ST. PETERSBURG — The City Council voted Thursday to settle a 6-month-long dispute with Progress Energy by waiving the majority of $147,000 in overdue taxes and bills.
By a 5-3 vote, council members approved a settlement negotiated by Mayor Bill Foster that excused the utility from paying the debt in exchange for a $50,000 contribution to the construction of a courtyard at Pinellas Safe Harbor, a homeless shelter that the city and county has built. Foster said he tried to get the utility to contribute more but was happy with Progress' donation.
He also asked that, in forgiving the taxes and bills, the council consider two other contributions that Progress Energy has made: $50,000 to Al Lang Field to host international baseball, soccer and other sports; and $15,000 it spent on landscaping at a downtown electrical substation.
If the council rejected that settlement, the city was at risk of alienating an important corporate partner, Foster said, especially if it ended in a lawsuit.
Council president Jim Kennedy and members Bill Dudley, Steve Kornell, Wengay Newton and Karl Nurse approved the settlement.
"Sometimes you're in a situation where there's an unhappy ending," Nurse said. "If the city sues, how eager would Progress Energy be to open up their wallets for city causes?"
Leslie Curran, Jeff Danner and Herb Polson opposed the deal.
In the context of the $183.7 million that Progress Energy paid the city in collected franchise fees and municipal taxes from customers from Jan. 1, 2005, to Dec. 31, 2009, the owed amount was miniscule.
Yet in the context of the city's budget, which faces an $11 million deficit next year, the $147,000 could be used to save jobs and preserve services, at least for one year.
Representatives from Progress Energy disputed the city's audit last year that showed it had failed to collect and pay the city fees and taxes from properties that had been annexed into the city in 2004. They said the utility had not been properly notified that the properties were now in the city. In a Dec. 8 letter, Gail Simpson, a manager at the utility, stated it would be willing to pay only $5,050.
Last week, Foster told the St. Petersburg Times that he was negotiating a settlement with Progress Energy and had ruled out a lawsuit because he considered the utility such a good corporate partner. He said the settlement would consider its contributions to the community, including $200,000 a year to the Progress Energy Center of the Arts and $50,000 to his sports alliance, which promotes international baseball.
He worked alone with the utility on the agreement and with little input from his legal staff.
"We were informed late in the process," City Attorney John Wolfe told the council. Asked if this set a precedent whereby other corporations could claim past good works in avoiding fees, Wolfe gave a careful response.
"It opens the door a little bit is all I can say," he replied.
Michael Van Sickler can be reached at email@example.com.