MARCO ISLAND — Newly elected Marco Island City Council Chairman Larry Magel and Councilor Bill Trotter led a discussion Monday on reducing utility surcharges. Plans for the reduction were considered at several council water and sewer rate workshops in the past month.
During an earlier presentation of a rate sufficiency study, council’s consultants from Burton and Associates made the recommendation for surcharge reductions. They based their decision on the city’s sufficient reserves for Septic Tank Replacement Program road resurfacing and the STRP buy down subsidy. Council voted 7-0 to reduce the surcharges.
Councilors had been worried that accounting for the surplus might not have been explicitly delineated.
“I think there’s a lot of money in the surplus reserve that is unclear,” said Trotter. “We shouldn’t keep the city as a bank for reserves for road resurfacing. We need to identify it properly and not continue the surplus amount. Let’s refund it to the people if we don’t need it for road resurfacing.”
In a previous meeting, council members directed the city manager to have Collier County’s Clerk audit the surcharges and report back to council. Magel said that more surcharge reserves might be refunded after that report.
“The 6 percent is a no brainer,” he said. “I, too, want to discuss the balance after the county clerk does the audit on our financials.”
City Manager Jim Riviere said he was meeting with the county’s clerk on Wednesday of this week, and following the discussion, would have a timetable for the audit to give to council.
Patricia Bliss, city finance director, reviewed the two surcharges last year at council’s May 16 meeting. The 2011 and 2012 road resurfacing surcharges were based on bid contracts and quantity estimates. The 2013 surcharge was an engineering estimate that included factors for increased crude oil products.
The buy down surcharges offset a $2,758 subsidy given to homeowners for improvements to the older wastewater treatment plant that would have occurred if the STRP program had not been developed.
The original 6-percent road resurfacing surcharge was reduced in January from 6 percent to 4 percent. On Monday, that surcharge was further reduce by 1 percent to a new rate of 3 percent. The buy down surcharge was reduced from 8 percent to 3 percent. The resulting blend decreased surcharge billing from 12 percent to 6 percent.
Bliss said the new rates will go into effect March 20 with residents seeing the decrease in bills generated on March 31. Consultants have recommended that further surcharge reductions be considered for the beginning of fiscal year 2013.
One of Magel’s plans as new council chairman is to get data about the city’s financial condition, utilities and surcharges to the public through local organizations.
“I want to refute rumors that are not fact based,” he said.
“I plan to communicate more with the public,” Magel said. “for example, the misinformation that the city has $4 million dollars in debt. The city has $230 million dollars in debt with $176 million in utilities. I want people to understand where that debt is.”
Magel plans to visit community organizations like Kiwanis, the Rotary Clubs, Marco’s Board of Realtors and other groups to present the financial facts and discuss them with residents.