Key West is leaning toward no new property-tax increase.
Commissioners Thursday showed support for dipping into two days fewer of the city's $11 million reserve money rather than raising property taxes by 2 percent to balance the proposed $53 million general operating fund for 2014.
Walking into the budget hearing Thursday with a budget that called for 90 reserve days' worth of funds, the commission instead chose to tap 88.
Cities like Key West typically keep between 72 to 92 days' worth of spending money as a reserve.
In a unanimous vote at Old City Hall, commissioners set the 2013-14 tax rate at $279 per $100,000 worth of property valuation and approved a complete annual budget of $163 million.
But only the general fund affects the property tax rate.
A final budget hearing is set for Sept. 17.
If approved before month's end, Key West's tax rate will mean, for a home valued at $313,000, the city's slice of the tax bill will be $875.55.
Even with a surprise infusion of back property taxes from this month's sale of Peary Court -- the Navy and Southeast Housing agreed to pay $576,000 in once-disputed taxes in order to seal the deal -- Key West was facing a slight budget crunch.
The city's proposed $53 million operating budget is about a half-million dollars higher than last year's.
Before Thursday, the first of two required budget reviews before the new fiscal year kicks off Oct. 1, the proposed tax rate was $288 per $100,000 of property value. A house worth $313,000 would have generated a $902 tax bill on the city portion.
Assistant City Manager Mark Finigan led the six commissioners through the tentative budget, which features two new jobs -- an assistant attorney and an assistant for the city historical district planner.
"We've gotten down to 60 days in reserves," Commissioner Clayton Lopez said during the budget hearing at Old City Hall. "I don't want to give you a heart attack, Mark, but we've gone that far down and dug ourselves out of it. I don't know that it's that big of a deal to go another couple of days."
Tough nonprofits talk
The three-hour budget hearing included a frank discussion about determining the city's priorities.
Clean streets and attractive public venues sometimes require a tax hike, said resident Perry Johnston, who reminded the commission that Key West relies on tourist dollars.
Commissioner Jimmy Weekley said taxpayers want to see results when tax bills rise.
"It's about investing in our community," said Weekley. "They don't have a problem with increasing taxes when they see it. It's where they see us raising taxes and putting money in somebody's pocket" they protest.
But when the commission reviewed staff's recommendation to cut the Boys & Girls Club's $25,000 allocation to $18,000 -- part of the city's plan to phase out nonprofit funding for good -- several critics jumped in to take issue.
"What you fund is what you get," said Bob Henkel. "Do you want more homeless people or do you want more Boys & Girls families in Key West? You want the demographics to look like your funding? I don't think Key West wants that."
Henkel pointed to the city's budget line of $441,000 to run the overnight homeless shelter on Stock Island, a bunkhouse that takes in about 140 men and women each night and empties out by 7 a.m. daily.
Dan Dombroski, the Boys & Girls Club's executive director for 11 years, urged commissioners to give his agency a break, considering that a number of the children attend the day care on scholarships.
Zachary Moses told commissioners he and his wife raise their son in what Key West considers a one-bedroom apartment and rely on the Boys & Girls Club for childcare so they can keep steady jobs.
"Our son is on a daybed in the kitchen-slash-front room area," Moses said. "We don't make enough. People who work in the service industry here in Key West don't make enough, but we made do. We live in paradise."
Moses said, "If funding gets cut, they're going to cut families out of their programs. You cut workers out, you're reducing money for the economy of Key West."
Many of the kids' families earn a living in the service industry, said Dombroski, who also told commissioners that a School District official on Wednesday informed him there was no room in the district's buildings for "nonprofit organizations."
The Boys & Girls Club has operated out of the back of the Glynn Archer School building, which the schools handed over to the city this year for the site of a grand new City Hall.
The School District will keep a piece of the Glynn Archer site for offices, and Dombroski says his club's headquarters are within that part of the building.
Commissioner Billy Wardlow said, "I'm sure they have room somewhere."
Dombroski replied, "I don't think they know to be honest with you."
Mayor Craig Cates and Commissioner Tony Yaniz led the charge to return the $6,200 budget cut to the Boys & Girls Club, and the rest of the dais appeared to agree.
Commissioner Mark Rossi was absent Thursday, and for the panel's regular meeting the night before.
But Commissioner Teri Johnston said the city cannot keep funding nonprofits on an island that holds 144 agencies all doing public service.
"I don't have a problem with $6,000," Johnston said, but she added that the lodging industry and other businesses that employ struggling families need to fund the Boys & Girls Club rather than rely on the city's coffers.