ISLAMORADA -- Michael Reckwerdt, who had held the largely honorary position of village mayor since the spring of 2010, gave up the gavel last week, handing it over to former Vice Mayor Ken Philipson.

The move, which received unanimous support from the five-member Village Council, came less than two months before the November elections, when Reckwerdt will be termed off the council after more than 8 ¬½ years and Philipson will attempt to fight off a challenge for his seat from harsh Reckwerdt and village critic Paul Bates, who has lost in three previous runs for the council.

Speaking in the closing moments of the Sept. 12 Village Council meeting, Reckwerdt emphasized that he wasn't trying to set the course for the council that will be seated in November, which will have to decide anew who will hold the mayor's gavel. Rather, he said, he felt Philipson had earned the job through hard work and outstanding service.

"We are not trying to put a hold on the future," Reckwerdt said. "Ken deserves to have this sitting council vote for him as mayor."

Philipson responded to Reckwerdt's gesture with laudatory comments of his own.

"The last 2 ¬½ years I've had an excellent mentor sitting in the center seat," he said, before nominating Reckwerdt for the honorary title of mayor emeritus, which had previously been bestowed upon just two people; three-time mayor Chris Sante and Ron Levy, a former mayor who was also the driving force behind Islamorada's incorporation nearly 15 years ago.

Council members quickly took Philipson's lead, voting 5-0 to name Reckwerdt mayor emeritus. Ted Blackburn was unanimously selected to replace Philipson as vice mayor.

Last week's scene of mutual admiration was in stark contrast to last November, when the council reappointed Reckwerdt for an unprecedented third straight term as mayor just weeks after the IRS and other federal agencies had raided his home and marina businesses on Stock Island and Lower Matecumbe Key as part of a probe into his financial dealings.

The reappointment was made even though Philipson, as vice mayor, had made his interest in the post clear.

The vote was 5-0, but Blackburn and Philipson went along with the selection only after they saw that Reckwerdt had the support of councilmen Dave Purdo and Don Achenberg, making the issue a fait accompli.

In the aftermath of the vote, Philipson retained legal counsel in case he needed to protect his interests against the rest of the council.

"Just for my protection," he told the Free Press at the time.

Reckwerdt, meanwhile, acknowledged that his decision to stand for a third term was in part driven by his aggravation with Philipson for conducting talks on a possible settlement agreement with Cheeca Lodge Spa without authorization from the full council.

Last week Reckwerdt said those tensions have since been resolved.

"[Philipson] behaved with dignity, despite what happened," he told the Free Press.

With the results of the federal probe still uncertain, Reckwerdt also sought to shoot down what he expected to be rumors of the reasoning behind his abdication of the mayorship.

"I'm not going to prison. I'm not going to be arrested. The UFO has not scheduled an abduction. There's nothing wrong," Reckwerdt said.

Both he and Philipson also said the move wasn't orchestrated to boost Philipson's re-election campaign against Bates.

"I don't see that as a campaign issue," Philipson said.

In other action last week, the Village Council gave unanimous final approval to the 2012-13 budget. The village property tax rate in the coming year will be $253 per $100,000 in assessed value, almost identical to this year. The rate will bring in $5.94 million, also identical to what the village expects to collect in property taxes this year.

The budget contains revenues and expenditures of $9.4 million. It also includes a cash reserve fund of $3.45 million. Council members made no changes to the budget before taking their unanimous vote last Wednesday.

The fiscal year begins on Oct. 1.

Also last week, the council:

• Formally accepted a low-interest, $20 million sewer construction loan from the state of Florida. The loan, with an anticipated interest rate of 2.79 percent, will help finance the $91 million construction cost of the Islamorada-wide sewer system.

• Gave unanimous final passage to an ordinance regulating towing companies. The ordinance requires wreckers operating within Islamorada to be licensed by the village. It also sets maximum private property towing rates to the same price schedule used by the Monroe County Sheriff's Office and Florida Highway Patrol for tows from roadways and other public properties.

• Agreed to refinance a $2.37 million loan the village took out in 2007 to finance construction of the Lower Matecumbe Fire Station, the Village Hall at Founders Park and renovations of the Plantation Yacht Harbor marina. The refinancing will reduce the interest rate on the loan from 4.47 percent to 2.44 percent, thereby saving the village $745,000 between now and 2029.

rsilk@keysnews.com