Key West has a new rule governing the way sightseeing tour vehicles operate on city streets, but lawmakers failed to hash out a specific agreement for a company that wants to start a new trolley-tour business here.

In a meeting that began at 6 p.m. Tuesday, the Key West City Commission approved a general ordinance at 1:05 a.m. Wednesday, after seven hours of discussing city business.

After the vote, the commission stopped the meeting and said it would reconvene at 4:30 p.m. Wednesday to finalize a specific franchise agreement for CityView Trolleys, which wants to begin tour operations this tourist season.

City Attorney Shawn Smith advised the commission on Wednesday to postpone approving the CityView franchise until a December meeting that is legally and publicly noticed. Smith said he did not want anyone to challenge the agreement on the grounds that it was approved during a meeting that had not been publicly noticed.

CityView will be the first company to compete with Historic Tours of America (HTA), which operates the Conch Tour Train and Old Town Trolley.

In a landmark legal decision, HTA's previously exclusive franchise agreement with the city of Key West was ruled a monopoly. The city earlier this year paid an $8 million settlement to the owners of Duck Tours Seafari, which was driven out of business by city officials and the monopoly.

"This commission is in the position that people could believe you don't care what the law is," attorney Mick Barnes, who represents CityView, told the commission late Tuesday. He criticized the commission for waiting until a new tour business wanted to begin operations before officials reworked their franchise laws.

Under the new sightseeing law, tour operators will pay a one-time application fee of $5,000 to establish their franchise. After that, businesses will pay the city 5 percent of their gross revenue, or a minimum of $7,500 per vehicle, with annual increases according to the Consumer Price Index that makes adjustments for cost-of-living increases throughout the nation. There also will be a penalty for late payments.

Commissioner Mark Rossi emphasized that the city should receive 5 percent of gross sales, whether the tickets are sold in Key West, on cruise ships or online.

During the discussion overnight Tuesday, commissioners also eliminated a rule that would have prevented competing tour companies from operating within 150 feet of each other. The city attorney advised against the protective zone, and instead suggested that controversial trolley stops be decided on by the city manager.

Other requirements in the new law require potential franchisees to also submit a traffic impact study to show the city how their vehicles will affect local traffic and residents' quality of life.

Commissioners Teri Johnston and Jimmy Weekley emphasized their concern about the quality-of-life issue.

"We've been hearing what (HTA) wants in this law and what CityView wants," Johnston said. "Let's turn this around and say what we want, and then let companies decide if they want to come in and operate in this environment. I want to see more specific quality-of-life issues in this."

Johnston had suggested at a previous meeting that tour companies be forced to give their customers headphones to eliminate amplified tours from residential neighborhoods. Her motion failed.

Weekley also said he is concerned about increasing the number of vehicles on city streets.

"I am going to ask for a one-year moratorium on any increase in sightseeing vehicle or taxi licenses in this town," Weekley said. "Unfortunately, those already in the pipeline need to move forward."

He wants the city to commission a comprehensive traffic study in the coming year to determine an acceptable number of sightseeing trolleys, trains, buses, taxis, pedicabs and other vehicles.

He acknowledged the city must proceed with the pending franchise agreements with CityView and Duck Tours Seafari, which submitted a proposal to the city last month.

mbolen@keysnews.com