Council hears about $2.6 million shortfall in police pension fund; budget workshop to follow

Councilor Schwan told the Marco Island City Council on July 6 that the city’s police pension fund is carrying a $2,600,000 shortfall that began in 2022 and needs a plan to be restored to the ordinance-required funding level of 100 percent.

"The fund though was running a deficit now of $2,600,000," Councilor Schwan said as he urged the council to consider options. Members discussed possible causes including investment-return assumptions, contribution levels and prior administrative decisions.

City Manager Casey Lucius said staff had only recently been made aware and that the deficit will be a topic for the FY27 operating budget workshops scheduled for July 13 and July 20. Lucius noted the city faces competing demands for maintenance and capital projects and told councilors: "If you're really serious about funding the pension plan, you may be looking at a millage increase."

Councilors discussed possible actions: reviewing actuarial assumptions, asking the police pension board for recommendations, and coordinating with legal counsel regarding what the city's ordinance requires versus state law. Several councilors asked staff to return with analysis and options during the upcoming budget workshops; no formal corrective action was taken at the July 6 meeting.