The Key West City Commission, on Thursday, raised its property tax rate for non-homesteaded homes by 5.5% for the upcoming fiscal year that starts Oct. 1.
The non-homesteaded property tax rate is about $213 per $100,000 of assessed value, which is about 5.5% above the rollback rate, which is the rate needed generate the same amount of revenue as the current fiscal year.
A homesteaded Key West homeowner is to pay $5.33 a month more in taxes beginning Oct. 1.
The property tax rate, known as the millage rate, will generate about $17.2 million for the city in its $68.4 million general fund within a total budget of $207,455,652. By accepting the recommended pay in the Evergreen Salary Study, personnel costs are to be 7% higher in the new fiscal year compared to the past year, according to the city.
Twelve new positions are being added to city staff, but two former positions are being eliminated for a net of 10 more.
Like at the Sept. 13 budget hearing, commissioners Sam Kaufman and Billy Wardlow opposed the tax rate and budget and voted no. Historically, they have voted against tax increases.
Mayor Teri Johnson said this week on U.S. 1 Radio that the city is having a record year for revenues. In particular, bed tax revenue is up 169% compared to 2019 revenues. She did not factor 2020 because of the COVID-19 pandemic. Sales tax revenue is up 148% and parking meter revenue is up 124%, also compared to 2019 revenues, she said.
Chief Financial Officer Mark Finigan said bed tax revenue is not under the city’s control nor part of the city’s budget. Those revenues are determined by the Tourist Development Council. However, the sales tax and parking revenue do fund city expenditures and could be used for any legal public purpose without restriction.
He clarified about 90% of parking revenue goes to the general fund, but the Key West Bight and the Key West Transit Park & Ride parking areas fund those particular entities.
“We did much better [revenue-wise] than we thought we would. We hope to have a better year coming,” City Manager Patti McLauchlin said on U.S. 1 Radio this week said.
When the commissioners last met, the budget had a deficit of $60,210. Chief Financial Officer Finigan balanced the budget by increasing revenues because the Emergency Management Services department obtained a grant to $42,000 for paramedic certification. The city reduced police repair and maintenance expenditures by $25,000. The city reduced pension allocations for employees recently joining the “DROP” retirement program by $9,353.
Also, the city reduced its certification pay allocation by $4,306 and reducing human resources communications and postage by $7,600.
The city’s revenue comeback as a whole was quicker than most people anticipated, Finigan said. Other indicators such as increased airport landings seem to show positive tourism signs although with COVID-19 and its variants still looming and it’s tough to predict the future, he said.
At the meeting, city commissioners also approved a collective bargaining agreement between the city of Key West and Teamsters Local 769, Office Clerical and Blue Collar Workers, and gave kudos to Manager McLaughlin for effective talks. The agreement extends from Oct. 1, 2021 through Sept. 30, 2024.
Changes to the agreement included eliminating Good Friday as an official holiday, changing sick leave wording, and increasing the city’s input on performance evaluations and merit increases.
After increasing staff’s pay because of the Evergreen Salary Study, the city has an expectation of performance, Mayor Johnston said. The salary enhancements are “life-changing” for many city employees, McLaughlin said.