, Internal Service, and Special Revenue Funds for FY 2026 is, therefore, presented to you at this time for final adoption.

COMMISSION MEMORANDUM

5:01 p.m. Second Reading Public Hearing

$ Variance	% Variance	FY 2026 Budget
$483,216,000 16,296,000 36,344,000 1,697,000 312,047,000 144,887,000 $994,487,000 (82,751,000) $911,736,000	$27,052,000 (2,000) 2,435,000 301,000 12,290,000 (1,905,000) $40,171,000 (813,000) $39,358,000	5.9% (0.01%) 7.2% 21.6% 4.1% (1.3%) 4.2% 1.0% 4.5%
$146,327,000	$10,119,000	7.4%

ANALYSIS

As detailed in the Letter to Commission (LTC #269-2025) dated July 2, 2025 and summarized below, the City’s overall taxable property values based on the 2025 Certified Taxable Values provided by the Miami-Dade County Property Appraiser as of July 1, 2025 increased overall by 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. Within the overall increase, however, property values in 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

$56,396,947,099

City Center Redevelopment Area

$6,709,447,439

North Beach Community Redevelopment Area

1,844,424,002

Total (Net of RDA & CRA)

$47,843,075,658

July 2024 Certified	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%

Property Values:

Existing Values

New Construction

Total

It is important to note that while the City’s overall taxable values increased by $3.9 billion, or 6.9%, compared to the previous year, overall taxable property values within the City since FY 2023 have been increasing at a diminishing rate, as reflected in the overall property value trend chart below.

Overall Property Value Trend

35.0%

30.3%

30.0%

25.0%

18.1%

20.0%

13.3%13.0%

15.0%

9.9%

6.9%

10.0%

5.0%

0.2%

-0.6%

0.0%

-8.2% -10.5%

-5.0%

-10.0%

-15.0%

FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026

The overall increase in values of $3.9 billion, or 6.9%, is comprised of $2.9 billion, or 5.1%, increase in existing values and a $1.0 billion increase in new construction values.

11.2%10.8%

9.4%

7.8%

6.9%

4.0% 3.1% 4.1%

0.3%

Existing Property Value Trend

30.0% 25.8%

25.0%

16.8%

20.0%

12.3%

15.0%

9.3%

6.5%

10.0%

4.5%

5.0%

-0.6%

-1.0%

0.0%

-5.0%

-12.7% -14.8%

-10.0%

-15.0%

-20.0%

FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026

New Construction Value Trend

$2.0

$1.8

$1.6

$1.4

$1.2

$ Billion

$1.0

$0.8

$0.6

$0.3

$0.4

$0.2

$0.1 $0.1 $0.1

$0.2

FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026

GENERAL FUND BUDGET

The General Fund is the primary source of funding for many City services that are provided such as Police and Fire, as well as Parks and Recreation, Public Works, Code Compliance, among other services. Revenues that fund these services and the various other City services in the General Fund are comprised of ad valorem property taxes, franchise and utility taxes, business license and permit fees, revenue sharing from various statewide taxes, intergovernmental revenues from Miami-Dade County, user fees for services, fines, rents and concession fees, and

9.5% 10.3% 8.8%

9.2%

5.3%

5.1%

3.5%

2.3%

0.8%

-0.2%

$1.3

$1.2

$1.0

$0.9

$0.7

$0.3

$0.2

interest income. Additionally, the City’s 2% Resort Tax Fund contributes funding annually for tourism-related services provided by General Fund departments.

At the July 11, 2025 Finance and Economic Resiliency Committee (FERC) Budget Briefing, the Mayor and City Commission were briefed regarding the preliminary FY 2026 General Fund budget. The preliminary budget represents the cost of providing the same level of services as in the prior year and serves as the baseline of funding for the annual budget development process.

General Fund

Revenues

Expenditures

Surplus/Gap)

The Administration also identified and recommended a combination of budget reductions/efficiencies, one-time and recurring expenditure enhancements, as well as revenue and expenditure refinements, which, if endorsed by the FERC, would have resulted in a balanced General Fund budget for FY 2026.

FY 2026 General Fund Balancing Strategies

Preliminary Surplus/(Gap)

Recommended Recurring Reductions/Efficiencies

Recommended “One-Time” Expenditure Enhancements

Recommended Recurring Expenditure Enhancements

Revenue Refinements

Expenditure Refinements

Net Surplus/(Gap)

The FERC endorsed most of the Administration’s recommendations summarized above and proposed several additional reductions/efficiencies and expenditure enhancements to be included in the FY 2026 General Fund budget.

Adjustments Subsequent to Budget Briefings

Following the FERC’s recommendations from the July 11, 2025 Budget Briefing and the finalization of the proposed FY 2026 General Fund budget, the Administration made further updates and refinements to the FY 2026 General Fund budget. These updates are detailed further below.

FY 2026 Based on July 1 st Values

$478,367,000

477,513,000

$854,000

1,343,000

(1,886,000)

(2,485,000)

4,567,000

(2,393,000)

$ -

FY 2026 General Fund Balancing Strategies

Surplus/(Gap) as of July 11, 2025 FERC Budget Briefing

Recommended Recurring Reductions/Efficiencies

Recommended Recurring Expenditure Enhancements

Revenue Refinements

Expenditure Refinements

Net Surplus/(Gap)

Recommended Recurring General Fund Reductions/Efficiencies – $292,000  At the July 11, 2025 Budget Briefing, the FERC recommended the following adjustments to the recurring General Fund reductions/efficiencies: o Eliminate the Employee Wellness Program – $190,000 (General Fund Impact) o Eliminate additional Commission Aide position of one Commissioner – $120,000 o Withdraw recommendation to reduce funding for senior events at the Miami Beach Convention Center from four events per year to three – ($18,000)

Recommended Recurring General Fund Expenditure Enhancements – ($261,000)  At the July 11, 2025 Budget Briefing, the FERC recommended funding for the following recurring General Fund enhancements: o Extension of Wraparound Palm Tree Lighting on 71 st Street to the East of Normandy Fountain and Collins Avenue – ($129,000) o Sanitation Fund Contribution for Dedicated Pressure Washing Services on Lincoln Road from Washington to Collins Avenue – ($120,000)  Finalization of Recommended FY 2026 Living Wage Increase Impact – ($12,000) (General Fund Impact)

General Fund Revenue Refinements – $475,000  Adjustment in FY 2026 Resort Tax contribution to General Fund for tourism-eligible expenditures based on finalization of the proposed FY 2026 Resort Tax Budget – $316,000  Finalization of FY 2026 General Fund administrative fees based on cost allocation study – $190,000  Refinement of other miscellaneous General Fund revenues based on finalization of the proposed FY 2026 General Fund budget – ($31,000)

General Fund Expenditure Refinements – ($506,000)  Finalization of FY 2026 Internal Services Funds budgets and allocations – ($140,000)  Refinement of other miscellaneous General Fund expenditures based on finalization of the proposed FY 2026 General Fund budget – ($5,000)  Adjustment in FY 2026 General Fund budgeted set aside for reserves – ($361,000)

First Public Hearing

At the first public hearing on September 17, 2025, the Administration presented the proposed FY 2026 General Fund budget to the Mayor and City Commission, which was balanced.

In addition, several additional one-time and recurring General Fund expenditure enhancements, reductions/efficiencies, and other revenue and expenditure adjustments were presented by the

$ -

292,000

(261,000)

475,000

(506,000)

$ -

Administration. These items, which were approved by the Mayor and City Commission as part of the FY 2026 General Fund budget, are further detailed below.

FY 2026 General Fund Balancing Strategies

Surplus/(Gap) as of September 17, 2025 First Public Hearing

Recommended Recurring Reductions/Efficiencies

Recommended “One-Time” Expenditure Enhancements

Recommended Recurring Expenditure Enhancements

Revenue Refinements

Expenditure Refinements

Net Surplus/(Gap)

Recommended Recurring General Fund Reductions/Efficiencies – $3,000 • Add Back Partial Funding for Continuation of Wellness Program – ($77,000) (General Fund Portion) • Reductions in operating expenditures in the City Attorney's Office and Municipal Prosecution Program for Professional Services and Legal Fees – $80,000

Recommended “One-Time” General Fund Expenditure Enhancements – ($100,000) • Flag Football Program (based on the realignment of funding in the 2% Resort Tax budget for Wodapalooza) – ($50,000) • League Against Cancer, Inc. Grant for Mobile Mammogram Screening Services – ($25,000) • Clean Miami Beach, Inc. Grant Award – ($25,000)

Recommended Recurring General Fund Expenditure Enhancements – ($250,000) • Maintenance of Green Bicycle Lanes (requested as recurring enhancement, but recommended for funding as one-time in FY 2026) – ($100,000) • Additional funding for UNIDAD Senior Meals Services Program – ($70,000) • Jewish Community Services' Senior Transportation Program Grant (requested as recurring enhancement, but recommended for funding as one-time in FY 2026) – ($41,000) • Dedicated Mid-Size Bus Service to Enhance Transportation at Senior Centers (requested as recurring enhancement, but recommended for funding as one-time in FY 2026) – ($39,000)

General Fund Revenue Refinements – ($193,000)

Adjustment in 2% Resort Tax Contribution to General Fund – ($193,000)

General Fund Expenditure Refinements – $540,000

Adjustment in Parks and Recreation’s FY 2026 budget based on Children's Trust Grant Award – $234,000 Adjustment in set aside for budgeted General Fund reserve and stabilization – $306,000

FY 2026 GENERAL FUND BUDGET

Based on discussion and direction given at the May 27, 2025 Commission Budget Retreat, the two (2) FERC Budget Briefings that were held on June 13, 2025 and July 11, 2025, the additional

$ -

3,000

(100,000)

(250,000)

(193,000)

540,000

$ -

budget adjustments made over the summer recess, and direction given by the Mayor and City Commission at the first public hearing on September 17, 2025, the Administration proposes the following FY 2026 General Fund budget, which, if approved by the Mayor and City Commission, will result in a balanced budget that includes the expenditure enhancements and reductions/efficiencies listed below.

September 30, 2025 Budget

Revenues

$483,216,000

Expenditures

483,216,000

Surplus/(Gap)

$ -

The charts below reflect the major revenue and expenditure categories of the FY 2026 General Fund budget totaling $483,216,000.

FY 2026 GENERAL FUND REVENUES

Resort Tax Contribution 8%

Other Taxes 6%

Licenses & Permits 6%

FY 2026 Budget $483,216,000

Property Taxes 62%

Charges For Services 4%

Miscellaneous 3% Non-Operating Revenues 3% Intergovernmental 3%

Use of General Fund Reserves/Prior Year Surplus Other Revenues 1% 4%

FY 2026 GENERAL FUND EXPENDITURES

Fire 27%

FY 2026 Budget $483,216,000

Police 35%

Recommended Recurring Attachment A – $1,611,000 General Fund

After an extensive review of the submissions from departments based on discussions at the FY 2026 Commission Budget Retreat, the two (2) FERC Budget Briefings, and the first public hearing on September 17, 2025, Attachment A reflects a listing of all FY 2026 expenditure reductions/efficiencies with detailed descriptions. The recurring reductions/efficiencies summarized below reflect those recommended in FY 2026 in the General Fund.

Item

Recurring General Fund Reductions/Efficiencies

Reallocation of Three (3) Finance Department Customer Service Center Positions that provide services to the Parking Department from the General Fund to the Parking Fund

Eliminate Cashiering Window at City Hall Two (2) Full-Time Financial Analyst I Positions

Elimination of One (1) Full-Time G.O. Bond Assistant Director and One (1) Full-Time Community Info Manager Position (General Fund Portion)

Eliminate One (1) Full-Time Additional Commission Aide Position

Eliminate One (1) Full-Time Senior GIS Analyst Position

Eliminate One (1) Full-Time Customer Service Representative Position from the Customer Service Center

Reduce Asset Management Division’s Professional Services Operating Expenditures for Miscellaneous Appraisals, Assessments, Audit Leases, and Market Studies

Parks & Rec 11%

Public Works 4%

Other 23%

Expenditure	Reductions/Efficiencies	–
$ FY 2026	$ FY 2027
($232,000)	($297,000)
(151,000)	(196,000)
(147,000)	(155,000)
(120,000)	(120,000)
(103,000)	(132,000)
(103,000)	(129,000)
(100,000)	(100,000)

Reduce City Attorney's Office and Municipal Prosecution Program Professional Services Operating Expenditures for Professional Services and Legal Fees

1-3

Reduce Grants Management Division’s Operating Expenditures for Grant Consulting Services

Elimination of the Restroom Index, Sidewalk Cafe Index, and Service Shopper Index, as well as the reallocation of the Garage Indexes and Mystery Rider Index to the Parking Enterprise and Transportation Special Revenue Funds.

Reduce Funding for the Commercial Lease Subsidy Program

Eliminate Drug Prevention and Intervention, Flu Vaccine, SAT/ACT Mock Testing, and Substitute Teacher Incentive Programs

Eliminate Resident Guide Printing and Only Push Online Version

Reduce Funding for Paid College Interns

Reallocation of Full-Time Management Analyst Position Responsible for the Excellence Assessors Program Between General Fund, Sanitation, Parking, and Transportation Funds

Reduce Frequency of Update for General Fund Cost Allocation Plan from annually to every three years

Reduce Funding for Miscellaneous Parks and Recreation Programming

Reduce Funding for School Graduations Program

Impact of Internal Services Reductions/Efficiencies

Recommended “One-Time” General Fund Expenditure Enhancements – Attachment B – ($1,986,000)

After an extensive review of the enhancements requested by departments, requests originating from the City’s various Commission Committees, and direction provided by the City Commission, Attachment B reflects a listing of all FY 2026 one-time expenditure enhancements with detailed descriptions. The one-time enhancements summarized below reflect those recommended for funding in FY 2026 in the General Fund.

Item

One-Time General Fund Enhancements

Police High Visibility Overtime Detail

Flag Football Program

Park View Island Garden Project

City Resident Miami-Dade College Scholarship Program

League Against Cancer, Inc. Grant for Mobile Mammogram Screening Services

Clean Miami Beach, Inc. Grant Award

Records Storage and Retrieval Services (over 3 years)

Open Heart, Inc. Grant for Miami Beach Cancer Walk

(80,000)

(75,000)

(47,000)

(49,000)

(40,000)

(29,000)

(23,000)

(20,000)

(17,000)

(18,000)

(13,000)

(10,000)

Sub-Total	($1,323,000)	($1,499,000)
(288,000)	(267,000)
Total	($1,611,000)	($1,766,000)
$ FY 2026	$ FY 2027
$1,800,000	$ -
50,000	-
35,000	-
30,000	-
25,000	-
25,000	-
16,000	16,000
5,000	-
$1,986,000	$16,000	Total

Recommended Recurring General Fund Expenditure Enhancements – Attachment C – ($3,007,000)

Similar to the one-time expenditure enhancements, Attachment C reflects a listing of all recurring FY 2026 expenditure enhancements with detailed descriptions. The recurring enhancements summarized below reflect those recommended for funding in FY 2026 in the General Fund.

Item

Recurring General Fund Enhancements

Property and Evidence Off-Site Storage Facility Lease

Street and Sidewalk Renewal and Replacement Fund

Axon Fusus Real-Time Operations Platform

Summer Camp at South Shore Community Center

South Shore Community Center Senior Meals Program

CCTV/LPR Cameras Maintenance

Extension of Wraparound Palm Tree Lighting on 71st Street to the East of Normandy Fountain and Collins Avenue

One (1) Full-Time Fire Protection Radio Systems Administrator – (cost to be offset by new inspection fee)

Contribution to the Sanitation Fund for Dedicated Pressure Washing Services on Lincoln Road from Washington to Collins Avenue

Additional Funding for the Job Creation Incentive Program*

Maintenance of Green Bicycle Lanes*

Additional Funding for Rhythm Foundation

Janitorial Services for UNIDAD Restroom

Fire Department Mental Health and Wellness Coordinator Services*

Additional funding for UNIDAD Senior Meals Services Program

Collins Park Artist Workforce Housing (rent for ground floor sublease)

Style Saves Back-to-School Program Grant

Living Wage Increase for Contractors (General Fund Portion)

Jewish Community Services' Senior Transportation Program*

Dedicated Mid-Size Bus Service to Enhance Transportation at Senior Centers*

Advance Mobile ALPR and in Car Video Contract - Ten (10)

Funding to Continue Chess Programing

16 & 78

One (1) Full-Time Digital Media Specialist Position (General Fund Portion) – Split-funded

Impact of Internal Services Enhancements

Items with asterisk (*) were requested as recurring, but recommended for funding as one-time in FY 2026

$ FY 2026

$ FY 2027

$478,000

$501,000

360,000

371,000

300,000

200,000

257,000

317,000

175,000

150,000

129,000

26,000

121,000

109,000

120,000

100,000

99,000

96,000

80,000

70,000

63,000

65,000

60,000

63,000

41,000

39,000

35,000

20,000

10,000

13,000

Sub-Total	$2,986,000	$2,490,000
21,000	21,000
Total	$3,007,000	$2,511,000

GENERAL FUND RESERVES

The General Fund reserve as of September 30, 2024 is $114.0 million, which is the equivalent of three (3) months, or 25.0%, based on the adopted FY 2025 General Fund budget of $456.2 million. The current reserve policy for the General Fund is a requirement of two (2) months with a goal of three (3) months pursuant to Resolution No. 2024-33340 that was adopted by the City Commission on October 30, 2024. As of the fiscal year ending September 30, 2024, the City has achieved the 3 month, or 25.0%, General Fund reserve goal.

Based on the General Fund budget for FY 2026, the reserve goal for the General Fund increases by approximately $6.8 million to $120.8 million, which is the equivalent of three (3) months, or 25%, of the FY 2026 budget of $483.2 million.

Of the additional $6.8 million General Fund reserve goal based on the FY 2026 General Fund budget, approximately $3.1 million is included in the current year General Fund budget, resulting in a difference of approximately $3.7 million that will be re-evaluated as part of the year end process for FY 2025.

RESORT TAX FUND

The Resort Tax Fund is a Special Revenue Fund that consists of three main components:

1. A 2% Resort Tax that is comprised of a 2% Bed Tax and 2% Food & Beverage Tax 2. A 1% Bed Tax for Quality of Life (QOL) capital projects, transportation initiatives, and arts and culture 3. A 1% Bed Tax for the repayment of outstanding debt service for Resort Tax bonds issued as part of the most recent Convention Center renovation and expansion project, as well as funding for renewal and replacement of Convention Center assets

2% Resort Tax

At the July 11, 2025 FERC Budget Briefing, the Mayor and City Commission were briefed regarding the preliminary FY 2026 2% Resort Tax Fund budget. Based on actual 2% Resort Tax collections as of April 2025, which assumed FY 2026 Resort Tax collections remaining flat over FY 2025 projections and the offsetting expenditure adjustments that were presented, the FY 2026 2% Resort Tax budget was balanced.

2% Resort Tax

FY 2026

Revenues

$76,541,000

Expenditures

76,541,000

Surplus/(Gap)

$ -

Approach to Balance

Although the preliminary 2% Resort Tax budget that was presented at the July 11, 2025 FERC Budget Briefing was balanced, the Administration recommended a combination of one-time and recurring enhancements and reductions/efficiencies, as well as revenue and expenditure refinements that would result in a balanced 2% Resort Tax Fund budget, if approved by the FERC.

FY 2026 2% Resort Tax Balancing Strategies

Preliminary Surplus/(Gap)

Recommended Recurring Reductions/Efficiencies

Recommended “One-Time” Expenditure Enhancements

Recommended Recurring Expenditure Enhancements

Revenue Refinements

Expenditure Refinements

Net Surplus/(Gap)

The FERC endorsed most of the Administration’s recommendations summarized above and proposed certain adjustments to the recommended expenditure enhancements to be included in the FY 2026 2% Resort Tax budget.

Adjustments Subsequent to Budget Briefings

Based on the FERC’s recommendations from the July 11, 2025 Budget Briefing, items that were adopted by the Mayor and City Commission at the July 23, 2025 Commission meeting, and the finalization of the proposed FY 2026 2% Resort Tax budget, the Administration made further updates and refinements to the FY 2026 2% Resort Tax budget. These updates are detailed further below.

FY 2026 2% Resort Tax Fund Balancing Strategies

Surplus/(Gap) as of July 11, 2025 FERC Budget Briefing

Recommended Recurring Reductions/Efficiencies

Recommended “One-Time” Expenditure Enhancements

Recommended Recurring Expenditure Enhancements

Revenue Refinements

Expenditure Refinements

Net Surplus/(Gap)

Recommended Recurring 2% Resort Tax Reductions/Efficiencies – $5,000  At the July 11, 2025 Budget Briefing, the FERC recommended the following adjustments to the recurring 2% Resort Tax reductions/efficiencies: o Eliminate the Employee Wellness Program – $5,000 (Estimated 2% Resort Tax Impact)

Recommended “One-Time” 2% Resort Tax Expenditure Enhancements – $1,000,000  At the July 23, 2025 City Commission meeting, the Mayor and City Commission adopted Resolution No. 2025-33847, approving a sponsorship agreement between the City and the Greater Miami Sports Commission (FIFA Host Committee) for 2026 FIFA World Cup-related events in Miami Beach. Under the terms of the approved sponsorship agreement, the maximum cash sponsorship was reduced from $1,500,000 to $1,250,000, of which $750,000 is to be paid in the current fiscal year, resulting in a balance of $500,000 to be budgeted in FY 2026 instead of $1,500,000 that was recommended to be budgeted in FY 2026 at the July 11, 2025 FERC Budget Briefing.

$ -

879,000

(1,910,000)

(27,000)

1,665,000

(607,000)

$ -

5,000

1,000,000

25,000

(750,000)

(280,000)

$ -

Recommended Recurring 2% Resort Tax Expenditure Enhancements – $25,000  At the July 11, 2025 Budget Briefing, the FERC recommended the following adjustments to the recurring 2% Resort Tax enhancements: o Withdraw recommendation to fund the sponsorship for the South Beach Seafood Festival on a one-time basis – $25,000

2% Resort Tax Revenue Refinements – ($750,000)  Adjustment in the use of 2% Resort Tax reserves for the FIFA sponsorship agreement approved by the Mayor and City Commission at the July 23, 2025 City Commission meeting to account for the first portion of the cash sponsorship that is to be paid in the current fiscal year instead of in FY 2026.

2% Resort Tax Expenditure Refinements – ($280,000)  Finalization of FY 2026 Internal Services Funds Budgets and Allocations – ($33,000)  Adjustment in the FY 2026 Resort Tax contribution to the General Fund for tourism- eligible expenditures based on finalization of the proposed FY 2026 2% Resort Tax Budget – ($247,000)

First Public Hearing

At the first public hearing on September 17, 2025, the Administration presented the proposed FY 2026 2% Resort Tax budget to the Mayor and City Commission, which was balanced.

In addition, several additional one-time and recurring 2% Resort Tax expenditure enhancements, reductions/efficiencies, and other revenue and expenditure adjustments were presented by the Administration. These items, which were approved by the Mayor and City Commission as part of the FY 2026 2% Resort Tax budget, are further detailed below.

FY 2026 2% Resort Tax Balancing Strategies

Surplus/(Gap) as of September 17, 2025 First Public Hearing

Recommended “One-Time” Expenditure Enhancements

Recommended Recurring Expenditure Enhancements

Expenditure Refinements

Net Surplus/(Gap)

Recommended “One-Time” 2% Resort Tax Expenditure Enhancements – ($218,000) • July 4 th Semi-Quincentennial Celebration – ($93,000) • Paraiso Miami Swim Week Sponsorship – ($75,000) • "Doors to Freedom" Art Production – ($50,000)

Recommended Recurring 2% Resort Tax Fund Expenditure Enhancements – ($25,000) • South Beach Seafood Festival Sponsorship (requested as recurring enhancement, but recommended for funding as one-time in FY 2026) – ($25,000)

$ -

(218,000)

(25,000)

243,000

$ -

2% Resort Tax Expenditure Refinements – $243,000

• •

Adjustment in 2% Resort Tax Contribution to General Fund – $193,000 Adjustment in FY 2026 allocation for Wodapalooza from $800,000 to $750,000 to fund Flag Football Program enhancement in the Parks and Recreation Department budget – $50,000

FY 2026 2% RESORT TAX BUDGET

Based on discussion and direction given at the May 27, 2025 Commission Budget Retreat, the two (2) FERC Budget Briefings that were held on June 13, 2025 and July 11, 2025, as well as additional budget adjustments made over the summer recess, and direction given by Mayor and City Commission at the first public hearing on September 17, 2025, the Administration proposes the following FY 2026 2% Resort Tax budget, which, if approved by the Mayor and City Commission, will result in a balanced budget that includes the expenditure enhancements and reductions/efficiencies listed below.

September 30, 2025 Budget

Revenues

Expenditures

Surplus/(Gap)

Recommended Recurring 2% Resort Tax Expenditure Reductions/Efficiencies – Attachment A – $881,000

Item

Recurring 2% Resort Tax Reductions/Efficiencies

Reduction in Police High-Impact Overtime for Memorial Day

Reduction in Holiday Lighting and Decorations

Reduction in Code High Impact Overtime for Halloween, Memorial Day, and July 4 th

Elimination of the Sidewalk Cafe Index

Reduction in Lummus Park Activations

Reduce frequency of Update for Resort Tax Cost Allocation Plan from Annually to Every Three Years

Reduction in Miscellaneous Inspector General Operating Expenditures

Impact of Internal Services Reductions/Efficiencies

$75,791,000

75,791,000

$ -

$ FY 2026

$ FY 2027

($600,000)

(100,000)

(63,000)

(54,000)

(56,000)

(45,000)

(8,000)

(4,000)

Sub-Total	($874,000)	($876,000)
(7,000)	(7,000)
Total	($881,000)	($883,000)

Recommended “One-Time” 2% Resort Tax Expenditure Enhancements – Attachment B – ($1,128,000)

Item

One-Time 2% Resort Tax Enhancements

2026 FIFA World Cup Sponsorship

March Fitness Festival Large Scale Event

July 4th Semi-Quincentennial Celebration

Paraiso Miami Swim Week Sponsorship

"Doors to Freedom" Art Production

Women's History Month

Recommended Recurring 2% Resort Tax Expenditure Enhancements – Attachment C – ($27,000)

Item

Recurring Enhancements (2% Resort Tax)

South Beach Seafood Festival Sponsorship*

Living Wage Increase for Contractors (2% Resort Tax Portion)

Impact of Internal Services Enhancements

Items with asterisk (*) were requested as recurring, but recommended for funding as one-time in FY 2026

RESORT TAX RESERVES

The 2% Resort Tax reserve as of September 30, 2024 is $38.3 million, which is the equivalent of six (6) months, or 50%, based on the adopted FY 2025 2% Resort Tax budget of $76.6 million. The current reserve policy for the 2% Resort Tax budget is a minimum of two (2) months with a goal of six (6) months pursuant to Resolution No. 2019-30664 that was adopted by the City Commission on January 16, 2019. As of the fiscal year ending September 30, 2024, the City has achieved the six (6) month, or 50%, Resort Tax Fund reserve goal.

$ FY 2026

$ FY 2027

$500,000

$ -

400,000

93,000

75,000

50,000

10,000

$1,128,000	$ -	Total
$ FY 2026	$ FY 2027
$25,000	$ -
1,000	1,000
Sub-Total	$26,000	$1,000
1,000	1,000
Total	$27,000	$2,000

Based on the FY 2026 2% Resort Tax budget, the updated reserve goal for the 2% Resort Tax Fund decreases by approximately $0.4 million to $37.9 million, which is the equivalent of six (6) months, or 50%, of the FY 2026 2% Resort Tax budget of $75.8 million.

The City’s 2% Resort Tax reserves will be re-evaluated again as part of the year-end process for FY 2025.

FY 2026 ENTERPRISE FUNDS BUDGETS

The City accounts for those goods and services provided by a particular department to external users for which a fee is charged as Enterprise Funds. The City’s Water, Sewer, Storm Water, Building, Parking, Convention Center, and Sanitation operations comprise this category of proprietary funds. The FY 2026 Enterprise Funds budgets total $312.0 million. This represents an increase of approximately $12.3 million, or 4.1%, from the adopted FY 2025 Enterprise Funds budgets totaling $299.7 million, primarily due to the following:

Water reflects an overall increase of approximately $2.7 million, or 5.8%, primarily due to an increase in the costs for wholesale water purchased from Miami-Dade County’s Water and Sewer Department (WASD) based on projected consumption and an increase in the rates for wholesale water purchased in FY 2026 from WASD. In addition, the FY 2026 budget includes an increase in the budgeted set aside for future renewal and replacement of capital assets and reserves for future projects that is based on projected revenues in excess of expenditures for FY 2026.

Sewer reflects an overall increase of approximately $4.8 million, or 7.5%, primarily due to an increase in the costs for sanitary sewer treatment services provided by Miami-Dade County’s Water and Sewer Department (WASD) based on projected usage. In addition, the FY 2026 budget includes an increase in the budgeted set aside for future renewal and replacement of capital assets and reserves for future projects that is based on projected revenues in excess of expenditures for FY 2026.

Storm Water reflects an overall increase of approximately $1.2 million, or 3.0%, primarily due to an increase in the budgeted set aside for future renewal and replacement of capital assets and reserves for future projects that is based on projected revenues in excess of expenditures for FY 2026.

Building reflects an overall increase of $2.4 million, or 12.3%, primarily due to personnel and technology-related enhancements that are included as part of the FY 2026 budget to enhance and streamline services in the Building Department.

Parking reflects an overall increase of approximately $3.2 million, or 5.9%, primarily due to an increase in the budgeted set aside for reserves for future projects that is based on projected revenues in excess of expenditures for FY 2026.

The Convention Center Fund reflects an overall decrease of $2.0 million, or 4.2%, primarily due to a decrease in the City’s projected FY 2026 Convention Development Tax (CDT) bonus from Miami-Dade County pursuant to Resolution No. 2014-28836 and the Amended and Restated Interlocal Agreement, resulting in a decrease in the budgeted set aside for future renewal and replacement of capital assets.

FY 2026 INTERNAL SERVICE FUNDS BUDGETS

The City accounts for goods and services provided by one department to other departments citywide on a cost reimbursement basis as Internal Services Funds. Central Services, Facilities and Fleet Management, Information Technology, Risk Management, Medical and Dental, and the Office of the Inspector General comprise this category of proprietary funds. The FY 2026 budgets for the Internal Services Funds total $146.3 million, which is an increase of $10.1 million, or 7.4%, over the total budgets for the Internal Services Funds adopted for FY 2025 of $136.2 million, primarily due to the following:

Central Services reflects an overall decrease of $13,000, or 1.1%, primarily due to one- time expenditures that were budgeted in FY 2025 based on the scheduled replacement of vehicles, machinery, and equipment.

Facilities Management reflects an overall decrease of $370,000, or 2.8%, primarily due to one-time expenditures that were budgeted in FY 2025 based on the scheduled replacement of vehicles, machinery, and equipment.

Fleet Management reflects an overall increase of $2.0 million, or 10.2%, primarily due to the costs associated with vehicles, machinery, and equipment that are scheduled for replacement in FY 2026.

Information Technology reflects an overall increase of $1.3 million, or 6.5%, primarily due to increases in the renewals to maintain public safety and citywide enterprise software licenses.

Risk Management reflects an overall increase of approximately $2.2 million, 7.9%, primarily due to projected increases in workers’ compensation and liability payments based on claims experience and actuarial projections.

The Medical and Dental Fund budget increased by approximately $4.8 million, or 9.2%, primarily due to projected increases in paid medical and prescription claims based on current year actuarial projections and claims experience.

The Office of the Inspector General reflects an overall increase of $220,000, or 11.3%, primarily due to increases in professional services related to future audits and investigations, including outside audit assistance, technical engineering support, and contract oversight.

Internal Service costs are mostly allocated to the General Fund and Enterprise Fund departments, as well as Special Revenue Funds. The Risk Management Fund does, however, reimburse the General Fund for the cost of legal services provided.

Attachments A, B, and C reflect a complete list with detailed descriptions of all the FY 2026 reductions/efficiencies, one-time expenditure enhancements, and recurring expenditure enhancements, respectively, requested for the Enterprise, Internal Service, and Special Revenue Funds budgets, as well as those recommended in the respective FY 2026 budgets.

USE OF ONE-TIME REVENUES FOR RECURRING EXPENDITURES

The City’s current policy regarding the use of one-time revenues states that “the City of Miami Beach will use one-time, non-recurring revenue for capital expenditures or one-time expenditures and not subsidize recurring personnel, operations, and maintenance costs.” The FY 2026 budgets for the Building, Sanitation, and Sustainability Funds require the use of fund balance for recurring operating expenditures as set forth in the budgets presented for FY 2026.

As a result, it is recommended that the Mayor and City Commission waive this policy, as adopted by Resolution No. 2006-26341, providing for the one-time use of fund balance to be utilized for the FY 2026 Building, Sanitation, and Sustainability Fund budgets for recurring personnel, operations, and maintenance costs. The Administration continues to explore and recommend further actions to ensure that these funds move toward being structurally balanced.

FEE SCHEDULE

On September 25, 2019, the Mayor and City Commission adopted Ordinance No. 2019-4299, which established an annual adjustment for certain specified City fees and charges to reflect increases indexed to the Consumer Price Index (CPI). It also established that certain other fees and charges shall be subject to adjustment as otherwise provided in the City code.

This fiscally responsible policy ensures that the City’s fee structure remains aligned with inflationary trends and adequately recovers the costs of delivering high-quality services to residents and customers. From a best practices standpoint, smaller incremental increases over time help avoid future "rate shock" and large "catch up" rate increases and are looked upon favorably by credit rating agencies which will help position the City for higher credit ratings and lower interest rates.

On November 20, 2024, the Mayor and City Commission adopted Ordinance No. 2024-4657, which approved several changes to the original 2019 Ordinance such as commencing in FY 2026, all applicable fees would be tied to the Consumer Price Index (CPI) for annual adjustments, with a cap of 3%, except for certain exclusions. Additionally, it established that parking fees would follow the CPI adjustment with the same 3% cap, and fees would be rounded to the nearest cent, replacing the previous rounding to the nearest dollar. It also removed the practice of adjusting certain parking fees every five years.

Applicable City fees that are indexed to the Consumer Price Index (CPI) for annual adjustments are recommended to be adjusted by 2.8% as part of the proposed FY 2026 budget. This is based on the December 2024 Consumer Price Index for the Miami-Fort Lauderdale-West Palm Beach, Florida area, as published by the Bureau of Labor Statistics of the United States Department of Labor and represents approximately $5.3 million in revenues that are included across the City’s various funds in FY 2026, including approximately $1.3 million in the General Fund, $1.3 million in the Parking Funds, $1.1 million in the Water and Sewer Fund, $1.1 million in the Storm Water Fund, and $0.5 million in the Building Fund.

Attachment D reflects a listing of all applicable City fees, including those to be adjusted by 2.8% in FY 2026 in accordance with Resolution No. 2025-33471 that was adopted by the Mayor and City Commission on February 3, 2025. This Resolution directed the Administration to include a comprehensive list detailing all increases to City fees that are scheduled to take effect in the upcoming fiscal year.

ADDITIONAL REDUCTIONS

At the July 11, 2025 FERC Budget Briefing, the Administration was directed to compile and present additional programs and/or positions that could be considered for reduction and/or elimination as part of the FY 2026 budget.

At the first public hearing on September 17, 2025, the Administration presented a detailed listing of additional programs and/or positions that could be considered for reduction and/or elimination to the Mayor and City Commission. The Mayor and City Commission recommended certain expenditure reductions in the City Attorney’s Office that would not significantly impact core services.

Attachment E builds upon the recommended reductions/efficiencies that are detailed in Attachment A. It is important to note that the Administration is not recommending any of the reductions/efficiencies listed in Attachment E that were solely compiled based on the direction received from the July 11, 2025 FERC Budget Briefing.

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 budgets for the General, G.O. Debt Service, City Center RDA Ad Valorem Taxes, North Beach CRA Ad Valorem Taxes, Enterprise, Internal Service, and Special Revenue Funds budgets for FY 2026.

Attachment A – FY 2026 Recurring Expenditure Reductions/Efficiencies

Attachment B – FY 2026 One-Time Expenditure Enhancements

Attachment C – FY 2026 Recurring Expenditure Enhancements

Attachment D – FY 2026 Fee Schedule

Attachment E – FY 2026 Additional List of Reductions/Efficiencies

EC/JDG/TOS/RA

Applicable Area

Citywide

Is this a “Residents Right to Know” item, pursuant to City Code Section 2-17?

Is this item related to a G.O. Bond Project?

Yes

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 Budgets-Gen/GO/RDA/NBCRA/Ent/Int/SR Funds. OMB

Previous Action (For City Clerk Use Only)

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

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Sponsors

Detailed Information

RECOMMENDATION

BACKGROUND/HISTORY

COMMISSION MEMORANDUM

ANALYSIS

-8.2% -10.5%

4.0% 3.1% 4.1%

30.0% 25.8%

-12.7% -14.8%

$0.1 $0.1 $0.1

GENERAL FUND BUDGET

9.5% 10.3% 8.8%

FY 2026 GENERAL FUND BUDGET

FY 2026 GENERAL FUND REVENUES

FY 2026 GENERAL FUND EXPENDITURES

16 & 78

$ FY 2026

$ FY 2027

GENERAL FUND RESERVES

RESORT TAX FUND

FY 2026

• •

FY 2026 2% RESORT TAX BUDGET

$ FY 2026

$ FY 2027

RESORT TAX RESERVES

$ FY 2026

$ FY 2027

FY 2026 ENTERPRISE FUNDS BUDGETS

FY 2026 INTERNAL SERVICE FUNDS BUDGETS

USE OF ONE-TIME REVENUES FOR RECURRING EXPENDITURES

FEE SCHEDULE

ADDITIONAL REDUCTIONS

FISCAL IMPACT STATEMENT

FINANCIAL INFORMATION

CONCLUSION

EC/JDG/TOS/RA

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