When CareerSource Pinellas bought a science center in 2014, its leaders agreed that if the project went bust and they sold the center, they’d deposit any money earned into a trust for education.
Fast forward five years and the Science Center of Pinellas County has been sold to the City of St. Petersburg in a deal that will net CareerSource, the local job placement agency, about $2.4 million, according to its CEO.
But that money may never go to helping people learn.
The jobs center is still trying to extricate itself from a controversy that has left it potentially millions of dollars in debt to the federal government. The proceeds from the land deal, it believes, could help cover that cost.
Not everyone in the organization is comfortable with using the profits to pay for the agency’s past misdeeds. When asked whether such a move would be in the spirit of the Science Center’s mission, County Commissioner Pat Gerard, who is also the vice chair of the CareerSource Pinellas board, said: “Not necessarily, but I’m in the minority on the board.”
CareerSource Pinellas attorney Charles Harris “insists that it’s okay to use it that way,” Gerard said.
Harris did not respond to multiple requests for comment.
The potential debt for CareerSource Pinellas stems from a U.S. Department of Labor report last month, which detailed mismanagement at the center and its former sister agency, CareerSource Tampa Bay, under former CEO Edward Peachey. The review identified as much as $17 million in potential disallowed costs, tax dollars that may need to be returned to the government.
The questioned spending includes millions of dollars in prepaid credit cards distributed without proper controls, staffer bonuses paid based on false data and salary spikes for Peachey that were not approved by agency boards. Many revelations cited by the Labor Department were first published by the Tampa Bay Times, which found the agencies also reported phony job placements to the state.
CareerSource Pinellas, charged with helping job seekers on training and employment searches, is funded almost entirely by public money. The government will not accept its own money back as repayment, meaning the jobs center may need to tap into an unrestricted account, supported by sources like program fees, to cover any disallowed costs. As of late last month, new CEO Jennifer Brackney said, CareerSource Pinellas had just $200,000 in unrestricted funds.
Appearing Tuesday before the Pinellas County Commission, Brackney said proceeds from the Science Center sale could bolster the agency’s unrestricted account. She explained that CareerSource Pinellas also hopes to pay less than the $6.4 million it believes it could owe the federal government. The organization is working with the Florida Department of Economic Opportunity, which administers the statewide jobs center network, on a response to the Department of Labor’s report, due later this month.
The $6.4 million figure is an estimate derived from the Department of Labor’s compliance review, Brackney said. CareerSource may hire a consultant to analyze the questioned spending to determine exactly how much it owes the government. The organization is trying to figure out whether its insurance covers some of what it could owe, too.
The Pinellas County Commission is the backstop to CareerSource Pinellas, meaning it would be responsible for any disallowed costs the agency can’t pay.
Brackney did not mention the clause in the asset purchase agreement between the Science Center and CareerSource Pinellas that addresses real estate profits at Tuesday’s meeting. That provision says if the jobs center sells the property “due to continuing operating losses related to the Business,” it “shall place excess funds" after covering liabilities related to the business "into a trust account to support STEM education.”
It’s unclear how that clause could affect CareerSource Pinellas’ plans for the money. Pinellas County Attorney Jewel White said she had not yet reviewed the purchase agreement sent to her by the Times on Wednesday.
Mike Mikurak, chair of the Science Center at the time of the sale, and a former CareerSource Pinellas board member, said the proceeds are meant for education.
“It should go towards what the breadth of the Science Center was built for,” he said. “It was continuing the drive for STEM education in the community.”
The sale of the Science Center comes just months before the jobs center would have owed a $586,000 balloon payment on its mortgage for the property. Peachey pushed to acquire the center, which had taught schoolchildren and summer campers about topics like planets and wildlife, for $100. But the deal quickly soured. It was never approved by the full CareerSource Pinellas board, and the agency took out a $700,000 mortgage while spending hundreds of thousands of dollars on repairs and bills at the aging facility.
Peachey was fired last year by boards in both Pinellas and Hillsborough. CareerSource Pinellas and CareerSource Tampa Bay have since split.
Local officials could replace the Science Center with affordable housing, but they are still determining plans, and some exhibits need to be moved. That includes a snake, Elliott, which Brackney said will be adopted, and an iguana sanctuary that was used for educational lessons.
The iguana exhibit came from former CareerSource Pinellas board chair Lenne Nicklaus, who signed the original purchase agreement for the Science Center. Nicklaus said she paid about $40,000 to build a habitat there for her animals.
No longer on the board, Nicklaus said Wednesday she hopes to move the iguanas to a Society for the Prevention of Cruelty to Animals facility in Largo.
CareerSource Pinellas has agreed to pay up to $40,000 for the iguanas’ relocation.
Contact Zachary T. Sampson at firstname.lastname@example.org or (727) 893-8804. Follow @ZackSampson. Contact Kirby Wilson at email@example.com or (727) 893-8793. Follow @kirbywtweets.