Council Approves Purchase of Utilities

On Monday, November 6th, City Council approved the purchase of stock of North Marco Utilities, bringing that under city control. The issued and outstanding stock constitutes 1,686 shares for $1,563,000. Also included in the deal was a payoff of all North Marco Utilities Indebtedness for approximately $237,000, bringing the total purchase cost to $1.8 million. The North Marco Utilities is a wastewater collection utility only with around 260 customers, mostly in Old Marco. “They literally are a pass-through agency,” said City Manager Mike McNees. “They collect the wastewater and bring it to our wastewater facility where we treat it and then we bill the customers on their behalf.” Council had asked staff to investigate and evaluate the viability of purchasing the utility. “Both finance staff and utility operations staff have conducted a significant amount of due diligence, looking at the assets, looking at the books of the North Marco Utilities and haven’t raised any issues with this acquisition,” said McNees.

Councilor Blonna sees this as a “win-win for everyone.” “We already are doing a lot of the maintenance on it – we are called out for issues when there are problems with some of these pipes and pump stations,” said Blonna.

Councilor Rola had concerns. “Two major aspects of this acquisition. One is the cost and the value and the other impacts and implications of the acquisition.” Folded into his concerns were the future growth of Old Marco and the Old Marco Master Plan, the potential repair and replacement costs and whether sufficient testing on the system was done.

Jeff Poteet, General Manager of the Water and Sewer Department said, “We did take a high-level look at the system,” pointing out that there have been many upgrades to the system in the last five to seven years, including the lift stations. He also pointed out that as the area grows, “Growth pays for growth. If those lines need to be increased because of development in that area, that developer would need to pay for that infrastructure.”

After more questions were asked and answered, Council approved the purchase with a 7-0 vote.

Also on the agenda was a final recap on the now-defunct Short Term Rental (STR) Registration. Council asked staff to put together a final report of all the costs associated with the program. As a recap, residents passed a ballot referendum establishing the ordinance in August 2022. Staff started the process of preparing implementation with new hires and a portal for property owners. Then four lawsuits were filed in March 2023. In May 2023, ordinance enforcement was postponed by Council in May 2023 until January 2024. In June 2023, Chairman Folley requested a second legal opinion in June 2023 and council heard that opinion during a closed session on August 21, 2023. On October 2, 2023 City Council passed a resolution declaring the STR Ordinance null and void by operation of state law, which ended the registration requirement.

Assistant City Manager Casey Lucius presented the report, detailing that the estimated total cost of the program came to $726,934. That amount included reimbursement to the 59 owners who had already paid the fee, employee time, legal fees, and new employee hires. 

Grifoni thanked Lucius for the work put into the memo “so we understand how much money was wasted over the course of a two-year span, two and a half to three-year span, actually.” He went on to reiterate the now moot arguments over the STR program, saying, “government grew and the citizens really got nothing out of it.” He then questioned Lucius on the employees hired for the STR program who were moved into other positions. “Those individuals who were moved were existing positions that were left vacated by the previous employee,” Lucius said. City Manager McNees reiterated Lucius’ comments. “The only people that we retained, who were among those FTE’s (Full Time Employees hired for the STR program) went to existing vacant positions that we would have filled with someone else had we not had these people, frankly it was kind of a bonus for us because they had proven themselves. There was no net leftover effect of new employees by virtue of the creation of that program.” Grifoni pointed out that in the past, “we’ve had positions in the budget that have been vacant for a very long time.” “Oh, we don’t have those anymore,” said McNees. “We either fill them or take them for something else.”

“I voted for this ordinance and it was a mistake,” said Councilor Brechnitz in response to comments by Grifoni and Councilor Palumbo. “It’s not the only mistake I have made in my life and it won’t be the last mistake. If I had to vote for it today, I wouldn’t vote that way. I’m sure there are issues that many of us feel the same way about. So, I agree with you but let’s stop the lectures, okay? We get it.”