Help us preserve Islamorada
VILLAGE FINANCE ISSUES
The Growing Cost of Life in Islamorada
Islamorada voters decided to incorporate in 1997. With three of the five county commissioners from Key West, many Islamorada residents believed they paid a significant portion of County taxes, but the community’s voice was often ignored.
Surely Islamorada could have their own efficient local government and have tax money left over to make quality of life better in their community, and perhaps even a tax cut would be possible, thought incorporation proponents.
Much has changed in the last 20 years. Islamorada has made major improvements developing Founders Park, adding two fire stations to the one previously established that are fully equipped and manned, building a new municipal office building, and preserving a variety of conservation and park areas.
The cost has been significant with a total Village budget growing from $10 million to almost $38 million for a community with just 6,500 residents.
Let us compare the 1999-2000 budget totals to the current 2020 – 2021 budget.
According to the US Inflation Calculator the combined rate of inflation, 2000 to 2019, is 50.3%.
In 1999-2000, the County provided Law Enforcement services for $155,000 per year paid from the Village General Fund. This year, this village is paying $2.08 million for law enforcement services.
Did incorporation save taxpayers money? Do residents have a louder voice?
Check the 2020-2021 budget summary with a total budget or more than $37 million. Few taxpayers study the numbers in detail, but when they do, are their voices heard?
Click here to see a sample response to a taxpayer's suggestion and our opinion.
Are we better off today? Are we carefully budgeting tax dollars? Look at the challenges the Village faced the first year or two while hiring a staff, creating departments, and while limited to about 25% of the financial resources we have now:
In September 1998, following the first budget hearings for Islamorada, the Council established a millage rate of 2.13 for the first full year’s budget (October 1, 1998 – September 30, 1999).
On September 25, 1998, 10 months into incorporation, the Village was hit with Hurricane Georges and significant costs for cleanup.
February 1999, the Village borrowed $10 million to buy Plantation Yacht Harbor to create a community park.
Created a Village fire department and began purchasing fire rescue equipment.
Have the councils in recent years spent our tax dollars wisely?
According to the US Inflation Calculator the cumulative rate of inflation from 2000 to 2019 is 50.3%.
The chart comparing 1999-2000 and 2020-2021 budgets shows there are only two Village budget categories that fall below the 50% cumulative rate of inflation, indicating we did much worse than the rate of inflation in nearly every category.
The budget number that impacts property owners the most is the Millage Rate.
The millage rate has gone up 42%, less than the 20-year combined rate of inflation. However, the total assessed value for all property in Islamorada has gone up 253%, so that plus the increase in millage, means the total real estate taxes increased 368% over the 20 years, 7.3 times the cumulative rate of inflation. Do we have infrastructure and services that are 7 times better?
Village Council and lobbyists
The Village Council “departmental” budget has increased by a greater percentage than any other category in the budget. This is primarily due to hiring three different lobbying firms, two to lobby in Tallahassee and one in Washington, which is listed as part of the Village Council budget. The lobbyists were hired about 10 years ago when the Village began the effort to construct a central wastewater system. Initially, the primary task of the lobbyists was to help obtain wastewater grants. Now that we have a grants and procurement administrator on staff, perhaps the work of the lobbyist is no longer worth the $200,000 they receive according to the current budget.
Instead of being included in the General Fund, the revenues and expenditures for the building department are now a separate enterprise fund, as the department takes in more revenue in building fees than it cost to run the entire building department. They are expected to generate a fund balance of almost $300,000 this year. Could it be that the building fees are too high? Even Village Planning Director Ty Harris complained about the high fees at a January 2021 council meeting when a vacant lot he owned was under consideration for a BPAS allocation, which he was granted.
We have 140 employees including 16 sheriff deputies. The county provides vehicles for the deputies. The Village provides vehicles for many of the other 124 employees. The most recent list of vehicles from January 2021 itemized 57 vehicles owned by the Village, worth a total of $4 million. The list includes 3 boats. It also includes $3 million worth of fire department vehicles: 4 fire trucks, 5 rescue trucks, and 9 other vehicles. A replacement fire truck and two other new vehicles have already been approved by Council and will bring our total vehicle value to approximately $4,250,000.
The Village inventory includes approximately 40 cars or trucks, a majority of which are assigned to a specific employee. Perhaps we should be using pooled vehicles to cut down on the number of vehicles needed. Or, are these vehicles considered an employment benefit for some of the employees? Are they allowed to drive vehicles to and from work and for personal use at taxpayers’ expense?
Click here to see vehicle inventory.
How often does the Village Council waive competitive bidding and why? Often it is because they are utilizing the competitive bidding of another municipality, as when they purchase new vehicles. Most often those purchases are at an advantageous price. But in many other cases, there may be significant advantage to competitive bidding. When existing contracts for services are extended, competitive bidding is often waived for years.
Over the last three years, competitive bidding was waived more than 30 times. Among beneficiaries of the non-competitive, no-bid process are the lobbyists.
Major Expenditure without open Council discussion
There have been several occasions in the past when major Village funds have been approved by the council with no discussion. Council serves the residents, and residents have the right to understand the items that come before council and comment on them.
Purchase of 292 Gardenia Street. The 6,000-square-foot,property is a non-waterfront lot. While there was a home on the property at the time of purchase, it was the intent of the Village prior to the purchase to demolish the house in order to redevelop the property with affordable housing. In January 2020, a motion was made to purchase the property for $539,000 and a vote to approve occurred with no discussion. Chris Sante, while not on council, was the one to negotiate and sign the purchase contract, and then assigned it to the Village without public discussion.
Click here to see this story. Affordable housing story 292 Gardenia
Pre-lawsuit settlement. Several years ago the Village Council voted to approve an expenditure of $148,000 to avoid a lawsuit against the Village. There was no council discussion at the Council meeting before the vote was taken. The real story is in the email sent to council members via their personal email accounts by then mayor Chris Sante. Sante’s emailed logic in spending taxpayers’ money:
”…… to settle for $148,000. The cost to settle is $.044 cents per $1,000 of value, so if you are taxed at $500,000, the cost is $22.00 or $44.00 for a 1 million dollar house. I think it is worth it to close this matter and avoid a long legal battle and bad PR for the village.”
Is this the right way to make budget decisions? What other bad PR has been avoided?
Click here to see the story. (Transparency story – government by email)
Consider the significant time members of Council devote to their efforts to make Islamorada the best it can be. Surely, they are worth more than our part-time lobbyists. Yet, members of council receive $12,000 for their 52-week effort while three lobbyist firms are paid more than $200,000 per year. Of course, the number of monthly meetings has decreased from at least twice a month since this stipend was set.
Legislative Aide agreement financially benefits Village Attorney
In 2016, the Village Council decided to hire a part-time legislative aide for $30,000. That $30,000 is still in the Village Council budget. A resolution was passed to give the Village Attorney that function and the additional $30,000 above his salary as an employee. Is this a duplication of the tasks we ask the lobbyists to perform? Doesn’t this fit within the professional services the Village Attorney provides as an employee? And, the Council had the Attorney prepare the work agreement and they waived competitive bidding. In addition, they gave the right to extend the agreement, year after year, to the Village Manager without Council discussion or approval. The agreement has been extended each year through 2021.
The Village has 124 employees in the current 2020-2021 budget with personnel costs totaling $10,202,173.
There are 54 Village employees that cost taxpayers more than $75,000 a year in pay and benefits.
Not included in personnel numbers, but people that do work for the Village:
Cost of Vacation Rentals
While the owners of vacation rentals are typically receiving $400 to $3,000 per night, what is the cost to taxpayers? Many residents complain about the number of illegal vacation rentals or the problems generated by the rentals in residential neighborhoods. And there is also a financial cost and an impact on long-term housing costs for the workforce.
A vacation rental license is required by the Village. The license fee since the vacation rental ordinance was passed in 2003 -- 18 years ago -- has been $1,000/year. The purpose of the fee is to cover regulations' enforcement costs. Any excess funds are to be used for affordable housing projects. This provision was intended to help mitigate the impact of the rentals on affordable housing.
A study of the vacation rental enforcement costs versus the revenue generated by the license fee over the last seven years shows that enforcement costs have totaled $232,537 more than the revenue generated. The Achievable Housing committee recommended to the Council and shared its report with the pubic in December 2020 that the annual fees be increased from $1,000 to $2,500, plus additional fees for homes with greater occupancy defined as number of bedrooms. This would not require a change to the ordinance, but rather a majority vote approving a new resolution; however, no action has been taken by council. Thus, the affordable housing fund languishes.
Click here to see recommendation