Marco City Council Declines City Manager’s Resignation

Marco Island City Council declined a resignation from City Manager Mike McNees in a 4-3 vote during a special-called meeting on Monday night.  

Council Chair Erik Brechnitz had called for the ousting of McNees the week prior when he said “material weaknesses” were discovered by auditors, which Brechnitz first described to Council during that regular meeting on July 7. In the meantime, finance director Guillermo Polanco resigned effective immediately on Tuesday, July 8.  

McNees declined to publicly describe the conditions of that personnel matter. 

The “no” votes from Council came from Councilors Deb Henry, Bonita Schwan, Darrin Palumbo and Rene Champagne.  

“We have no exit strategy. We have no successor named. We have budget season going on,” Palumbo said of his vote not to support McNees’s resignation.  

Henry asked McNees if he signed the resignation under duress.  

Brechnitz, City Attorney Alan Gabriel, and McNees drafted McNees’s resignation agreement in a meeting of just the three of them, which McNees signed and dated on Monday, prior to the audit review, another special called meeting of the day that began at 2:30 PM Monday. 

The meeting to discuss McNees began immediately after the audit discussion, at about 5:00 PM Monday.  

“It would be extremely difficult to define any of this as anything other than duress,” McNees replied.  

The audit discussions earlier Monday revealed that the “material weaknesses” found by the auditors, Clifton, Larson, Allen, LLP, were not illegal or fraudulent but showed that there were weaknesses in processes and controls that allowed for accounting errors to occur. These errors included accounting for approximately $2 million in state and federal grants in the wrong year, among other accounting errors that needed corrections. The City should have reported the income in 2023 rather than 2024, auditors said. Brechnitz noted other management concerns involving McNees, including not renegotiating impact fees with Collier County. McNees has worked with the city for six years. The impact fees were last set in 2002, Brechnitz said in his list of management concerns presented to Council on July 7. 

Although McNees’s resignation was not accepted, the conversation is not over, Council members said.  

City Council intends to continue discussing how to move forward with McNees and potentially to develop a plan over several months to transition to new leadership, Palumbo suggested.  

Council Chairman Under Fire, Too 

Meanwhile, Henry and Champagne suggested it is the chairman – Brechnitz - who should come under fire for his methodologies. Gabriel said Brechnitz’s process was not illegal.  

Overall, Council was dismayed that the audit was not reviewed by them or the audit committee before submitted and posted to the City’s website and particularly without any notification nor awareness of “material weaknesses.”   

Council members were also caught off guard that Brechnitz negotiated a severance or resignation without their knowledge, support or approval, they said.  

Regret Over Process Among Staff and Council  

Council members and city staff - even Brechnitz - agreed that the process of discussing potential shortcomings of McNees and of the audit was not ideal.  

“I probably went a little bit over the edge with my language,” Brechnitz said. “Maybe I went over the edge a lot with my language,” he added.  

McNees, just after being spared the chopping block, said he does not want to go through this again in a few weeks, months, or ever. “I’d rather put a fork in my eye,” McNees said. 

Additional Audit Findings and Meetings  

According to the auditor, Chris Kessler, nothing in the audit signified any money was missing nor was there anything fraudulent or criminal. Errors included accounting within the Hideaway Beach Taxing District accounts and application of an additional grant payment, which were both corrected in the audit process, Kessler said.  

Though not scandalous, on a scale of 1-10, “material weaknesses” are a 10, Kessler said.  

Polanco attempted to describe to Council on July 7 that assets purchased from grants were recorded when they were usable by the City. However, auditors said these federal and state grants received should have been accounted for when secured.  

Now, with Federal Emergency Management Agency grants and others being deemed less dependable in the current national political climate, perhaps that strategy would change, Council members pondered aloud. But for now, auditing principles describe when grant expenditures and receivables should be accounted for, and Marco Island accounted for the receiving of them in the wrong fiscal year and likely did so without prior auditing firms catching or reporting the error for multiple years.  

When asked by Champagne, Kessler said that in his experience with dozens of other municipal government audits, in no case he could recall was anyone ever fired for material weaknesses, which are somewhat common.  

Instead, internal processes are changed and in this case, additional staff seemed to be needed, Kessler said.  

McNees noted that he has requested an additional staff member in the 2026 budget that Council will be reviewing during their next scheduled operating budget workshop, 1:00 PM Monday, July 21, followed by the regularly scheduled meeting which begins 5:30 PM.