Marco Island spent $727,000 for rescinded vacation rental registration program

Marco Island spent almost $727,000 on a nullified single-family home rental registration program. The city bought software, hired full-time employees, bought vehicles, hired an attorney and spent thousands of hours in manpower to implement a program voters approved in August 2022.

"That $727,000 is gone. It was flushed away on a promise that this was not going to cost taxpayers a dime, not only not a dime, it wasn't going to cost taxpayers a penny. That was false," Vice Chair Jared Grifoni said Monday after Assistant City Manager Casey Lucius presented the cost analysis to City Council.

Voters approved a registration requirement for Marco Island single-family homeowners who rent their properties less than 30 days at a time. City Council had two public hearings and tweaked the language, and the ordinance went into effect on Dec. 5. The registration portal opened March 15. The first of four lawsuits was filed 12 days later.

A law signed by Gov. Ron DeSantis in June affects local governments within a 100-mile radius of Hurricane Ian, which made landfall Sept. 28, 2022 at Cayo Costa and then in Punta Gorda, as near Category 5. The law prohibits "restrictive or burdensome" amendments by local governments to land development or comprehensive plans until next October and nullifies any put in place after Ian hit.

Marco Island's vacation rental ordinance falls under the "restrictive and burdensome" category and therefore is rendered null and void, City Attorney Alan Gabriel and attorney Robert Pritt – hired for a second opinion – determined. City Council on Oct. 2 approved an order ending the program by a 5-2 vote.

What happens to the cars, employees and money paid by homeowners?

Those who paid in have been reimbursed, Lucius said. To the tune of $47,200 for the 59 owners that each paid the $800 fee. Of those, 33 passed inspection and were issued short-term rental certificates. The remaining 26 failed inspection. A total of 226 residents started the registration process, she said.

The estimated costs from process start in May 2020 to ordinance approval in December 2022 was $281,621, which includes employee time and legal costs budgeted during those fiscal years, Lucius said.

Implementation costs from December 2022 to program dissolution in October 2023 were $45,313, she said. For a total cost of $726,934.

The city hired five full-time and one part-time employee to implement the rental registration program and bought four vehicles.

All but one employee were hired to fill other positions this year, Lucius and City Manager Michael McNees said. The fifth employee was approved for a newly created position as a fire inspector. That position was approved Monday by City Council.

"We were actively seeking to recruit people to fill those vacancies," McNees said.

Some money – $144,439 – was reallocated from May to October to Code Enforcement and Fire Rescue where rental registration employees were reassigned, Lucius said.

Three of the four vehicles will be moved to other departments that have replacement automobiles budgeted for FY24: Building Department, Facilities/City Hall vehicle pool and Fire Inspector van. The Building Department will reimburse the General Fund, Lucius said. The other two old vehicles will be put up for auction.

The fourth vehicle will stay with Fire Rescue to accommodate the new inspector at a cost of $23,953, according to Lucius's report.

The other major purchase for Maco Island was software to run the registration and inspections. The city purchased GovOS for $87,179. That contract was canceled Oct. 11, Lucius said.

The lawsuits

All four lawsuits remain outstanding, Gabriel said. The city is hoping to have the lawsuits dismissed without any cost.

Lucius said any legal fees for the lawsuits are being charged to the city's insurance company.

The lawsuits are from Ferrarie (formally Reinalda Properties); Florida Association of Realtors; Gulfcoast & Atlantic Corporation; and Howard D. Reitz.

Brechnitz: I voted for this ordinance and it was a mistake

Councilman Erik Brechnitz addressed Grifoni and Councilman Darrin Palumbo's comments about what a mistake and a waste the ordinance was, saying he would like the lectures to end and everyone to move on.

"I voted for this ordinance and it was a mistake," Brechnitz said. "If I had to vote to do over today, I wouldn’t vote that way."

Marco Island resident Martin Winter expressed disappointment in the ordinance's existence during public comment.

"$729,000," he said. "That’s a whole lot of money that we could have used for other things."

More:Marco Island's controversial single-family home rental registration program tossed out