LEALMAN — Fire commissioners here canceled a million-dollar contract in a quest to preserve a tenth of that in property taxes.
Now, the Lealman Fire District has lost the contract and the tax money. And it could lose even more revenue because the contract was forfeited.
But far from looking at it as a bad trade, at least some fire commissioners think they had no choice and acted wisely.
"It's not a matter of being a trade," fire board member Kathleen Litton said. "It's not a matter of a good trade or not a good trade. It's principle."
The fire board voted last fall to cancel a contract to provide fire service to Kenneth City because the town annexed seven properties for a total tax revenue of about $7,200 a year. Because of the way the contract was written, Kenneth City did not come under a law that requires annexing cities to pay special districts like Lealman the property taxes for four years.
The contract was worth a bit more than $200,000 a year. It had five years to run, meaning the board canceled an agreement worth more than $1 million over the loss of $7,200 a year, or $28,800 for the four years and the possibility that Kenneth City would annex more in the future.
Negotiations between Kenneth City and Lealman failed, and the town chose to go with Pinellas Park for fire coverage.
During negotiations, Kenneth City annexed more properties, bringing Lealman's total annual tax loss to $27,400, or $109,600 for the four years. That's about a tenth of the million dollars the Kenneth City contract would have brought into district coffers.
This is not the first time the Lealman fire board has sacrificed a lot of money for what seems to be relatively little return.
The board has paid about $475,000 in costs and attorneys fees to the Lewis Longman & Walker law firm of West Palm Beach during the past five years, according to copies of bills submitted to the district. Much of that went to lawsuits against Seminole, Pinellas Park and St. Petersburg to reclaim tax money the district said it was owed for properties the three cities had annexed. Lobbying the Legislature for a law to protect the district from annexation accounts for another chunk of the bills.
What did taxpayers get in return?
• A written promise from Seminole that it would not annex east of Park Street for 15 years. But Seminole had enacted a policy in 2001 of not annexing east of Park Street anyway.
• A written promise from Pinellas Park that it would refrain from annexing into the Lealman fire district for eight years. But that city, too, had announced in 2002 that it would no longer annex into the Lealman fire district.
• A judgment against St. Petersburg for $47,284. Of that, $37,507 was tax money owed from annexed lands. The remaining $9,777 was reimbursement for the district's attorney fees.
• A court ruling that any city annexing land in the Lealman district has to pay the fire taxes for four years. After that, the city gets all tax money.
• No law has been passed to protect the Lealman district from annexation. Lobbying continues.
"I think the lawsuit money had to be spent," said fire board member Vivian Diane Campbell. "There was no way not to."
If the fire district did not aggressively fight annexation, she said, "there might not be a Lealman."
Lealman fire Chief Rick Graham said the bills aren't just for the lawsuit and lobbying. They include representation at an annexation tax force established by the Legislature and a countywide annexation task force.
Graham said he made many appearances in the community to warn taxpayers about the expense of fighting the lawsuits, but no one ever protested. Besides, he said, the district did get a big bang for its buck. In particular, it got the court to rule that annexing cities have to pay the district.
"That was huge," Graham said.
"The bottom line is those tax dollars,'' Litton said. "The loss of them hurts us as a community. The law says we're entitled to them."
Reach Anne Lindberg at email@example.com or (727) 893-8450.