A short-term rental ordinance passed by voters more than a year ago and later by Marco Island City Council, only to be nullified in October, cost the city more than $700,000, city officials said during a Monday Council meeting.
The ordinance, which was never fully instated, required those who rent their homes for less than 30 days more than three times a year to register their properties with the city and follow a list of rules. It was put on the 2022 primary election ballot and passed in a 56.9% vote by the residents.
Council passed the ordinance in December in a narrow 4-3 vote. The registration program started in March, but within two months, four lawsuits were filed against the city.
Council then voted during the summer to postpone enforcement of the ordinance until January 2024. The ordinance was officially nullified in October by Council following a second legal opinion on its enforceability, largely based on Senate Bill 250. The bill states municipalities within 100 miles of where either Hurricane Ian or Hurricane Nicole made landfall shall not propose or adopt any moratorium on construction, reconstruction and redevelopment of any damaged property or can a municipality propose more restrictive or burdensome amendments to its comprehensive plan for land development regulations.
Assistant City Manager Casey Lucius presented the estimated $726,934 price tag for the short-lived ordinance to Council.
Vice-Chair Jared Grifoni expressed disappointment in the loss of taxpayer dollars. “That $727,000 is gone. It was flushed away on a promise that this was not going to cost the taxpayers a dime,” Grifoni said. “Not only not a dime, it wasn’t going to cost the taxpayers a penny. That turned out to be absolutely 100% false.”
Between 2020 and 2022, staff time and legal fees to prepare the program totaled to more than $250,000.
Once the ordinance was passed, $445,000 was spent. The city hired five full-time employees and one part-time employee, who were eventually reassigned after Council postponed the statute. Marco Island also purchased two fire inspector vehicles and two code enforcement vehicles, all of which have either been moved to different departments or used as replacements for vehicles scheduled to be replaced in 2024. The GovOS software to be used for the registered properties was canceled by the city last month, but the $87,000 annual fee was still paid.
The city made no revenue from the program, as the 59 short-term rental owners who paid their $800 fee will be reimbursed.
Councilman Darrin Palumbo expects this ordinance to be brought back to Council in the future but hopes for a different outcome.
“I’m going to come out and say it—three of us have been saying it over and over—you’re going down the wrong path,” Palumbo said. “And this is the end result for taking that journey down the wrong path.”
Councilman Erik Brechnitz was one of four on Council who voted to pass the ordinance and admitted he made the wrong decision.
“I voted for this ordinance, and it was it was a mistake,” Brechnitz said. “I agree with what [Grifoni and Palumbo] are saying. It’s not the only mistake I’ve made in my life and won’t be the last mistake I make. But if I had to vote to do it over again today, I wouldn’t vote that way.”
