How is the city of Key West’s budget shaping up?

Key West Mayor Teri Johnston joined Good Morning Keys on KeysTalk 96.9/102.5FM this morning to talk about what’s been going on in the city.

The budget continues to be discussed in the city.

Johnston said, “It was two very full days of a lot of really good conversation between the department heads and the City Commission. We did have a couple people attend. Normally it’s not well attended, but it is open to the public and I would encourage everybody to get out there. We anticipate having 551 employees in the city of Key West and we had a pretty good long discussion about that, because that’s pretty close to the highest amount of employees that we have had within the city. If you remember, during the 2008 financial crunch, when we had the housing crunch, we cut it down below 400 and we were providing pretty good service to our community. I mean, no one saw a lapse in service or a lapse in in response from the city of Key West. So, that’s certainly something that we want to keep our eyes on, because 60% of our entire budget is based around our personnel and the costs associated with those. So that’s going to be something that we take a really close look at. Also, I think what’s interesting is that the recommendation was that we come in at the same millage rate that we had last year, and that was at 2.08%. That seemed to resound pretty well with the commission. But there’s a couple of things that I’d like your listening audience to know is that our operating expenses over the past three years have gone up 49%. It’s unheard of. When we get into conversations about going to rollback, which is collecting the same amount of money we did last year, all of those things continue to increase. So actually, at rollback, we’re providing less goods and services to our community than we did the year before. So that should be off the table. But we are looking at coming in at the same millage rate, as we did last year and interestingly enough, that is the lowest millage rate in the entire county. In fact, Islamorada has a millage rate that’s 44% higher than Key West and when you take a look at the cost of living down here, the cost of providing goods and services, that’s a very, very modest request. We did have a lot of conversations about where we wanted to come in at the tentative millage rate. We always set our millage rate higher than where we’re actually going to come in to, because we’ve got another almost three months before we set our final millage rate and in those three months, we’re in the height of hurricane season. In fact, we’re in the most active months of hurricane season and we’re also still in negotiations with our firefighters. So those two things can change our budget radically. That’s the reason we always like to put a cushion in there. Hopefully our public knows that that’s worst case scenario, and we are going to come down from there. But this year, we did not have consensus. We had three commissioners who wanted to bring it in at 2.08 for tentative and we had three commissioners who wanted to bring it in higher and bring it in at the millage rate that was suggested by our director of finance. So the next budget pass, we will have three new commissioners and a new mayor. So we left them in good shape for a conversation and that group will actually be the group that that creates our final budget for ‘24, ’25 season.”

The bond issues is another popular topic of discussion.

Johnston said, “We had lengthy conversations with our department heads on all of those issues and we had a lengthy conversation, Commissioner Kaufmann made a recommendation that we create much, much lower numbers. We had a long conversation about that and his feeling was that the temperature out there was not receptive to bonding out. We actually talked about the fact that we have gotten very little, very little feedback on bonding. The Chamber of Commerce came out against bonding, which surprised me a lot because what Chamber of Commerce wouldn’t want their community improved by $300 million over the next 30 years? So I’m not understanding that.”

There was support for the bond from one gentleman.

Johnston said, “I don’t know which organizations he’s representing and then we got one letter in opposition which city staff responded to. So that’s basically our input on this. My thoughts are these are all something that we need to take to the voters. We need to educate the voters and we need to get their opinions on. Because we get lots of opinions about our roads and sidewalks. We get a lots of opinions about people being very concerned about sea level rise and flooding in our streets and sunny day flooding and things of that nature. I think when you lock in on that $300 million number, you don’t realize that, for instance, the Casa Marina, this past year have put $150 million into just their single property. We heard a presentation on our waste treatment plant and to replace our waste treatment plant is about $150 million. So we’re talking big, big, big numbers for the major things that we have to do to keep our infrastructure up, to keep our quality of life up, to keep our streets and roads safe to continue to improve the city of Key West. One of the things that concerns me greatly is, if we continue to deny these projects, we are going to wind up in a point where we can’t make the repairs any longer. They’re just astronomical and we’ve got to continue to take bites out of this and continue to improve our community, to harden our community, so that we are the same vibrant Key West for 56 years to come.”

What was the end result of the public safety referendum?

Johnston said, “The end result was we cut that back a little bit, too. Chief Brandenburg stood up because this is for police and fire. We know we need a new fire station. I mean, that is just a given and Chief Brandenburg gave a great presentation. He said, fires needs are greater than mine right now. Although I will tell you this, that they have already grown out of the police station, and they are renting a facility off site that costs the taxpayers $40,000 a year. So I mean, we can’t wait too long to improve their structure so that we’re not paying that $40,000 a year, which is guaranteed to go up every single year. So we know we need a new fire station. The number bantered around at that is about $42 million and we are going to need to do something with our police force. So the number came down a little bit. But we left a lot of that money in. I think the number that surprised me the most, we had a recommendation to cut our adaptation and our flooding number down from $99 million to $50 million. We did not. We brought it back up to 65. Because those are the projects that are astronomical. I mean, when you start to raise roads, and you start to make differences, improvements in your drainage system, when you start to do all the things that we need to combat sea level rise and climate change, those are astronomical.”

A number of the votes seemed to be split.

Johnston said, “There’s always been this notice our taxes are high in Key West. 90% of our residents came from somewhere else. I came from a location where I paid three times the tax that I’m paying right now for the property value. So I think that we get into this little bind, where we really don’t ask the public what they think of our tax base. We were listening to a very few people whose year after year objection is that our taxes are too high. Most of the people that live in Key West, I would guess that their taxes went down considerably when they moved to Key West.”

Public input is so important for government to function.

Johnston said, “It’s required. We cannot make decisions in a vacuum. We need to hear from the people that it the impacts on every single issue.”