Marco Prepares to Increase Property Tax Rate

Marco Island City Council decided narrowly that they will likely increase the property tax rate for the first time in years. Council set their maximum tax rate for fiscal year 2026, which begins October 1 and ends September 20, to 1.668 mils. Council will finalize this millage rate during public meetings in September and can lower that rate but not increase it. 

Council approved the 1.668 millage rate in a 4-3 vote with Council Chair Erik Brechnitz and Councilors Stephen Gray and Darrin Palumbo each voting against the rate. The current rate is 1.24 mils. 

For a property assessed at $1 million, for example, the city portion of their tax bill will be $1,668. That’s about $441 more than they paid the year before, estimated City Assistant Manager Casey Lucius in her presentation to Council on Monday night. 

“I find it hard to vote for the largest tax increase in the history of Marco Island when we haven’t completed the basics that are required under the comprehensive plan and under the statutes of Florida,” Brechnitz said.  

Brechnitz was particularly critical of the lack of a more detailed five-year capital improvement plan and a lack of an annual level of service report.  

The City had approved a rollback rate each year for eight consecutive years prior, thus decreasing the tax rate as property values increased. 

Although almost all members of Council agreed some sort of increase was needed, the amount of that increase was in question.  

Brechnitz and Gray have been the most critical of the City’s financial reporting and would consider a greater increase if there were details provided to support it. And while at times Councilor Rene Champagne has also been concerned about the clarity and detail of financial reporting, he supported increasing city revenue due to increased costs.  

Further, members of Council argued that with auditors citing a shortage in financial department staff, accounting errors and procedural deficiencies, an increase in revenue to increase staffing was needed to not only make those corrections as required by September but also to make other financial reporting improvements as requested by Council and in some cases as required by Florida statute and Marco Island ordinances. The Level of Service reporting could allow Marco Island to earn more in impact fees from Collier County, which haven’t been adjusted for years, Brechnitz reported.  

Several residents who have spoken recently in public meetings did not oppose some tax rate increase but cautioned going too high.  

“I don’t think anybody argues now the taxes need to be raised for obvious reasons,” resident Teri Sommerfeld, who serves on the City’s audit committee.  

However, Sommerfeld suggested not increasing taxes too quickly without full and complete reporting of how the money is being spent.  

Budget Recap and Workshop 

During a budget workshop held before the regularly scheduled Council meeting on Monday afternoon, Lucius presented Council with a summary of budget meetings held previously in May and June. The workshop included a presentation of the operating budget by Lucius. 

Gray was particularly concerned about a lack of available details in reports on capital projects and improvements. 

Sharon Dangles, the city’s controller, is serving as interim finance director following the resignation of the former director Guillermo Polanco earlier in July amidst audit reporting concerns raised by Brechnitz and later reviewed by auditors in a public meeting. 

Among the most significant increases in the budget are staff-related, including hiring two staff members — an ombudsman to serve as a liaison in the permitting process and an employee in public works to assist with grants and project management. The latter of which City Manager Mike McNees said would address some of the concerns raised during the audit process, including late reporting that occurred in that short-staffed department. 

The budget, at approximately $30.5 million, includes staff pay increases of three percent for general employees, six percent for police, and three percent for fire employees if the latter of those isfinalized with the union during ongoing negotiations, Lucius said. Staff had received a four percent increase earlier in spring to meet market comparisons, staff had reported to Council.  

McNees said he and the reorganizing finance department could take on creating a more detailedfive-year capital improvement plan. Meanwhile, Dan Smith, Director of Community Affairs, said he already had more than $30,000 allocated toward the transportation aspect of the level of service study. The level of service studies stopped in 2013, and no one on council or in staff leadership was involved to know why those stopped.  

Council batted back and forth options like a franchise fee on the LCEC electric bills of three percent or six percent. Palumbo suggested raising money through parking fees and other sources, which he suggested could be considered in addition to or instead of a tax rate increase, potentially minimizing the increase.  

“I support raising taxes. I support going with the highest number you’re willing to go with,” resident Rick Woodworth advised Council during what was the final budget workshop on Monday, July 21.  

Woodworth, who is a member of Clean Marco Waters, which supports advanced wastewater treatment improvements, among other water quality-related issues, said it may not be popular to raise taxes but it’s needed. Council will decide the final rate in September. Meanwhile, property owners will receive their TRIM notices, or truth in millage notices in the mail, which will include all taxes from Collier County, the school district, and other taxing districts. Collier County has tentatively planned to adopt the general fund rollback rate of a combined 3.25 mils, which maintains a reduction to Conservation Collier from what Collier County voters approved.   

For Marco, inflation; increased material and labor costs; years of rollback tax rates; capital improvement needs related to roads, bridges and buildings; water quality improvement needs; and staff needs are all part of the justification for increasing taxes and setting a bigger budget.  

For a detailed release from the City on the proposed tax and impacts, see “City Council Approved Tentative Increase in Property Tax Rate” online.