THANKS TO EVERYONE FOR ATTENDING & WATCHING MY "COFFEE"
My first "Coffee With the Other Larry" was the first one televised by the City, based on suggestions by Councilor Joe Batte and the good offices of the City Manager, Roger Hernstadt. Many thanks to them! If you couldn't attend and would like to see a re-broadcast, please click on the link below. The City Manager introduces me and welcomes the citizens. MICA provided coffee and doughnuts, and I respond to questions and follow-up from 10 individuals, covering just about every topic of interest on the Island today. The entire video lasts for about 1 hr. 55 mins.
YOU'LL NEED TO ADVANCE THE VIDEO TO THE 2:45 MARK BEFORE IT BEGINS
Let's talk about Marco Island
I ran for City Council, and was elected in November 2012, on a platform of transparency, fiscal conservatism, and responsiveness to all the citizens and constitutencies (homeowners, condo snowbirds, businesses and institutions).
At almost every City Council meeting, I make a presentation or discuss an important situation. The newspapers do not report these events. The meeting minutes provide only cursory summaries. I understand this.
So the purpose of this website is to provide the materials for your review, organized by topic, and to give you my point of view.
Most of the analyses I do, and present to City Council, are based on my detailed examination of comparable cities in Florida. In each case, I explain the comparison. You can decide if they're relevant. I spend an enormous amount of time going through the financial statements and budgets of these comparison cities. Some of my colleagues on City Council complain that "no city is like Marco Island," which of course is true but irrelevant. We can learn from what other cities do. We can learn from the mistakes they make, and try to avoid them. We're in very good shape now. We can lose this within a few years.
This site does not violate Florida's sunshine laws, according the the City Attorney.
Current hot-button topics
- Transparency: City Council rejects it. Nothing to see here, folks. Click here for editorial. We need to examine and discuss the process surrounding the dismissal of an employee. Learning from what happened can help us avoid potential problems in the future. Please make no mistake about it: I am accusing no one of wrongdoing. But the process is flawed.
- Mackle Park Community Center: We need to rebuild it. Click here for my argument. Unfortunately, my colleagues have decided to put it to a referendum, where it will fail. Earlier, grandiose plans, which have since been scaled back, have soured many voters. The Community Center fails routinely in polls and surveys (such as by MICA).
- Unfunded pension liabilities: We're one of the lowest in the state. Click here to see. There's no reason to panic. A healthy discussion would involve deciding the right levels. Many of us would start first by reducing the overall debt, holding unfunded pension liabilities in check until we can discuss a global solution. The Police and Fire Rescue unions will have to be involved at the appropriate time.
- Compensation and benefits: Marco Island's employees are not overpaid. Not the Police. Not Fire Rescue. Not City government. Click here (Pages 8-10) and here (Pages 2-6). Yes, we do have an unusual benefits breakout, under which we give a high percentage (but our pension and health contributions are comparatively lower), in part to make up for lower average salaries and pension contributions. This could be studied.
- Water and sewer rates: Our utility spends more than it has to spend. Marco Island has a state-of-the-art utility that can be maintained using far less capital than Council allows it to spend. Click here for details. We have been caught in a debt spiral: high assets, supported by high debt, requiring high maintenance spending, which unfortunately we augment from City funds from time to time. It doesn't have to be this way. We can reduce debt if we wish to do so. We can reduce water sewer rates if we wish to do so. Or we can do some combination. However, the way we're headed, we're going to increase debt and increase rates.
My presentations, analyses, and points of view
Some of my colleagues on City Council want to increase our debt. Their argument is that if we have a long-lived project, such as the Smokehouse Bridge, future users should help fund it. This is pure folly. Every capital project we undertake is for the benefit of future users, so with that logic, we should borrow for everything. And this much is crystal clear: if we borrow when we don't need to, the money we could have used will be spent by the City Council, on something. That's life. Here are the facts:
- Marco Island has the highest debt burden in Florida among mid-size municipalities.
- We need to pay down our debt, and we can do it. All it takes is business sense, and will.
- The bond refinancing freed up $6.9 million, and the Water Sewer Utility can generate more free cash in the future. Click here, and see especially Pages 3 and 5.
- The Water Sewer Utility can generate these profits, without a rate increase. Very conservative assumptions still lead to cash build-up. Click here and go to Page 12.
- We can easily pay cash for all capital projects being discussed. Click here. We can do so without reducing the prudent emergency reserves we need (25% of operating budgets). Three projects are going to be under review in the next few months. They are:
- Smokehouse Bay bridge. Likely cost $6.8 million. It will take 2 years to build. The Water Sewer Utility should pay at least $800,000 of the cost, for line relocation.
- Mackle Park Community Center. Likely cost $2.2 million. City Council, under the leadership of Councilor Ken Honecker, has reduced the prospective cost substantially, but I believe that competitive bidding can reduce it further.
- Fire Rescue building renovation. Likely cost $2.8 million. This figure is below some numbers quoted, but the renovation has not yet been subjected to scrutiny.
- We are not an overspending, over-indulgent City. We are managed conservatively.
- We live within our means. Most cities have far larger fees and charges, and most cities levy much larger ad valorem taxes. Click here and see Pages 10-12.
- The "fire boat" is not an example of spendthrift. It's a necessary marine rescue vessel, and we're a marine community. Its incremental cost is low. Click here.
- But we need to fix our "spending cap problem," because we haven't been living within the rules required by our City Charter. Click here for my white paper on this.
Several of my colleagues have deep and vast experience on the Water Sewer Utility, which I respect. However, I believe the direction we're taking is not right for the Island. Some City Councilors will allow the past practices of the Water Sewer Utility (overcharging, overfunding, over-investing), and some City Councilors want to avoid hard decisions about the Utility. Here are the facts:
- Marco Island's utility charges way above what it costs to run the utility. This is because of interest on debt and depreciation associated with the high-priced assets. Click here.
- We spend far more than required by our bond indenture. We typically spend 10% of revenues vs. 5% required for renewal and replacement. This is unnecessary. Click here.
- The amount we spend is out of line with what similar cities spend. In fact, most water sewer utilities actually pay their cities a return on the city's investment. Click here (Page 4).
- Our water sewer utility actually earns a sizeable profit. If rates stay flat, the utility could generate up to $20 million in 5 years, possibly to reduce debt. Click here (Pages 3 & 5).
- We don't need to change the rate structure. And we shouldn't spend more money on consultants nor should we put the Island through another wrenching argument. Click here.
For more statistical information on Marco Island, from an outside source, please click here. (You will be directed to another website, not controlled by me, and away from this website.)