Largo has about $632,000 in tax money in frozen fund
Officials plan to review the situation with the city attorney.
By ANNE LINDBERG and RITA FARLOW, Times Staff Writers
Published January 16, 2008
Frustrated and angry city officials blame the county tax collector because some of their property tax revenues have been frozen.
Municipalities aren't the only ones affected. None of Pinellas' 47 taxing districts are able to tap some money they are supposed to get from property taxes.
The money - a countywide total of $48.1-million - was in a state-run investment pool when the State Board of Administration froze the fund in late November to prevent a run on the account.
Cities, counties and other taxing authorities began pulling investments out of the pool late last year as the stock market began tanking and it became obvious that some of the pool's investments were not performing well. Embarrassed state officials are investigating why those investment decisions were made.
However, the localities did get some good news last week, when they were informed by the State Board of Administration that some thawing could start by the end of the month. The thaw will mean cities can tap into a percentage of their moneys. The remainder would remain frozen.
Pinellas' 47 cities and taxing districts will be affected by the thaw. Each has some money in the state investment pool.
St. Petersburg has the largest amount frozen with more than $3.2-million. Clearwater has $1.7-million, while Largo has $632,000.
But Largo officials say they're counting their blessings.
A day before the freeze took effect, city staffers nearly emptied the balance of the account, about $25-million, said Largo finance director Kim Adams.
They left $1,000, to keep the account open and Tax Collector Diane Nelson deposited $631,950 in property tax revenues into the frozen account.
"So, the unknown there is whether we will ever receive that full amount of money," said Assistant City Manager Henry Schubert. "Obviously, we never want to lose even one dollar, but it would not have a significant impact on our finances. But we are concerned that the money was put there in the first place."
Schubert said the city staff would review the situation with City Attorney Alan Zimmet.
"We're going to discuss what our legal options are. At this point, we haven't lost anything, so we're not going to rush into legal action until we see how this all works out."
Tax collector blamed
Carlos Thomas, chief deputy in Nelson's office, said this is a one-time situation. Nelson is holding the money in an account at Wachovia bank.
Some city leaders said Nelson failed to pull the money out of the investment pool before the freeze took place, failed to tell the cities in a timely way what she was doing with their money, and placed more money than expected in a fund consisting of investments that could prove to be worthless.
Thomas said Nelson did draw down her account to make a distribution in mid November, but did not want to make the situation worse by taking out all of the money when others started pulling out. The $48-million was still in there when the accounts were frozen. Thomas said he does not want to minimize the seriousness of the situation, but the money involved is a small portion of the taxes each authority receives during the year.
The process is complex.
Nelson receives the tax money property owners pay each year. Her job is to make sure that each taxing entity gets the amount it's entitled to.
But Nelson does not cut a check to those entities every time she receives a payment from a taxpayer. Instead, she parks the money someplace safe and, basically, writes the cities and other entities one check a month consisting of the total she has collected for them during that time.
But late last year, as the stock market began dropping and the investment picture became tumultuous, cities and others began pulling their money out of the state investment pool.
The state froze the pool before everyone got out. Some of the money Nelson was holding was still in the pool when it was frozen.
Her solution was to transfer the amount of money each city or taxing authority was owed into new or existing accounts in the frozen pool.
South Pinellas County tax collection
Taxing authorityAmount frozenTierra Verde Fire$44,240Emergency Medical$1,307,470Belleair Beach$26,803Belleair Bluffs$33,822Belleair$101,086Belleair Shore$2,289Clearwater$1,693,888Gulfport$88,860Indian Rocks Beach$48,005Indian Shores$53,798Kenneth City$15,761Largo$631,950Madeira Beach$60,368North Redington Beach$16,624Pinellas Park$609,876Redington Beach$27,609Redington Shores$28,169St. Petersburg$3,247,890Seminole$101,807South Pasadena$19,006St. Pete Beach$216,514Treasure Island$119,703General School$19,043,275Lealman Fire$135,876Pinellas Suncoast Fire$77,773
Source: Pinellas County Tax Collector
[Last modified January 16, 2008, 00:32:32]
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