ST. PETERSBURG — The city will no longer accept utility payments at a popular African-American community center and will instead send cash strapped residents to Amscot Financial, a controversial Tampa-based company.
The two-year agreement with Amscot will save the city $96,000 annually and make utility payments more convenient.
But residents, community activists and some city leaders are in an uproar over a deal they say will unfairly impact the city's neediest residents.
"We certainly as a city should not be encouraging our most financially desperate citizens to go to legal loan sharks to pay their utility bills," said City Council member Karl Nurse, who will ask the council to come out against the deal Thursday. "It's like sending someone on a diet to a candy store. It's the worst thing we could do."
The Enoch Davis Center will accept utility payments through the end of the month. Residents who went there this week to pay their bills were given a flier that listed local Amscot locations.
Amscot started accepting St. Petersburg utility payments Monday. The company charges a $1 convenience fee and is located as far away from some of the city's low-income neighborhoods as City Hall.
"It makes it harder for the people who don't have transportation," said Crystal Reid, 38, who has grown accustomed to paying her water bill at Enoch Davis.
Starting in January, residents who need to pay their water bill in cash have two options: the city's downtown Municipal Building or any of Amscot's 166 retail centers, some of which are open 24 hours. Residents who pay by check or credit card can still pay by phone or via the Internet.
Mayor Rick Baker's close relationship with the Amscot executive who pitched the deal to the city has also sparked controversy.
Deveron Gibbons, Amscot's vice president for public affairs, was a significant supporter and fundraiser in both of Baker's campaigns for mayor. Gibbons has also said he will run for mayor in 2009 and many expect Baker to support him.
"It seems like an inside deal, like they aren't putting the well being of the citizens first," activist Winnie Foster said.
The city had already decided to eliminate two cashier positions at the Enoch Davis Center when Gibbons approached the city about allowing Amscot to collect utility payments in 2007, said Mike Connors, the city's internal services administrator.
Baker instead put the deal out for bid, Connors said.
Amscot submitted a proposal. So did Global Express Money Orders in Maryland.
Baker's staff, including Connors, gave the two companies nearly equal scores on qualification, experience, fees and financial stability, according to public records.
Amscot's recognizable brand gave the company an edge. Global Express had more locations in St. Petersburg than Amscot, but city officials said they were concerned because the company subcontracted out its services to gas stations and convenience stores.
That's the point, said Lyle Wolinsky, vice president of Global Express.
"If somebody needs gas on a Sunday they can pay their bill at the same time," he said. "What can a family do at Amscot other than get a payday loan?"
Neither Baker nor Gibbons returned requests for comment for this article Tuesday.
Ian MacKechnie, executive vice president of Amscot, said he did not think his company got the contract because of Gibbons' relationship with Baker. The company also has bill service deals with Pinellas, Orange and Brevard counties.
"It is a convenient place to make your payments," he said. "Bill services is one of our major business segments."
Payment services at Enoch Davis were eliminated to save cash in October 2007, said First Deputy Mayor Tish Elston.
The city continued to pay two cashiers at Enoch Davis anyway with money reserved for vacant positions while the Amscot deal was settled.
Elston said it would be difficult to call the deal off.
"When you make a decision to reduce your budget, you've got to follow through or you undo the savings that you intended," she said. "If we did that for everything we wouldn't be able to keep our budget balanced and we are required to do that by law."
Cristina Silva can be reached at (727) 893-8846 or [email protected]