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Bonds flub costs Pinellas Park $67,000

Pinellas Park has already fired its finance director, who says others were responsible for the costly delays.

By ANNE LINDBERG, Times Staff Writer
© St. Petersburg Times
published February 5, 2003

PINELLAS PARK -- Officials discovered last week that the former finance director failed to pay off bonds as the City Council ordered last summer, resulting in a substantial loss for Pinellas Park.

The failure to pay off the bonds cost taxpayers about $67,177, according to city records. That's interest paid to bondholders Pinellas Park could have kept had the bonds been paid off as the council wished.

It was the third incident involving Dick Wheaton, who was fired last month after officials discovered he had twice neglected to send enough money to city pension plans.

Those oversights cost taxpayers about $12,600 in interest penalties, city records show. That's a total loss to taxpayers of about $79,777.

Wheaton denied Tuesday he had neglected his duties. He said that the City Council had authorized the staff to pay off the bonds, but that they were scheduled to be paid off concurrent with the issuance of new indentures. In any case, he said, preparing to pay them off took time.

First, documentation had to come from the city's bond counselors or financial advisers, he said. Then, that information was sent to the city attorney's office. The attorney, Wheaton said, returned the documents only shortly before Wheaton was fired.

In any case, Wheaton said City Manager Jerry Mudd, his supervisor, knew the situation.

"He knew they were not paid off," Wheaton said. "Yes, I had conversations with him."

Wheaton said he felt he was being made the fall guy.

Mudd was in the hospital Tuesday and could not be reached for comment. But it's unclear why Mudd took so long to discover Wheaton's alleged oversights.

Officials only discovered last month that he had failed to promptly pay pension bills on Oct. 1, 2002, and for the fiscal year ending Sept. 30, 2000. And they did not realize until last week that he had not paid off bonds as the council ordered last July. That discovery came after Mudd ordered an investigation into Wheaton's office.

Assistant City Manager Mike Gustafson, who is in charge until Mudd returns, said he was not familiar with the situation. However, Gustafson said Mudd has changed procedures to require the finance manager to provide a quarterly report on the city's investments so more people will know what payments have to be made.

"When Jerry found out we had a problem, he dealt with it quickly," Gustafson said.

The bonds were issued in 1984 so Pinellas Park could repair and expand its water system. Last summer, council members briefly considered refinancing them to avoid large increases in water rates.

When it became clear that refinancing the bonds would cost the city money, the council decided to pay them off and issue new bonds to improve the water and sewer system.

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