For the second straight year, Monroe County plans to do away with sewer taxes to help bring its budget under state property-tax reform mandates.

The County Commission agreed Monday not to collect money from wastewater taxing districts in the 2008-09 fiscal year in order to help shore up its budget and keep a property tax hike below 10 percent -- a greater increase can draw financial penalties from the state.

Last year, the commission agreed not to collect taxes from the eight districts, which run from Key Largo to Stock Island. However, county staff cut funds from an Art in Public Places program, redirecting $127,675 to a Big Coppitt Key area wastewater fund and $115,139 to a Duck Key wastewater fund.

The money will be used for administration costs and design and engineering work for sewer projects in those areas.

In 2007, $19,616 was collected from Bay Point residents, $114,461 from Big Coppitt, $1.1 million from Key Largo, $119,216 from Stock Island, $369,833 from Cudjoe and Sugarloaf keys, $10,856 from Conch Key, $49,774 from Long Key and Layton and $124,041 from Duck Key, county records show.

County Commissioner George Neugent is voicing concern about discontinuing the taxes this year, and how that choice might impair the county's ability to get state funding.

Much of the federal and state grant money for wastewater is allocated on a ready-to-start basis, with projects already under design being funded first. Neugent is concerned that there won't be enough money to design county projects, and that the county will fall behind other local governments in funding priority.

The county does have some sewer money in a so-called 304 infrastructure fund, which is funded by a 1-cent sales tax. But Neugent believes the funds in that account are spoken for up to 2018, when the sales tax expires.

"We don't have enough to design and engineer, to be in that ready-to-proceed position, and 2010 is right around the corner," he said.

Neugent also said the county has used the 304 fund for other items outside of wastewater, including the $3.1 million purchase of the Hickory House restaurant on Stock Island, which the county is currently trying sell.

The county also committed $2 million from 304 funds to the Vandenberg artificial reef project.

However, the taxing districts, called MSTUs, were set up to run for only four years. The taxing districts for Key Largo, Bay Point, Big Coppitt, Conch Key, Long Key and Layton are either about to expire or their projects are nearly complete and not in need of future funding, said county Engineering Division Director Dave Koppel.

Koppel argues that putting off collection of wastewater taxes in those districts will not jeopardize state funding. The county has projects in the design phase and has money to continue designing projects, Koppel said.

"We have projects that are ready to start construction," he said. "This is not going to mean the difference between getting the projects completed or not."

The county and Keys' municipalities are under a state mandate to replace all septic tanks and cesspits with "advanced wastewater treatment" by July 2010.

Many doubt the county will make that deadline, and residents could face fines for not being compliant.

The state Legislature did pass a bond measure that authorized, but did not allocate, $200 million over four years for Keys wastewater treatment. Legislators for the next four years must approve each allocation of that money.

tohara@keysnews.com