Marco Island’s missing $4 million – uncovered during revenue sufficiency study – may be found

Marco Island Fire Chief Mike Murphy answers question about the contractual relationship between the island's fire service and the service provided to Goodland by the department. Sitting with him at Monday's City Council meeting are City Zoning Administrator Joe Irvin, left, and City Manager Jim Riviere. Cheryl Ferrara / Eagle Correspondent

Marco Island Fire Chief Mike Murphy answers question about the contractual relationship between the island's fire service and the service provided to Goodland by the department. Sitting with him at Monday's City Council meeting are City Zoning Administrator Joe Irvin, left, and City Manager Jim Riviere. Cheryl Ferrara / Eagle Correspondent

Bryan Milk, Community Affairs Director, explain the unique qualities of a residential property on Shores Court that was granted a variance for a 35-foot flagpole Monday by Marco Island's City Council. Cheryl Ferrara / Eagle Correspondent

Bryan Milk, Community Affairs Director, explain the unique qualities of a residential property on Shores Court that was granted a variance for a 35-foot flagpole Monday by Marco Island's City Council. Cheryl Ferrara / Eagle Correspondent

Lourdes Barajas, a seventh grader from Manatee Middle School, wins first place in Marco Island 2012 Earth Day photo competition. She received her award at Marco Island City Council's meeting on Monday. Cheryl Ferrara / Eagle Correspondent

Lourdes Barajas, a seventh grader from Manatee Middle School, wins first place in Marco Island 2012 Earth Day photo competition. She received her award at Marco Island City Council's meeting on Monday. Cheryl Ferrara / Eagle Correspondent

— A team tasked with uncovering how $4 million seemingly disappeared from the city’s ledgers, gave its report Monday to Marco Island’s City Council. City Manager Jim Riviere appointed staff representatives who studied the deficit and presented the report.

While creating a revenue sufficiency study, consultants from Burton & Associates brought to light a cash shortfall in the utilities’ Fund 400, a melting pot of money related to the Septic Tank Replacement Program. The team began untangling the fund by returning to its 2009 origins as a single entity.

In 2010, the fund was divided into nine sub-funds. The money in each sub-fund entered from a different source such as grants, impact fees and resurfacing surcharges. Creating one account in 2009 and nine subdivided funds in 2010 made it difficult to determine which receivables should be applied to the general fund and what money went to other categories.

The billing cycle for sewer assessments compounded the problem. Bills were mailed in September with payments due in late October. However, the city repaid STRP money borrowed through bond issues on October 1. Repayment required the city temporarily borrow from the surcharge account to make payments. By borrowing money, a deficit was created in that fund’s total.

The missing money was recouped when sewer assessments were paid, but auditing accounts in the interim would have resulted in a perceived shortfall. If the city had not borrowed from its own accounts, the city would have needed to use short-term financing to cover bond repayments, said Patricia Bliss, city finance director. Borrowing to cover bond loans would have cost the city additional interest charges.

Earlier this year, City Council Chairman Larry Magel asked for an independent audit of the utility funds by the Collier County Clerk. On Tuesday, he said he had not seen the results of that audit.

“We haven’t lost the money,” he said. “It was comingled from surcharges to make bond payments. That’s why I wanted an accounting audit independent of staff.”

Bliss suggested a minimum balance in the water and sewer fund could eliminate the need to temporarily borrow from other areas. Council also discussed creating a rate sufficiency study every one to two years, purchasing new software for better accountability and changing the timing of cash transfers.

In other financial information, the city manager presented his 2012 mid-year report. The city has collected 95 percent of its property taxes in the first six months with revenues exceeding expenses by about $7 million as of March 30. At the midway point, operating expenses for the city and utilities are below 50 percent of budget. Sewer revenues have increase 2 percent, but water revenues are down 2 percent.

The city’s complete 2011 annual audit will be presented at council’s May 21 meeting.

The city has created new interactive online programs to assist residents and businesses using city services. New programs include a sewer assessment mapping site for payment information and account balances, a program for tracking building permits, and a site that compiles the voting records of city councilors by issue.

Council unanimously passed on second reading a natural gas franchise with Tampa Electric Company and approved two resolutions for variances. The first will allow a 35-foot flagpole for a single-family residence at 1572 Shores Court. The property was deemed unique since it was originally considered as a site for a marina.

The second provided Joey’s Pizza and Past House with two variances: one to move a legal non-conforming shed to allow for a recycling dumpster and one to vary a side yard setback for construction of an overhead retractable awning.

© 2012 marconews.com. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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Comments » 22

Throat_Yogurt writes:

Agreed Klaus. As for the dumpster behind Joey's..it's been there for a decade, why is it a problem? Plus there is a dumpster behind the establishment anyways.

happy6 writes:

where the hell's the high priced finance lady we hired....maybe in las vegas?

marcofriend writes:

in response to rolomokat:

(This comment was removed by the site staff.)

Better yet, how can it possibly take 3 months to find the answer using 5 staffers and a County person to help? They then make it sound like they knew the answer all along. If all this is true, why didn't then just answer the question as to where is the money when the question was asked in January.
OK. They will review Riviere (and I can't imagine he deserves a good review). We have no open government and they make nothing easy and clear for the people. We have a Finance Director who is doing business the same old way as the past with no basic accounting principles in place.
Clean house and try again, even though it is a common theme at City Hall.

happy34145 writes:

We need more Fire trucks!

maharg writes:

The finance director did not make the decision to borrow money internally which created the confusion. The audit showed there is no missing money. I sense a lot of misogyny in the comments that the "high priced finance lady" is in Las Vegas. She works longer hours than anybody and "Shadow" and "MarcoFriend" are way off base. I fear they have an agenda we'll be sorry for. We have never had a more competent guardian of the city's finances.

OldMarcoMan writes:

Do you have first hand knowledge that she was working 'long hours?' Was she supervised while working past normal business hours?
It's generally excepted that when dealing with money no one works alone and if she was putting in all these extra hours how much does it cost the tax payers to provide this oversight?
The more I read/hear about how the finance department is run the more I think a Forensic Audit of the Department is needed sooner than later.

marco826 writes:

Hire more police. We're understaffed. Buy Fireworks too....a few more gigantic flags....Klaus hit the nail on the head...incompetent.

maharg writes:

Yes, I have first hand knowledge of the long hours she works. She gets paid a salary, no overtime. She is the boss of a 16 person department. There is no money missing ! There was an audit completed last month with flying colors. The auditors understood exactly where the money is and isn't. It's the room temperature IQ people that don't understand.

Sparky100 writes:

This just keeps getting better. Now we have a finance director with a 16 person department taking three months to tell us room temperature IQ people were the money was hiding. I am starting to think the room temperature IQ people are the people answering the questions, not asking them.
If you need to misplace another 4 million, I have an open bank account you can use for 3 months.

happy6 writes:

maharg,,sorry you are so "in the bag" for the finance dept...i have never seen a city the size of marco with a 16 person finance dept that can't keep track of money and has to keep hiring consultants to do their job...sorry...i agree to disagree with you on this...you must work for the lady.

mahiman writes:

Seems as if most of the decisions by men have run the city into the ground. Get more women in there!

happy6 writes:

at least they "found" the money before someone had time to leave town with it....poor waldi.

26yearsonmarco writes:

An issue like this should serve a wakeup call for "We the People" to start a Petition to end Cityhood, and place it on the next Ballot, assuming at least 1300 people sign it.
If this is not done, then we might as well subscribe to the old saying: "When Rape is Inevitable, Lay back and Enjoy It”, because this nonsense will never end, and most likely get worse over time.
There are many highly intelligent and successful business people who I’m sure will volunteer their time to handle the transmission back to County control, and to form an oversight committee to insure the County is doing the right thing.

marco97 writes:

I'm with you 26years, that's how we became a City. Year after year it was put on the ballot and I think the fifth time it passed and we became a City. I think we should have a repeal City question on the ballot every year, at least it may get the city counselors and managers to stop spending money like it grows on trees. It seems like every other vehicle on the road is a City vehicle except I rarely see police cars in my neighborhood, guess they are all hanging out near the condos and not the residential areas.

26yearsonmarco writes:

This person will be looking for a new job.

http://news.yahoo.com/blogs/lookout/s...

loscabos writes:

The only legal way to change the city government structure is through changing the city charter. City council can change the charter by setting up a board of representatives they select. History shows that doesn't work for this city. Our only future hope is that the councilors lead the city into such a financial bind that the State steps in with it's true Austerity measures in place in order to get finances back under control. But then the State never really relinquishes control back to the city. Then it's good-by Parks & Rec., Beautification,etc.,etc.Maybe that would be good!

26yearsonmarco writes:

in response to loscabos:

The only legal way to change the city government structure is through changing the city charter. City council can change the charter by setting up a board of representatives they select. History shows that doesn't work for this city. Our only future hope is that the councilors lead the city into such a financial bind that the State steps in with it's true Austerity measures in place in order to get finances back under control. But then the State never really relinquishes control back to the city. Then it's good-by Parks & Rec., Beautification,etc.,etc.Maybe that would be good!

Here is a good description of the Florida Statutes regarding this matter.

http://www.myfloridalegal.com/ago.nsf...

1Paradiselost writes:

$4,000,000 found..... Time for a tax cut!

loscabos writes:

in response to 26yearsonmarco:

Here is a good description of the Florida Statutes regarding this matter.

http://www.myfloridalegal.com/ago.nsf...

That is a very informative piece of legalese. If I'm not mistaken, the jest of the articles lays dissolution at the feet of our state or county legislators; or by ordinance of our city councilors and approved by a vote of the qualified voters. Seems like a big impossiblity to rid ourselves of this citys' form of government.

Throat_Yogurt writes:

Islanders! Mutiny is the only way to over come this insubordinate group of "counsel"! What say you? AY?!

Throat_Yogurt writes:

in response to 1Paradiselost:

$4,000,000 found..... Time for a tax cut!

theyll most like raise our rates still..

26yearsonmarco writes:

in response to loscabos:

That is a very informative piece of legalese. If I'm not mistaken, the jest of the articles lays dissolution at the feet of our state or county legislators; or by ordinance of our city councilors and approved by a vote of the qualified voters. Seems like a big impossiblity to rid ourselves of this citys' form of government.

From what I understand, it requires a petition with at least 10 percent of registered voters to place this matter on the ballot for the next election.

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