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City of Key West proposes $300M FY2027 budget, staff seeks direction on deeper cuts and bond plan
Summary
City staff presented a proposed FY2027 budget totaling about $300 million and a $105 million general fund, recommending a tentative millage of 1.866 (roughly 1% under rollback). The commission pressed staff on personnel reductions, contingency reserves and a planned $10 million paving bond that would add $3.3 million of debt service in FY2028 if approved.
Christina Vivaldi, the city’s finance director, presented the City of Key West’s proposed FY2027 budget and answered detailed questions from commissioners on revenue assumptions, personnel and capital projects.
Vivaldi said the proposed total budget is roughly $300,000,000, with a general fund operating budget of about $105,000,000. The tentative millage shown in the presentation is 1.866, which Vivaldi described as about 1% under the rollback rate. Personnel remains the largest expense category: the budgeted personnel cost in the general fund is approximately $65 million, roughly 79% of general fund expenditures. Health insurance allocation per full-time employee is set at $18,534. Vivaldi said the city used a zero-based review and identified 17 vacant positions recommended for deletion, and noted that some employee groups (police, fire, Teamsters) have contractual increases and step adjustments built into their cost forecasts.
On capital and grants, Vivaldi walked the commission through a long list of infrastructure projects proposed in FY2027, including Southernmost Point Plaza, Mallory Square Wharf rehabilitation, Higgs Beach seawall work, ferry-terminal revitalization and Duval Street revitalization. She said the presentation assumed some grant awards that are still pending and that historically the city programs grant-funded projects on a reimbursement basis (projects may pause if grants are not received).
The commission focused heavily on contingency planning. Vice Mayor Lee and other commissioners pressed staff on the potential impact of an upcoming property-tax reform measure; Vivaldi estimated the city’s first-year ad valorem delta at about $700,000 under current tax base assumptions. Commissioners also asked about the long-term effect of several proposed bonds. Staff outlined a $10,000,000 bond the city may issue for citywide paving — with Atlantic Boulevard planned as the first-year project — and offered a debt millage estimate of about 0.271 to cover roughly $3.3 million of debt service when the bond is executed in FY2028.
City management said staff achieved what it called a “rollback minus” initial proposal through a combination of operating savings, frozen positions and other reductions but told commissioners the team could pursue deeper savings only if given explicit direction. “We changed the approach to see with a fresh set of eyes and to be able to deliver a rollback minus budget,” the city manager said; he added that if the commission directs additional cuts staff is prepared to pursue further personnel reductions with “care and compassion.”
On timing, staff said the commission will certify a tentative millage now and retain flexibility through the September public hearings, when final decisions and any further personnel or program changes will be presented.
The commission and staff agreed to further review grant contingency, capital priorities and the personnel list between now and the September hearings. The budget workshop recessed for lunch and reconvened for additional departmental Q&A; the commission directed staff to return in September with refined options.
