Islamorada council adopts 2.65-mill tentative rate, approves tentative FY2025-26 budget amid wastewater funding questions

The Islamorada, Village of Islands Village Council on Tuesday adopted a tentative millage rate of 2.65 mills and approved a tentative fiscal year 2025-26 budget after residents pressed the council for clearer explanations about wastewater funding and stewardship grants.

The vote on the tentative millage — the rate used to calculate property tax bills before a final hearing — passed unanimously 5-0. Vice Mayor Don Horton, Council members Steve Freriedman, Deb Gillis and Anna Richards, and Mayor Sharon Mahoney all voted in favor. Council also approved the tentative budget on a 5-0 roll call; final adoption and any adjustments will be considered at a later hearing the council noted.

Why it matters: staff told the council the 2.65 mills represents an 8.64% increase over the rollback rate of 2.4392 mills and said the higher rate is needed to cover nondiscretionary increases in public safety and other operating costs. Adoption of a tentative millage is a statutory step that sets the ceiling for the final rate the village may adopt at the follow-up hearing.

Public concerns and staff response

Residents at the meeting urged more transparency and questioned several budget line items. Resident Joe Wisher said he was concerned Islamorada spends more per person than neighboring jurisdictions and cited an increase in the municipal budget from $35.8 million (2020-21) to about $60.7 million over the last five years, calling for renewed review of staffing, EDU counts and competitive bidding.

Sue Miller, speaking for the Alamada Community Alliance, told the council the proposed 2.65 rate still results in tax increases for many homeowners and outlined itemized concerns: general fund expenditures rising from nearly $15 million to over $23 million in five years, total local government expenditures rising from $36 million to $65 million, and recurring wastewater deficits. "We always are taking money and adding it to the wastewater," Miller said, adding that a stewardship revenue line of about $3.5 million that appeared in last year's general fund is blank this year.

Council members asked staff to clarify those stewardship and wastewater concerns. Peter (staff) said the village has a state stewardship grant of approximately $4.2 million for North Plantation Key wastewater improvements and that the grant funds were budgeted this year because the project is moving from design into procurement and construction. "This is actually money that we got from the state for a grant that is actually to help improve our system," Peter said, adding that there was no transfer from the general fund to pay for the grant-funded work.

Officials acknowledged the village's wastewater system has not been operating as a fully self-supporting enterprise and said the village has retained an accounting firm to analyze operations. Staff said they expect to pursue a rate study and to meet with wastewater engineers to improve coordination. "We will have to do a rate study eventually," one staff member said, noting the village wants to make sure assessments and charges are accurate and that the enterprise fund does not continue to lose money.

Council discussion and staff notes

Council members emphasized protecting staff while finding ways to reduce costs. Several members pointed out that some projected overtime is set by collective bargaining (notably for fire services and the village's contract with the sheriff) and that some overtime budgeted is unavoidable without hiring additional full-time staff. The council said overtime would be tightly controlled and approved only as necessary.

Hattie (staff) presented a budget memo showing roughly $2.2 million in reductions from the first draft of the budget. She said the council-appointed citizens budget review task force and staff worked to limit layoffs and reduce spending while maintaining services.

What happens next

Council members and staff said work will continue through the remainder of the budget process: staff will pursue a rate study for wastewater, follow up with the accounting firm's analysis, and return to the council with final figures at the required follow-up hearing. The council set the procedural timeline for final adoption consistent with statutory notice requirements.

Votes at a glance

- Tentative millage rate: motion to approve 2.65 mills; vote: 5-0 (Horton, Freriedman, Gillis, Richards, Mahoney). Outcome: approved. - Tentative FY2025-26 budget: motion to approve as presented; vote: 5-0 (Horton, Freriedman, Gillis, Richards, Mahoney). Outcome: approved.

The council adjourned and said it will reconvene on the date set for the follow-up budget hearing.