Key Biscayne’s Village Council adopted a $37 million dollar budget Wednesday with $12.5 million in capital investments, splitting 4-3 in a largely ideological dispute over taxation policy and the size of the village’s reserves. The spending plan lays the groundwork for massive sea level rise expenditures in coming years, as well as a beefed-up maintenance plan for the village’s aging public buildings.
It was the second year in a row that the budget, arguably the most important decision the council makes every year, passed by a single vote.
Property taxes are going up 3% for owners who qualify for Florida’s Homestead exemption, but will rise 8.4% for everyone else, including commercial property owners and for landlords, who can pass the increase onto tenants. About one-third of island property owners qualify for the exemption. The general budget is rising about 4%, but accounting changes mean that some costs are being transferred to other budgets. The overall increase, without those changes, would be about 8%.
The millage rate is decreasing from 3.199 to to 3.153, but taxes are increasing because of a 10% increase in property values.
|Capital Project Highlights|
|K-8 Stormwater Project||1,511,000|
|Resiliency Project Planning||1,220,000|
|Pave Village Streets||472,000|
|Beach Park Improvements||471,000|
|Coastal Protection Study/Army Corps||400,000|
|New Fleet Vehicles||300,000|
|Village Wide Security Cameras||300,000|
|Streetlight conversion to LED||250,000|
|Village Green Bathroom Renovation||250,000|
|Replace Playground Equipment||200,000|
|Paint Village facilities||200,000|
|Replace Police Boat||150,000|
The core of the dispute? Whether to set an overall tax rate first, and then find cuts to match, or make line-by-line decisions first, and let those decisions drive the taxation rate. Of particular debate was whether the village budget had grown too fast over the years, and whether the village’s $14 million in various reserve funds was too large.
“I think we are incredibly efficient with what we have,” said Mayor Mike Davey, who said staff continue to provide “stellar” service even as the population has grown over the years. An analysis produced by the Village Chief Financial Officer Benjamin Nussbaum showed that over time, Key Biscayne’s budget increases actually have been below the rate of increase in population.
But Council Members Ed London, Luis Lauredo, and Ignacio Segurola tried to remove more than $2.5 million from the budget, including leaving a resiliency coordinator position unfilled, deleting a part-time fire inspector, and making a more aggressive estimate of tax collection rates. The list, which was created by London and not made public prior to the meeting, gave staff no time to prepare. Manager Steve Williamson said he saw it for the first time during the meeting. One by one, department heads defended the administration’s budget, sometimes in testy exchanges.
“Taxpayers of this community are going through some difficult times,” said Council Member Luis Lauredo. Council Member Ignacio Segurola agreed. “We are addicted to taxpayer money. We just can’t let go.” When the cuts failed, the three voted no.
The only cut that was adopted was the deletion of $75,000 from a potential athletic field on Virginia Key, which is being negotiated with the City of Miami. Williamson said that if that money is needed during 2023, he will ask for a budget amendment. On the expense side, the budget adds $50,000 for special-needs programming at the Community Center.
All of the candidates for elective office spoke at the meeting. Mayoral candidate Fausto Gomez and Council candidate Oscar Sardiñas asked that the village restore funding for an expansion of the crowded center, but no member of council brought it forward, and the planned expansion no longer appears in the village’s 2023 capital program.
Vice Mayor Brett Moss said, however, that he would be willing to restore Community Center expansion funds later in the year depending on size of the carryover from the 2022 to the 2023 budget. Williamson said he is projecting about a 1% to 1.5% carryover, which would be the subject of a budget amendment likely next year. That amount would be between $350,000 to $500,000, said Nussbaum, the financial officer.
In recent years, the village has used carryover funds, or surpluses, to lower capital improvement costs or restore reserves, said Nussbaum. The surplus was perhaps the single biggest objection by Lauredo, London, and Segurola, who maintained it was a result of an established practice of routinely over budgeting.
“I fell into the trap of going line item by line item,” said Segurola. “We have a systematic problem in creating a budget,” he continued.
But others, including Council Member Allison McCormick, said having healthy reserves was important in obtaining good ratings from bond agencies to get optimum finance rates, which will become big expense areas in future years.