Highland Center Costs Detailed
By Leo Coughlin
LARGO - That there is a sharp difference of opinion on the financial outlook in Largo between a commission member and the city administration is no secret.
Commissioner Curtis Holmes has expressed the utmost concern about the city's borrowing, using money not yet in hand from Penny for Pinellas, to fund projects now on line and to be paid for over the next 10 years.
Holmes is frank and open about it. "There is a fundamental difference of opinion between the City Manager and Finance Director and me. If their projections are incorrect, the result is catastrophic. If I'm wrong, that is wonderful."
On June 30, Holmes sent a memo to his colleagues on the City Commission and Mac Craig, the City Manager, expressing his concerns and citing what appear to be hard numbers.
A week later, Craig rebutted that with figures of his own that predicted that Largo would get 17.6 percent more in the next 10 years from Penny for Pinellas than it got from 2001-2010.
County figures project a 12.6 percent fall off in Penny revenue and, of course, any reduction is across the board; that is, Largo could not conceivably get more while others got less, so Craig's preposterous numbers have been written off by most as pie in the sky.
Last week, Kim Adams, who backed Craig in his July 8 memo, gave specifics on one of the projects that Holmes questioned.
The Highland Recreation Center reconstruction had been listed as costing $15 million and then in that July 8 memo Adams listed it as costing $21 million. This elicited an immediate question from Holmes as to what the additional $6 million was all about.
(Curiously, in that same July 8 memo, Adams listed city projects that added up to $57,700,000 and then, in the very next sentence of his memo, wrote that the projects 'totaled $50-53 million.')
Adams gave the details on the Highland project last Friday.
He said "estimated borrowing for the Highland Complex" is $18.5 million ($3.5 million right there above the earlier reported $15 million).
Adams went on to list "estimated total debt service costs for this borrowing" of $2.5 million in interest, which is figured as a loan to be amortized over eight years at 4 percent interest.
In all fairness, those numbers are subject to change, and have not yet been firmly established. But Largo, under Adams's financial direction dealing with loans, has done well in getting favorable rates and terms.
As Adams points out in the Highland Rec case, borrowing and associated costs are dependent on market conditions, which are subject to change and can be volatile.
The bulk of the costs, as listed by Adams, are building, $10.3 million; site work, $2.4 million; design, $2.6 million. Then there is $350,000 for an aquatics center and a mysterious "other" of $750,000.
Holmes is concerned because city administration figures add up to more in costs than what may come in from "Penny" funds. The actual name of the fund is the Local Option Sales Tax (LOST) and the two terms are used interchangeably.
He says that his examination of the situation shows income to Largo as low as $55 million to $60 million over the next 10 years. "When you figure everything, we could be already over-committed," Holmes says.
Craig insists that, "The latest information indicates that the projection for Penny Three (2011-2020) is approximately 72 million dollars programmed for the City of Largo."
Largo got $61 million-plus from 2001 to 2010 from the LOST fund, so Craig's prediction would be a 17.6 increase, which many question because of the economic situation and a bleak outlook over the years ahead.
As for Holmes, he hopes Craig is correct. "If he isn't, we have a problem of monumental proportions."
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