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Eyeing fiscal conservancy, the Marco Island City Council has approved an ordinance that would put in a safeguard for major capital expenses.

By a 4-3 vote, the council approved requiring a supermajority for capital purchases that are greater than 10 percent of the average of the last four years of general fund revenues.

The capital spending ordinance was proposed by Councilor Jared Grifoni, who put together the concept late last year.

In a white paper he presented to the Council, Grifoni noted how local voters supported Amendment 5, which put requirements in both state legislative chambers that a two-thirds majority was needed to impose new taxes or increase existing fees.

“It’s not a revolutionary concept,” Grifoni said. “It’s actually a concept that protects taxpayer dollars, which is why Florida statutes require a supermajority or unanimous vote to raise your taxes over a certain amount.”

More: Marco Council one step closer to adding capital spending safeguards

More: Marco Council to explore ordinance adding requirement for major capital projects

Looking at general fund revenues over the last several years, the new ordinance would apply to capital purchases of around $2 million or higher.

One of the main concerns among councilors heading into the second reading of the ordinance was how it may affect future borrowing.

Councilor Howard Reed, who was among the dissenting opinion, read letters from the city’s bond counsel which stated that the ordinance likely wouldn’t lower the borrowing costs and it couldn’t be said it won’t increase costs in the future.

Part of the rationale in the opinion was that the ordinance would take away some of the city’s financial flexibility.

“We the City Council are responsible for spending the taxpayers’ money wisely,” Reed said. “If we the City Council do something that would negatively affect our bond rating, then it could make it so that we don’t get a bond or a loan that we were seeking or that we might get one at a higher rate.”

Councilor Sam Young also voted against the ordinance and noted how the supermajority vote requirement would have negatively impacted the city years ago.

“Had this been in place when the STRP (was approved), we’d still be on septic,” Young said.

Young also said that there were already safeguards in place regarding increasing the millage rate and said the ordinance would only result in gridlock.

“Why shackle ourselves even further?” Young said.

Millage rates five percent over of the rollback rate require a supermajority vote while rates 10 percent over require a unanimous vote.

In response to Young’s comments, Grifoni said the comparison was likely comparing apples to oranges as there were no requirements for specific projects.

As part of the ordinance, it would also require a supermajority by future councils to repeal the new requirements.

 

 

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