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St. Petersburg Council calls for external audit on impact fees

ST. PETERSBURG — The City Council reversed course yet again on reviewing transportation impact fees, voting Thursday for an external audit of how the city collects them.

It's the latest fallout from a mysterious 2004 tax break that cost the public $219,000. That's what the Hilton at Carillon Park project should have paid eight years ago before a still-unknown city official gave them a still-unexplained break.

City Council member Steve Kornell led the charge as a majority voted for an independent audit weeks after the council voted for a less rigorous review of the way city officials assessed those fees.

"It's not a witch hunt," Kornell said. "I'm not making wild accusations ... in my view there's too many questions to make me feel comfortable."

Kornell wants these questions answered about the way the city handled the impact fees during the past decade:

•How can the council keep a better eye on the city's purse strings?

•Was the council given accurate information in 2008 and 2011 meetings with city attorneys that convinced them to settle for much less money?

•Were two 2009 internal audits done correctly? Since those audits uncovered more impact fee errors, how many more could be out there?

"We've not answered any of these questions to my satisfaction," Kornell said. Then the council voted 5-3 to hire the accounting firm Mayer Hoffman McCann P.C. to review a sample of the transportation impact fees assessed from 2004 to 2011.

They were opposed by council members Jim Kennedy, Jeff Danner and Bill Dudley, who believed that spending $50,000 or more on the audit was a waste. They argued that the flawed process was already fixed under Rick Baker, who was mayor when the tax break was given.

"I'm fairly confident that any employees who were involved with anything are no longer with the city," Kennedy said.

He made a motion against the external audit. Danner seconded it.

"I also agree that we're going to find out how we should have closed the barn door after the horses were gone," he said. Added Dudley: "I think we're trying to beat a dead horse."

The 2004 tax break came about because city plans examiner Don Tyre said a superior — he couldn't recall who — ordered him to undercharge the Hilton developer by more than $219,000 in transportation impact fees. The public should have gotten $313,000.

The county discovered the error three years later. St. Petersburg sued the developers to get back the money. But in November the council agreed to a settlement of just $60,000. Council members later blamed staff for not keeping them better informed about the deal.

So on Jan. 12, the council voted to hire an outside auditor to review past impact fee assessments. The council was supposed to meet later to figure out the scope of the external audit, and that's when their resolve fell apart.

After spending nearly two hours on the subject, the council voted March 29 on a less rigorous review: have an external auditor look at an internal audit dating back to 2008.

"I don't necessarily think (anything) went wrong," said city attorney John Wolfe. "I just don't think we're going to get enough out of this.

"I just think it's an expensive way to find out that, yes, better policies would have prevented what happened in the past."

But council members Kornell, Leslie Curran, Charlie Gerdes, Wengay Newton and Karl Nurse decided they still want answers.

"Losing the public trust is very expensive, too," Nurse said. "I think if it costs us a little bit more money to get back the public trust, I think that's money well spent."

Said Curran: "It's time to do it, be done with it and then we can move on."

St. Petersburg Council calls for external audit on impact fees 05/17/12 [Last modified: Friday, May 18, 2012 12:20am]
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