'Generous' Forecast Produces Real Concern With Largo CommissionBy Leo CoughlinLARGO - If Amy Davis falls asleep at night with numbers streaming through her mind, one can understand why. She is Largo's director of the Office of Management and Budget and is the main person dealing with, juggling, thinking of and compiling figures in a very complicated city budget. The Largo city budget bears the nihil obstat of Norton Craig, the city manager, thus it is his responsibility by law, but it is Davis who does the hands-on work for the most part. As the City Commission wound up its budget review talks last Thursday, Davis submitted a massive amount of numbers relating to the budget (as well as estimates on the future). What she submitted is a gold mine of information. An overriding theme at the commission meeting Thursday was the "generous predictions." The meaning was optimistic and in an economic climate that is scary and chancy, the numbers seem to be imbued more with hope than reality. The suspicion is that the theme comes from the top down - from Craig, who has whooped about prospects being brighter than those of more prudent mind may believe. While a standard method of looking at the financial future has dictated among most folks to low-ball income and highball outgo, Largo's top officialdom seems to take an opposite tack. Thus the comment made again and again, particularly by Mayor Pat Gerard, "I'm concerned about these generous predictions." She may well be concerned. Already the numbers are shifting. The comparisons of the past few years, which were rocky, don't seem to measure up to the prospects of the coming years which portend, in most experts estimates, to be even more rockier. For example, on July 8, in an obvious rebuttal to figures that Commissioner Curtis Holmes had shared with his colleagues on the commission expressing concern about expenditures predicated on expected revenue from the Penny for Pinellas, Craig submitted a memo to the commission predicting an income over the next 10 years from the Penny fund of $72 million. Holmes's estimates, based on his research, cited projected income from the Local Options Sales Tax (LOST), the official name of Penny for Pinellas, to Largo as low as $55 million to $60 million over the next 10 years. Craig maintained in his July 8 communication that "The latest information indicates that the projection for Penny Three (2011-2020) is approximately 72 million dollars programmed for the City of Largo." As many suspected at the time, that was so much pie in the sky, with the $72 million prediction more in the realm of poetry than reality. Information provided to the commission last Thursday radically changed Craig's whistling in the dark forecast. The LOST fund 10-year projections, according to that memo, have been downgraded to $67.8 million, already down, in the prediction arena, by 5.8 percent, and many analysts think the figure given is still too optimistic. What is glaringly out of focus in the Craig scenario is that Largo collected $61,186,252, in the Penny for Pinellas decade just ending, and Craig predicts a 17.5 increase over that in the face of the county's prediction of a 12.6 percent decrease in the years ahead. The words in the memo submitted by Davis are chilling - "The Local Option Sales Tax Fund has experienced declining revenue since FY 2007, a trend that has been continuing." According to the figures, 2007 was down 9 percent from 2006, 2008 was down another 3 percent, 2009 was down 11 percent. The economic situation has not improved. Instead, it has gotten worse with the oil spill in the Gulf, the impact of which has not yet been fully felt and the effect of which was never factored into revenue predictions. Under Craig's scenario, assumptions for LOST revenue forecast a 2 percent increase in 2011, another 4 percent increase in 2012 and then 2.5 upticks each year through 2015. Standing all alone in a universe of bleakness is the bright Craig outlook that "the economic climate will bottom out in FY 2011, with slow growth starting in 2012." Very "generous" indeed, and with many, a case of strong concern. What is critical about the LOST fund is that Largo is borrowed to the hilt predicated on what Penny revenue will come in. The question was put to Kim Adams, the city's Finance Officer, not long ago. "If these figures don't work out, what then happens?" Adams replied that the onus would be then on the general fund. And that means, in short, a tax increase.
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