Marco council to discuss property tax rates for '07

Marco Island City Council members today will get their first shot at discussing potential property tax rates for fiscal 2007, with the new knowledge that the city's taxable property base increased 27 percent in taxable value over last year's tax base.

The council meets in a special session at 4 p.m. to consider fiscal 2007 budget options, and then meets in regular session at 6 p.m. with a hefty agenda of work scheduled.

Both sessions are at Mackle Park Community Center.

During the workshop, the council will be presented by city staff with three property tax rate scenarios.

The news that the city's tax base grew in taxable value by 27 percent over last year's tax base valuation — -to slightly more than $12 billion this year — is tempered by the reality that Marco is the only city in Florida that, by city law, limits annual spending increases to 3 percent plus the annual cost of living adjustment.

Even so, only 25 percent of Marco's property owners are homesteaded and qualify for protection under the Save Our Homes provision in state law.

Under Save Our Homes, a single-family home that increased in value by the full 27 percent, for example, can only be taxed for an additional 3 percent above the home's taxable value recorded last year.

A homesteaded property also earns the automatic reduction of taxable property value of $25,000.

On Marco, 75 percent of properties are not homesteaded and do not qualify for Save Our Homes protection. So a non-homesteaded home that increased in taxable value by the 27 percent can be taxed on the full taxable value with the 27 percent increase.

Although the city can realize a huge increase in property tax revenues as a result, city officials' hands still are tied, spending wise, by the spending cap.

City Finance Director Bill Harrison offered the three property tax rate options only as guides for the council according to previously discussed goals for fiscal 2007. Harrison says in his staff report that other options are available for the council's consideration.

The three options listed in Harrison's report are:

• An annual 3 percent reduction of the current property tax rate of $1.39 per $1,000 taxable property value (1.3875 mills) beginning in fiscal 2007, which begins Oct. 1, 2006. This plan allows homesteaded property owners to pay no more in actual property tax dollars than in the preceding year. It also allows the council to transfer $1 million annually to the water/sewer enterprise fund to defray a portion of residents' costs for participating in the mandatory septic tank replacement program.

Under this option, at the end of five years, unrestricted reserves would increase to $10.4 million to cover outstanding debt balances of $11.4 million.

• Keep the current property tax rate of $1.39 per $1,000 of taxable property value in place for five years. Voters would be asked in a referendum to support a $31 million bond issue to pay for parks and recreation improvements. Keeping the current property tax rate current for five years would enable the city to pay the $3 million annual debt service on the bond issue. Voters would be asked to exempt the bond issue debt service from the annual spending cap limits.

Under this second option, the city would have unrestricted reserves of $5.6 million to cover outstanding debt balances of $11.4 million, excluding the debt service on the parks bond issue.

• The current property tax rate of $1.39 per $1,000 taxable property value would be reduced in fiscal 2007 by 10 percent. The property tax rate would then be reduced by 3 percent for the next four years of the five-year capital improvements planning period. All expenditures would remain subject to the spending cap. Unrestricted reserves would reach $9.4 million in five years, to cover a debt balance of $11.4 million.

Harrison's report didn't list the rolled back rate for fiscal 2007. The rolled back rate is the property tax rate that, excluding new construction and annexations, would generate the same amount of property tax revenue as the previous year's rate.

During the 6 p.m. session the council will reconsider its recent decision to remove 625 feet of landscaped median from North Collier Boulevard to put in a center turn lane so motorists can more easily access businesses on the east side of North Collier.