By Coral Gables Gazette staff
The Coral Gables City Commission voted 4–1 on September 12 to tentatively approve a $313.6 million budget for fiscal year 2026, keeping the city’s millage rate flat for the 12th straight year.
The adopted budget represents increase of about $5.4 million (1.75 percent) over the city’s initial July estimate, reflecting higher property values since the July 1 estimates, internal fund transfers and revised capital priorities.
Mayor Vince Lago, Vice Mayor Rhonda Anderson, Commissioner Ariel Fernandez and Commissioner Richard Lara voted to maintain the existing 5.559 millage rate. Commissioner Melissa Castro cast the lone dissenting vote, arguing for her proposed phased rollback plan, which she characterized as fiscally responsible and structured to avoid service cuts.
“This has been a flat millage rate for the past 10 (sic.) years, and that says a lot. That is great. But I do believe that we could do better,” Castro said. “I came up with a phased approach that was extremely responsible… They just didn’t want to vote on it.”
Budget shaped by pressures and priorities
Finance Assistant Director Paula Rodriguez outlined the updated plan in detail, explaining that the additional $1 million in revenue realized since the July workshop was matched by corresponding expenditures—most of it directed to capital improvements, including $300,000 in design funding for Ponce de Leon streetscape improvements, $250,000 for audible crosswalks, $200,000 for traffic calming, and $176,000 for sidewalk repairs. In total, the capital budget now stands at $57.1 million.
The city will also use $1.3 million in reserves from the Building Division and Sanitary Sewer Fund to support these projects, all categorized as one-time expenditures. Rodriguez emphasized that while the millage decision carried political weight, it was financially sound.
The budget also includes funding for ten new staff positions—seven full-time and three part-time—spanning IT, planning and zoning, public works, and internal audit functions.
Slowing revenues, rising costs
While the city’s property tax base continued to grow, the pace of increase has slowed considerably—down to 5% this year, compared to 8%, 11%, and 12% in prior years. This has created a budget environment where inflation and service expectations outpace revenue gains.
At the same time, the city’s pension obligations continue to exert pressure. The budget includes a $7.6 million voluntary contribution to the pension fund—down from $9.5 million last year, largely due to the cost of a retiree cost-of-living adjustment (COLA) approved in 2024.
That COLA added $1.8 million in annual costs for the next ten years. The decision, supported by Commissioner Castro and opposed by Mayor Lago, has become a flashpoint in broader debates over fiscal strategy.
“Numbers don’t lie. These are facts. You cannot play with people’s retirements,” Lago said, pointing out that the pension fund’s funding ratio declined slightly after the COLA—from 75.2% to 74.5%.
Rodriguez and Finance Director Diana Gomez both confirmed that staff had recommended against approving the COLA.
Defending the reserves
Throughout the hearing, commissioners repeatedly returned to the subject of reserves. Coral Gables currently maintains $59.4 million in general fund reserves—meeting its 25% target. That cushion, city leaders argued, is vital for disaster recovery and long-term credit strength.
The vice mayor emphasized the broader context.
“FEMA funding is not as robust… Cash is king when we get our city restored,” she said. “We’re still closing out Hurricane Irma projects from 2017. If we had to borrow instead of using reserves, the cost to residents would have been massive.”
Commissioner Lara agreed, noting the reserves’ role in enabling swift responses.
“It is a very reassuring feeling to know you can reach into your reserves when you need immediate assistance,” Lara said, citing a recent microburst storm that damaged trees and infrastructure.
Fernandez, who ultimately voted in favor of the budget and millage, expressed concern about rising expenses but acknowledged the value of maintaining services.
“I want to find a quick turnaround on relief that we can provide to residents,” he said, suggesting that future efforts might include eliminating the city’s fire fee. “But we can’t sacrifice the service levels that residents expect.”
Political theater and pointed exchanges
Much of the hearing’s tension centered on the political history of tax cut proposals. Mayor Lago played video clips from meetings in the previous two years showing Castro opposing even modest rollback efforts in previous years, calling those cuts “pennies” and “self-sabotage.” He framed her current proposal as an election-season reversal.
“What you’ve seen there is two years of rhetoric and constant fighting by Commissioner Castro,” Lago said. “She said cutting $30 in taxes wasn’t worth the impact on services. So if you weren’t willing to do it then—when revenue was up 12%—why are you pushing it now?”
Castro pushed back, arguing that this year’s proposal was different: it included a detailed, phased approach built with staff input and no service reductions.
“I was never in acceptance of lowering the millage rate for those exact reasons,” she said. “But this year, I figured it out. I did. And I came up with a plan that was responsible, prudent, and fully balanced.”
At several points, the discussion devolved into interruptions and sharp asides. At one point, Lago quipped, “Now that we’re done with the Instagram reel for next week, let’s talk about this,” after Castro concluded a rebuttal. Later, he told the room, “I feel like I just lost 50 brain cells.” Castro offered barbed lines of her own, at one point snapping, “No, no, I’m talking to Paula, but I appreciate you having an intent to respond,” as Lago attempted to jump in. She later accused her colleagues of posturing: “They just didn’t want to vote on it because they weren’t serious about lowering the millage the whole time.”
Residents weigh in
Two residents spoke during the public comment period. City Hall fixture Maria Cruz criticized executive compensation, citing a professional tennis manager making $357,000 and executive bonuses totaling tens of thousands.
“We have employees in this city that make $20,000 a year,” Cruz said. “Paying an executive $34,000 extra for doing something extra is really, really shameful.”
Former commission candidate Tom Wells praised Anderson and Lago for past cost-cutting.
“To the extent that we can have that same review in this budget process, I think it would benefit everyone,” he said.
Looking ahead
The second and final budget hearing is scheduled for Thursday, September 25, when the commission will adopt the final budget and millage. Commissioners indicated that further adjustments may still be considered before the final vote—including potentially revisiting specific staffing decisions or evaluating solid waste collection reforms.
This Post Has 11 Comments
It is truly dishonest for Mayor Lago and Commissioner Lara to campaign on cutting taxes by reducing the millage rate and then ignore their promise. Lara says he broke his promise to cut taxes because of actions that occurred during the last 2 years – something else he ran on! Lago referred to it during Wednesday’s Commission meeting as the “political election season.” I guess that we always get campaign lies from Lago because he has a 2-year term with constant campaign Instagram messages (like the recent one with Claudia Miro, his next plant on the Commission). File # 24-7907 (Item F.1 at the September 10, 2024 Commission meeting which Anderson raised at Wednesday’s Commission meeting as to why she was against Castro’s tax cut because Castro did not vote for her 2024 proposal – very petty) was a good plan to cut expenses by $837,787 to create money for City Hall restoration. Anderson even proposed to eliminate the $65,000 that the City spends on the 10-minute drone show during the July 4 Biltmore party thrown for non-residents. It was Anderson’s campaign promise of “conservative budgeting to keep taxes low.” But now that LAL (Lago, Anderson, Lara) is in power as a unified voting pact, Anderson and Lara are not doing anything without the consent of our “strong mayor” – that is who they owe their allegiance and not the residents. And Lago’s discussion on Friday’s budget meeting of a variable floating interest rate?!? Coral Gables can issue fixed-rate bonds, have a cash reserve and accelerate repairs to avoid inflationary increased repair costs. As inflation and repair costs increase, Lago’s economic mistakes dramatically cost Coral Gables much more than any $30,000 salary reduction (another 3 Stooges comment by Lara as to why he broke his promise to cut taxes and has not shown any knowledge of the budget – because he cut his salary)!!!
Tom Wells: you are a sour grape.
Alberto – no sour grapes by me. I just want to foster voter education and engagement regardless of whether we vote in April or November. I am thankful that you are reading Coral Gables Gazette (and the posts) for your education. You and 847 other voters (2.5% of registered voters) choose development, traffic and secret deals (e.g., bringing back the former City Manager who had lied from the dais and ignoring the SRA Martinez below-market lease default) over independence, civility and common sense. Commissioner Lara spent $753,650 compared to $20,000 by me. Mayor Lago says that the voters “choose 3 people by a significant margin” – he is either referring to the amount spent to elect his voting pact or is math impaired. With LAL getting elected based on campaign lies to residents (and money from developers and PACs which is the real “promises made/promises kept”), Lago’s “election mandate” is another lie. Thankfully, we have a chance to fix this problem soon. But we all need to be informed and vote.
It’s like Groundhog Day at the commission meetings. We have to relive the same tired retort over and over: the prior commission voted themselves a salary increase, car allowance, etc, but the new majority voting bloc rescinded it. All is now right in the City Beautiful! The new voting bloc are the saviors of Coral Gables…and if they can bring it up over and over at every single commission meeting, they will.
Mayor Lago is so concerned about blogs, reels, and his “pay to play” entities, which have to be mentioned over and over and over again…commission meetings would probably end an hour earlier if he stopped beating that dead horse.
It’s all a bait and switch to hide the fact that Lago, Anderson, and Lara’s campaign promises were just that, promises, now broken promises, and cutting taxes was never going to happen. Promises Unfulfilled.
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