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Alternative revenue sources are not bankers with spiked hair cuts, earrings and big black boots. They are the answer proposed by city staff to the challenge of decreased property values and tax reform.

Since last month’s first general budget workshop, many public discussions have been held where residents pose several questions to city staff about budget issues. Among them are requests for explanations of PILOT, payment-in-lieu-of-taxes, the fire assessment and the storm water utility fee which may supplement or replace traditional property taxes.

The City of Marco Island will collect $1.8 million less this year due to decreased taxable property values and tax reform if the millage rate were to stay the same. In a phone interview, City Finance Director Bill Harrison helped to boil it down per property owner.

If all property owners on island were to split the $1.8 million like a large community bill, owners would need to contribute about $90 more dollars this year per property, he said. There are about 20,000 dwellings on island, he further explained.

City Council has a few options as to how they will collect that $90, or whether they believe the city should run with more or less revenue than it received last year and therefore increase or decrease the $90 estimated average.

Some of the options, or alternative revenue sources, which city officials have proposed to make up for a lack of property tax revenue, may be confusing.

Don Farmer described the confusion in a recent column in the Naples Daily News about a televised City of Marco Island budget meeting.

“I suggest televised council meetings include voice-over, play-by-play announcers and color commentators. That’s because our councilmen and commissioners tend to speak in tongues,” Farmer wrote.

As Farmer says, this political and financial lingo is a “tangle of acronyms, synonyms, homonyms and occasional good old fashioned Gospel-hymns, as in ‘Lordy Lordy, how much longer will this meeting last?”

Even simple words like “fire” and “assessment,” when combined, run the possibility of becoming more confusing.

However Harrison along with Fire Chief Mike Murphy and City Manager Steve Thompson, have found new ways throughout the last couple weeks to explain these proposed expenses that tax payers may soon take on.

Florida state law limits ad valorem rates to 10 mils (a mil is one thousandth of a dollar). With last year’s property tax rate being less than 1 mil, “that’s not much of a safe guard,” Harrison said.

Fire assessments on the other hand have “an absolute legal limit,” he said. They cannot exceed the actual expenditures.

However, if the fire assessment were as high as legally allowed, the average single family residence would pay $152 and raise more than $4 million for the city.

“That’s way more than what we need. We could cut the tax levy,” Harrison said.

A special assessment can only be used for fire, not EMS, because they legally must have a direct benefit on property value, not health and safety, Thompson explained.

Thompson further explained some skepticism raised by Marco Island Tax Association president Fay Biles who attends many of the city’s public forums on tax issues.

Biles said she was skeptical that the fire assessments could be waged to account for 91 percent of the total Fire Rescue and EMS budget.

“I see a lot more EMS responding to medical calls than just nine percent,” Biles said.

Thompson explained that “you have to still be able to maintain a certain level of service even if you only had one fire call. Nine percent would not be necessary if we were not providing medical service,” he explained.

The PILOT as proposed would also make up for the city’s quest for that average $90 loss due to property tax losses.

PILOT is a common way for municipalities to make up for the property taxes lost when what once was a private company is municipalized. Such is the case when the city took over the water utility.

To make up for the loss, Public Works Director Rony Joel proposed a six and a half percent increase on customers’ water bills.

Harrison said the average single family residence pays about $129 per month for water, so PILOT would cause bills to increase by about $8.38 per month. Annually, that’s more than enough to make up the loss in tax reform and property values.

Another alternative revenue source is a storm water runoff fee. A storm water utility enterprise fund would be created with this fee in order to use the money raised exclusively to pay for improvements to the storm water drainage and collection system.

Storm water has a cost to the city because it must be diverted in the right direction using ditch lines, held in storage tanks and may need to be treated due to chemicals such as pesticides. These hazardous materials must be collected or the water treated, Thompson explained.

The cost as proposed to City Council would be $6 per single family residence. The storm water utility fee, likely to also be placed on the water bill, would not be enough if it is the only alternative revenue source to make up for the loss.

City Council will likely set the millage rate at the July 24 meeting, which starts at 5:30 p.m. in the community room next door from the police office. Unless the millage rate is raised more than 10 percent, one or more of these new fees or assessments is likely to be used to supplement the tax rate and make up for decreases caused by Amendment 1 and decreased property value. If not, the city will be required to cut expenses or services.