South Miami staff propose FY27 budget holding millage at 3.95%; stormwater fee study and on-demand transit funding flagged

City of South Miami finance staff walked the City Commission through the highlights of the proposed fiscal year 2027 budget, including staffing changes, new fund accounting and potential fee changes to shore up stormwater infrastructure.

Alfredo, the finance staff member who led the presentation, said the administration proposes keeping the millage at 3.95. “That would generate… $12,000,000,” he said, describing the figure as the ad valorem revenue budgeted at a 95% collection assumption and noting it is roughly $1 million higher than last year because of property-value growth and new construction.

Staff framed the proposed budget around the uncertainty of a pending state property-tax reform measure. Alfredo cited a recently provided state fiscal impact analysis estimating roughly a $1,000,000 revenue effect in the first year of impact (fiscal 2028) and up to $2,830,000 when the full exemption effect is applied. Because ad valorem comprises a large portion of the city’s general-fund revenue, staff said the budget was developed to preserve emergency reserves and maintain a $5.7 million unrestricted fund balance.

The presentation also detailed several new or isolated funds to improve transparency: a Public Benefit Trust (staff expects an approximately $4,000,000 contribution related to Avalon Phase II and proposed $634,000 in FY27 expenditures from that fund), a building permit inspection fund (to track direct and indirect permit-related expenses), an automated traffic safety fund (to isolate red-light and speed-camera revenues and spending) and newly established general obligation bond capital/debt funds for clearer accounting.

On operational items, staff proposed capping the opt‑out health insurance stipend at $612 per month to save about $76,000, converting two part‑time, non‑sworn police tasks into a single full‑time police support specialist to review camera infractions, and adding one sworn police officer position funded 40% by a COPS grant (the hire contingent on reaching full staffing). Alfredo noted only one new FTE is added in this budget: an assistant director in public works, plus several reclassifications.

Mobility and stormwater were singled out as funding challenges. On-demand transit (Freebee/Via) reserve monies have expired; keeping service at current levels would require about $210,000–$215,000 from the general fund, staff said. For stormwater, staff explained the city has charged a $54 annual ERU since 2002; a preliminary consultant recommendation is roughly $18.50 per month per ERU (pending the final stormwater master plan and fee study and pending an interlocal agreement with Miami‑Dade County). Staff said that level of fee would approximate $1.3 million in revenue and fund a set of stormwater projects presented in the proposed budget.

Why it matters: The staff proposals preserve reserves and introduce accounting changes meant to improve transparency, but several items — the Underline maintenance obligation, the City Hall redevelopment financing and the stormwater master plan — remain contingent on further study or outside agreements.

Next steps: The Commission will consider a millage-setting resolution on the TRIM notice and hold two statutorily required budget hearings in September; staff will return with more granular line‑item detail and responses to commissioner questions.