Vatikiotis: Penny running short
By KATHERINE GAZELLA
© St. Petersburg Times, published March 15, 2001
TARPON SPRINGS -- While Pinellas County officials try to sort out their overcommitment of Penny for Pinellas funds, a mayoral candidate in Tarpon Springs is predicting a dire future for the city's portion of the tax.
"At some point, we're going to run out of money," former City Manager Costa Vatikiotis said. He contends that the city "is in a worse problem" than the county with respect to over-pledging its revenues from the sales tax.
But revised budget figures for the city show that the Penny fund will break even this year. And city records show that budgets produced when Vatikiotis was city manager projected deficits of more than $7-million, more than deficits once projected by the current city administration.
Vatikiotis based his criticism of the current City Commission's handling of the Penny fund partly on this year's budget, which showed a deficit of more than $3-million in the one-cent tax fund, when it was adopted last fall.
City Finance Director Arie Walker, a certified public accountant, was named to that position after this year's budget was completed. She has since revised the figures by moving some projects to other funds, factoring in cost reductions for some projects and moving some projects to the future. Because of those changes, she said, the Penny fund will break even this year.
A 1999 budget, produced when Vatikiotis was city manager, projected a zero cash balance for that fiscal year. It also projected a $7-million deficit for the following year, and a $6.8-million deficit for 2001.
Mayor Frank DiDonato, Vatikiotis' opponent in the March 20 election, said the city has had to work hard to make the Penny budget reach a zero balance.
"In three years, we've gone from a $7-million (projected) deficit to zero," he said. "It's on solid ground."
Vatikiotis said the future projections shown in the 1999 budget were not important. From a budgeting perspective, he said, the 1999 budget "is the only valid column."
He said the future projections "were somewhat of a wish-list type thing."
"We never budgeted a deficit in the current year," he said.
He stood by his warnings that the city is overspending the Penny fund.
He said too much of the fund is dedicated to paying off the debt on the Public Safety Building and paying for two firetrucks. He said that will restrict the amount of money future City Commissions have at their disposal.
Of the approximately $1.4-million or $1.5-million the city receives from the Penny fund, about $577,000 a year will be dedicated to paying the debt service for the Public Safety Building for the next five years. Another $87,000 a year will be used to pay for two firetrucks.
This year, the city plans to pay for those expenses and another 22 projects using Penny funds and $3-million in interfund transfers, grants and a loan from the local option gas tax. The 1999 budget, created while Vatikiotis was city manager, likewise suggested using interfund transfers to help pay for projects on the Penny list.
City administrators dispute Vatikiotis' prognosis for the fund. They say they still will have plenty of money to complete projects throughout the city. Although officials had previously produced budgets showing that the Penny fund would run deficits in future years, they now say they will continue to have budgets with zero cash balances.
City Manager Ellen Posivach said the city is taking a "conservative" approach to spending Penny for Pinellas money and all other city funds.
The Penny for Pinellas program provides money for the county and cities. Earlier this year, county officials discovered they would have to cut $162-million from Penny for Pinellas projects.
- Staff writer Katherine Gazella can be reached at (727) 445-4182 or email@example.com.
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