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Audit: Penny claims a stretch

County officials, past and present, deny findings they misled the public about Penny for Pinellas tax expenditures.

Published March 20, 2004

Year after year, on brochures and construction signs, Pinellas County's government told the public that every road, park and facility it built was paid for by the Penny for Pinellas sales tax.

In all, $741-million in Penny money was spent in the 1990s, the county said.

But the real total was much lower - about $448-million, a new audit says.

"The county represented that the Penny for Pinellas was providing a bigger bang for the buck than it was actually providing," said Robert Melton, the internal audit division's chief deputy director.

The audit covers 1990-2000, the first decade in which the 1-cent sales tax was collected. The report describes a county administration that didn't keep precise records of how the money was spent. And while no laws were broken, the audit says the government misled the public, which approved the tax in 1989 and extended it in 1997.

Melton said the county should come clean about how it informs the public.

But county officials, past and present, vehemently deny wrongdoing.

"I really don't accept the notion that the public is misled," said County Administrator Steve Spratt, who was not with Pinellas when the tax was initially levied. "What annoys me are these exaggerated points."

The 80-page report also found that:

Sometimes without the knowledge of the County Commission, 193 public projects were canceled over the 10-year period.

The county cannot say how much Penny money went to any given project because the money was comingled with other revenue into a fund that pays for most street improvements and parks.

The audit sampled 65 projects and found that 64 percent of them were significantly over budget.

Melton worked on the report for a year and presented a draft to county officials in August. It took county officials until this week to respond, Melton said. He said county officials showed only "passive cooperation" during the process.

Spratt contested that, saying that it takes time to dig up decade-old documents.

Former County Administrator Fred Marquis called the report an example of "Monday morning quarterbacking" some 14 years after the fact.

"The whole report is bunk," said Marquis, who was in power during the audit's coverage period.

No matter what Melton wrote, Marquis said, 75 percent of every park and street improvement project was paid for by the Penny.

Perhaps Melton doesn't understand the process, Marquis said. Some projects were canceled because the residents later decided they didn't want them, or because an individual city paid for them, he said.

People always understood that the Penny for Pinellas was one of several sources of money for projects, he said.

"The Penny was never intended to be anything but a funding mechanism that became the backbone of the capital improvements program," he said.

Signs posted at county construction sites usually read: "Your Penny for Pinellas at work for you." An uninformed reader might construe that to mean the project was funded entirely by the Penny tax, the audit says.

That's partly why at least one county commissioner thinks more information is always better.

"I think they should have detailed the listing of what the Penny expenditures were used for and the use of other monies," said Commissioner Karen Seel, who joined the commission in 1999.

"Most people see a large county budget and don't understand fully all the different resources that all of us utilize to make capital projects happen," she said.

Melton referred to a statement by Commissioner Calvin Harris as an example of the spread of misinformation.

In the county's 2002 "Annual Services Report & Directory," Harris wrote: "a full report of where the pennies have come from and what projects those pennies have made possible is located within these pages."

That's misleading, Melton said, because the Penny tax paid for only a portion of the projects included in the quoted brochure.

Harris acknowledges that the county could have been clearer. But he said Melton's report strayed too far beyond financial issues.

"It appears to go beyond the normal auditing," Harris said. "This auditing looks at intent. They don't appear to want to try to do anything constructive.

"In the future, we can say that this project was paid for by gas tax, federal highway tax - yes, we could do that," added Harris. "But we felt in the past that citizens didn't care about federal dollars; they just wanted to know that we were doing what we're supposed to be doing."

The audit is the second major blow to the Penny program.

In January 2001, county officials conceded that for years they had approved various Penny projects without adding up the total cost. As a result, they overcommitted themselves and had to trim more than $50-million in projects.

Melton's report also claims that county budget officials consistently underestimated the cost of projects. The result, Melton said, is that when early projects came in over budget, other projects had to be dropped from the list.

"When it happens time and time again, it's time to look at the estimation process so you hit closer on an overall basis," Melton said.

Far too many projects were delayed, he said. And with delays come inflation, driving up project costs. One year into the second 10 years of the Penny program, 36 projects had to be cut because there just wasn't enough money to go around, Melton said.

Most of the issues raised in the audit have already been addressed, said Spratt. For example, he said, county staffers now spend more time updating the timing of projects to project the future cost more accurately.

"I don't disagree that we ought to improve the quality of those forecasts," Spratt said.

Commissioner Ken Welch doesn't want the public to lose faith in the Penny funds, which paid for the new medical examiner's facility and the Bayside Bridge.

"I am disappointed by the timing and the tone of this audit," Welch said. "I would hope this audit wouldn't undermine the public's faith in the Penny."

Karleen DeBlaker, clerk of the Circuit Court, said she ordered the audit in response to a number of questions raised by residents about the use of the money in the Penny for Pinellas program.

DeBlaker said the audit likely would not have been conducted if left up to commission.

"It doesn't bother me if they (county commissioners) like it or not," DeBlaker said. "We're just responding to the facts; that's all. They made their bed, so to speak. I didn't expect to be loved when I started asking questions."

- Adrienne Samuels can be reached at 445-4157 or

[Last modified March 20, 2004, 01:20:34]

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