ST. PETERSBURG — Mayor Bill Foster is bracing the public for the austere times ahead and the cuts that will result from the $11 million deficit in next year's budget.
"We're seeing all of these reductions, from franchise fees, telecommunications, and all of these sources," Foster said Monday during a Pinellas County Republican Party meeting. "We will find a way to cut, but it'll involve real people and it will involve programs."
Yet at the same time Foster is prescribing cuts, he's set to forgive an overdue tax bill from one of the city's largest businesses, Progress Energy.
A city audit completed in September found that the utility had failed, since 2005, to pay fees and taxes it was required to collect from eight commercial properties north of Ulmerton Road. The properties were annexed into the city in 2004. City Auditor Brad Scott estimates the city is owed $147,000.
That's chump change compared to the $40 million Progress Energy pays the city every year in franchise fees and taxes. Still, in these lean times, that overdue money could help ease some cuts.
The utility, however, disputes that total. The company says the fees went uncollected for years because the city didn't include the addresses of the properties in notices to the utility about the 2004 annexation, said Mark Winn, the city's chief assistant city attorney.
The city contends that the notices should have been adequate because they included property identification numbers for each parcel, as well as a map showing the annexed land, Winn said.
How will the dispute be resolved?
It already has, said Winn, who said he is drafting a settlement that will be voted on by the City Council soon. Foster negotiated the proposed settlement himself and without help from legal counsel, Winn said.
But neither he nor Foster will say exactly what the proposed settlement is. However, Winn did say the settlement does not require the company to pay the unpaid fees and taxes.
"At no time, with the sum of money that we are talking about, have I considered filing a lawsuit against our best corporate partner in the city of St. Petersburg," Foster said.
In negotiating the settlement, he said he considered the contributions the utility has made to the community, such as $200,000 a year to the Progress Energy Center of the Arts and $50,000 to Foster's sports alliance, which promotes, among other things, international baseball.
Utility officials also stressed their community involvement during the dispute.
"We've always enjoyed a good working relationship with the city, and we're working in good faith with the city," said spokeswoman Suzanne Grant. "We both appreciate the value of the larger, longer term relationship."
Grant said that Progress Energy's foundation contributed $1.3 million to various causes last year in Pinellas County. The company contributed a total of $3.4 million last year in Florida, where it serves 35 counties.
Foster told some members of the City Council about the issue, but they said they didn't recall the details.
"They're a little fuzzy in my head," said Karl Nurse, who said he spoke with Foster by phone about 10 days ago. "It does put the city in the awkward position of what happens when your most generous local business made a mistake. It puts everyone in a bad position."
Bill Dudley said Foster told him about two weeks ago so that Dudley wouldn't be blindsided in case the media called.
But Dudley said he didn't know the details. When told that Progress Energy owed $140,000, he expressed surprise.
"We're hurting financially," he said. "If they owe it, they should pay it. But by the same token, there may be a reason for them not to do it. I really don't know anything."
Michael Van Sickler can be reached at (727) 893-8037 or [email protected]