Palmetto Bay staff propose 2.35 millage for FY27, warn of multimillion-dollar risk if homestead exemption passes

Palmetto Bay staff presented a draft fiscal year 2027 budget Tuesday built around a proposed 2.35 millage rate and said the village can close a budget gap for the coming year by using roughly $805,000 of this year’s surplus and limiting capital projects.

The presenter said the village’s current tax rate is 2.3018 mills and that “a rate of 2.69 mills would fully fund operations for a home with a median taxable value of 394,000.” He recommended a 2.35 millage as a compromise that would require a four-fifths council vote and would increase the typical homeowner’s annual village tax bill by about $19 (from approximately $907.56 to $926).

Why it matters: staff reported a strong fund balance—an FY25 ending balance near $14.72 million and a projected FY26 surplus of about $1.1 million—leaving the village with an estimated $12.27 million in reserves. The presenter noted that those reserves currently exceed Government Finance Officers Association guidance and are one reason the village retains a favorable bond rating.

Budget details: the draft FY27 budget lists roughly $23.7 million in revenues and $24.52 million in expenditures (about an 8.1% increase from FY26). Staff propose closing the gap primarily with $805,000 from the current-year surplus plus $250,000 allocated for one capital project at Coral Reef Park (replacement of deteriorated wood perimeter fencing with composite materials), leaving the village with a projected FY27 fund balance around $11.2 million.

Police and overhead: the presentation compared Palmetto Bay’s municipal district police expenditures to nearby Pinecrest and concluded the village’s contract with the Miami-Dade County Sheriff’s Office yields similar sworn staffing (about 37 officers) but lower overhead because many civilian and administrative functions are provided by the sheriff’s office. “We have by far, a much more capable, police department or, sheriff’s municipal district here,” the presenter said, arguing a standalone municipal police force would not be cheaper when overhead is considered.

Ballot risk: staff emphasized a separate ballot issue could change the calculus: the presenter cited polling and warned that if a proposed homestead-exemption amendment passes, the village could lose an estimated $2.5 million in FY28 and about $4.0 million in FY29 in general-fund revenue. “If HJR 1f passes, then we really need to reevaluate where the village needs to go in terms of reducing service levels, expanding user fees, [or] raising millages,” he said.

Next steps: staff asked the council for feedback on the 2.35 millage framework and said the draft assumes one modest capital project for FY27, preserving reserves while awaiting clarity on the ballot measure. The presenter and department directors remained available to answer council questions at the end of the presentation.