By Coral Gables Gazette staff

Coral Gables will open its budget season Friday with a $308.2 million plan that keeps property taxes steady but draws heavily on reserves, setting up debate over how to balance services, debt, and long-term priorities.

The hearing, scheduled for Sept. 12 at 5:01 p.m. in City Hall Commission Chambers, is the first of two required public sessions where commissioners will hear comments, set the tentative millage, and vote on an ordinance adopting the fiscal year 2025–26 budget.

Earlier that morning, commissioners will also weigh millions in annual special assessments that fund fire protection, solid waste, streetscape projects, and neighborhood security districts. Together, the two hearings underscore how Coral Gables sets both its general budget priorities and the targeted fees that support specific services.

Millage rate in focus

The city’s Budget and Audit Advisory Board has recommended maintaining the current millage rate of 5.559, a position backed by Mayor Vince Lago, Vice Mayor Rhonda Anderson, and Commissioner Richard Lara. Commissioner Melissa Castro, however, plans to present a competing proposal to lower the rate by a quarter-point this year, followed by additional reductions through 2028–29.

Castro described her plan as a modest step toward tax relief that trims non-essential expenses while protecting services. “We’re pretty stable — we have the second-lowest tax rate for a full-service city in the county,” she said at her town hall earlier this week. “The question is, can we improve a little? I believe we could.”

The debate is expected to highlight broader divides over fiscal strategy and how the city positions itself for the future.

Inside the spending plan

The proposed budget balances expenditures by combining steady property tax revenues with significant transfers from reserves. Staff project $137 million in property tax revenue, based on a total assessed value of $26 billion.

To support operations and capital spending, the city would draw $31.2 million from reserves, including $8.6 million from the capital improvement fund and $10 million from general fund reserves. Additional transfers include $3.4 million from the parking fund to cover trolley operations, $4.4 million from the sanitary sewer fund, and $3.6 million to expand building department staffing.

Spending is divided into $245.6 million for operations, $52 million for capital projects, and $10.6 million for debt service. The budget also funds seven new full-time positions, ranging from procurement and audit support to tree trimming and fleet maintenance. These additions build on 20 positions already created in the Building Division last year.

Debt and fiscal strain

Debt obligations are expected to play a significant role in Friday’s discussion. Coral Gables currently carries $99.5 million in principal debt, with total obligations of $132.8 million including interest.

Mayor Lago has repeatedly warned against additional borrowing, citing a $20 million bond issued last year to fund a cost-of-living adjustment. “We need to pay down our debts. The faster we pay down our debts, the more money you’re going to have to spend on projects,” he said at a prior budget workshop.

Castro has countered that the city should focus on lowering the tax burden while still maintaining balance, a stance that has set her apart from the commission majority.

Services under review

The hearing may also touch on how Coral Gables delivers services, particularly in solid waste. Lago has pressed the city to reform green waste disposal, citing abuse of the trash pit system by outside landscapers. He has proposed shifting to containerized pickup, while Anderson has cautioned that new equipment and resident cooperation would be essential.

City Manager Peter Iglesias confirmed that Coral Gables’ disposal contract with Miami-Dade County expires in March 2026, emphasizing the need to prepare now. Staff are studying alternatives, including potential cost-sharing agreements with neighboring municipalities.

Balancing priorities

Despite differences, commissioners generally agree on the challenge of sustaining services, managing debt, and planning for long-term infrastructure needs. The proposed budget attempts to address those priorities by tapping reserves for one-time costs while maintaining the current tax rate.

For Lago, the stakes go beyond the immediate fiscal year. “This is a $312 million business that has to be run in a fashion that doesn’t jeopardize the vitality and viability of this business for the next decade,” he said.

Friday’s hearing will begin with a staff presentation and public comment before commissioners set the tentative millage and adopt the preliminary budget ordinance. The final vote on both measures will take place Sept. 25.