No New Projects as Marco’s Proposed Budget Holds the Line

Marco Island won’t see significant projects in the upcoming budget year as City Council proposes a slightly lower tax rate.

There will be two more public hearings in September, following this recent proposal for a $32 million budget considered in July, before the final budget is actually adopted. 

“There are no projects,” said Marco Island City Manager Michael McNees. “Given the expiration of the locally generated money for capital projects and having rolled back the general fund millage rate for the eighth consecutive year, there are no significant projects in the budget for the next year,” he said.

Loss of Infrastructure Surtax Income and Maintaining Status Quo

Collier County voters approved a 1 percent Infrastructure Surtax implemented in 2019 and that tax ended in December 2023. Of the more than $500 million collected, Marco Island received more than $23 million, based on population. That is one significant loss of revenue for the upcoming budget year. 

“It’s a status quo budget to continue operations. There isn’t anything new in the budget,” McNees said.

Decreasing the tax rate for eight consecutive years is the most significant budget matter, McNees added.

“That’s a pretty amazing story,” said McNees.

Millage Rate Explained

Marco Island City Council proposed a property tax rate of 1.24 mills for Fiscal Year 2025. This represents the rolled-back rate, or the rate that will bring the same amount of revenue into the City as the year before. Due to increased property values and new development, this means the rate is a decrease of about 1.1 percent from the 1.3137 mills paid by property owners this year. 

One mill is equal to $1 for every $1,000 worth of property. A $1 million home would pay about $1,240 in property taxes in 2025, following City Council’s final approval of the corresponding budget to be decided at 5:30 PM Monday, September 9 and September 23.

Marco Island Police Raises Proposed at 15 and 20 Percent

Despite a tax rate that is 1.1 percent lower than the previous year, one of the areas of a significant percentage increase going into 2025 is a proposed 15 or 20 percent pay increase for Marco Island police, depending upon rank. 

Raises proposed for other city staff included three percent for most city employees. Fire and police are negotiated through unions, with the police still pending, including five percent for the fire department, 15 percent for most police officers and 20 percent for police sergeants.

City Council will review MIPD’s proposed union contract at the next meeting, scheduled 5:30 PM Monday, August 19. 

MIPD’s union contract was last negotiated three years ago. 

“In 2021, all of a sudden, the market just did this massive change,” said Marco Island Police Chief Tracy Frazzano.

Since then, most Marco Island police officers’ pay has been below the market value, she said.

The City hired a consultant to review salaries and all staff, except those in union contracts, were adjusted accordingly in previous years, Frazzano said. Police pay was quite far behind other departments when compared to other city departments, including looking at nearby law enforcement agencies, such as Naples Police Department and others, she said.

Marco Island police officers make a starting minimum salary of approximately $55,000 per year; a sergeant earns $71,000 and lieutenant $90,000, according to the Florida Department of Law Enforcement. The average salary for Marco Island police is $65,732 per year, according to Glassdoor. Additional pay of approximately $14,077 per year could be earned. These entry-level officers are making $5,000 less than their counterparts in Naples and Marco Island sergeants are earning $17,000 less per year than Naples police sergeants, according to FDLE. 

Marco Island's cost of living is high, but officers can live off the island as far as 50 miles away, said Frazzano.

"We were very low in our market area,” said Frazzano, who’s been advocating for increased compensation for Marco Island’s law enforcement officers for years.

The contract negotiations will affect the pay of Marco’s 26 police officers and seven sergeants, she said. The command staff, including the chief, two captains and two lieutenants are not part of these union negotiations. 

“I’m a big advocate for market comparable salaries and I’m appreciative to the city manager and city council for identifying this need and changing it,” said Frazzano.

More details on the proposed contract will be available at the upcoming City Council meeting August 19, she said. 

There are job openings available with MIPD and with code enforcement, but no urgent shortage, Frazzano said. She is looking for the most qualified candidates possible and pay adjustments will help, she added. 

Could City Fines Be a Source of Income?

Requests for financial details of fines levied versus received by Marco Island went unanswered. But the City of Marco Island’s leadership is clear about one thing— fines are not meant to be an income producer, said McNees. 

“Code enforcement, for us, is more about trying to gain compliance than fines,” said Frazzano.

Usually, people comply after a given deadline, she said. For example, moving a trash can, turning off a light or even poor parking, in some instances, can be corrected without a fine. 

Often times, when fines accrue to very large amounts due to daily situations that have added up over months, the magistrate will allow for mitigation of those fines, she said.

Though the finance director didn’t return requests by this reporter for that precise data, McNees said it’s not significant.

“When it comes to fine revenues, it’s not a big enough number to really move the needle,” he said.

“We’re interested in compliance more than punishment. If fines are appropriate, we’ll certainly collect them,” said Mc Nees.

“Fines are a tool for compliance, not a revenue device,” he added.

He said this perspective was a good thing for the culture of the city, including not punishing visitors learning the island. 

Will Development Cease to Aid in Lowering Millage Rates in Future Years?

A significant aspect of the Council’s ability to implement the rollback rate and slightly lower taxes is that development brought in new taxes for the coming year. However, with fewer than 1,000 vacant lots on Marco Island, new development may be limited, acknowledged McNees.

Still, redevelopment is almost limitless in potential, he said. 

New construction will bring in approximately $300,000 in new property tax revenue for the City of Marco Island, staff had estimated.

Marco Island’s taxable property values are more than $16.3 billion, according to most recent estimates by the Collier County Property Appraiser. 

Did the City Lose Income from Grants?

A phenomena occurring throughout Florida is a change in cost estimate for projects from the time they were estimated to when actual work could begin. That phenomena had an effect on the City of Marco Island, which lost $2.5 million in potential grant revenue when finding that true project costs were too expensive compared to the estimates for upgrading City Hall’s hurricane resilience. 

“We had a grant devoted to hurricane hardening of the City Hall building,” said McNees. “The estimate of the project cost required replacement of all the windows in an all-glass building. The estimate for that construction was not valid,” he said. 

City staff had conducted the estimate prior to the Covid-19 pandemic, McNees explained. But that estimated price was much lower than market prices following the pandemic, he added.

The City could not pay the local matching share and thus accepting the $2.5 million grant no longer made sense, he said. 

“Once construction costs escalated the way they did, even if it did cover the costs, we might not have wanted to do the project based on the value of the building,” McNees said.