Council Reverses Course on Millage Rate

The specially called budget meeting held on Monday began with a rocky start and never really smoothed out on where to go with the discussions about how to proceed forward. Council Chair Erik Brechnitz, Vice Chair Stephen Gray, and Councilor Darrin Palumbo were all absent from their seats at the dais and were having trouble at times communicating with their fellow members over the airways. Eventually, the technical difficulties would be overcome.

For the first time in its history, the board was required to elect a member to stand in for the Chair and Vice Chair, as neither could carry out the duties of the chair from an electronic venue. Councilor Palumbo nominated Councilor Schwan, and Councilor Henry seconded Palumbo’s motion and the motion carried.

Having put aside that housekeeping chore, Assistant City Manager Casey Lucius went into the details regarding the issues before council. Having turned down a proposed millage rate of 1.461, council’s direction to staff was to look at a millage rate of 1.24 and view the impact on how those cuts would affect the operating budget for the next year.

Councilor Rene Champagne was the first to speak on his opinion on the 1.24 rate. 

“This is bad news. We claim we are paradise and if this is adopted, we will be underfunded significantly and will no longer be paradise. I believe we need to adopt the 1.29 millage and after that, reconsider reinstating the 3% LCEC proposal previously defeated.”

City staff laid out that should the 1.24 rate be adopted, the following would need to be cut to get council within the $600,000+ in savings, which would require additional cuts.

• Remove the infrastructure maintenance program (-$2,000,000)

• Remove new operating initiatives. (-$133,601)

• Remove capital maintenance items (-$330,000)

• Remove general government items (-$468,689)

• Adjustments to Capital Asset Replacement Plan (“Buckets”): (-$1,941,489)

To achieve a 1.2400 millage, an additional $607,399 will need to be cut from the FY26 budget. 

Below are options for Council consideration but not recommended by City staff.

Possible Additional Budget Reductions: 

Winterberry Boardwalk (public safety) -$430,000 

Thor-Guard upgrade (safety – lightning signal) $34,000 

Replace broken city-owned sidewalks (safety) $20,000 

Replace broken streetlights (safety) $48,000

Two new FTEs (Grants Acct*, Public Works Project Manager) $229,018.00 *recommended by the auditor

At the end of Lucius’ presentation, she included the following.

Options for City Council: 

1. Recommended: approve 1.29 millage.

The difference in revenue between 1.24 mills and 1.29 mills is approximately $890,000, which would allow the City to fund items identified as “safety” items at $532,000 and budget for two new FTEs (public works and grants accountant) at $230,000. 

2. Keep millage at 1.24, but reconsideration of the LCEC Franchise Fee.

The average Marco Island electric bill in July is $184. A 3% franchise fee would add $5.52 to that bill. This would raise $1.5 million for the City to devote directly to capital improvements. The capital expenditures would not impact the spending cap, and safety items would be included in the budget, and the annual Capital Replacement Program would be funded from a combination of State Gas Tax and LCEC Franchise Fee. 

3. Keep millage at 1.24 with significant additional cuts to the proposed City budget.

Reducing the millage to 1.24 from the proposed 1.4611 and the elimination of the LCEC fee is an additional reduction of revenue in the amount of $5,481,118. All items listed.

It would be Councilman Palumbo who moved that the millage rate of 1.24 be adopted. It would be council’s responsibility to identify the significant budget cuts to then balance the 2025-2026 budget. Councilor Tamara Goehler would second that motion, and it passed with a vote of 4-3. Palumbo and Goehler would be joined by Brechnitz and Gray.

Councilors will have two meetings in September wherein they will be faced with some important decisions regarding the final outcome of the budgeting process and the future of the island. The first budget hearing will be on September 8th, with the final budget to be in by the September 30 deadline.