Concerned Citizens of St. Petersburg and WOWSTPETE, Inc.

I received the letter from Mr. Ballard via e-mail and Post here for your information.

William C. Ballard

1255 Brightwaters Blvd.

St. Petersburg, FL 33704

727-827-5021

wballard12@verizon.net

January 18, 2013

Anthony Sullivan, President
WOWSTPETE, Inc.
901 34th Ave. No. #7683
St. Petersburg, FL 33743-7683

Dear Mr. Sullivan:

I am president of Concerned Citizens of St. Petersburg, Inc., the organization sponsoring the proposed ordinance to terminate the architectural services agreement between the Maltzan firm and the City of St. Petersburg. You and your organization have statements up on your website that are false or which omit so much relevant information that they will mislead visitors to your site.  I am speaking now only to your FAQ’s about Money and Taxes; specifically, statements you made in response to your FAQ’s numbered 1, 5, 6 and 12.  

I ask you to do a web search for “St. Petersburg FY 2013 Adopted Fiscal Plan,” to locate “Fund Summaries” and to download the three pages for “General Fund (0001).”  You will see that the General Fund is the principal fund of the city and is used to account for those activities “traditionally associated with local government” – basic services such as fire and police protection, parks, libraries, street maintenance and administration. 

You will see that property taxes are the largest source of revenue to the City’s General Fund.  Look up the County’s budget and you will see that its general fund is also heavily dependent on property taxes.  The current millage rates imposed by the City and the County on City property owners throughout the City are 6.4472 for the City and 5.0105 for the county.  Total general fund expenditures to provide basic governmental services throughout the entire city in 2012 were about $206 million.  Of the $70 million in property taxes imposed by the City, about $4 million were transferred to “Community Redevelopment District.”  

The Florida Community Redevelopment Act permits cities, in concert with their home counties, to designate economically blighted areas as redevelopment areas.  The Intown Redevelopment Area was established in 1981 when total taxable property values in that area were less than 20 percent of what they are today.  Under the Act, the annual property tax amount calculated by multiplying the city and county millage rates times the increase in taxable value in Intown Redevelopment Area since 1982 yields the annual contribution the city and county make to the Area’s trust fund.  This is the “tax increment.” Tax increment funds will continue to be transferred to the Intown Redevelopment Area Fund until the Community Redevelopment Act expires in 2032.  

At page E-27 of the City’s Adopted Fiscal Plan your will see that the City expects, in 2013, to transfer $4.7 million dollars from the General Fund to the Intown Redevelopment Area Fund.  The County’s 2013 “Intergovernmental Transfer” of property tax dollars diverted pursuant to the Act is budgeted to be $3.5 million.  Keep in mind that both the City and the County, facing general fund budget deficits, raised property tax millage rates for FY 2013. The City, to raise an additional $10 million in property taxes, imposed a 14 percent millage rate increase; the County millage rate went up 4 percent. 

There is much more to be learned from page E-27 under “Appropriations.”  Payment for debt incurred for projects built long ago ended in 2012 freeing up $6.7 million of tax increment annual receipts for FY 2013. Per page E-27, the City, in FY 2013 intends that the Intown Area fund will expend $1.7 servicing pre-existing debt and $0.2 for “General Capital Improvements” (presumably fighting slum and blight) leaving $7.8 million to accumulate in the fund by year end. This  fits nicely with the $50 million budget for The Lens, a scheduled construction start in 2014 and a publicly stated intent to borrow $42 million secured by future tax increment cash flow. 

To comply with Florida Statue Section 163.387(7), the $7.8 million expected to be sitting in the Intown Area Fund at the end of  FY 2013 must be returned to each taxing authority unless the funds have been pledged for outstanding debt or, as in the case of the pier project, appropriated for a project to be completed within three years. The only two taxing authorities, as evidenced by page E-27, that contribute to the Intown Area Redevelopment Fund are the City and the County general funds. 

I know that I have been asking for you to do a lot, but please go to the Pinellas  County Tax Collector’s web site and look up the property tax bills for two St. Petersburg properties, one for a property within the Intown Redevelopment Area and one outside of it. If the property owner has paid the 2012 tax bill you will see a list naming each “taxing authority” that imposes a millage and receives property
taxes based on that millage.  When you compare the two paid bills you will see two significant things; first, that the list of taxing authorities and the millage rates are identical on both tax bills.  Secondly, you will see that the Intown Area is not a taxing authority. No taxes are collected within or specific to the Intown Redevelopment Area. 

At this point it should be apparent to you that the statement in FAQ 5 that the owners of  property located in the Intown Area are paying for the new St. Pete Pier through an earmarked set aside of their existing taxes is a false statement. The tax increment funding mechanism simply directs property tax dollars collected from all taxpayers into a fund that can only be spent within a designated redevelopment area. 

FAQ 1, which states that nobody’s taxes will be raised to pay for the New Pier is a nice mis-direction play. It avoids the fact that every property tax dollar diverted from the City and County general funds must be replaced by additional property tax dollars and hidden taxes in the form of service fees, franchise taxes on electricity, heating gas and communications in order for the local governments to provide basic general fund services to the entire community.  Those hidden taxes have increased dramatically since 2010.  See the FY 2013 Adopted financial Plan.  The alternative to not raising taxes and service fees to is to reduce the quantity and quality of basic governmental services throughout the City. 

Let’s test FAQ 12 which says the police station does not fall within the Intown Tax (sic) District so the money generated by downtown property owners cannot be used for a new police station.  Partly true, but very wrong.  All City Council would need to do to use the tax increment money received in 2013 for the construction of a police station outside the Intown Area is to cancel the redevelopment plan
appropriation for the New Pier in 2013 so that the City’s 2013 contribution to the Redevelopment Fund of $4.7 million would be returned to the general fund in 2014 pursuant to Florida Statute 163.387(7).  Do you think the County would refuse to amend the plan and forego the return of its $3.5 million contribution?  Yes, that would mean no New Pier until the new police station is completed. This is a matter of getting our civic priorities in order, thinking carefully about use of
scarce financial resources, and making sure that we are not spending $50 million for monument some want when there are huge unmet needs in our city. In addition to the police station, the impending loss of the Sweetbay Supermarket in Midtown, and all the needs that loss represents, comes to mind.  

I italicized your team’s use of the word “generated” in FAQ 12 because that is misleading for the reasons I stated regarding FAQ 1.  Intown Area property owners do not generate taxes, they pay taxes from their earnings or savings which are no different from those paid by all other city property holders.   

FAQ  6 contains language which characterizes as “earnings” the annual property taxes diverted to the Redevelopment Fund.  That is false.  Unless this fund makes an extraordinary investment, it will not have earnings beyond the tiny sums of interest it will earn on funds held.  Again, see page E-27 of the City’s 2013 Adopted Plan. The only Redevelopment Fund earnings you will see is earned interest of $35 thousand, not earnings of $7.4 million as stated in WOWSTPETE’s FAQ 6. 

I recall meeting you briefly and having a cordial conversation prior to a ommunity forum regarding The Lens project at Lakewood High School.  I recall that at that forum the local archtitect for the project and the City’s representative made statements along the line of your FAQ’s which I have commented on here.  Were you misled? 

This letter has only dealt with tax and funding issues.  There are other issues of greater importance.  My closing at this point does not mean I agree with those statements on your web site that I have not commented on. 

We are engaged in a discussion of a public issue; this letter will be circulated publicly.  

Very truly yours, 

William C. Ballard