The City of Coral Gables has proposed a $308.2 million budget for the coming fiscal year. It holds the line on the millage rate, preserves services and advances dozens of capital projects. On its face, the plan looks prudent. But look closer and a different picture emerges—one in which the city increasingly relies on reserves and carryover balances to stay afloat. It’s a short-term solution to a long-term challenge.

A city budget is more than numbers. It reflects priorities, values, and a vision for what kind of city Coral Gables wants to be. In this case, the budget reflects ambition without overreach—yet also without the structural underpinnings to sustain that ambition beyond the next year or two. For residents and businesses who expect excellence in services, safety, infrastructure and fiscal stewardship, the question now is not whether the budget is balanced. It is whether that balance can last.

The issue is one of financial design—how reserves, surpluses and service levels are aligned. It is the quiet erosion of financial resilience through incremental decisions that draw on savings rather than build them. According to the proposed budget, the city will use $31.2 million in reserves and carryover funds to make this year’s plan work. That includes $8.6 million from the General Capital Improvement Fund and $10 million from General Fund reserves. Those dollars support not only new park construction, fleet maintenance and City Hall upgrades but also help cover core service needs without new revenue streams.

Many municipalities adopt similar strategies when faced with capital surpluses and service demands. Cities often draw on past savings to fill short-term gaps or move projects forward. In Coral Gables, however, the trend is becoming persistent. At the city’s July 2 budget workshop, Assistant Finance Director for Management & Budget Paula Rodriguez explained the logic behind the drawdowns. “We’re bringing in $8.6 million, which is a result of prior year surpluses that were brought in from the general fund to the capital fund from two years prior,” she said. “We’ve had this discussion before where we take the (FY)24 surpluses and use those to plan the (FY)26 budget.”

That circular planning model—using yesterday’s leftovers to fund tomorrow’s vision—may work in the short term. But it carries risks. Surpluses can shrink in economic downturns. Reserve balances can dry up. Costs, especially personnel costs and debt service, tend to climb. Meanwhile, long-term capital needs like a new sanitation site and stormwater upgrades are approaching without clear funding plans. At some point, the arithmetic stops working.

This year’s capital budget is already a sign of that pressure. Proposed FY26 capital expenditures total just $52 million—a 71 percent drop from the $180 million in capital spending authorized last year. That difference is driven in part by the exhaustion of carryforward balances. In plain terms, the city had money in the bank last year. This year, it doesn’t.

There is time to correct course. Coral Gables has an experienced finance staff, strong credit ratings and the political will—so far—to avoid over-leveraging the city’s future. What’s needed now is a return to disciplined, forward-looking financial planning. That includes building recurring revenues that keep pace with recurring costs. It means rebuilding capital reserves, not just spending them. And it calls for a public conversation about trade-offs: If the millage rate is to remain flat, what services or projects may need to scale back?

In this context, transparency becomes more than a virtue. It becomes a necessity. The city’s improved clarity this year in separating recurring revenues from one-time transfers is a step in the right direction. But transparency is only useful if it prompts action. Residents, commissioners and city staff must use that information to steer the budget back toward long-term stability.

This marks a shift that deserves attention. It is a moment of opportunity. The decisions made this fall won’t just shape next year’s balance sheet. They will determine whether the city’s ambitions can be sustained—and what kind of Coral Gables the next generation will inherit.

A budget that balances today must also endure tomorrow. That will require discipline, clarity and an honest reckoning with the limits of one-time fixes. Coral Gables has the tools to do it. What matters now is whether it has the resolve.